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Bill C-5

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Limitation

Limitation on by-law

41. No by-law governing the withdrawal of a member from membership or the termination of the membership of a member may authorize a redemption of membership shares or member loans in contravention of section 149.

Termination of Membership by Members

Termination by members

42. Unless the by-laws provide otherwise, the membership of a member may be terminated by a special resolution of the members. Section 40 applies, with any modifications that the circumstances require, to a termination by the members.

Other Terminations

Termination of inactive membership

43. (1) A cooperative may, by written notice to a member, terminate the membership if the member

    (a) is a body corporate and winding-up proceedings have commenced with respect to it; or

    (b) failed, during a period of two consecutive years, to transact any business with the cooperative.

Provisions not to apply

(2) Section 40, other than subsections 40(7) to (10), does not apply to a termination under this section.

Non-profit housing cooperatives

44. If the membership of a person in a non-profit housing cooperative is terminated, any right of the person to possession or occupancy of residential premises acquired by virtue of membership in the cooperative is subject to Part 20.

Re-admission

45. A person whose membership has been terminated under section 40 or 42 may be re-admitted to membership only by special resolution of the members.

Transfer

46. No transfer of a membership, a member loan or a membership share in a cooperative is valid for any purpose unless it is approved by the directors and the transferee has otherwise complied with the articles and by-laws of the cooperative and, if applicable, become a party to a unanimous agreement.

If membership too low

47. If the membership of a cooperative is reduced to a number less than the number of members required for incorporation, and if after thirty days notice remains at less than that number, the Director may require the cooperative

    (a) to apply for a certificate of continuance under the Canada Business Corporations Act, if it was incorporated with membership capital; or

    (b) to be liquidated or dissolved under Part 17.

PART 6

CORPORATE GOVERNANCE

Meetings

Place of members' meetings

48. (1) Meetings of the members of a cooperative are to be held at the place in Canada provided for in the by-laws or, in the absence of such a provision, at any place in Canada that the directors may determine.

Place of shareholders' meetings

(2) Meetings of the shareholders must be held at the place set out in the articles. If the articles do not set out such a place, the meetings are to be held at the place in Canada that the directors determine, unless all the shareholders entitled to vote at the meeting agree that the meeting is to be held at another place that is not in Canada.

Electronic meeting

(3) Subject to the by-laws, a member or a shareholder may attend a meeting of the cooperative by means of a telephonic, electronic or other communication facility if it permits all participants to communicate adequately with each other during the meeting.

Presence

(4) A person participating in a meeting referred to in subsection (3) is deemed to be present at the meeting.

Calling members' meetings

49. (1) After holding the organizational meeting referred to in section 82, the directors must call a meeting of the members without delay.

Business at first meeting

(2) The members, at their first meeting, must

    (a) adopt by-laws for the cooperative;

    (b) elect directors in accordance with subsection 81(3); and

    (c) subject to subsection 254(1), appoint an auditor to hold office until the close of the first annual meeting of members.

Calling meetings of the members

50. (1) The directors must call the first annual meeting of members not later than eighteen months after the cooperative comes into existence and an annual meeting of members must be held not later than the earlier of

    (a) fifteen months after holding the last annual meeting, and

    (b) six months after the end of the preceding financial year.

Special meetings

(2) The directors may at any time call a special meeting of the members or of the shareholders.

Unanimous agreement

(3) If a unanimous agreement contains a provision that eliminates the need for meetings of shareholders referred to in subsection 115(6), a shareholder may nevertheless at any time call a special meeting of the shareholders.

Record date

51. (1) The directors may fix in advance a date as the record date for the determination of the members or shareholders who are entitled to receive payment of a dividend or for any other purpose except the right to receive notice of, or to vote at, a meeting, but the record date so fixed must not precede by more than sixty days the particular action to be taken.

Record date - members' meetings

(2) For the purpose of determining the persons who are entitled to receive notice of, or to vote at, a meeting of members, the record date is

    (a) the day before the day on which the notice is given; or

    (b) if no notice is given, the day of the meeting.

Record date - notice of shareholders' meetings

(3) For the purpose of determining the shareholders who are entitled to receive notice of a meeting of the shareholders, the directors may fix in advance a date as the record date for that determination, but the record date so fixed must not precede by more than sixty days or by less than twenty-one days the date of the meeting.

Record date - voting at shareholders' meetings

(4) For the purposes of determining the shareholders who are entitled to vote at a meeting of shareholders, the directors may fix in advance a date as the record date for that determination, but the record date so fixed must not precede by more than sixty days or by less than twenty-one days the date of the meeting.

If no record date fixed

(5) If no record date is fixed under subsection (1) or (3), the record date

    (a) for the determination of members or shareholders for any purpose, other than to establish the right of a member or shareholder to receive notice of a meeting or to vote, is the day on which the directors pass the resolution relating to the particular purpose; and

    (b) for the determination of shareholders who are entitled to receive notice of a meeting is

      (i) the day before the day on which the notice is given, or

      (ii) if no notice is given, the day of the meeting.

