Bill C-5
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Stated capital
account
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(2) If shares of a cooperative are issued in
payment of a dividend, the declared amount of
the dividend stated as an amount of money
must be added to the stated capital account.
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Limitation on
paying
dividends
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154. A cooperative may not declare or pay
a dividend if there are reasonable grounds to
believe that
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Patronage
returns
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155. (1) A cooperative may allocate among
and credit or pay to the members, as a
patronage return, all or a part of the surplus
arising from the operations of the cooperative
in a financial year in proportion to the business
done by the members with or through the
cooperative in that financial year, calculated
in the manner described in subsection (2) at a
rate set by the directors.
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Calculation of
patronage
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(2) For the purpose of subsection (1), the
directors may calculate the amount of the
business done by each member with or
through a cooperative in a financial year by
taking into account
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Non-member
patronage
allocation
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(3) The by-laws may provide that a cooper
ative may allocate among and credit or pay to
persons who use the services of the coopera
tive but who are not members a share of any
surplus at a rate that is equal to or less than the
rate at which the surplus is distributed to
members.
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Calculation of
non-member
patronage
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(4) If a cooperative allocates among and
credits or pays to persons referred to in
subsection (3) a share of any surplus, the
directors must calculate the business done by
the non-member patrons in the manner de
scribed in subsection (2).
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Investment of
patronage
return
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156. (1) A cooperative may, by by-law,
provide that the whole, or any part that the
directors may determine, of the patronage
return of each member in respect of each
financial year be applied to the purchase for
the member of membership or investment
shares in the cooperative.
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Contents of
by-law
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(2) The by-law must provide for the giving
of notice to each member of the number of
shares purchased or to be purchased for the
member, the manner of issuance or transfer of
shares, the payment for the shares out of the
patronage returns of members and, if applica
ble, the issuance and forwarding of certifi
cates to members representing shares so
issued or transferred.
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Price of shares
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(3) No member is required under this
section to purchase membership shares, in the
case of membership shares with a par value, at
a price in excess of their par value, and in the
case of membership shares with no par value
or investment shares,
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Stated capital
account
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(4) If shares of a cooperative are issued in
payment of a patronage return, the amount of
the patronage return, stated as an amount of
money, must be added to the stated capital
account.
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Loans from
patronage
returns
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157. A cooperative may, by by-law, require
its members to lend to it the whole, or any part
that the directors may determine, of the
patronage returns to which they may become
entitled in each financial year, on the terms
and at the rate of interest that the directors
determine, so long as the rate of interest does
not exceed the rate that is provided in the
by-laws.
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Insolvent
cooperative
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158. If a cooperative is unable to pay its
liabilities as they become due, no member
need, under section 157, lend a patronage
return to the cooperative, and no member need
purchase shares under section 156.
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Marketing |
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Marketing
plans
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159. (1) Subject to subsection (3), this
section applies to a cooperative and its
members if the members are required by a
marketing plan established under an Act of
Parliament or of the legislature of a province
to sell or deliver things or render services to or
through a producer board or a marketing
commission or agency.
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Patronage
returns
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(2) For the purposes of allocating, crediting
and paying patronage returns among or to
members and of making payments to mem
bers as part of the price or proceeds of their
things or services, the members referred to in
subsection (1) are deemed to have sold and
delivered the things or to have rendered the
services to the cooperative.
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Conditions
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(3) The by-laws of a cooperative may
provide that this section does not apply to a
member until any conditions with respect to
the delivery of things or rendering of services
set out in the by-laws are fulfilled.
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Loans and Guarantees |
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Prohibited
loans and
guarantees
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160. (1) Subject to subsection (2) and any
additional restrictions set out in the articles, a
cooperative or any of its affiliates may not,
directly or indirectly, give financial assistance
by means of a loan, guarantee or otherwise
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if there are reasonable grounds for believing
that
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Permitted
loans and
guarantees
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(2) A cooperative may give financial assis
tance by means of a loan, guarantee or
otherwise
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Enforceabi- lity
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(3) A contract made by a cooperative in
contravention of this section may be enforced
by the cooperative or by a lender for value in
good faith without notice of the contravention.
