42-43 ELIZABETH II

CHAPTER 24

An Act to amend the Canada Business Corporations Act and to make consequential amendments to other Acts

[Assented to 23th June, 1994]

      Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

R.S., c. C-44; R.S., c. 27 (1st Supp.), c. 27 (2nd Supp.), c. 1 (4th Supp.); 1990, c. 17; 1991, cc. 45, 46, 47; 1992, cc. 1, 27, 51; 1993, c. 28

CANADA BUSINESS CORPORATIONS ACT

1. Section 1 of the French version of the Canada Business Corporations Act is replaced by the following:

Titre abrégé

1. Loi canadienne sur les sociétés par actions.

2. (1) The definition ``société de personnes'' in subsection 2(1) of the French version of the Act is repealed.

(2) The definition ``société par actions'' ou ``société'' in subsection 2(1) of the French version of the Act is replaced by the following:

« société par actions » ou « société »
``corporation' '

« société par actions » ou « société » Personne morale constituée ou prorogée sous le régime de la présente loi.

(3) The portion of subsection 2(3) of the Act before paragraph (b) is replaced by the following:

Control

(3) For the purposes of this Act, a body corporate is controlled by a person or by two or more bodies corporate if

    (a) securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those bodies corporate; and

(4) Subsection 2(5) of the Act is replaced by the following:

Subsidiary body corporate

(5) A body corporate is a subsidiary of another body corporate if

    (a) it is controlled by

      (i) that other body corporate,

      (ii) that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or

      (iii) two or more bodies corporate each of which is controlled by that other body corporate; or

    (b) it is a subsidiary of a body corporate that is a subsidiary of that other body corporate.

3. Section 3 of the Act is amended by adding the following after subsection (4):

Limitations on business that may be carried on

(5) No corporation shall carry on business as a degree-granting educational institution unless expressly authorized to do so by a federal or provincial agent that by law has the power to confer degree-granting authority on an educational institution.

4. Subparagraph 6(1)(c)(ii) of the French version of the Act is replaced by the following:

      (ii) en cas d'émission d'une catégorie d'actions par séries, l'autorisation accordée aux administrateurs tant de fixer le nombre et la désignation des actions de chaque série que de déterminer les droits, privilèges, conditions et restrictions dont les actions sont assorties;

1992, c. 1, s. 53(1)

5. (1) Subsection 10(1) of the Act is replaced by the following:

Name of corporation

10. (1) The word or expression ``Limited'', ``Limitée'', ``Incorporated'', ``Incorporée'', ``Corporation'' or ``Société par actions de régime fédéral'' or the corresponding abbreviation ``Ltd.'', ``Ltée'', ``Inc.'', ``Corp.'' or ``S.A.R.F.'' shall be part, other than only in a figurative or descriptive sense, of the name of every corporation, but a corporation may use and be legally designated by either the full or the corresponding abbreviated form.

Saving for ``S.C.C.''

(1.1) Subsection (1) does not apply to a corporation that has a corporate name that, immediately before the day on which this subsection comes into force, included, other than only in a figurative or descriptive sense, the expression ``Société commerciale canadienne'' or the abbreviation ``S.C.C.'', and any such corporation may use and be legally designated by either that expression or that abbreviation.

(2) Subsection 10(5) of the French version of the Act is replaced by the following:

Publicité de la dénomination sociale

(5) La dénomination sociale de la société doit être lisiblement indiquée sur tous ses effets de commerce, contrats, factures et commandes de marchandises ou de services.

(3) Subsection 10(6) of the Act is replaced by the following:

Other name

(6) Subject to subsections (5) and 12(1), a corporation may carry on business under or identify itself by a name other than its corporate name if that other name does not contain, other than in a figurative or descriptive sense, either the word or expression ``Limited'', ``Limitée'', ``Incorporated'', ``Incorporée'', ``Corporation'' or ``Société par actions de régime fédéral'' or the corresponding abbreviation.

