Bill C-4

TRUST INDENTURES

105. (1) The following definitions apply in this Part.

“event of default” means an event specified in a trust indenture on the occurrence of which a security interest effected by the trust indenture becomes enforceable, or the principal, interest or other money payable under the trust indenture becomes or may be declared to be payable before maturity, once all conditions — such as the giving of notice or the lapse of time — provided for by the trust indenture in connection with the event have been satisfied.

“trustee” means any person appointed as trustee, including the administrator of the property of others, under the terms of a trust indenture to which a corporation is a party and includes any successor trustee.

“trust indenture” means any deed, indenture or other instrument or act, including any supplement or amendment to one, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations issued under the deed, indenture or other instrument.

(2) This Part applies to a trust indenture if the debt obligations issued or to be issued under the trust indenture are part of a distribution to the public.

(3) On application, the Director may exempt a trust indenture from the application of this Part if the trust indenture, the debt obligations issued under it and the security interest effected by it are subject to a law of a province or a country other than Canada that is substantially equivalent to this Part.

106. (1) No person shall accept an appointment as trustee if there is a material conflict of interest between their role as trustee and their role in any other capacity.

(2) A trustee shall, within the prescribed period after becoming aware that a material conflict of interest exists, eliminate the conflict of interest or resign.

(3) A trust indenture, any debt obligations issued under it and a security interest effected by it are valid despite a material conflict of interest of the trustee.

(4) The court may, on the application of an interested person, order, on any terms that it thinks fit, that a trustee who has contravened subsection (1) or (2) be replaced.

107. A trustee, or at least one of the trustees if more than one is appointed, shall be a body corporate incorporated under the laws of Canada or a province and authorized to carry on the business of a trust company.

108. (1) A holder of debt obligations issued under a trust indenture may, on payment to the trustee of any reasonable fee and on sending to the trustee the statutory declaration referred to in subsection (4), require the trustee to furnish, within the prescribed period, a list of debt obligation holders setting out the prescribed information and updated in accordance with the regulations.

(2) On the demand of a trustee, the issuer of debt obligations shall furnish the trustee with the information required to enable the trustee to comply with subsection (1).

(3) If the applicant is a body corporate, the statutory declaration shall be made by a director or officer of the body corporate.

(4) The statutory declaration shall

(a) state the name and address of the applicant and, if the applicant is a body corporate, its address for service; and

(b) state that the list will not be used except as permitted under subsection (5).

(5) A list obtained under this section shall not be used by any person except in connection with

(a) an effort to influence the voting of the holders of debt obligations;

(b) an offer to acquire debt obligations; or

(c) any other matter relating to the debt obligations or the affairs of the issuer, the guarantor or, in Quebec, the surety of the debt obligations.

109. (1) An issuer, a guarantor or, in Quebec, a surety of debt obligations issued or to be issued under a trust indenture shall, before taking any of the following actions, provide the trustee with evidence of compliance with the conditions, if any, in the trust indenture for taking that action:

(a) the issue, certification or delivery of debt obligations under the trust indenture;

(b) the release or release and substitution of property subject to a security interest effected by the trust indenture; or

(c) the satisfaction and discharge of the trust indenture.

(2) On the demand of a trustee, the issuer, the guarantor or, in Quebec, the surety of debt obligations issued or to be issued under a trust indenture shall provide the trustee with evidence of compliance with the trust indenture by the issuer, guarantor or surety in respect of any act to be done by the trustee at their request.

110. Evidence of compliance as required by section 109 shall consist of a statutory declaration or certificate made by a director or an officer of the issuer, the guarantor or, in Quebec, the surety stating that the conditions referred to in that section have been complied with. If compliance with any of those conditions is subject to review by legal counsel, evidence of compliance also includes an opinion of legal counsel that those conditions have been complied with. If compliance with any of those conditions is subject to review by an auditor or accountant, evidence of compliance also includes an opinion or report of the public accountant of the issuer, guarantor or surety, or any other accountant that the trustee selects, that those conditions have been complied with.

111. The evidence of compliance referred to in section 110 shall include a statement by the person giving the evidence

(a) declaring that they have read and understand the conditions of the trust indenture referred to in section 109;

(b) describing the nature and scope of the examination or investigation on which the statutory declaration, certificate, opinion or report is based; and

(c) declaring that they have made the examination or investigation that they believe necessary to enable them to make their statutory declaration, certificate, opinion or report.

112. (1) On the demand of a trustee, the issuer, the guarantor or, in Quebec, the surety of debt obligations issued under a trust indenture shall provide the trustee with evidence in any form that the trustee may require for compliance with any condition relating to any action required or permitted to be taken by the issuer, guarantor or surety under the trust indenture.

(2) At least once in each prescribed period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer, the guarantor or, in Quebec, the surety of debt obligations issued under a trust indenture shall provide the trustee with

(a) a certificate that the issuer, the guarantor or, in Quebec, the surety has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default; or

(b) a certificate of the particulars of any failure to comply with the requirements.

113. The trustee shall give notice to the holders of debt obligations issued under a trust indenture of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs in writing the issuer, the guarantor or, in Quebec, the surety. The notice shall be given within the prescribed period.

114. A trustee in exercising their powers and discharging their duties shall

(a) act honestly and in good faith with a view to the best interests of the holders of the debt obligations issued under the trust indenture; and

(b) exercise the care, diligence and skill of a reasonably prudent trustee.

115. Despite section 114, a trustee is not liable if they rely in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

116. No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued under the trust indenture or between the trustee and the issuer, the guarantor or, in Quebec, the surety shall operate so as to relieve a trustee from the duties imposed on the trustee by section 114.

PART 8

RECEIVERS, RECEIVER-MANAGERS AND SEQUESTRATORS

117. A receiver or sequestrator of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property, pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver or sequestrator is appointed, but, except to the extent permitted by a court, the receiver or sequestrator may not carry on the activities of the corporation.

