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Bill C-5

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	PART 16
	FUNDAMENTAL CHANGES
Definition of ``common share''	284. For the purposes of this Part, ``com mon share'' means a share in a body corporate, the rights of the holders of which are equal in all respects, including equal rights to
	(a) receive dividends declared by the body corporate on the shares; and
	(b) receive the remaining property of the body corporate on dissolution.
Continuance	285. (1) A body corporate incorporated or continued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Director for a certificate of continuance under this Act if the body corpo rate
	(a) satisfies, or by its articles of continuance would satisfy, the requirements for incorpo ration as a cooperative under this Act;
	(b) is organized and operated and carries on its business on a cooperative basis or, by its articles of continuance, causes the body corporate to be organized and operated and to carry on its business on a cooperative basis; and
	(c) has a capital and corporate structure that, if set out in its articles and by-laws, would meet the requirements of this Act.
Continuance for the purpose of amalgama- tion	(2) A body corporate incorporated or con tinued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Director for a certificate of continuance and a certificate of amalgamation under this Act if the body corporate
	(a) proposes to be continued under this section for the purpose of amalgamating with another body corporate in compliance with this Act and does, or will after the amalgamation, satisfy the requirements for incorporation as a cooperative under this Act;
	(b) is organized and operated and carries on its business on a cooperative basis or, after the amalgamation, will be organized and operated and will carry on its business on a cooperative basis; and
	(c) has a capital and corporate struc ture - or after the amalgamation will have a capital and corporate structure - that, if set out in its articles and by-laws, would meet the requirements of this Act.
Amendments in articles of continuance	(3) A body corporate that applies for continuance under subsection (1) or (2) may, without so stating in its articles of continu ance, effect by those articles any amendment to its constating documents if the amendment is one that a cooperative incorporated under this Act may make to its articles.
Articles of continuance	(4) If a body corporate wishes to apply for continuance under subsection (1), articles of continuance in the form that the Director fixes must be sent to the Director, together with any information that the Director may require and a declaration of the directors
	(a) that after continuance the cooperative will be organized and operated and will carry on business on a cooperative basis;
	(b) in the case of a cooperative to which Part 20 applies, that after continuance the coop erative will be in compliance with Part 20; and
	(c) in the case of a cooperative to which Part 21 applies, that after continuance the coop erative will be in compliance with Part 21.
Articles of continuance and articles of amalgama- tion	(5) If a body corporate wishes to apply for continuance under subsection (2), articles of continuance - and articles of amalgam ation - in the form that the Director fixes must be sent to the Director, together with an amalgamation agreement containing the par ticulars set out in section 296, any information that the Director may require and a declaration of the directors
	(a) that after amalgamation the cooperative will be organized and operated and will carry on business on a cooperative basis;
	(b) in the case of a cooperative to which Part 20 applies, that after amalgamation the cooperative will be in compliance with Part 20; and
	(c) in the case of a cooperative to which Part 21 applies, that after amalgamation the cooperative will be in compliance with Part 21.
Certificate of continuance	(6) The Director must issue
	(a) a certificate of continuance, on receipt of the articles of continuance and the declaration required by subsection (4), if she or he is satisfied that the requirements for incorporation have been met; or
	(b) a certificate of continuance and a certificate of amalgamation, on receipt of the articles of continuance, the articles of amalgamation, the amalgamation agree ment and the declaration required by sub section (5), if she or he is satisfied that the requirements for incorporation and the requirements for amalgamation have been met.
Reliance	(7) For the purpose of subsection (6), the Director may rely on the articles and the declarations.
Effect of certificate	(8) On the date shown in the certificate of continuance,
	(a) the body corporate becomes a coopera tive to which this Act applies as if it had been incorporated under this Act;
	(b) the articles of continuance are deemed to be the articles of incorporation of the continued cooperative; and
	(c) the certificate of continuance is deemed to be the certificate of incorporation of the continued cooperative.
