| Negotiable
instruments
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(2) Except when a transfer is restricted and
noted on a security in accordance with subsec
tion 183(2), a security is a negotiable instru
ment.
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| Registerable
form
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(3) A security is in registered form if it
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(a) specifies a person who is entitled to the
security or to the rights it evidences, and its
transfer is capable of being recorded in a
securities register; or
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(b) bears a statement that it is in registered
form.
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| Order form
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(4) A debt obligation is in order form if, by
its terms, it is payable to the order of a person
specified with reasonable certainty in it or to
a person to whom it is assigned.
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| Bearer form
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(5) A security is in bearer form if it is
payable to bearer according to its terms and
not by reason of an endorsement.
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| Guarantor for
issuer
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(6) A guarantor for an issuer is deemed to be
an issuer to the extent of the guarantee,
whether or not the obligation is noted on the
security.
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| Application
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178. This Part governs the transfer or
transmission of a security.
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| Security
certificate
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179. Every security holder is entitled, at
their option, to obtain from the cooperative
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(a) a security certificate that complies with
this Act; or
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(b) a non-transferable written acknowl
edgement of their right to obtain a security
certificate.
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| Fee
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180. A cooperative may charge a reason
able fee for a security certificate issued in
respect of a transfer.
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| Joint owners
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181. If securities are held jointly by more
than one person,
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(a) a cooperative is not required to issue
more than one security certificate in respect
of those securities; and
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(b) delivery of a security certificate to one
of the joint owners is sufficient delivery to
them all.
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| Signatures
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182. (1) A security certificate must be
signed manually by one of the following
individuals, or a facsimile of the signature
must be reproduced on the certificate:
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(a) at least one director or officer;
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(b) an individual on behalf of a director,
transfer agent or branch transfer agent of the
cooperative; or
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(c) a trustee who certifies it in accordance
with a trust indenture.
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| Former
director
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(2) A cooperative may issue security certifi
cates that contain the signature of a person
who is no longer a director or officer and the
validity of the certificate is not adversely
affected.
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| Contents of
certificate
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183. (1) The following information must be
stated on the face of each security certificate
issued by a cooperative:
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(a) the name of the cooperative;
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(b) the words ``Incorporated under the
Canada Cooperatives Act'', ``constituée
sous l'autorité de la Loi canadienne sur les
coopératives'', ``Subject to the Canada
Cooperatives Act'' or ``assujetti à la Loi
canadienne sur les coopératives'';
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(c) the name of the person to whom it was
issued; and
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(d) the number and class of shares and the
designation of any series that the certificate
represents.
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| Notation of
restrictions
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(2) No restriction, charge or endorsement
described in subsection (3) is effective against
a transferee of a security, issued by a coopera
tive or by a body corporate before it is
continued under this Act, who has no actual
knowledge of the restriction, charge or en
dorsement unless it or a reference to it is noted
conspicuously on the security certificate.
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| Restrictions,
etc.
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(3) The restrictions, charges and endorse
ments referred to in subsection (2) are
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(a) a restriction on transfer other than a
constraint under section 130;
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(b) a charge in favour of the cooperative;
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(c) a unanimous agreement; and
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(d) an endorsement under subsection
302(10).
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| Restrictions
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(4) If the issued investment shares of a
cooperative are or were part of a distribution
to the public, remain outstanding and are held
by more than one person, the cooperative must
not restrict the transfer or ownership of its
investment shares of any class or series except
by way of a constraint under section 130.
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| Conspicuous
notation
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(5) A reference to a constraint on the issue,
transfer or ownership of any class or series of
investment shares must be noted conspicuous
ly on every security certificate evidencing
such a share that is issued after the share
becomes subject to the constraint under this
Act, if the constraint is one
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(a) for the purpose of attaining or maintain
ing a level of Canadian ownership or
control specified in its articles or required
by law to carry on business or qualify for
benefit; or
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(b) to comply with section 379 of the Trust
and Loan Companies Act, section 411 of the
Insurance Companies Act or Part X.3 of the
Income Tax Act.