118. A receiver-manager of the corporation may carry on any activities of the corporation to protect the security interest of those on behalf of whom the receiver-manager is appointed.

119. If a receiver-manager or sequestrator is appointed by a court or under an instrument or act, the powers of the directors of the corporation that a receiver-manager or sequestrator is authorized to exercise may not be exercised by the directors until the receiver-manager or sequestrator is discharged.

120. A receiver, receiver-manager or sequestrator appointed by a court shall act in accordance with the orders of the court.

121. A receiver, receiver-manager or sequestrator appointed under an instrument or act shall act in accordance with that instrument or act and any order of a court made under section 123.

122. A receiver, receiver-manager or sequestrator of a corporation appointed under an instrument or act shall

(a) act honestly and in good faith; and

(b) deal with any property of the corporation in their possession or control in a commercially reasonable manner.

123. On the application of a receiver, receiver-manager or sequestrator, whether appointed by a court or under an instrument or act, or of any interested person, a court may make

(a) an order appointing, replacing or discharging a receiver, receiver-manager or sequestrator and approving their accounts;

(b) an order determining the notice to be given to any interested person or dispensing with notice to any person;

(c) an order fixing the remuneration of the receiver, receiver-manager or sequestrator;

(d) an order requiring the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom the receiver, receiver-manager or sequestrator is appointed, to make good any default in connection with the receiver’s, receiver-manager’s or sequestrator’s custody or management of the property and activities of the corporation, or relieving the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom the receiver, receiver-manager or sequestrator was appointed, from any default on any terms that the court thinks fit;

(e) an order confirming any act of the receiver, receiver-manager or sequestrator;

(f) an order giving directions on any matter relating to the duties of the receiver, receiver-manager or sequestrator; and

(g) any other order that it thinks fit.

124. A receiver or receiver-manager shall

(a) immediately notify the Director of their appointment and discharge;

(b) take into their custody and control the property of the corporation in accordance with the court order, instrument or act under which they are appointed;

(c) open and maintain a bank account in their name as receiver or receiver-manager of the corporation for the money of the corporation coming under their control;

(d) keep detailed accounts of all transactions carried out as receiver or receiver-manager;

(e) keep accounts of their administration that shall be available during usual business hours for inspection by the directors of the corporation;

(f) prepare at least once in every prescribed period after the date of their appointment financial statements of their administration as far as is practicable in the form required by section 173; and

(g) on completion of their duties, render a final account of their administration in the form adopted for interim accounts under paragraph (f).

PART 9

DIRECTORS AND OFFICERS

125. Subject to this Act, the articles and any unanimous member agreement, the directors shall manage or supervise the management of the activities and affairs of a corporation.

126. A corporation shall have one or more directors, but a soliciting corporation shall not have fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates.

127. (1) The following persons are disqualified from being a director of a corporation:

(a) anyone who is less than 18 years of age;

(b) anyone who has been declared incapable by a court in Canada or in another country;

(c) a person who is not an individual; and

(d) a person who has the status of a bankrupt.

(2) Unless the by-laws otherwise provide, a director of a corporation is not required to be a member of the corporation.

(3) No person shall act for an absent director at a meeting of directors.

128. (1) After the issue of the certificate of incorporation, the directors of a corporation shall hold a meeting at which the directors may

(a) make by-laws;

(b) adopt forms of debt obligation certificates and corporate records;

(c) authorize the issue of debt obligations;

(d) appoint officers;

(e) appoint a public accountant to hold office until the first annual meeting of members;

(f) issue memberships;

(g) make banking arrangements; and

(h) transact any other business.

(2) Subsection (1) does not apply to a body corporate to which a certificate of amalgamation has been issued under subsection 209(4) or to which a certificate of continuance has been issued under subsection 212(5).

(3) An incorporator or a director may call the meeting by giving notice of the time and place of the meeting to each director within the prescribed period.

(4) A director may waive notice of the meeting, and attendance of a director at the meeting is a waiver of notice of the meeting, except if the director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

(5) If all directors sign a resolution dealing with any matter referred to in paragraphs (1)(a) to (g), they are not required to hold the meeting referred to in subsection (1).

(6) A copy of the resolution shall be kept with the minutes of the meetings of directors.

129. (1) At the time of sending articles of incorporation, a notice of directors in the form that the Director fixes shall be sent to the Director.

(2) Each director named in the notice holds office from the issue of the certificate of incorporation until the first meeting of members.

(3) Members shall, by ordinary resolution at each annual meeting at which an election of directors is required, elect directors to hold office for a term expiring within the prescribed period.

(4) It is not necessary that all directors elected at a meeting of members hold office for the same term.

(5) A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of members following the director’s election.

(6) Despite subsections (2), (3) and (5), if directors are not elected at a meeting of members, the incumbent directors continue in office until their successors are elected.

(7) If a meeting of members fails to elect the number or the minimum number of directors required by the articles by reason of the lack of consent, the disqualification, the incapacity or the death of any candidate, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.

(8) The directors may, if the articles of the corporation so provide, appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of members, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of members.

(9) An individual who is elected or appointed to hold office as a director is not a director, and is deemed not to have been elected or appointed to hold office as a director, unless

(a) the individual was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

(b) the individual was not present at the meeting when the election or appointment took place and

(i) consented to hold office as a director in writing before the election or appointment or within the prescribed period, or

(ii) has acted as a director after the election or appointment.

130. (1) A director of a corporation ceases to hold office when the director dies, resigns, is removed in accordance with section 131 or becomes disqualified under section 127.

(2) A resignation of a director becomes effective at the time a written resignation is sent to the corporation or at the time specified in the resignation, whichever is later.

131. (1) The members of a corporation may by ordinary resolution at a special meeting remove any director or directors from office.

(2) A director elected by a class or group of members that has an exclusive right to elect the director may only be removed by an ordinary resolution of those members.

(3) A vacancy created by the removal of a director may be filled at the meeting of the members at which the director is removed or, if not so filled, may be filled under section 133.

