Generally, the officers of a startup shall be designated in the corporate bylaws or by the Board of Directors according to the bylaws. Any person agreeing to become an officer of a startup should be made aware of the responsibilities and duties that accompany the particular office. The same person may hold two or more offices. The names and addresses of the officers must be kept at the startup's principle place of business and reported annually to the Corporations Canada, if the company is federally incorporated, and to the Companies and Personal Property Security Branch, if the company is incorporated in Ontario.
Under the Ontario Business Corporations Act (OBCA), the officers of a corporation must consist of a president and a secretary, who are elected by the Board of Directors, or as otherwise described in the bylaws. The bylaws may authorize the Board of Directors to elect other officers, assistant officers and agents. Any two or more of the offices may be held by the same person. These provisions leave considerable latitude in drafting the bylaws of the startup to specify the offices for the startup, which will best suit its needs. Unlike the Board of Directors of the startup, the officers of the corporation are not vested by the statute with any significant authority to manage the business and affairs of the corporation. On the contrary, the officers are elected by the Board of Directors and may be removed by the Board of Directors. Their position is that of an agent or employee of the startup, and they are subordinate to the Board of Directors and the bylaws of the startup.
The OBCA imposes statutory restrictions on a startup corporation with regard to the structure of its body of officers: first, an officer must be appointed to take and maintain minutes at the meetings of the Board of Directors; second, an officer must be selected to keep certain corporate records required by statute. The Board of Directors determines who will manage and what their duties will be, but the statute does not require that a president, treasurer, or any other officer holding a specific title be appointed. The OBCA authorizes startup corporations to elect or appoint officers, define their duties, and fix their compensation. These duties can be defined in the bylaws or may be determined by a resolution of the Board of Directors.
Each officer has authority to perform the duties set forth in the bylaws to the extent that his or her actions remain consistent with such bylaws. The duties of Ontario corporate officers are not restricted by the OBCA, rather, they can be structured in any way consistent with the bylaws of the startup corporation and the decisions of the Board of Directors. However, in performing their duties, officers should remember that they owe a fiduciary duty to the startup and its shareholders by virtue of their positions.
The OBCA imposes upon an officer duties to act in good faith, with ordinary prudence, and in the best interests of the startup. The OBCA occasionally specifies in what situation an officer must or may act. For example, if share certificates are used they must be signed by one of the officers. Officers may authorize and approve issuance of shares if they are granted such authority by the Board of Directors. They may also receive proxy votes or tabulate shareholder votes. Other than this, very little guidance is given governing the officers' duties. Generally, any officer may be removed by the Board of Directors with or without cause, but such removal must be without prejudice to any contract rights.