S. 188 of the Quebec Business Corporations Act provided that "Unless otherwise provided in the by-laws, in the case of a tie, the chair of the meeting casts the tie-breaking vote." Where the shares of a corporation are held equally by two shareholders and s. 188 applies, does the chair have de facto control of the corporation under s. 256(5.1)?
CRA stated (TaxInterpretations translation):
[W]e do not believe that section 188 of the QBCA, respecting the conduct of an annual shareholders meeting, automatically confers de facto control of a corporation on the person occupying the post of chair of the meeting and having a tie-breaking vote.
In this regard, we note that section 188 of the QBCA provides that "Unless otherwise provided in the by-laws, the president of the corporation chairs a shareholders meeting," and that the chair, in general, is elected by the directors of the corporation.
The determination of de facto control ... remains a question of fact ... .
For example, we note that ... Brownco ... and Avotus ... recognized that the right to a tie-breaking vote attaching to the position of chair of the board of directors or of the shareholders' meeting accorded, to a shareholder holding 50% of the voting shares of a corporation, an influence whose exercise would result in de facto control of the corporation.