Skip to main content

Bill S-11

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

PDF

SUMMARY

This enactment amends the Canada Business Corporations Act. It is the first major revision of the Act since it came into force in 1975.

Among other things, the enactment amends the provisions concerning liability of directors. It allows for a defence based on due diligence and amends the indemnification provisions allowing for the advancement of defence costs, and allowing indemnification in relation to investigations. It also implements a new regime regarding the apportionment of damage awards applicable to persons involved in the preparation of financial information required under the Act or the regulations, including directors and officers.

The residency requirements for directors and the requirements specifying the location of corporate records have been relaxed. Residency requirements for committees of directors have been eliminated.

The enactment also includes measures to facilitate communications among shareholders and between corporations and their shareholders. To this end, it permits a greater utilization of electronic communications, including holding meetings and voting by electronic means. The enactment also relaxes the rules for proxy solicitation and for certain aspects of the requirements for the submission of proposals and sets conditions for the latter.

The enactment also amends the provisions relating to the civil remedies available in situations of insider trading and eliminates insider reporting.

A series of amendments are included that remove the requirements relating to financial assistance and take-over bids. The enactment expressly authorizes, under certain conditions, going-private and squeeze-out transactions. It also addresses the rights, powers, duties and liabilities of directors and shareholders under a unanimous shareholder agreement and defences available to them.

The enactment provides a number of limited exceptions to the general rule prohibiting subsidiaries from acquiring shares of the parent corporation.

The enactment also includes technical amendments to the Act to clarify certain provisions, to correct errors, to modernize it and to render the language in the English version gender neutral.

It also amends the Canada Cooperatives Act in order to harmonize its provisions with the amendments mentioned above and makes consequential amendments to other Acts.

EXPLANATORY NOTES

Canada Business Corporations Act

Clause 1: (1) The definitions ``auditor'', ``person'' and ``unanimous shareholder agreement'' in subsection 2(1) read as follows:

``auditor'' includes a partnership of auditors;

``person'' includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative;

``unanimous shareholder agreement'' means an agreement described in subsection 146(2) or a declaration of a shareholder described in subsection 146(3).

(2) The definition ``mandataire'' in subsection 2(1) of the French version reads as follows:

« mandataire » Personne qui agit pour le compte d'autrui, y compris l'ayant cause.

(3) and (4) The relevant portion of the definition ``associate'' in subsection 2(1) reads as follows:

``associate'' when used to indicate a relationship with any person means

      . . .

      (c) a trust or estate in which that person has a substantial beneficial interest or in respect of which he serves as a trustee or in a similar capacity,

(5) New.

(6) Subsection 2(4) reads as follows:

(4) A body corporate is the holding body corporate of another if that other body corporate is its subsidiary.

(7) Subsections 2(6) to (8) read as follows:

(6) For the purposes of this Act, securities of a corporation

    (a) issued on a conversion of other securities, or

    (b) issued in exchange for other securities

are deemed to be securities that are part of a distribution to the public if those other securities were part of a distribution to the public.

(7) Subject to subsection (8), for the purposes of this Act a security of a body corporate

    (a) is part of a distribution to the public where, in respect of the security, there has been a filing of a prospectus, statement of material facts, registration statement, securities exchange take-over bid circular or similar document under the laws of Canada, a province or a jurisdiction outside Canada; or

    (b) is deemed to be part of a distribution to the public, where the security has been issued and a filing referred to in paragraph (a) would be required if the security were being issued currently.

(8) On the application of a corporation, the Director may determine that a security of the corporation is not or was not part of a distribution to the public if he is satisfied that such determination would not prejudice any security holder of the corporation.

Clause 2: Subsection 3(3) reads as follows:

(3) The following do not apply to a corporation:

    (a) the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970;

    (b) the Winding-up and Restructuring Act; and

    (c) the provisions of a Special Act, as defined in section 87 of the Canada Transportation Act, that are inconsistent with this Act.

Clause 3: (1) and (2) The relevant portion of subsection 6(1) reads as follows:

6. (1) Articles of incorporation shall follow the prescribed form and shall set out, in respect of the proposed corporation,

    . . .

    (b) the place within Canada where the registered office is to be situated;

Clause 4: Section 8 reads as follows:

8. On receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 262.

Clause 5: Subsection 10(3) reads as follows:

(3) Subject to subsection 12(1), a corporation may set out its name in its articles in an English form, a French form, an English form and a French form or in a combined English and French form and it may use and may be legally designated by any such form.

Clause 6: Subsection 13(1) reads as follows:

13. (1) When a corporation has had its name revoked and a name assigned to it under subsection 12(5), the Director shall issue a certificate of amendment showing the new name of the corporation and shall forthwith give notice of the change of name in the Canada Gazette or in the periodical referred to in section 129.