(4) If all of the directors have resigned or have been removed without replacement, a person who manages or supervises the management of the activities or affairs of the corporation is deemed to be a director for the purposes of this Act.

(5) Subsection (4) does not apply to

(a) an officer who manages the activities or affairs of the corporation under the direction or control of a member or other person;

(b) a lawyer, a notary, an accountant or other professional who participates in the management of the corporation solely by providing professional services; or

(c) a trustee in bankruptcy, receiver, receiver-manager, sequestrator or secured creditor who participates in the management of the corporation or exercises control over its property solely for the purpose of the realization of security or, in the case of bankruptcy, the administration of a bankrupt’s estate.

132. (1) Subject to the by-laws, a director is entitled to submit to the corporation a written statement giving reasons for resigning or for opposing the removal or replacement of the director if a meeting is called for that purpose.

(2) A corporation shall immediately give notice to the members of the statement in the manner referred to in section 163.

(3) A corporation shall immediately send a copy of the statement to the Director.

(4) No corporation or person acting on its behalf incurs any liability by reason only of complying with this section.

133. (1) Subject to subsections (4) and (5), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number or the minimum or maximum number of directors provided for in the articles or a failure to elect the number or minimum number of directors provided for in the articles.

(2) If there is not a quorum of directors or if there has been a failure to elect the number or minimum number of directors provided for in the articles, the directors then in office shall without delay call a special meeting of members to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any member.

(3) If a corporation has neither directors nor members, the court may, on the application of an interested party, make an order appointing the required number or minimum number of directors provided for in the articles.

(4) If any class or group of members has an exclusive right to elect one or more directors and a vacancy occurs among those directors,

(a) subject to subsection (5), the remaining directors elected by the class or group may fill the vacancy, except a vacancy resulting from an increase in the number or the minimum or maximum number of directors provided for in the articles for that class or group or from a failure to elect the number or minimum number of directors provided for in the articles for the class or group; or

(b) if there are no remaining directors, any member of the class or group may call a meeting of the class or group to fill the vacancy.

(5) The by-laws may provide that a vacancy among the directors shall be filled only by a vote of the members, or by a vote of the members of any class or group having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by that class or group.

(6) A director appointed or elected to fill a vacancy holds office for the unexpired term of their predecessor.

134. (1) The members of a corporation may amend the articles to increase or decrease the number of directors, or the minimum or maximum number of directors, but no decrease shall shorten the term of an incumbent director.

(2) If the members at a meeting adopt an amendment to the articles of a corporation to increase or decrease the number or minimum or maximum number of directors, the members may, at the meeting, elect the number of directors authorized by the amendment, and for that purpose, despite subsections 203(1) and 277(3), on the issue of a certificate of amendment the articles are deemed to be amended as of the date the members adopt the amendment.

(3) If a minimum and maximum number of directors is provided for in the articles, the members may, from time to time by ordinary resolution, fix the number of directors of the corporation and the number of directors to be elected at annual meetings of the members or delegate those powers to the directors. No decrease in the number of directors shall shorten the term of an incumbent director.

135. (1) A corporation shall send to the Director a notice, within the prescribed period and in the form that the Director fixes, setting out any change among its directors or of the address of a director.

(2) A director shall, within the prescribed period, send the corporation a notice of any change in his or her address.

(3) The court may, on the application of an interested person or the Director, make an order requiring a corporation to comply with subsection (1) and make any further order that it thinks fit.

136. A director is entitled to attend and be heard at every meeting of members.

137. (1) Unless the articles or by-laws otherwise provide, the directors may meet at any place and on any notice that the by-laws require.

(2) Subject to the articles or by-laws, a majority of the number of directors or minimum number of directors required by the articles constitutes a quorum at any meeting of directors, and, despite any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

(3) A notice of a meeting of directors shall specify any matter referred to in subsection 139(2) that is to be dealt with at the meeting but, unless the by-laws otherwise provide, need not specify the purpose of or the business to be transacted at the meeting.

(4) A director may waive notice of a meeting of directors, and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except if the director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

(5) Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.

(6) If a corporation has only one director, that director may constitute a meeting.

(7) Subject to the by-laws, a director may, in accordance with the regulations, if any, and if all the directors of the corporation consent, participate in a meeting of directors or of a committee of directors by means of a telephonic, an electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. A director so participating in a meeting is deemed for the purposes of this Act to be present at that meeting.

138. (1) The by-laws may provide that the directors or members shall make any decision by consensus, including a decision required to be made by a vote, except a decision taken

(a) by a resolution referred to in subsection 183(1);

(b) by special resolution; or

(c) by a vote if consensus cannot be reached.

(2) By-laws that provide for consensus decision-making shall define the meaning of consensus, provide for how to determine when consensus cannot be reached and establish the manner of referring any matter on which consensus cannot be reached to a vote.

(3) A decision made by consensus in accord- ance with this section is deemed to satisfy any requirement under this Act for the taking of a vote.

139. (1) Directors of a corporation may appoint from their number a managing director or a committee of directors and delegate to the managing director or committee any of the powers of the directors.

(2) Despite subsection (1), no managing director and no committee of directors has authority to

(a) submit to the members any question or matter requiring the approval of members;

(b) fill a vacancy among the directors or in the office of public accountant or appoint additional directors;

(c) issue debt obligations except as authorized by the directors;

(d) approve any financial statements referred to in section 173;

(e) adopt, amend or repeal by-laws; or

(f) establish contributions to be made, or dues to be paid, by members under section 31.

140. An act of a director or an officer is valid despite an irregularity in their election or appointment or a defect in their qualification.

141. (1) A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or of a committee of directors, is as valid as if it had been passed at a meeting of directors or committee of directors.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the meetings of directors.

