The Freestanding Company Limited is the owner of a number of commercial buildings in a large Ontario city. One of the directors, Denise, suggested that the corporation purchase a large apartment building. Another director, Zaida, was the owner of a one-third interest in the building. Zaida may be obliged to pay over to the corporation any profit earned on the sale of the building if she fails to disclose her interest at the directors' meeting.

Question

Quizplus · Accepted Answer

Under Canadian corporate law, directors have a duty to disclose any conflict of interest in transactions involving the corporation. If Zaida fails to disclose her one-third interest in the building, she may indeed be required to pay any profit earned from the sale to the corporation, as this would be considered a breach of her fiduciary duty to act in the best interest of the corporation.

The Freestanding Company Limited Is the Owner of a Number