Clause 7: (1) Subsection 14(1) reads as follows:

14. (1) Subject to this section, a person who enters into a written contract in the name of or on behalf of a corporation before it comes into existence is personally bound by the contract and is entitled to the benefits thereof.

(2) Subsection 14(3) reads as follows:

(3) Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order fixing obligations under the contract as joint or joint and several or apportioning liability between or among the corporation and a person who purported to act in the name of or on behalf of the corporation and on such application the court may make any order it thinks fit.

Clause 8: Section 18 reads as follows:

18. A corporation or a guarantor of an obligation of the corporation may not assert against a person dealing with the corporation or with any person who has acquired rights from the corporation that

    (a) the articles, by-laws and any unanimous shareholder agreement have not been complied with,

    (b) the persons named in the most recent notice sent to the Director under section 106 or 113 are not the directors of the corporation,

    (c) the place named in the most recent notice sent to the Director under section 19 is not the registered office of the corporation,

    (d) a person held out by a corporation as a director, an officer or an agent of the corporation has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the corporation or usual for such director, officer or agent,

    (e) a document issued by any director, officer or agent of a corporation with actual or usual authority to issue the document is not valid or not genuine, or

    (f) financial assistance referred to in section 44 or a sale, lease or exchange of property referred to in subsection 189(3) was not authorized,

except where the person has or ought to have by virtue of his position with or relationship to the corporation knowledge to the contrary.

Clause 9: Section 19 reads as follows:

19. (1) A corporation shall at all times have a registered office in the place within Canada specified in its articles.

(2) A notice of registered office in prescribed form shall be sent to the Director together with any articles that designate or change the place of the registered office of the corporation.

(3) The directors of a corporation may change the address of the registered office within the place specified in the articles.

(4) A corporation shall send to the Director, within fifteen days of any change of address of its registered office, a notice in prescribed form and the Director shall file it.

Clause 10: Subsection 20(5.1) is new. Subsection 20(5) reads as follows:

(5) Where accounting records of a corporation are kept at a place outside Canada, there shall be kept at the registered office or other office in Canada accounting records adequate to enable the directors to ascertain the financial position of the corporation with reasonable accuracy on a quarterly basis.

Clause 11: (1) Subsection 21(1.1) is new. Subsection 21(1) reads as follows:

21. (1) Shareholders and creditors of a corporation, their agents and legal representatives and the Director may examine the records described in subsection 20(1) during the usual business hours of the corporation, and may take extracts therefrom, free of charge, and, where the corporation is a distributing corporation as defined in subsection 126(1), any other person may do so on payment of a reasonable fee.

(2) Subsection 21(3) reads as follows:

(3) Shareholders and creditors of a corporation, their agents and legal representatives, the Director and, where the corporation is a distributing corporation as defined in subsection 126(1), any other person, on payment of a reasonable fee and on sending to a corporation or its agent the affidavit referred to in subsection (7), may on application require the corporation or its agent to furnish within ten days from the receipt of the affidavit a list (in this section referred to as the ``basic list'') made up to a date not more than ten days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

(3) Subsection 21(7) reads as follows:

(7) The affidavit required under subsection (3) shall state

    (a) the name and address of the applicant;

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

    (c) that the basic list and any supplemental lists obtained pursuant to subsection (4) will not be used except as permitted under subsection (9).

(4) Subsection 21(8) reads as follows:

(8) If the applicant is a body corporate, the affidavit shall be made by a director or officer of the body corporate.

(5) Subsection 21(9) reads as follows:

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

    (a) an effort to influence the voting of shareholders of the corporation;

    (b) an offer to acquire shares of the corporation; or

    (c) any other matter relating to the affairs of the corporation.

Clause 12: Section 23 reads as follows:

23. An instrument or agreement executed on behalf of a corporation by a director, an officer or an agent of the corporation is not invalid merely because a corporate seal is not affixed thereto.

Clause 13: Subsection 25(5) reads as follows:

(5) For the purposes of this section, ``property'' does not include a promissory note or a promise to pay.

Clause 14: (1) Subsection 26(3) reads as follows:

(3) Notwithstanding subsection 25(3) and subsection (2), where a corporation issues shares

    (a) in exchange for

      (i) property of a person who immediately before the exchange did not deal with the corporation at arm's length within the meaning of that term in the Income Tax Act, or

      (ii) shares of a body corporate that immediately before the exchange or that, because of the exchange, did not deal with the corporation at arm's length within the meaning of that term in the Income Tax Act, or

    (b) pursuant to an agreement referred to in subsection 182(1) or an arrangement referred to in paragraph 192(1)(b) or (c) to sharehold ers of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate,

the corporation may, subject to subsection (4), add to the stated capital accounts maintained for the shares of the classes or series issued the whole or any part of the amount of the consideration it received in the exchange.