(3) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

142. (1) A director or an officer of a corporation shall disclose to the corporation, in writing or by requesting to have it entered in the minutes of meetings of directors or of committees of directors, the nature and extent of any interest that the director or officer has in a material contract or material transaction, whether made or proposed, with the corporation, if the director or officer

(a) is a party to the contract or transaction;

(b) is a director or an officer, or an individual acting in a similar capacity, of a party to the contract or transaction; or

(c) has a material interest in a party to the contract or transaction.

(2) The disclosure required by subsection (1) shall be made, in the case of a director,

(a) at the meeting at which a proposed contract or transaction is first considered;

(b) if the director was not, at the time of the meeting referred to in paragraph (a), interested in the proposed contract or transaction, at the first meeting after the director becomes so interested;

(c) if the director becomes interested after a contract or transaction is made, at the first meeting after the director becomes so interested; or

(d) if an individual who is interested in a contract or transaction later becomes a director, at the first meeting after the individual becomes a director.

(3) The disclosure required by subsection (1) shall be made, in the case of an officer who is not a director,

(a) immediately after the officer becomes aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting;

(b) if the officer becomes interested after a contract or transaction is made, immediately after the officer becomes so interested; or

(c) if an individual who is interested in a contract or transaction later becomes an officer, immediately after the individual becomes an officer.

(4) If a material contract or material transaction, whether entered into or proposed, is one that, in the ordinary course of the corporation’s activities, would not require approval by the directors or members, a director or an officer shall, immediately after they become aware of the contract or transaction, disclose in writing to the corporation, or request to have entered in the minutes of meetings of directors or of committees of directors, the nature and extent of their interest.

(5) A director required to make a disclosure under subsection (1) shall not vote on any resolution to approve the contract or transaction unless the contract or transaction

(a) relates primarily to the director’s remuneration as a director, an officer, an employee, an agent or a mandatary of the corporation or an affiliate;

(b) is for indemnity or insurance under section 152; or

(c) is with an affiliate.

(6) For the purposes of this section, a general notice to the directors declaring that a director or an officer is to be regarded as interested, for any of the following reasons, in a contract or transaction made with a party, is a sufficient declaration of interest in relation to the contract or transaction:

(a) the director or officer is a director or an officer, or acting in a similar capacity, of a party referred to in paragraph (1)(b) or (c);

(b) the director or officer has a material interest in the party; or

(c) there has been a material change in the nature of the director’s or the officer’s interest in the party.

(7) The members of the corporation may examine the portions of any minutes of meetings of directors or of committees of directors that contain disclosures under this section, and of any other documents that contain those disclosures, during the corporation’s usual business hours.

(8) A contract or transaction for which disclosure is required under subsection (1) is not invalid, and the director or officer is not accountable to the corporation or its members for any profit realized from the contract or transaction, because of the director’s or officer’s interest in the contract or transaction or because the director was present or was counted to determine whether a quorum existed at the meeting of directors or of the committee of directors that considered the contract or transaction, if

(a) disclosure of the interest was made in accordance with this section;

(b) the directors approved the contract or transaction; and

(c) the contract or transaction was reasonable and fair to the corporation when it was approved.

(9) Even if the conditions of subsection (8) are not met, a director or an officer, acting honestly and in good faith, is not accountable to the corporation or to its members for any profit realized from a contract or transaction for which disclosure is required under subsection (1), and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction, if

(a) the contract or transaction is approved or confirmed by special resolution at a meeting of the members;

(b) disclosure of the interest was made to the members in a manner sufficient to indicate its nature and extent before the contract or transaction was approved or confirmed; and

(c) the contract or transaction was reasonable and fair to the corporation when it was approved or confirmed.

(10) If a director or an officer of a corporation fails to comply with this section, a court may, on the application of the corporation or any of its members, set aside or annul the contract or transaction on any terms that it thinks fit, require the director or officer to account to the corporation for any profit or gain realized on the contract or transaction or make any other order that the court thinks fit.

143. Subject to the articles, the by-laws and any unanimous member agreement,

(a) the directors may designate the offices of the corporation, appoint as officers persons of full capacity, specify their duties and delegate to them powers to manage the activities and affairs of the corporation, except powers to do anything referred to in subsection 139(2);

(b) a director may be appointed to any office of the corporation; and

(c) two or more offices of the corporation may be held by the same person.

144. (1) Subject to the articles, the by-laws and any unanimous member agreement, the directors of a corporation may fix the reasonable remuneration of the directors, officers and employees of the corporation.

(2) Subject to the by-laws, a director, an officer or a member may receive reasonable remuneration and expenses for any services to the corporation that are performed in any other capacity.

145. Unless the by-laws of the corporation otherwise provide, a director, an officer or an employee may receive indemnification for their expenses incurred on behalf of the corporation as a director, an officer or an employee.

146. (1) Directors of a corporation who vote for or consent to a resolution authorizing the issue of a debt obligation under subsection 29(1) for a consideration consisting of property or past services are jointly and severally, or solidarily, liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the debt obligation had been issued for money on the date of the resolution.

(2) Directors of a corporation who vote for or consent to a resolution authorizing any of the following are jointly and severally, or solidarily, liable to restore to the corporation any money or other property so paid or distributed and not otherwise recovered by the corporation:

(a) a payment or distribution to a member, a director or an officer contrary to this Act; or

(b) a payment of an indemnity contrary to this Act.

(3) A director who has satisfied a judgment rendered under this section is entitled to recover from the other directors who voted for or consented to the unlawful act on which the judgment was founded their respective shares.

(4) A director liable under subsection (2) is entitled to apply to a court for an order compelling a member or other recipient to pay or deliver to the director any money or other property that was paid or distributed to the member or other recipient contrary to this Act.

(5) On an application under subsection (4), a court may, if it is satisfied that it is equitable to do so, order a member or other recipient to pay or deliver to a director any money or other property that was paid or distributed to the member or other recipient contrary to this Act and make any further order that it thinks fit.

(6) A director is not liable under subsection (1) if the director proves that they did not know and could not reasonably have known that a debt obligation was issued for a consideration less than the fair equivalent of the money that the corporation would have received if the debt obligation had been issued for money.