If record date fixed

(6) If a record date with respect to shareholders is fixed under this section, unless notice of the date is waived by each shareholder whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given not less than seven days before the record date

    (a) by advertisement in a newspaper published or distributed in a place where the cooperative has its registered office and in each place in Canada where it has a transfer agent or where a transfer of its investment shares may be recorded; and

    (b) by written notice to each stock exchange in Canada on which the investment shares of the cooperative are listed for trading.

Notice of meetings

52. (1) Notice of the time and place of a meeting of a cooperative must be sent not less than twenty-one days or more than sixty days before the meeting

    (a) to each person who is entitled to vote at the meeting;

    (b) to each director; and

    (c) to the auditor of the cooperative, if any.

Publication

(2) Notice of the time and place of a meeting of the holders of investment shares of any class that is publicly traded on a recognized stock exchange in Canada may be published once a week for at least four consecutive weeks before the date of the meeting in a newspaper in general circulation in the place where the registered office of the cooperative is situated and in each place in Canada where the cooperative has a transfer agent or where a transfer of the investment shares may be recorded.

By-laws may specify manner of giving notice to members

(3) The by-laws of a cooperative may derogate from this section, but only in respect of the manner in which notice of a meeting of members may be given to members.

Notice not required

53. A notice of a meeting of a cooperative need not be sent to a shareholder who was not registered on the records of the cooperative or its transfer agent on the record date fixed or determined under section 51.

Failure to receive notice

54. Failure to receive notice of a meeting does not deprive a person of a right to vote at the meeting to which the person is otherwise entitled.

Notice when adjournment

55. (1) If a meeting of a cooperative is adjourned for less than thirty days, it is not necessary, unless the by-laws provide otherwise, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.

Notice of adjournment - meetings of members

(2) If a meeting of members is adjourned by one or more adjournments for a total of thirty days or more, notice of the adjourned meeting must be given as for the original meeting.

Notice of adjournment - meetings of shareholders

(3) If a meeting of shareholders is adjourned by one or more adjournments for a total of thirty days or more, notice of the adjourned meeting must be given as for the original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than ninety days, subsection 165(1) does not apply.

Special business

56. (1) All matters dealt with at a special meeting of a cooperative and all matters dealt with at an annual meeting, except consideration of the financial statements, the auditor's report, the business of the cooperative, the election of directors, the remuneration of directors and the re-appointment of the incumbent auditor, are special business.

Notice if special business is to be transacted

(2) Notice of a meeting of a cooperative at which special business is to be transacted must

    (a) state the nature of the special business in sufficient detail to permit the recipient to form a reasoned judgement with respect to the special business; and

    (b) contain the text of any special resolution to be submitted to the meeting.

Waiver of notice

57. (1) A person who is entitled to attend a meeting of a cooperative may waive notice of the meeting in any manner.

Attendance is waiver

(2) Attendance at a meeting of a cooperative is a waiver of notice of the meeting, except when a person attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called.

Proposals

Proposals

58. (1) A member may

    (a) submit to the cooperative notice of any matter that the member proposes to raise at an annual meeting; and

    (b) discuss at the meeting any matter in respect of which the member would have been entitled to submit a proposal.

Proposals to amend articles

(2) The following persons may, in accordance with section 290, make a proposal to amend the articles:

    (a) a member;

    (b) a director or a shareholder; and

    (c) a person who has beneficial ownership of investment shares, if the person who alleges that they have beneficial ownership provides, not less than fourteen days before the earliest day on which notice of the meeting at which the proposal is to be considered may be sent, satisfactory evidence of that beneficial ownership, if the cooperative so requests.

Proposal and statement to accompany notice of meeting

(3) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the person making the proposal, a statement of not more than two hundred words in support of the proposal and the name and address of the person making the proposal.

Exceptions

(4) A cooperative need not comply with subsection (3) if

    (a) the proposal is not submitted to the cooperative at least ninety days before the anniversary date of the previous annual meeting;

    (b) it clearly appears that the purpose of the proposal is to enforce a personal claim or redress a personal grievance against the cooperative or its directors, officers, members or security holders;

    (c) not more than two years before the receipt of a request, a person failed to present, at a meeting, a proposal that, at the person's request, had been attached by the cooperative to the notice of the meeting;

    (d) substantially the same proposal was attached to a notice of meeting relating to a meeting of the cooperative held not more than two years before the receipt of the proposal and the proposal was defeated; or

    (e) the rights conferred by subsections (1) and (2) are being abused to secure publicity.

Liability for circulation

59. No cooperative or person acting on behalf of a cooperative incurs any liability by reason only of circulating a proposal or statement in accordance with section 58.

Refusal to include proposal

60. (1) If a cooperative refuses to include a proposal in a notice of a meeting referred to in section 52, the cooperative, not later than ten days after receiving the proposal, must notify the person submitting the proposal of its intention to omit the proposal from the notice and send the person a statement of the reasons for the refusal.

Restraining order by court

(2) On the application of a person claiming to be aggrieved by a cooperative's refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

Order to omit proposal from notice

(3) A cooperative or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the cooperative to omit the proposal from a notice of meeting, and the court, if it is satisfied that subsection 58(4) applies, may make any order that it thinks fit.

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