(2) Subsection 26(9) reads as follows:

(9) For the purposes of subsection 34(2), sections 38 and 42, subsection 44(1) and paragraph 185(2)(a), when a body corporate is continued under this Act its stated capital is deemed to include the amount that would have been included in stated capital if the body corporate had been incorporated under this Act.

(3) Subsection 26(12) reads as follows:

(12) For the purposes of this section, ``open-end mutual fund'' means a corporation that makes a distribution to the public of its shares and that carries on only the business of investing the consideration it receives for the shares it issues, and all or substantially all of those shares are redeemable on the demand of a shareholder.

Clause 15: (1) Subsection 27(1) reads as follows:

27. (1) The articles may authorize the issue of any class of shares in one or more series and may authorize the directors to fix the number of shares in and to determine the designation, rights, privileges, restrictions and conditions attaching to, the shares of each series, subject to the limitations set out in the articles.

(2) Subsection 27(4) reads as follows:

(4) Before the issue of shares of a series authorized under this section, the directors shall send to the Director articles of amendment in prescribed form to designate a series of shares.

Clause 16: The relevant portion of subsection 29(1) reads as follows:

29. (1) A corporation may issue certificates, warrants or other evidences of conversion privileges, options or rights to acquire securities of the corporation, and shall set out the conditions thereof

Clause 17: (1) The relevant portion of subsection 30(1) reads as follows:

30. (1) Subject to subsection (2) and sections 31 to 36, a corporation

    (a) shall not hold shares in itself or in its holding body corporate; and

(2) The relevant portion of subsection 30(2) reads as follows:

(2) A corporation shall cause a subsidiary body corporate of the corporation that holds shares of the corporation to sell or otherwise dispose of those shares within five years from the date

Clause 18: (1) Section 31 reads as follows:

31. (1) A corporation may in the capacity of a legal representative hold shares in itself or in its holding body corporate unless it or the holding body corporate or a subsidiary of either of them has a beneficial interest in the shares.

(2) A corporation may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money.

(2) New.

Clause 19: Section 33 reads as follows:

33. A corporation holding shares in itself or in its holding body corporate shall not vote or permit those shares to be voted unless the corporation

    (a) holds the shares in the capacity of a legal representative; and

    (b) has complied with section 153.

Clause 20: The relevant portion of subsection 34(2) reads as follows:

(2) A corporation shall not make any payment to purchase or otherwise acquire shares issued by it if there are reasonable grounds for believing that

Clause 21: (1) and (2) The relevant portion of subsection 35(3) reads as follows:

(3) A corporation shall not make any payment to purchase or acquire under subsection (1) shares issued by it if there are reasonable grounds for believing that

    . . .

    (b) the realizable value of the corporation's assets would after the payment be less than the aggregate of

      . . .

      (ii) the amount required for payment on a redemption or in a liquidation of all shares the holders of which have the right to be paid prior to the holders of the shares to be purchased or acquired.

Clause 22: (1) Subsection 36(1) reads as follows:

36. (1) Notwithstanding subsection 34(2) or 35(3), but subject to subsection (2) and to its articles, a corporation may purchase or redeem any redeemable shares issued by it at prices not exceeding the redemption price thereof stated in the articles or calculated according to a formula stated in the articles.

(2) and (3) The relevant portion of subsection 36(2) reads as follows:

(2) A corporation shall not make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that

    . . .

    (b) the realizable value of the corporation's assets would after the payment be less than the aggregate of

      . . .

      (ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a redemption or in a liquidation, rateably with or prior to the holders of the shares to be purchased or redeemed.

Clause 23: Subsection 38(6) reads as follows:

(6) This section does not affect any liability that arises under section 118.

Clause 24: Subsection 39(12) reads as follows:

(12) Debt obligations issued by a corporation and purchased, redeemed or otherwise acquired by it may be cancelled or, subject to any applicable trust indenture or other agreement, may be reissued, pledged or hypothecated to secure any obligation of the corporation then existing or thereafter incurred, and any such acquisition and reissue, pledge or hypothecation is not a cancellation of the debt obligations.

Clause 25: Section 40 reads as follows:

40. (1) A contract with a corporation providing for the purchase of shares of the corporation is specifically enforceable against the corporation except to the extent that the corporation cannot perform the contract without thereby being in breach of section 34 or 35.