(7) An action to enforce a liability imposed by this section may not be commenced after two years from the date of the resolution authorizing the action complained of.

147. (1) Directors of a corporation are jointly and severally, or solidarily, liable to employees of the corporation for all debts not exceeding six months’ wages payable to each employee for services performed for the corporation while they are directors.

(2) A director is not liable under subsection (1) unless

(a) the corporation has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part;

(b) the corporation has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proved within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution; or

(c) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy and Insolvency Act and a claim for the debt has been proved within six months after the date of the assignment or receiving order.

(3) A director, unless sued for a debt referred to in subsection (1) while a director or within two years after ceasing to be a director, is not liable under this section.

(4) If execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

(5) A director who pays a debt referred to in subsection (1) that is proved in liquidation and dissolution or bankruptcy proceedings is subrogated to any priority that the employee would have been entitled to and, if a judgment has been obtained, the director is

(a) in Quebec, subrogated to the employee’s rights as declared in the judgment; and

(b) elsewhere in Canada, entitled to an assignment of the judgment.

(6) A director who has satisfied a claim under this section is entitled to recover from the other directors who were liable for the claim their respective shares.

148. (1) A director who is present at a meeting of directors or of a committee of directors is deemed to have consented to any resolution passed or action taken at the meeting unless

(a) the director requests a dissent to be entered in the minutes of the meeting;

(b) the director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

(c) the director sends a dissent by registered mail or delivers it to the registered office of the corporation immediately after the meeting is adjourned.

(2) A director who votes for or consents to a resolution is not entitled to dissent under subsection (1).

(3) A director who was not present at a meeting at which a resolution was passed or action taken is deemed to have consented to the resolution or action unless, within the prescribed period after becoming aware of the resolution or action, the director

(a) causes a dissent to be placed with the minutes of the meeting; or

(b) sends a dissent by registered mail or delivers it to the registered office of the corporation.

149. (1) Every director and officer of a corporation in exercising their powers and discharging their duties shall

(a) act honestly and in good faith with a view to the best interests of the corporation; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) Every director and officer of a corporation shall comply with

(a) this Act and the regulations; and

(b) the articles, the by-laws and any unanimous member agreement.

(3) Every director of a corporation shall verify the lawfulness of the articles and the purpose of the corporation.

(4) Subject to subsection 171(5), no provision in a contract, the articles, the by-laws or a resolution relieves a director or an officer from the duty to act in accordance with this Act or the regulations or relieves them from liability for a breach of this Act or the regulations.

150. (1) A director is not liable under section 146 or 147, and has complied with his or her duties under subsection 149(2) and (3), if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the public accountant of the corporation fairly to reflect the financial condition of the corporation; or

(b) a report of a person whose profession lends credibility to a statement made by that person.

(2) A director has complied with his or her duties under subsection 149(1) if the director relied in good faith on

(a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the public accountant of the corporation fairly to reflect the financial condition of the corporation; or

(b) a report of a person whose profession lends credibility to a statement made by that person.

151. (1) An officer has complied with his or her duties under subsection 149(2) if the officer exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on a report of a person whose profession lends credibility to a statement made by that person.

(2) An officer has complied with his or her duties under subsection 149(1) if the officer relied in good faith on a report of a person whose profession lends credibility to a statement made by that person.

152. (1) A corporation may indemnify a present or former director or officer of the corporation, or another individual who acts or acted at the corporation’s request as a director or an officer or in a similar capacity of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity.

(2) A corporation may advance money to a director, an officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual shall repay the money if the individual does not fulfil the conditions of subsection (3).

(3) A corporation 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 corporation or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the corporation’s request; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that their conduct was lawful.

(4) A corporation may, with the approval of a court, indemnify an individual referred to in subsection (1), or advance money under subsection (2), in respect of an action by or on behalf of the corporation or other entity to procure a judgment in its favour to which the individual is made a party because of the individual’s association with the corporation or other entity as described in subsection (1), against all costs, charges and expenses reasonably incurred by the individual in connection with the action, if the individual fulfils the conditions set out in subsection (3).

(5) Despite subsection (1), an individual referred to in that subsection is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the corporation or other entity as described in that subsection, if the individual seeking indemnity

(a) was not judged by the court or other competent authority to have committed any fault or to have omitted to do anything that the individual ought to have done; and

(b) fulfils the conditions set out in subsection (3).

(6) A corporation may purchase and maintain insurance for the benefit of an individual referred to in subsection (1) against any liability incurred by the individual

(a) in the individual’s capacity as a director or an officer of the corporation; or

(b) in the individual’s capacity as a director or an officer, or in a similar capacity, of another entity, if the individual acts or acted in that capacity at the corporation’s request.

(7) On the application of a corporation or an individual or entity referred to in subsection (1), a court may approve an indemnity under this section and make any further order that it thinks fit.

(8) On an application under subsection (7), 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.

PART 10

BY-LAWS AND MEMBERS

153. (1) Unless the articles, the by-laws or a unanimous member agreement otherwise provides, the directors may, by resolution, make, amend or repeal any by-laws that regulate the activities or affairs of the corporation, except in respect of matters referred to in subsection 198(1).

(2) The directors shall submit the by-law, amendment or repeal to the members at the next meeting of members, and the members may, by ordinary resolution, confirm, reject or amend the by-law, amendment or repeal.

(3) Subject to subsection (5), the by-law, amendment or repeal is effective from the date of the resolution of the directors. If the by-law, amendment or repeal is confirmed, or confirmed as amended, by the members it remains effective in the form in which it was confirmed.

(4) The by-law, amendment or repeal ceases to have effect if it is not submitted by the directors to the members as required under subsection (2) or if it is rejected by the members.

(5) If a by-law, an amendment or a repeal ceases to have effect, a subsequent resolution of the directors that has substantially the same purpose or effect is not effective until it is confirmed, or confirmed as amended, by the members.