6. Subsection 11(2) of the Act is replaced by the following:

Designating number

(2) If requested to do so by the incorporators or a corporation, the Director shall assign to the corporation as its name a designating number followed by the word ``Canada'' and a word or expression, or the corresponding abbreviation, referred to in subsection 10(1).

7. (1) The portion of subsection 12(1) of the Act before paragraph (a) is replaced by the following:

Prohibited names

12. (1) A corporation shall not be incorporated or continued as a corporation under this Act with, have, carry on business under or identify itself by a name

(2) Subsection 12(3) of the Act is repealed.

(3) Subsection 12(5) of the Act is replaced by the following:

Undertaking to change name

(4.1) Where a corporation acquires a name as a result of a person undertaking to dissolve or to change names, and the undertaking is not honoured, the Director may direct the corporation to change its name in accordance with section 173, unless the undertaking is honoured within the period specified in subsection (5).

Revoking name

(5) Where a corporation has been directed under subsection (2), (4) or (4.1) to change its name and has not within sixty days after the service of the directive to that effect changed its name to a name that complies with this Act, the Director may revoke the name of the corporation and assign a name to it and, until changed in accordance with section 173, the name of the corporation is thereafter the name so assigned.

8. (1) Subsection 20(2) of the French version of the Act is replaced by the following:

Procès-verbau x

(2) Outre les livres mentionnés au paragraphe (1), la société tient des livres comptables adéquats et des livres où figurent les procès-verbaux tant des réunions que des résolutions du conseil d'administration et de ses comités.

(2) Section 20 of the Act is amended by adding the following after subsection (2):

Retention of accounting records

(2.1) Subject to any other Act of Parliament and to any Act of the legislature of a province that provides for a longer retention period, a corporation shall retain the accounting records referred to in subsection (2) for a period of six years after the end of the financial year to which the records relate.

9. (1) Subsection 39(1) of the French version of the Act is replaced by the following:

Capital déclaré

39. (1) La société qui acquiert, notamment par achat ou rachat, conformément aux articles 34, 35, 36, 45 ou 190 ou à l'alinéa 241(3)f), des actions ou fractions d'actions qu'elle a émises doit débiter le compte capital déclaré, tenu pour la catégorie ou série dont elles relèvent, du produit des éléments suivants : le capital déclaré relatif aux actions de cette catégorie ou série et la fraction dont les numérateur et dénominateur sont respectivement le nombre d'actions, ou fractions d'actions, de cette catégorie ou série ainsi acquises et le nombre d'actions de la même catégorie ou série émises immédiatement avant l'acquisition.

(2) Paragraph 39(4)(a) of the French version of the Act is replaced by the following:

    a) d'une part, débiter le compte capital déclaré, tenu pour la catégorie ou série initiale d'actions, du produit des éléments suivants : le capital déclaré à l'égard de ces actions et la fraction dont les numérateur et dénominateur sont respectivement le nombre d'actions ayant fait l'objet de la conversion ou du changement et le nombre d'actions de la même catégorie ou série émises immédiatement avant la conversion ou le changement;

10. Section 44 of the Act is amended by adding the following after subsection (2):

Wholly-owne d subsidiary

(2.1) A corporation is a wholly-owned subsidiary of another body corporate for the purposes of paragraph (2)(c) if

    (a) all of the issued shares of the corporation are held by

      (i) that other body corporate,

      (ii) that other body corporate and one or more bodies corporate all of the issued shares of which are held by that other body corporate, or

      (iii) two or more bodies corporate all of the issued shares of which are held by that other body corporate; or

    (b) it is a wholly-owned subsidiary of a body corporate that is a wholly-owned subsidiary of that other body corporate.

11. Section 106 of the Act is amended by adding the following after subsection (7):

Appointment of directors

(8) The directors may, if the articles of the corporation so provide, appoint one or more directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.