(2) In any action brought on a contract referred to in subsection (1), the corporation has the burden of proving that performance thereof is prevented by section 34 or 35.

(3) Until the corporation has fully performed a contract referred to in subsection (1), the other party retains the status of a claimant entitled to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors but in priority to the shareholders.

Clause 26: Section 44 reads as follows:

44. (1) Subject to subsection (2), a corporation or any corporation with which it is affiliated shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise

    (a) to any shareholder, director, officer or employee of the corporation or of an affiliated corporation or to an associate of any such person for any purpose, or

    (b) to any person for the purpose of or in connection with a purchase of a share issued or to be issued by the corporation or affiliated corporation,

where there are reasonable grounds for believing that

    (c) the corporation is or, after giving the financial assistance, would be unable to pay its liabilities as they become due, or

    (d) the realizable value of the corporation's assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, after giving the financial assistance, would be less than the aggregate of the corporation's liabilities and stated capital of all classes.

(2) A corporation may give financial assistance by means of a loan, guarantee or otherwise

    (a) to any person in the ordinary course of business if the lending of money is part of the ordinary business of the corporation;

    (b) to any person on account of expenditures incurred or to be incurred on behalf of the corporation;

    (c) to a holding body corporate if the corporation is a wholly-owned subsidiary of the holding body corporate;

    (d) to a subsidiary body corporate of the corporation; and

    (e) to employees of the corporation or any of its affiliates

      (i) to enable or assist them to purchase or erect living accommodation for their own occupation, or

      (ii) in accordance with a plan for the purchase of shares of the corporation or any of its affiliates to be held by a trustee.

(2.1) A corporation is a wholly-owned subsidiary of another body corporate for the purposes of paragraph (2)(c) if

    (a) all of the issued shares of the corporation are held by

      (i) that other body corporate,

      (ii) that other body corporate and one or more bodies corporate all of the issued shares of which are held by that other body corporate, or

      (iii) two or more bodies corporate all of the issued shares of which are held by that other body corporate; or

    (b) it is a wholly-owned subsidiary of a body corporate that is a wholly-owned subsidiary of that other body corporate.

(3) A contract made by a corporation in contravention of this section may be enforced by the corporation or by a lender for value in good faith without notice of the contravention.

Clause 27: Subsections 45(1) and (2) read as follows:

45. (1) The shareholders of a corporation are not, as shareholders, liable for any liability, act or default of the corporation except under subsection 38(4), 146(5) or 226(5).

(2) Subject to subsection 49(8), the articles may provide that the corporation has a lien on a share registered in the name of a shareholder or his legal representative for a debt of that shareholder to the corporation, including an amount unpaid in respect of a share issued by a body corporate on the date it was continued under this Act.

Clause 28: (1) and (2) Subsections 46(1) and (2) read as follows:

46. (1) A corporation that has constraints on the issue, transfer or ownership of its shares of any class or series may,

    (a) in order to assist the corporation or any of its affiliates or associates to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control, or

    (b) in order to assist the corporation to comply with

      (i) section 379 of the Trust and Loan Companies Act, or

      (ii) section 411 of the Insurance Companies Act,

sell, for that purpose or for the purpose of attaining or maintaining a level of Canadian ownership specified in its articles, under such conditions and after giving such notice as may be prescribed, as if it were the owner thereof, any of those constrained shares that are owned, or that the directors determine in such manner as may be prescribed may be owned, contrary to the constraints.

(2) Where shares are to be sold by a corporation under subsection (1), the directors of the corporation shall select the shares for sale in good faith and in a manner that is not unfairly prejudicial to, and does not unfairly disregard the interests of, the holders of the shares in the constrained class or series taken as a whole.

Clause 29: The definition ``fiduciary'' in subsection 48(2) reads as follows:

``fiduciary'' means a trustee, guardian, committee, curator, tutor, executor, administrator or representative of a deceased person, or any other person acting in a fiduciary capacity;

Clause 30: (1) Subsection 49(2) reads as follows:

(2) A corporation may charge a fee of not more than three dollars for a security certificate issued in respect of a transfer.

(2) Subsections 49(4) and (5) read as follows:

(4) A security certificate shall be signed manually by at least one director or officer of the corporation or by or on behalf of a registrar, transfer agent or branch transfer agent of the corporation, or by a trustee who certifies it in accordance with a trust indenture, and any additional signatures required on a security certificate may be printed or otherwise mechanically reproduced thereon.

(5) Notwithstanding subsection (4), a manual signature is not required on

    (a) a security certificate representing

      (i) a promissory note that is not issued under a trust indenture,

      (ii) a fractional share, or

      (iii) an option or a right to acquire a security; or

    (b) a scrip certificate.