(6) A member entitled to vote at an annual meeting of members may, in accordance with section 164, make a proposal to make, amend or repeal a by-law.

154. A corporation shall, within the prescribed period, send to the Director a copy of any by-law, amendment or repealed by-law, except for those that have been rejected by the members.

155. (1) The by-laws shall set out the conditions required for being a member of the corporation, including whether a corporation or other entity may be a member.

(2) If the articles provide for two or more classes or groups of members, the by-laws shall provide

(a) the conditions for membership in each class or group;

(b) the manner of withdrawing from a class or group or transferring membership to another class or group and any conditions of transfer; and

(c) the conditions on which membership in a class or group ends.

(3) The members of a corporation that has only one class or group of members have the right to vote at any meeting of the members.

(4) If the articles provide for two or more classes or groups of members, the articles shall provide the members of at least one class or group with the right to vote at a meeting of members.

(5) Unless the articles otherwise provide, each member is entitled to one vote at a meeting of members.

(6) The corporation shall recognize any individual authorized by a member corporation or other entity to represent the member at meetings.

(7) The individual may exercise on behalf of the member corporation or other entity all the powers of that corporation or entity.

(8) Unless the by-laws otherwise provide, a membership may be transferred only to the corporation.

156. The directors may issue memberships in accordance with the articles and any conditions set out in the by-laws.

157. Unless the articles or by-laws of a corporation otherwise provide, a membership is terminated when

(a) the member dies or resigns;

(b) the member is expelled or their membership is otherwise terminated in accordance with the articles or by-laws;

(c) the member’s term of membership expires; or

(d) the corporation is liquidated and dissolved under Part 14.

158. Unless the articles or by-laws otherwise provide, the rights of a member, including any rights in the property of the corporation, cease to exist on termination of the membership.

159. The articles or by-laws may provide that the directors, the members or any committee of directors or members of a corporation have power to discipline a member or to terminate their membership. If the articles or by-laws provide for such a power, they shall set out the circumstances and the manner in which that power may be exercised.

160. (1) Meetings of members of a corporation shall be held within Canada at the place provided in the by-laws or, in the absence of such a provision, at the place that the directors determine.

(2) Despite subsection (1), a meeting of members of a corporation may be held at a place outside Canada if the place is specified in the articles or all the members entitled to vote at the meeting agree that the meeting is to be held at that place.

(3) A member who attends a meeting of members held outside Canada is deemed to have agreed to it being held outside Canada except when the member attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

(4) Unless the by-laws otherwise provide, any person entitled to attend a meeting of members may participate in the meeting, in accordance with the regulations, if any, by means of a telephonic, an electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the corporation makes available such a communication facility. A person so participating in a meeting is deemed for the purposes of this Act to be present at the meeting.

(5) If the directors or members of a corporation call a meeting of members under this Act and if the by-laws so provide, those directors or members, as the case may be, may determine that the meeting shall be held, in accordance with the regulations, if any, entirely by means of a telephonic, an electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

161. (1) The directors of a corporation shall call an annual meeting of members

(a) not later than the prescribed period after the corporation comes into existence; and

(b) subsequently, not later than the prescribed period after holding the preceding annual meeting but no later than the prescribed period after the end of the corporation’s preceding financial year.

(2) The court may, on the application of the corporation, make an order extending the time for calling an annual meeting.

(3) The directors of a corporation may at any time call a special meeting of members.

162. (1) The directors may fix, as a record date for any of the following purposes, a date that is within the period that is prescribed in relation to that purpose, namely, record dates for

(a) determining members entitled to receive notice of a meeting of members;

(b) determining members entitled to vote at a meeting of members;

(c) determining members entitled to participate in a liquidation distribution; or

(d) determining members for any other purpose.

(2) If no record date is fixed by the directors,

(a) the record date for the determination of members entitled to receive notice of a meeting of members is

(i) at the close of business on the day immediately preceding the day on which the notice is given, or

(ii) if no notice is given, the day on which the meeting is held;

(b) the record date for the determination of members entitled to vote at a meeting of members is

(i) if a record date has been fixed under paragraph (1)(a), the day that is the prescribed period after that date, and

(ii) otherwise, the date that is the record date under paragraph (a); and

(c) the record date for the determination of members for any purpose other than to establish a member’s right to receive notice of a meeting or to vote shall be at the close of business on the day on which the directors pass the resolution relating to the record date.

163. (1) The corporation shall give members entitled to vote at a meeting of members notice of the time and place of the meeting in accordance with the by-laws and the regulations. The provisions of the by-laws respecting the giving of notice shall comply with any prescribed requirements.

(2) If the provisions of the by-laws do not comply with the prescribed requirements, the corporation shall send, unless the regulations provide otherwise, the notice to the members within the prescribed period.

(3) The corporation shall send the public accountant and directors notice of the time and place of any meeting of members within the prescribed period.

(4) Any person who is entitled to notice of a meeting of members may waive notice, and attendance of the person at the meeting is a waiver of notice of the meeting, unless the person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

(5) On application of the corporation, the Director may authorize the corporation, on any terms that the Director thinks fit, to give notice of the meeting to members in any manner if the Director reasonably believes that members will not be prejudiced.

(6) The corporation is not required to give notice to members who were not registered on the records of the corporation on the record date determined under paragraph 162(1)(a) or subsection 162(2), but a member that is not given notice of the meeting is not deprived of the right to vote at that meeting.

(7) If a meeting of members is adjourned for less than the prescribed period, it is not necessary, unless the by-laws otherwise provide, that any person be notified of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.

(8) If a meeting of members is adjourned by one or more adjournments for an aggregate of days that is more than the prescribed period, notice of the adjournment shall be given to members entitled to vote at the meeting, the directors and the public accountant in the manner referred to in subsections (1) to (4).

(9) All business transacted at a special meeting of members and all business transacted at an annual meeting of members, except consideration of the financial statements, public accountant’s report, election of directors and re-appointment of the incumbent public accountant, is special business.