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Enforcement
of contract to
buy shares
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161. (1) A cooperative must fulfil its
obligations under a contract to buy shares of
the cooperative, except if the cooperative can
prove that enforcement of the contract would
put it in breach of subsection 147(2) or section
149.
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Right of
claimant
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(2) Until the cooperative has fulfilled all its
obligations under a contract referred to in
subsection (1), the other party retains the
status of claimant entitled to be paid as soon
as the cooperative is lawfully able to do so or,
in a liquidation, to be ranked subordinate to
the rights of creditors and to the rights of any
class of shareholders whose rights were in
priority to the rights given to the class of
investment shares being purchased, but in
priority to the rights of members and other
shareholders.
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Debt
obligations
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162. (1) Debt obligations issued by a
cooperative are not redeemed by reason only
that the indebtedness evidenced by the debt
obligation is repaid.
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Cancellation,
etc.
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(2) Debt obligations issued by a cooperative
and purchased, redeemed or otherwise ac
quired may be cancelled or may secure any
obligation of the cooperative then existing or
later incurred.
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PART 9 |
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PROXIES |
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Interpreta- tion
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163. (1) The definitions in this subsection
apply in this Part.
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``form of
proxy'' « formulaire de procura- tion »
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``form of proxy'' means a written or printed
form that, on completion and execution by
or on behalf of a shareholder, becomes a
proxy.
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``interme- diary'' « intermé- diaire »
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``intermediary'' means a securities broker or
dealer required to be registered to trade or
deal in securities under the laws of any ju
risdiction and includes
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``solicit'' or
``solicita- tion'' « sollicita- tion »
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``solicit'' or ``solicitation'' includes
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``solicita- tion by or on behalf of the management of a cooperative'' « sollicita- tion effectuée par la direction ou pour son comptets»
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``solicitation by or on behalf of the manage
ment of a cooperative'' means a solicitation
by a person pursuant to a resolution or in
structions of, or with the acquiescence of,
the directors or a committee of directors.
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Membership
and
membership
shares
excluded
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(2) This Part does not apply to a member or
membership shares, but a member who is a
shareholder may exercise the rights given to a
shareholder by this Part for all investment
shares held.
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Appointing
proxyholder
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164. (1) A shareholder who is entitled to
vote at a meeting of shareholders may appoint
a proxyholder or one or more alternate
proxyholders, who are not required to be
shareholders, to attend and act at the meeting
in the manner and to the extent authorized by
the proxy and with the authority conferred by
the proxy.
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Execution of
proxy
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(2) For a proxy to be valid, it must be
executed by the shareholder or by their legal
representative authorized in writing.
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Validity of
proxy
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(3) A proxy is valid only at the meeting in
respect of which it is given or at any adjourn
ment of that meeting.
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Revocation of
proxy
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(4) A shareholder may revoke a proxy
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Deposit of
proxies
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(5) The directors may specify in a notice
calling a meeting of shareholders a time not
more than forty-eight hours, excluding Satur
days and holidays, before the meeting or
adjournment before which time proxies to be
used at the meeting must be deposited with the
cooperative or its agent.
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Mandatory
solicitation
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165. (1) Subject to subsection (2), the
management of a cooperative shall, concur
rently with giving notice of a meeting of
shareholders, send a form of proxy in pre
scribed form to each shareholder who is
entitled to receive notice of the meeting.
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Exception
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(2) The management of a cooperative is not
required to send a form of proxy under
subsection (1) if
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Soliciting
proxies
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166. (1) No person may solicit a proxy
unless the applicable circular described in
subsection (2) is sent to the auditor of the
cooperative, to each shareholder whose proxy
is solicited, to each director and, if paragraph
(2)(b) applies, to the cooperative.
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Circulars
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(2) The circular that is to be sent under
subsection (1) is
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Copy to
Director
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(3) When a management proxy circular or
dissident's proxy circular is sent, a copy of it
must be sent to the Director together with a
statement in the prescribed form and a copy of
any notice of meeting, form of proxy and any
other documents for use in connection with
the meeting.
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