(3) The relevant portion of subsection 49(7) reads as follows:

(7) There shall be stated on the face of each share certificate issued by a corporation

    . . .

    (b) the words ``Incorporated under the Canada Business Corpora tions Act'';

(4) Subsections 49(8) to (10) read as follows:

(8) If a security certificate issued by a corporation or by a body corporate before the body corporate was continued under this Act is or becomes subject to

    (a) a restriction on its transfer other than a constraint under section 174,

    (b) a lien in favour of the corporation,

    (c) a unanimous shareholder agreement, or

    (d) an endorsement under subsection 190(10),

such restriction, lien, agreement or endorsement is ineffective against a transferee of the security who has no actual knowledge of it, unless it or a reference to it is noted conspicuously on the security certificate.

(9) A corporation any of the issued shares of which are or were part of a distribution to the public and remain outstanding and are held by more than one person shall not have a restriction on the issue, transfer or ownership of its shares of any class or series except by way of a constraint permitted under section 174.

(10) Where the articles of a corporation constrain the issue, transfer or ownership of shares of any class or series in order to assist

    (a) the corporation or any of its affiliates or associates to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control, or

    (b) the corporation to comply with

      (i) section 379 of the Trust and Loan Companies Act, or

      (ii) section 411 of the Insurance Companies Act,

the constraint, or a reference to it, shall be conspicuously noted on every security certificate of the corporation evidencing a share that is subject to the constraint where the security certificate is issued after the day on which the share becomes subject to the constraint under this Act.

Clause 31: (1) The relevant portion of subsection 51(2) reads as follows:

(2) Notwithstanding subsection (1), a corporation whose articles restrict the right to transfer its securities shall, and any other corporation may, treat a person as a registered security holder entitled to exercise all the rights of the security holder he represents, if that person furnishes the corporation with evidence as described in subsection 77(4) that he is

    (a) the executor, administrator, heir or legal representative of the heirs, of the estate of a deceased security holder;

    (b) a guardian, committee, trustee, curator or tutor representing a registered security holder who is an infant, an incompetent person or a missing person; or

(2) Subsection 51(5) reads as follows:

(5) If an infant exercises any rights of ownership in the securities of a corporation, no subsequent repudiation or avoidance is effective against the corporation.

(3) Subsection 51(8) reads as follows:

(8) Notwithstanding subsection (7), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a legal representative of the deceased holder is entitled, subject to any applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder, if he deposits with the corporation or its transfer agent

    (a) the security certificate that was owned by the deceased holder; and

    (b) reasonable proof of the governing laws, of the deceased holder's interest in the security and of the right of the legal representative or the person he designates to become the registered holder.

Clause 32: The relevant portion of subsection 65(1) reads as follows:

65. (1) In this section, ``appropriate person'' means

    . . .

    (d) if a person described in paragraph (a) is an individual and is without capacity to act by reason of death, incompetence, infancy, minority or otherwise, his fiduciary;

Clause 33: Section 75 reads as follows:

75. An agent or bailee who in good faith, including observance of reasonable commercial standards if he is in the business of buying, selling or otherwise dealing with securities of a corporation, has received securities and sold, pledged or delivered them according to the instructions of his principal is not liable for conversion or for participation in breach of fiduciary duty although the principal has no right to dispose of them.

Clause 34: Subsection 82(2) reads as follows:

(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.

Clause 35: Section 102 reads as follows:

102. (1) Subject to any unanimous shareholder agreement, the directors shall manage the business and affairs of a corporation.

(2) A corporation shall have one or more directors but a corporation, any of the issued securities of which are or were part of a distribution to the public and remain outstanding and are held by more than one person, shall have not fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates.

Clause 36: Subsection 103(1) reads as follows:

103. (1) Unless the articles, by-laws or a unanimous shareholder agreement otherwise provide, the directors may, by resolution, make, amend or repeal any by-laws that regulate the business or affairs of the corporation.

Clause 37: (1) Subsections 105(3.1) to (3.3) are new. Subsection 105(3) reads as follows:

(3) A majority of the directors of a corporation must be resident Canadians.

(2) The relevant portion of subsection 105(4) reads as follows:

(4) Notwithstanding subsection (3), not more than one-third of the directors of a holding corporation need be resident Canadians if the holding corporation earns in Canada directly or through its subsidiaries less than five per cent of the gross revenues of the holding corporation and all of its subsidiary bodies corporate together as shown in

Clause 38: (1) Subsection 106(1) reads as follows:

106. (1) At the time of sending articles of incorporation, the incorporators shall send to the Director a notice of directors in prescribed form and the Director shall file the notice.