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| Effect of
failure to note
constraint
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(6) A failure to note a constraint under
subsection (5) does not invalidate the invest
ment share or the security certificate and does
not render the constraint ineffective.
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| Contents of
certificate
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184. (1) Every share certificate for an
investment share of a cooperative that is
authorized to issue shares of more than one
class or series must clearly state
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(a) the rights, privileges, restrictions and
conditions attached to the shares of each
class and series that exist when the share
certificate is issued; or
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(b) that the class or series of shares that it
represents has rights, privileges, restric
tions or conditions attached to it and that the
cooperative will provide a shareholder, on
demand and without charge, with a full
copy of the text of
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(i) any rights, privileges, restrictions and
conditions attached to each class autho
rized to be issued, and to each series, that
have been fixed by the directors, and
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(ii) the authority of the directors to fix the
rights, privileges, restrictions and condi
tions of subsequent series.
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| Copy of
information
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(2) If a share certificate for an investment
share contains the statement referred to in
paragraph (1)(b), the cooperative must pro
vide the shareholder, on demand and without
charge, with a copy of
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(a) the rights, privileges, restrictions and
conditions attached to each class or series of
investment shares authorized to be issued;
and
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(b) the authority of the directors to fix the
rights, privileges, restrictions and condi
tions of subsequent series of investment
shares in the same class.
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| Fractional
shares
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185. (1) A cooperative may issue a certifi
cate for a fractional investment share or may
instead issue a scrip certificate in bearer form
that entitles the holder to receive a certificate
for a full investment share in exchange for
sufficient scrip certificates equalling a full
investment share.
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| Conditions
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(2) The directors may attach conditions to
scrip certificates issued by the cooperative,
including conditions that
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(a) the scrip certificates become null or void
if not exchanged for an investment share
representing a full investment share before
a specified date; and
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(b) any investment shares for which the
scrip certificates are exchangeable may,
despite any pre-emptive right, be issued by
the cooperative to any person and the
proceeds distributed rateably to the holders
of the scrip certificates.
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| Voting rights
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(3) A holder of a fractional investment share
is not entitled to exercise voting rights or to
receive a dividend in respect of the investment
share unless
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(a) the fractional share results from a
consolidation of investment shares; or
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(b) the articles of the cooperative provide
otherwise.
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| Exercise of
voting rights
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(4) A holder of a scrip certificate is not
entitled to exercise voting rights or to receive
a dividend in respect of the scrip certificate.
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| Securities
register
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186. (1) A cooperative that issues securities
must maintain a securities register in which it
records the securities issued by it in registered
form, showing with respect to each class or
series
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(a) the names, in alphabetical order, and the
latest known address of each person who
holds or previously held the security;
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(b) the number of securities held by each
security holder; and
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(c) the date and particulars of the issue and
transfer of each security.
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| Location of
register
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(2) The securities register must be main
tained at the cooperative's registered office or
at any other place in Canada designated by the
directors.
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| Branch
registers
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(3) A cooperative may maintain additional
branch securities registers in other places
designated by the directors.
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| Contents of
branch
register
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(4) A branch securities register only con
tains particulars of securities issued or trans
ferred at the branch. The same information is
also recorded in the central registry.
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| Destruction of
certificates
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(5) A cooperative, its agent or mandatary or
a trustee as defined in section 266 is not
required to produce
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(a) a cancelled security certificate in regis
tered form, an instrument referred to in any
of subsections 142(1) to (3) that is cancelled
or a like cancelled instrument in registered
form six years after the date of its cancella
tion;
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(b) a cancelled security certificate in bearer
form or an instrument referred to in any of
subsections 142(1) to (3) that is cancelled or
a like cancelled instrument in bearer form
after the date of its cancellation; or
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(c) an instrument referred to in any of
subsections 142(1) to (3) or a like instru
ment, irrespective of its form, after the date
of its expiration.
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| Agent
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187. A cooperative may appoint an agent to
maintain securities registers on its behalf.