Copy of certificate	(9) The Director must send, without delay after the certificate of continuance is issued, a copy of that certificate to the appropriate official or public body charged with the administration of the legislation under which continuance under this Act was authorized.
Rights preserved	(10) When a body corporate is continued as a cooperative under this Act,
	(a) the property of the body corporate continues to be the property of the coopera tive;
	(b) the cooperative continues to be liable for the obligations of the body corporate;
	(c) an existing cause of action, claim or liability to prosecution is unaffected;
	(d) a civil, criminal, administrative, investi gative or other action or proceeding pend ing by or against the body corporate may be continued to be prosecuted by or against the cooperative; and
	(e) a conviction against, or ruling, order or judgment in favour of or against, the body corporate may be enforced by or against the cooperative.
Membership shares	(11) When a body corporate is continued as a cooperative under this Act,
	(a) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act and the articles;
	(b) the holders of the common shares of the body corporate are deemed to be the members of the cooperative; and
	(c) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect.
Issued shares	(12) Subject to section 182,
	(a) a share of a body corporate issued before it was continued under this Act is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance, irrespective of whether the share is fully paid and of any designation, right, privilege, restriction or condition set out on or referred to in the certificate representing the share;
	(b) continuance under this Act does not deprive a holder of any right or privilege that the holder claims under, or relieve the holder of any liability in respect of, an issued share; and
	(c) shares carry voting rights only to the extent permitted by this Act.
Conversion privilege	(13) If a cooperative continued under this Act had, before it was so continued, issued a share certificate in registered form that is convertible to bearer form, the cooperative may, if a holder of such a share certificate exercises the conversion privilege attached to the certificate, issue a share certificate in bearer form for the same number of shares to the holder.
Definition of ``share''	(14) For the purposes of subsections (12) and (13), ``share'' includes a document re ferred to in any of subsections 142(1) to (3), a share warrant within the meaning of the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, or a like instrument.
Continu- ance - other federal acts	286. (1) A cooperative, other than one to which Part 20 or 21 applies, with membership share capital may, on special resolution of the members and, if the cooperative has issued investment shares, on a separate special resolution of the shareholders of each class, apply for continuance under the Canada Business Corporations Act, the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act. On the date specified in the document evidencing the continuance, that Act applies and this Act ceases to apply to the body corporate continued under that Act.
Result of continuance	(2) On a continuance under subsection (1), the membership shares of a cooperative are deemed to be common shares without a par value.
Withdrawal of application	(3) If a special resolution authorizing the application for continuance referred to in subsection (1) so states, the directors may, without further approval of the members or shareholders, withdraw the application before it is acted on.
Certificate of disconti- nuance	(4) On receipt of a notice satisfactory to the Director that the cooperative has been contin ued under this section, the Director must file the notice and issue a certificate of discontinu ance in the form that the Director fixes.
Date of disconti- nuance	(5) This Act ceases to apply to the coopera tive on the date shown in the certificate of discontinuance.
Export	287. (1) Subject to subsection (6) and Parts 20 and 21, a cooperative, on a special resolution of the members and, if the coopera tive has issued investment shares, on a sepa rate special resolution of the shareholders of each class, may, if it establishes to the satisfaction of the Director by a declaration of the directors that its proposed continuance in another jurisdiction would not have an effect set out in any of paragraphs (a) to (d), apply to the appropriate official or public body of another jurisdiction requesting that the coop erative be continued as if it had been incorpo rated under the laws of that other jurisdiction, namely, that the continuance would not
	(a) adversely affect the members, creditors or shareholders;
	(b) result in the cooperative carrying on its business and affairs in a manner not consis tent with carrying on business on a coopera tive basis;
	(c) result in a cooperative to which Part 20 applies carrying on its business or affairs in a manner not consistent with Part 20; or
	(d) result in a cooperative to which Part 21 applies carrying on its business or affairs in a manner not consistent with Part 21.