(2) Subsection 106(9) is new. Subsections 106(7) and (8) read as follows:

(7) If a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles by reason of the disqualification, incapacity or death of any candidates, 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 directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, 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 shareholders.

Clause 39: The relevant portion of section 107 reads as follows:

107. Where the articles provide for cumulative voting,

    . . .

    (g) a director may not be removed from office if the votes cast against his removal would be sufficient to elect him and such votes could be voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the articles were then being elected; and

    (h) the number of directors required by the articles may not be decreased if the votes cast against the motion to decrease would be sufficient to elect a director and such votes could be voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the articles were then being elected.

Clause 40: New.

Clause 41: Subsections 111(1) to (3) read as follows:

111. (1) Notwithstanding subsection 114(3), but subject to subsections (3) and (4), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number or minimum number of directors or from a failure to elect the number or minimum number of directors required by 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 required by the articles, the directors then in office shall forthwith call a special meeting of shareholders 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 shareholder.

(3) Where the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors and a vacancy occurs among those directors,

    (a) subject to subsection (4), the remaining directors elected by that class or series may fill the vacancy except a vacancy resulting from an increase in the number or minimum number of directors for that class or series or from a failure to elect the number or minimum number of directors for that class or series; or

    (b) if there are no such remaining directors any holder of shares of that class or series may call a meeting of the holders thereof for the purpose of filling the vacancy.

Clause 42: Subsection 113(1) reads as follows:

113. (1) Within fifteen days after a change is made among its directors, a corporation shall send to the Director a notice in prescribed form setting out the change and the Director shall file the notice.

Clause 43: (1) Subsections 114(3) and (4) read as follows:

(3) Directors, other than directors of a corporation referred to in subsection 105(4), shall not transact business at a meeting of directors unless a majority of directors present are resident Canadians.

(4) Notwithstanding subsection (3), directors may transact business at a meeting of directors where a majority of resident Canadian directors is not present if

    (a) a resident Canadian director who is unable to be present approves in writing or by telephone or other communications facilities the business transacted at the meeting; and

    (b) a majority of resident Canadian directors would have been present had that director been present at the meeting.

(2) Subsection 114(9) reads as follows:

(9) Subject to the by-laws, a director may, if all the directors of the corporation consent, participate in a meeting of directors or of a committee of directors by means of such telephone or other communications facilities as permit all persons participating in the meeting to hear each other, and a director participating in such a meeting by such means is deemed for the purposes of this Act to be present at that meeting.

Clause 44: (1) Subsection 115(2) reads as follows:

(2) If the directors of a corporation, other than a corporation referred to in subsection 105(4), appoint a committee of directors, a majority of the members of the committee must be resident Canadians.

(2) and (3) Paragraph 115(3)(c.1) is new. The relevant portion of subsection 115(3) reads as follows:

(3) Notwithstanding subsection (1), no managing director and no committee of directors has authority to

    . . .

    (b) fill a vacancy among the directors or in the office of auditor;

    (c) issue securities except in the manner and on the terms authorized by the directors;

    . . .

    (f) pay a commission referred to in section 41;

Clause 45: New.

Clause 46: (1) and (2) Subsections 118(1) and (2) read as follows:

118. (1) Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under section 25 for a consideration other than money are jointly and severally 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 share 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

    (a) a purchase, redemption or other acquisition of shares contrary to section 34, 35 or 36,

    (b) a commission contrary to section 41,

    (c) a payment of a dividend contrary to section 42,

    (d) financial assistance contrary to section 44,

    (e) a payment of an indemnity contrary to section 124, or

    (f) a payment to a shareholder contrary to section 190 or 241,

are jointly and severally liable to restore to the corporation any amounts so distributed or paid and not otherwise recovered by the corporation.

(3) Subsection 118(4) reads as follows:

(4) A director liable under subsection (2) is entitled to apply to a court for an order compelling a shareholder or other recipient to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 34, 35, 36, 41, 42, 44, 124, 190 or 241.

(4) The relevant portion of subsection 118(5) reads as follows:

(5) In connection with an application under subsection (4) a court may, if it is satisfied that it is equitable to do so,

    (a) order a shareholder or other recipient to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 34, 35, 36, 41, 42, 44, 124, 190 or 241;

Clause 47: (1) Subsection 119(1) reads as follows:

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

(2) Subsection 119(5) reads as follows:

(5) Where a director pays a debt referred to in subsection (1) that is proved in liquidation and dissolution or bankruptcy proceedings, he is entitled to any preference that the employee would have been entitled to, and where a judgment has been obtained he is entitled to an assignment of the judgment.