12. Subsection 112(2) of the Act is replaced by the following:

Election of directors where articles amended

(2) Where the shareholders at a meeting adopt an amendment to the articles of a corporation to increase or, subject to paragraph 107(h) and to subsection (1), decrease the number or minimum or maximum number of directors, the shareholders may, at the meeting, elect the number of directors authorized by the amendment, and for that purpose, notwithstanding subsections 179(1) and 262(3), on the issue of a certificate of amendment the articles are deemed to be amended as of the date the shareholders adopt the amendment.

13. Paragraph 122(1)(b) of the French version of the Act is replaced by the following:

    b) avec le soin, la diligence et la compétence dont ferait preuve, en pareilles circonstances, une personne prudente.

14. The definition ``société ayant fait appel au public'' in subsection 126(1) of the French version of the Act is replaced by the following:

« société ayant fait appel au public »
``distributing.. .''

« société ayant fait appel au public » Société dont les valeurs mobilières émises et en circulation font ou ont fait partie d'une souscription publique et sont détenues par plusieurs personnes.

15. Subsection 146(4) of the French version of the Act is replaced by the following:

Présomption

(4) Sous réserve du paragraphe 49(8), le cessionnaire d'actions assujetties à une convention unanime des actionnaires est réputé être partie à celle-ci.

1992, c. 1, s. 54

16. Subsection 150(2) of the Act is replaced by the following:

Copy to Director

(2) A person required to send a management proxy circular or dissident's proxy circular shall send concurrently a copy of it to the Director together with a statement in prescribed form, the form of proxy, any other documents for use in connection with the meeting and, in the case of a management proxy circular, a copy of the notice of meeting.

1992, c. 1, s. 55

17. Subsections 160(1) to (3) of the Act are replaced by the following:

Copies to Director

160. (1) A corporation any of the securities of which are or were part of a distribution to the public, remain outstanding and are held by more than one person shall send a copy of the documents referred to in section 155 to the Director

    (a) not less than twenty-one days before each annual meeting of shareholders or forthwith after the signing of a resolution under paragraph 142(1)(b) in lieu of the annual meeting; and

    (b) in any event not later than fifteen months after the last date when the last preceding annual meeting should have been held or a resolution in lieu of the meeting should have been signed.

1992, c. 1, s. 56

18. Subsection 163(4) of the Act is repealed.

19. Paragraph 173(1)(f) of the Act is replaced by the following:

    (f) reduce or increase its stated capital, if its stated capital is set out in the articles;

20. Subsection 184(1) of the Act is replaced by the following:

Vertical short-form amalgamation

184. (1) A holding corporation and one or more of its subsidiary corporations may amalgamate and continue as one corporation without complying with sections 182 and 183 if

    (a) the amalgamation is approved by a resolution of the directors of each amalgamating corporation;

    (a.1) all of the issued shares of each amalgamating subsidiary corporation are held by one or more of the other amalgamating corporations; and

    (b) the resolutions provide that

      (i) the shares of each amalgamating subsidiary corporation shall be cancelled without any repayment of capital in respect thereof,

      (ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of incorporation of the amalgamating holding corporation, and

      (iii) no securities shall be issued by the amalgamated corporation in connection with the amalgamation and the stated capital of the amalgamated corporation shall be the same as the stated capital of the amalgamating holding corporation.

21. The Act is amended by adding the following after section 186:

Amalgamatio n under other federal Acts

186.1 (1) Subject to subsection (2), a corporation may not amalgamate with one or more bodies corporate pursuant to the Bank Act, the Canada Cooperative Associations Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act unless the corporation is first authorized to do so by the shareholders in accordance with section 183.

Short-form amalgamation s

(2) A corporation may not amalgamate with one or more bodies corporate pursuant to the provisions of one of the Acts referred to in subsection (1) respecting short-form amalgamations unless the corporation is first authorized to do so by the directors in accordance with section 184.

Discontinuanc e

(3) On receipt of a notice satisfactory to the Director that a corporation has amalgamated pursuant to one of the Acts referred to in subsection (1), the Director shall file the notice and issue a certificate of discontinuance in accordance with section 262.

Notice deemed to be articles

(4) For the purposes of section 262, a notice referred to in subsection (3) is deemed to be articles that are in the prescribed form.