Notice of meeting	(2) A notice of a meeting of the cooperative to authorize a continuance under this section must be sent to each member and shareholder and state that a dissenting member or share holder is entitled to the benefit of section 302, but failure to make that statement does not invalidate a discontinuance under this Act.
Abandon- ment of application	(3) The directors may, if authorized by the special resolution at the time of approving an application for continuance under this section, abandon the application without further ap proval of the members or shareholders.
Certificate of disconti- nuance	(4) On receipt of a notice satisfactory to the Director that the cooperative has been contin ued under the laws of another jurisdiction, the Director must file the notice and issue a certificate of discontinuance in the form that the Director fixes.
Date of disconti- nuance	(5) This Act ceases to apply to the coopera tive on the date shown in the certificate of discontinuance.
Require- ments for continuance	(6) A cooperative may not be continued as a body corporate under the laws of another jurisdiction unless those laws provide that
	(a) its property continues to be the property of the body corporate;
	(b) the body corporate continues to be liable for the obligations of the cooperative;
	(c) an existing cause of action, claim or liability to prosecution is unaffected;
	(d) a civil, criminal, administrative, investi gative or other action or proceeding pend ing by or against the cooperative may be continued to be prosecuted by or against the body corporate; and
	(e) a conviction against, or ruling, order or judgment in favour of or against, the cooperative may be enforced by or against the body corporate.
Shareholders right to vote	288. Each investment share carries the right to vote on a continuance under section 286 or 287, whether or not it otherwise carries the right to vote.
Amendment of articles	289. (1) Subject to subsections (3) and 130(2) and sections 134, 290 and 291, the articles of a cooperative may be amended by a special resolution to
	(a) change its name;
	(b) change the place in which its registered office is situated;
	(c) add, change or remove a restriction on the business or businesses that the coopera tive may carry on;
	(d) convert par-value membership shares into no-par-value membership shares and provide for a maximum number of mem bership shares that may be issued;
	(e) change a price or formula at which membership shares may be issued or re deemed or otherwise acquired by the coop erative;
	(f) add, change or remove restrictions on membership;
	(g) convert a cooperative that is incorpo rated without membership shares to a cooperative with membership shares and provide for membership shares with a par value and their par value or membership shares without a par value and the maxi mum number of membership shares that may be issued;
	(h) convert a cooperative with membership shares into a cooperative without member ship shares and provide for the conversion of membership shares into member loans;
	(i) change any maximum number of shares that the cooperative is authorized to issue;
	(j) reduce or increase its stated capital which, for the purposes of the amendment, is deemed to be set out in the articles;
	(k) create investment shares or new classes of investment shares;
	(l) change the designation of all or any of its investment shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its investment shares, whether issued or unis sued;
	(m) change the investment shares of any class or series, whether issued or unissued, into a different number of investment shares of the same class or series or into the same or a different number of investment shares of other classes or series;
	(n) divide a class of investment shares, whether issued or unissued, into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of them;
	(o) authorize the directors to divide any class of unissued investment shares into series and fix the number of investment shares in each series and the rights, privi leges, restrictions and conditions of them;
	(p) authorize the directors to change the rights, privileges, restrictions and condi tions attached to unissued investment shares of any series;
	(q) revoke, diminish or enlarge any author ity conferred under paragraphs (o) and (p);
	(r) increase or decrease the number of directors or the minimum or maximum number of directors, subject to section 76 and subsection 124(4);
	(s) add, change or remove restrictions on the issue, transfer or ownership of invest ment shares; or
	(t) add, change or remove any other provi sion that is permitted by this Act to be set out in the articles.
Termination	(2) The directors may, if authorized by the special resolution effecting an amendment under this section, revoke the resolution before it is acted on without further approval of the members or shareholders.

Bill C-5

PART 16

FUNDAMENTAL CHANGES