Clause 48: Section 120 reads as follows:

120. (1) A director or officer of a corporation who

    (a) is a party to a material contract or proposed material contract with the corporation, or

    (b) is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the corporation,

shall disclose in writing to the corporation or request to have entered in the minutes of meetings of directors the nature and extent of his interest.

(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 is first considered;

    (b) if the director was not then interested in a proposed contract, at the first meeting after he becomes so interested;

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

    (d) if a person who is interested in a contract later becomes a director, at the first meeting after he 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) forthwith after he becomes aware that the contract or proposed contract is to be considered or has been considered at a meeting of directors;

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

    (c) if a person who is interested in a contract later becomes an officer, forthwith after he becomes an officer.

(4) If a material contract or proposed material contract is one that, in the ordinary course of the corporation's business, would not require approval by the directors or shareholders, a director or officer shall disclose in writing to the corporation or request to have entered in the minutes of meetings of directors the nature and extent of his interest forthwith after the director or officer becomes aware of the contract or proposed contract.

(5) A director referred to in subsection (1) shall not vote on any resolution to approve the contract unless the contract is

    (a) an arrangement by way of security for money lent to or obligations undertaken by him for the benefit of the corporation or an affiliate;

    (b) one relating primarily to his remuneration as a director, officer, employee or agent of the corporation or an affiliate;

    (c) one for indemnity or insurance under section 124; or

    (d) one with an affiliate.

(6) For the purposes of this section, a general notice to the directors by a director or officer, declaring that he is a director or officer of or has a material interest in a person and is to be regarded as interested in any contract made with that person, is a sufficient declaration of interest in relation to any contract so made.

(7) A material contract between a corporation and one or more of its directors or officers, or between a corporation and another person of which a director or officer of the corporation is a director or officer or in which he has a material interest, is neither void nor voidable by reason only of that relationship or by reason only that a director with an interest in the contract is present at or is counted to determine the presence of a quorum at a meeting of directors or committee of directors that authorized the contract, if the director or officer disclosed his interest in accordance with subsection (2), (3), (4) or (6), as the case may be, and the contract was approved by the directors or the shareholders and it was reasonable and fair to the corporation at the time it was approved.

(8) Where a director or officer of a corporation fails to disclose his interest in a material contract in accordance with this section, a court may, on the application of the corporation or a shareholder of the corporation, set aside the contract on such terms as it thinks fit.

Clause 49: The relevant portion of subsection 121 reads as follows:

121. Subject to the articles, the by-laws or any unanimous shareholder 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 business and affairs of the corporation, except powers to do anything referred to in subsection 115(3);

Clause 50: Subsection 123(5) is new. Subsection 123(4) reads as follows:

(4) A director is not liable under section 118, 119 or 122 if he relies in good faith on

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

    (b) a report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by him.

Clause 51: Section 124 reads as follows:

124. (1) Except in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favour, a corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation's request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of such corporation or body corporate, if

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

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

(2) A corporation may with the approval of a court indemnify a person referred to in subsection (1) in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favour, to which he is made a party by reason of being or having been a director or an officer of the corporation or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with such action if he fulfils the conditions set out in paragraphs (1)(a) and (b).

(3) Notwithstanding anything in this section, a person referred to in subsection (1) is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by him in connection with the defence of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity

    (a) was substantially successful on the merits in his defence of the action or proceeding; and

    (b) fulfils the conditions set out in paragraphs (1)(a) and (b).

(4) A corporation may purchase and maintain insurance for the benefit of any person referred to in subsection (1) against any liability incurred by him

    (a) in his capacity as a director or officer of the corporation, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the corporation; or

    (b) in his capacity as a director or officer of another body corporate where he acts or acted in that capacity at the corporation's request, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the body corporate.

(5) A corporation or a person referred to in subsection (1) may apply to a court for an order approving an indemnity under this section and the court may so order and make any further order it thinks fit.

(6) An applicant under subsection (5) shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel.

(7) On an application under subsection (5), the court may order notice to be given to any interested person and such person is entitled to appear and be heard in person or by counsel.

Clause 52: (1) and (2) The definitions ``distributing corporation'', ``insider'' and ``officer'' in subsection 126(1) read as follows:

``distributing corporation'' means a corporation, any of the issued securities of which are or were part of a distribution to the public and remain outstanding and are held by more than one person;

``insider'' means, except in section 131,

      (a) a director or officer of a distributing corporation,

      (b) a distributing corporation that purchases or otherwise acquires, except by means of a redemption under section 36, shares issued by it,

      (c) a distributing corporation that purchases or otherwise acquires or sells shares issued by any of its affiliates, or

      (d) a person who beneficially owns more than ten per cent of the shares of a distributing corporation or who exercises control or direction over more than ten per cent of the votes attached to shares of a distributing corporation, excluding shares owned by an underwriter under an underwriting agreement while those shares are in the course of a distribution to the public;

``officer'' means

      (a) the chairman, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any such office, and

      (b) each of the five highest paid employees of a corporation including any individual mentioned in paragraph (a);

(3) New.