(10) Notice of a meeting of members at which special business is to be transacted shall

(a) state the nature of that business in sufficient detail to permit a member to form a reasoned judgment on the business; and

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

164. (1) A member entitled to vote at an annual meeting of members may

(a) submit to the corporation notice of any matter that the member proposes to raise at the meeting, referred to in this section as a “proposal”; and

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

(2) A corporation shall include the proposal in the notice of meeting required under section 163.

(3) If so requested by the member who submits a proposal, the corporation shall include in the notice of meeting a statement in support of the proposal by the member and the name and address of the member. The statement and the proposal shall together not exceed the prescribed maximum number of words.

(4) The member who submitted the proposal shall pay any cost of including the proposal and any statement in the notice of the meeting at which the proposal is to be presented, unless it is otherwise provided in the by-laws or in an ordinary resolution of the members present at the meeting.

(5) A proposal may include nominations for the election of directors if the proposal is signed by not less than the prescribed percentage of the members of a class or group of members of the corporation entitled to vote at the meeting at which the proposal is to be presented or any lesser number of members as provided in the by-laws, but this subsection does not preclude nominations made at a meeting of members.

(6) A corporation is not required to comply with subsections (2) and (3) if

(a) the proposal is not submitted to the corporation within the prescribed period;

(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev- ance against the corporation or its directors, officers, members or debt obligation holders;

(c) it clearly appears that the proposal does not relate in a significant way to the activities or affairs of the corporation;

(d) not more than the prescribed period before the receipt of the proposal, the member failed to present — in person or, if authorized by the by-laws, by proxy — at a meeting of members, a proposal that at the member’s request had been included in a notice of meeting;

(e) substantially the same proposal was submitted to members in a notice of a meeting of members held not more than the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or

(f) the rights conferred by this section are being abused to secure publicity.

(7) No corporation or person acting on its behalf incurs any liability by reason only of complying with this section.

(8) If a corporation refuses to include a proposal in a notice of meeting, it shall, within the prescribed period after the day on which it receives the proposal, notify in writing the member submitting the proposal of its intention to omit it from the notice of meeting and of the reasons for the refusal.

(9) On the application of a member submitting a proposal who is aggrieved by the refusal, a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit.

(10) On the application of the corporation or any other person aggrieved by a proposal, a court may, if it is satisfied that subsection (6) applies, make an order permitting the corporation to omit the proposal from the notice of meeting and may make any further order that it thinks fit.

(11) An applicant under subsection (9) or (10) shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel.

165. (1) The by-laws may set out the quorum for a meeting of members, but the quorum set out shall be in conformity with any prescribed requirements.

(2) If the by-laws do not set out such a quorum, the quorum is a majority of members entitled to vote at the meeting.

(3) If a quorum is present at the opening of a meeting of members, the members present may, unless the by-laws otherwise provide, proceed with the business of the meeting, even if a quorum is not present throughout the meeting.

(4) If a quorum is not present at the opening of a meeting of members, the members present may adjourn the meeting to a fixed time and place but may not transact any other business.

(5) If a corporation has only one member, or only one member in any class or group of members, the member present in person or who submits a vote that meets the requirements of section 172 constitutes a meeting.

166. (1) Subject to section 172 and the by-laws, voting at a meeting of members shall be by show of hands, except if a ballot is demanded by a member entitled to vote at the meeting.

(2) A member may demand a ballot either before or after any vote by show of hands.

(3) Despite subsection (1), unless the by-laws otherwise provide, any vote referred to in that subsection may be held, in accordance with the regulations, if any, entirely by means of a telephonic, an electronic or other communication facility, if the corporation makes available such a communication facility.

(4) Unless the by-laws otherwise provide, any person participating in a meeting of members under subsection 160(4) or (5) and entitled to vote at that meeting may vote, and that vote may be held, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the corporation has made available for that purpose.

167. (1) Except where a written statement is submitted by a director under subsection 132(1) or by a public accountant under subsection 188(4),

(a) a resolution in writing signed by all the members entitled to vote on that resolution at a meeting of members is as valid as if it had been passed at a meeting of the members; and

(b) a resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of members, and signed by all the members entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of members.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the meetings of members.

(3) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

168. (1) The members of a corporation who hold the prescribed percentage of votes that may be cast at a meeting of members sought to be held, or a lower percentage that is set out in the by-laws, may requisition the directors to call the meeting for the purposes stated in the requisition.

(2) The requisition referred to in subsection (1), which may consist of several documents of similar form each signed by one or more members, shall state the business to be transacted at the meeting and shall be sent to each director and to the registered office of the corporation.

(3) On receiving the requisition referred to in subsection (1), the directors shall call a meeting of members to transact the business stated in the requisition, unless

(a) a record date has been fixed under paragraph 162(1)(a);

(b) the directors have called a meeting of members and have given notice of the meeting under section 163; or

(c) the business of the meeting as stated in the requisition includes matters described in paragraphs 164(6)(b) to (f).

(4) If the directors do not call a meeting within the prescribed period after receiving the requisition referred to in subsection (1), any member who signed the requisition may call the meeting.

(5) A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called under the by-laws and this Part.

(6) Unless the members otherwise resolve at a meeting called under subsection (4), the corporation shall reimburse the members for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

169. (1) A court, on the application of a director, a member who is entitled to vote at a meeting of members or the Director, may order a meeting of a corporation to be called, held and conducted in the manner that the court directs, if

(a) it is not practicable to call the meeting within the time or in the manner in which it is otherwise to be called;

(b) it is not practicable to conduct the meeting in the manner required by this Act or the by-laws; or

(c) the court thinks that the meeting should be called, held and conducted within the time or in the manner that it directs for any other reason.

(2) Without restricting the generality of subsection (1), the court may order that the quorum required by the by-laws or this Act be varied or dispensed with at a meeting called, held and conducted under this section.

(3) A meeting called, held and conducted under this section is for all purposes a meeting of members of the corporation duly called, held and conducted.

