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Bill C-91

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First Reading

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	(a) fix its quorum at not less than a majority of its members;
	(b) keep minutes of its proceedings; and
	(c) report, at each meeting of the directors, on the proceedings of the committee since the last meeting of the directors.
Deemed assent	110. (1) A director who is present at a meeting of directors is deemed to have consented to any resolution made or action taken at the meeting unless
	(a) the director requests that a dissent be entered in the minutes of the meeting or the dissent is so entered;
	(b) the director sends a written dissent to the secretary of the meeting before it is adjourned; or
	(c) the director sends a written dissent by confirmed delivery service or delivers it personally, to the registered office of the cooperative immediately after the meeting is adjourned.
Loss of right to dissent	(2) A director who votes for or expressly consents to a resolution or action taken at a meeting is not entitled to later dissent.
Deemed assent of absent director	(3) A director who is not present at a meeting of directors is deemed to have consented to any resolution made or action taken at the meeting unless the director, within seven days after becoming aware of the resolution or action,
	(a) causes a dissent to be entered in the minutes of the meeting; or
	(b) sends a written dissent by confirmed delivery service or delivers it personally, to the registered office of the cooperative.
Defence	111. A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the failure to fulfil their duties, including reliance in good faith on financial statements of the cooperative, on the reports of experts and on information presented by officers or professionals.
Remunera- tion	112. Unless the articles, the by-laws or a unanimous agreement provides otherwise, the directors may fix the remuneration of the directors, officers and employees of the cooperative.
Indemnifi- cation	113. (1) A cooperative may indemnify an individual who is or was a director or officer of the cooperative, or who acts or acted at the cooperative's request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a claim, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved by reason of their association with the cooperative or entity.
Advance of costs	(2) A cooperative may advance moneys to a director, officer or other individual for the costs of a proceeding referred to in subsection (1). The individual must repay the moneys if the court determines that the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.
Limitation	(3) A cooperative may not indemnify an individual under subsection (1) unless the individual
	(a) acted honestly and in good faith with a view to the best interests of the cooperative, or, as the case may be, to the best interests of the entity for which the individual acted as director or officer or in a similar capacity at the cooperative's request; and
	(b) in the case of a criminal or administrative proceeding, had reasonable grounds for believing that the individual's conduct was lawful.
Derivative action	(4) A cooperative may not indemnify an individual under subsection (1) or advance costs under subsection (2) in respect of an action by or on behalf of the cooperative or entity unless a court so orders.
Right to indemnity	(5) An individual referred to in subsection (1) is entitled to indemnity from the cooperative for the costs, charges and expenses referred to in that subsection if the individual
	(a) was not judged by the court to have committed any fault or omitted to do anything that the individual ought to have done; and
	(b) fulfils the conditions in subsection (3).
Insurance	(6) A cooperative may purchase and maintain insurance for the benefit of an individual referred to in subsection (1) against any liability incurred by the individual by reason of being or having been a director or officer of the cooperative, having been a director or officer of another entity or having acted in a similar capacity, if the individual acts or acted in that capacity at the cooperative's request.
Application to court	114. (1) A court may, on application of a cooperative or an individual referred to in subsection 113(3), approve an indemnity under section 113 and make any further order that it sees fit.
Notice	(2) On an application under subsection (1), the court may order notice to be given to any interested person and the person is entitled to appear and be heard in person or by counsel.
Restricting powers of directors	115. (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), that discretion and those powers, is valid.
Deemed unanimous agreement	(2) For the purpose of subsection (1), a unanimous agreement to which another person is also a party is deemed to be a unanimous agreement.
Investment shareholders	(3) Subject to this section but despite subsection 183(2), any purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement.
When no notice given	(4) If notice is not given to the purchaser or transferee of the existence of a unanimous agreement, the purchaser or transferee may, no later than thirty days after they become aware of its existence, rescind the transaction by which they acquired the investment shares.
Rights of members	(5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent.
Provisions re meetings	(6) A unanimous agreement may contain provisions respecting the rules and procedures governing meetings under this Act and provisions that eliminate the need for annual meetings of shareholders and meetings of directors.
Documents	(7) If there is to be no annual meeting of shareholders because of a provision in a unanimous agreement, the cooperative must send a copy of the documents referred to in section 247 to any shareholder who requests it.
Notice of unanimous agreement	(8) A notice of the initial execution or the termination of a unanimous agreement, in the form that the Director fixes, must be sent to the Director not later than fifteen days after it is so executed or terminated.
	PART 8
	CAPITAL STRUCTURE
	Membership Capital
Loan capital	116. The capital of a cooperative without membership shares may be in the form of member loans and those loans may be in the amounts, payable at the times, and with or without interest, that the articles of the cooperative provide.
Membership shares	117. A cooperative with membership shares must have one class of membership shares, designated as such in the articles.
Issuance to members	118. (1) Membership shares may be issued only to members, each of whom must hold the minimum number of membership shares prescribed by the by-laws.
Equal rights	(2) Subject to Parts 20 and 21, the membership shares of a cooperative confer on their holders equal rights, including equal rights to
	(a) receive dividends declared on membership shares; and