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| Registration
|
188. The registration of the issue or transfer
of an investment share in a securities register
maintained by the cooperative is complete and
valid registration for all purposes.
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| Trustee
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189. Subject to sections 51, 53 and 61, a
cooperative or a trustee as defined in section
266 may treat the person whose name appears
on the securities register as the owner of a
security as its owner for all purposes.
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| Proof of
ownership
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190. If a cooperative restricts the right to
transfer its investment shares, the cooperative
may, despite section 189, treat a person as the
registered holder of a security if the person
provides the cooperative with evidence that
reasonably meets the requirements of the
cooperative that the person is
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(a) the heir of a deceased security holder, or
the fiduciary of the estate or succession of
a deceased security holder, or of a registered
security holder who is a minor, an incompe
tent or incapable person or a missing
person; or
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(b) a liquidator of, or a trustee in bankruptcy
for, a registered security holder.
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| Proof of
ownership
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191. A cooperative must treat a person,
other than one described in section 190, as
being entitled to exercise the rights and
privileges attached to a security if the person
provides proof that the person has acquired
ownership of the security by operation of law
or has legal authority to exercise the rights and
privileges.
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| Joint owners
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192. If satisfactory proof of the death of a
joint holder of a security is provided to a
cooperative, it may treat any surviving joint
holders as the owner of the security.
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| Duties of
cooperative
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193. A cooperative is not required to inquire
into the existence of, or see to the performance
of, any duty owed to a third person by a
registered holder or a person who may be
treated as a registered holder of a security.
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| Minors
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194. If an individual who is less than
eighteen years of age exercises a right of
ownership in a security of a cooperative, no
subsequent repudiation or avoidance is effec
tive against the cooperative.
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| Deceased
owner
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195. (1) Subject to any applicable law
relating to the collection of taxes, a person
who is an heir or a fiduciary of an estate or
succession of a deceased security holder is
entitled to become the registered holder or to
designate a registered holder if the person
deposits the following information with the
cooperative or its transfer agent, together with
any reasonable assurances that the coopera
tive may require:
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(a) the security certificate or, in default of
one, a document proving that the deceased
was the security holder;
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(b) a document proving the death of the
security holder; and
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(c) a document proving that the heir or
fiduciary has the right under the law of the
place in which the deceased was domiciled
immediately before their death to deal with
the security.
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| Endorsement
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(2) A security certificate referred to in
paragraph (1)(a) must be endorsed
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(a) in the case of a transfer to an heir or
fiduciary, by that person; and
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(b) in any other case, in a manner acceptable
to the cooperative.
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| Right of
cooperative
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(3) Deposit of the documents required by
subsection (1) empowers a cooperative or its
transfer agent to record in a securities register
the transmission of a security from the de
ceased holder to the heir or fiduciary or to any
person that the heir or fiduciary may designate
and to treat the person who becomes a
registered holder as the owner of the securi
ties.
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| Overissue
|
196. (1) Subject to this section, the provi
sions of this Part that validate a security or
compel its issue or reissue do not apply if the
validation, issue or reissue of a security would
result in overissue.
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| Identical
security
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(2) The person who is entitled to a valida
tion or issue may, if there has been an
overissue and if a valid security that is similar
in all respects to the security involved in the
overissue is reasonably available for pur
chase, compel the issuer to purchase and
deliver that security against the surrender of
the security that the person holds.
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| If identical
security not
available
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(3) If a valid security that is similar in all
respects to the security involved in the overis
sue is not reasonably available for purchase,
the person who is entitled to the validation or
issue may recover from the issuer an amount
equal to the price the last purchaser for value
paid for the invalid security.
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| Increase in
capital
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(4) The overissued securities are valid from
the date they were issued only if the issuer
increases the number of its authorized securi
ties to a number equal to or greater than the
number of securities previously authorized
plus the number of the securities overissued.
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| Exemptions
|
197. Sections 147 to 149 and 152 do not
apply to a payment or purchase by an issuer
under section 196.
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