170. (1) A corporation or a member or director may apply to a court to determine any controversy with respect to an election or appointment of a director or public accountant of the corporation.

(2) On an application under this section, the court may make

(a) an order restraining a director or public accountant whose election or appointment is challenged from acting pending determination of the dispute;

(b) an order declaring the result of the disputed election or appointment;

(c) an order requiring a new election or appointment, and including in the order directions for the management of the activities and affairs of the corporation until a new election is held or appointment made;

(d) an order determining the voting rights of members and of persons claiming to hold memberships; and

(e) any other order that it thinks fit.

171. (1) An otherwise lawful written agreement among all the members of a corporation that is not a soliciting corporation, or among all the members and one or more persons who are not members, that restricts, in whole or in part, the powers of the directors to manage, or supervise the management of, the activities and affairs of the corporation is valid.

(2) A written declaration of the sole member of a corporation that similarly restricts the directors’ powers is valid.

(3) A person who becomes a member of a corporation that is subject to a unanimous member agreement is deemed to be a party to the agreement.

(4) If notice is not given to a member of the existence of a unanimous member agreement, in the manner referred to in subsection 43(2) or otherwise, the member may, no later than the prescribed period after they become aware of the existence of the agreement, rescind the transaction by which they acquired the membership and, within that period, the member is entitled to the return of any amount paid in respect of the membership.

(5) To the extent that a unanimous member agreement restricts the powers of the directors to manage, or supervise the management of, the activities and affairs of the corporation, parties to the agreement who are given that power to manage or supervise the management of the activities and affairs of the corporation have all the rights, powers, duties and liabilities of a director of the corporation, 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 147, to the same extent.

(6) Nothing in this section prevents members from fettering their discretion when exercising the powers of directors under a unanimous member agreement.

(7) Members that are party to a unanimous member agreement may not vote in accordance with section 172 when exercising the authority delegated to them under the agreement.

(8) If the unanimous member agreement does not provide for its termination, the members may terminate the agreement by a special resolution.

172. (1) The by-laws of a corporation may provide for any prescribed methods of voting by members not in attendance at a meeting of members. If the by-laws so provide, they shall set out procedures for collecting, counting and reporting the results of any vote.

(2) On application of the corporation, the Director may authorize the corporation, on any terms that the Director thinks fit, to permit members to vote by any method if the Director reasonably believes that the members and the corporation will not be prejudiced.

PART 11

FINANCIAL DISCLOSURE

173. (1) The directors of a corporation shall place before the members at every annual meeting

(a) prescribed comparative financial statements that conform to any prescribed requirements and relate separately to

(i) the period that began on the date the corporation came into existence and ended not more than six months before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and

(ii) the immediately preceding financial year;

(b) the report of the public accountant, if any; and

(c) any further information respecting the financial position of the corporation and the results of its operations required by the articles, the by-laws or any unanimous member agreement.

(2) Despite paragraph (1)(a), the financial statements referred to in subparagraph (1)(a)(ii) may be omitted if the reason for the omission is set out in the financial statements, or in a note to those statements, to be placed before the members at an annual meeting.

174. On the application of a corporation, the Director may exempt the corporation, on any terms that the Director thinks fit, from any requirement in this Part if the Director reasonably believes that the detriment that may be caused to the corporation by the requirement outweighs its benefit to the members or, in the case of a soliciting corporation, the public.

175. (1) A corporation shall keep at its registered office a copy of the financial statements of each of its subsidiaries and of each body corporate the accounts of which are consolidated in the financial statements of the corporation.

(2) Members of a corporation and their personal representatives may on request examine the statements referred to in subsection (1) during the corporation’s usual business hours and make copies or take extracts free of charge.

(3) On the application of a corporation made within the prescribed period after a request to examine under subsection (2), a court may, if it is satisfied that the examination would be detrimental to the corporation or a subsidiary, bar the right to examine and make any further order that it thinks fit.

(4) A corporation shall give the Director and the person asking to examine under subsection (2) notice of an application under subsection (3), and the Director and the person may appear and be heard in person or by counsel.

176. (1) A corporation, within the prescribed period, shall send a copy or summary of the documents referred to in subsection 173(1) or a copy of a publication of the corporation reproducing the information contained in the documents or summary to each member, other than a member who, in writing, declines to receive such documentation. A corporation that sends a summary to a member shall also inform that member of the procedure for obtaining a copy of the documents free of charge.

(2) A corporation, instead of sending the documentation referred to in subsection (1), may, if the by-laws so provide, give members notice in the manner referred to in section 163 that the documents referred to in subsection 173(1) are available at the registered office of the corporation and that any member may, on request, obtain a copy free of charge at the office or by prepaid mail.

177. (1) A soliciting corporation shall send a copy of the documents referred to in subsection 173(1) to the Director

(a) not less than the prescribed period before each annual meeting of members, or without delay after a resolution referred to in paragraph 167(1)(b) is signed; and

(b) in any event within the prescribed period after the preceding annual meeting should have been held or a resolution in lieu of the meeting should have been signed, but no later than the prescribed period after the end of the corporation’s preceding financial year.

(2) A subsidiary corporation is not required to comply with this section if

(a) the financial statements of its holding corporation are in consolidated or combined form and include the accounts of the subsidiary; and

(b) the consolidated or combined financial statements of the holding corporation are included in the documents sent to the Director by the holding corporation in compliance with this section.

178. A corporation shall, at the request of the Director, furnish the Director with a copy of the documents referred to in subsection 173(1).

179. (1) The directors of a corporation shall approve the financial statements referred to in section 173 and the approval shall be evidenced by the manual signature of one or more directors or a facsimile of the signatures reproduced in the statements.

(2) A corporation shall not issue, publish or circulate copies of the financial statements referred to in section 173 unless the financial statements are

(a) approved and signed in accordance with subsection (1); and

(b) accompanied by the report of the public accountant of the corporation, if any.

PART 12