	(b) subject to the articles, receive the remaining property of the cooperative on dissolution.
Membership shares	(3) The articles may not include any preference, right, condition, restriction, limitation or prohibition on membership shares, except as provided for by this Act.
Transfer requires approval	(4) A transfer of membership shares is valid only if it complies with section 46 and any restrictions set out in the by-laws.
No right to vote	(5) The right to vote attaches to membership in accordance with section 37 and not to a membership share.
Redeemable	(6) Subject to sections 146 and 149, membership shares may be redeemed by the cooperative.
	Certificates
Issue of certificates	119. (1) The by-laws of a cooperative may provide that no membership share certificates or certificates in respect of member loans need be issued. If the by-laws provide that no such certificates need be issued, the cooperative must, on the request of a member, issue a statement of the number of membership shares held, or the amount of any member loan of, the member.
Certificates	(2) The face of each certificate that the cooperative issues in respect of membership shares or member loans after the coming into force of this section must contain
	(a) the name of the cooperative;
	(b) a statement that the cooperative is subject to this Act;
	(c) the name of the person to whom it is issued;
	(d) a statement that the certificate represents membership shares in, or member loans to, the cooperative, and the number of the membership shares or the amount of the member loan;
	(e) a statement that the certificate is not transferable without the approval of the directors; and
	(f) a statement that there is a charge on the membership shares or member loans represented by the certificate in favour of the cooperative for any indebtedness of the member to the cooperative.
Certificate of membership	(3) Each member is entitled to a certificate of membership.
Authorized capital	120. (1) The membership shares of a cooperative may be issued with or without a par value.
Par-value membership shares	(2) If the membership shares of a cooperative are with a par value, the articles must specify that fact and specify their par value and any limit on their number.
No-par-value membership shares	(3) If the membership shares of a cooperative are without a par value, the articles must specify that fact and specify any limit on their number.
Fixed or determined value	121. If any no-par-value membership shares of a cooperative are to be issued and are to be redeemed at a fixed or determined value, the articles must set out those facts and state the fixed price or formula to be used to determine the value.
Distribution on dissolution	122. Subject to Parts 20 and 21, the articles of a cooperative may provide that, on dissolution of the cooperative and after the payment of all debts and liabilities - including any declared and unpaid dividends, the amount to be paid to the holders of any investment shares and the amount to be paid on the redemption of membership shares - the value of the remaining property of the cooperative is to be distributed or disposed of to any person, including distribution
	(a) among the members at the time of dissolution, in any manner, including equally among the members irrespective of the number of membership shares or amount of member loans, if any, held or made by a member;
	(b) among the members at the time of dissolution on the basis of patronage returns accrued to those members during a stated period before the dissolution; or
	(c) to charitable organizations or cooperative entities.
Charge on membership shares for amounts	123. (1) A cooperative has a charge on a membership share or any amount standing to the credit of a member or the legal representative of a member for a debt of that member to the cooperative.
Enforcement of charge	(2) A cooperative may
	(a) enforce a charge referred to in subsection (1) in the manner set out in its by-laws; or
	(b) apply any moneys standing to the credit of a member toward payment of a debt due by the member to the cooperative.
	Investment Shares
Investment shares	124. (1) The articles of a cooperative may provide that the cooperative may issue investment shares, and if they do, the articles must set out the following:
	(a) whether the investment shares may be issued to non-members;
	(b) whether the number of investment shares is to be unlimited and, if not, the maximum number of investment shares that may be issued;
	(c) the number of classes of investment shares; and
	(d) the preferences, rights, conditions, restrictions, limitations and prohibitions attaching to the investment shares and, if there is to be more than one class, the designation of each class and the special preferences, rights, conditions, restrictions, limitations and prohibitions attaching to each class.
No voting rights	(2) Subject to the articles and to this Act, no right to vote at a meeting of the cooperative attaches to an investment share.
Exception	(3) The articles may provide that
	(a) an investment share confers on its holder the right to vote at an election of directors by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled; or
	(b) the shareholders, any class of shareholders or the holders of a series of investment shares, may elect a fixed number or a percentage of the directors.
Limit on shareholders' directors	(4) Despite subsections (2) and (3), neither the articles nor a unanimous agreement may provide that the shareholders have the right to elect more than twenty per cent of the directors.
One share, one vote	(5) If shareholders are entitled to vote in accordance with subsection (3) or otherwise in accordance with this Act, each investment share entitles the holder to one vote.
Members may exercise shareholder rights if shareholders	(6) Despite section 37, a member who holds an investment share may exercise any voting right that holders of investment shares have.
No-par-value shares	125. (1) Investment shares of a cooperative must be in registered form and without a par value.
When cooperative continued	(2) Investment shares of a cooperative that is continued under this Act are deemed to be investment shares without a par value.
Shares in series	126. (1) The articles may authorize, subject to any limitations set out in them and subject to subsection (2), the issue of any class of investment shares in one or more series and may
	(a) fix the number of investment shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the investment shares of, each series; or
	(b) authorize the directors to fix the number of investment shares in, and to determine the designation, rights, privileges, restrictions and conditions attaching to the investment shares of, each series.
Member authorization	(2) No investment share may be issued until the members have authorized the principle of the issuance of investment shares.

Bill C-91

PART 8

CAPITAL STRUCTURE

Membership Capital

Certificates

Investment Shares