(4) The relevant portion of subsection 126(2) reads as follows:

(2) For the purposes of this Part,

    (a) a director or an officer of a body corporate that is an insider of a distributing corporation is deemed to be an insider of the distributing corporation;

(5) Subsections 126(3) and (4) read as follows:

(3) For the purposes of this Part,

    (a) if a body corporate becomes an insider of a distributing corporation, or enters into a business combination with a distributing corporation, a director or an officer of the body corporate or a shareholder of the body corporate who is a person referred to in paragraph (d) of the definition ``insider'' is deemed to have been an insider of the distributing corporation for the previous six months or for such shorter period as he was a director, an officer or such a shareholder of the body corporate; and

    (b) if a distributing corporation becomes an insider of a body corporate or enters into a business combination with a body corporate, a director or an officer of the body corporate or a shareholder of the body corporate who is a person referred to in paragraph (d) of the definition ``insider'' is deemed to have been an insider of the distributing corporation for the previous six months or for such shorter period as he was a director, an officer or such a shareholder of the body corporate.

(4) In subsection (3), ``business combination'' means an acquisition of all or substantially all the property of one body corporate by another or an amalgamation of two or more bodies corporate.

Clause 53: Sections 127 to 129 read as follows:

127. (1) Unless he has filed or has been exempted from filing an insider report under the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, or has been exempted from filing an insider report by the regulations, a person who is an insider of a body corporate on the day on which it is continued as a corporation under this Act shall, if the corporation is a distributing corporation, send to the Director an insider report in prescribed form within ten days after the end of the month in which such day occurs.

(2) A person who becomes an insider shall, within ten days after the end of the month in which he becomes an insider, send to the Director an insider report in the prescribed form.

(3) A person who is deemed to have been an insider under subsection 126(3) shall, within ten days after the end of the month in which he is deemed to have become an insider, send to the Director the insider reports for the period in respect of which he is deemed to have been an insider that he would have been required to send under this section had he been otherwise an insider for such period.

(4) An insider whose interest in securities of a distributing corporation changes from that shown or required to be shown in the last insider report sent or required to be sent by him shall, within ten days after the end of the month in which such change takes place, send to the Director an insider report in the prescribed form.

(5) An insider report of a person that includes securities deemed to be beneficially owned by that person is deemed to be an insider report of a body corporate referred to in paragraph 126(2)(c) and the body corporate is not required to send a separate insider report.

(6) An insider report of a body corporate that includes securities deemed to be beneficially owned by the body corporate is deemed to be an insider report of an affiliate referred to in paragraph 126(2)(d) and the affiliate is not required to send a separate insider report.

(7) An insider report of a person that includes securities deemed beneficially owned by that person shall disclose separately

    (a) the number or amount of the securities owned by a body corporate; and

    (b) the name of the body corporate.

(8) On an application by or on behalf of an insider, the Director may make an order on such terms as he thinks fit exempting the insider from any of the requirements of this section, which order may have retrospective effect.

(9) A person who, without reasonable cause, fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

(10) Where a body corporate commits an offence under subsection (9), any director or officer of the body corporate who knowingly authorized, permitted or acquiesced in the commission of the offence is a party to and guilty of the offence and is liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both, whether or not the body corporate has been prosecuted or convicted.

128. A corporation that proposes to purchase or otherwise acquire its own shares otherwise than by means of a purchase or redemption under section 36 shall, in the prescribed circumstances, give notice to the Director of the proposed purchase or other acquisition in the manner prescribed.

129. The Director shall summarize in a periodical available to the public the information contained in insider reports sent to him under sections 127 and 128 and the particulars of exemptions granted under subsection 127(8) together with the reasons therefor.

Clause 54: Sections 130 and 131 read as follows:

130. (1) An insider shall not knowingly sell, directly or indirectly, a share of the distributing corporation or any of its affiliates if the insider selling the share does not own or has not fully paid for the share to be sold.

(2) An insider shall not, directly or indirectly, buy or sell a call or put in respect of a share of the corporation or any of its affiliates.

(3) Notwithstanding subsection (1), an insider may sell a share he does not own if he owns another share convertible into the share sold or an option or right to acquire the share sold and, within ten days after the sale, he

    (a) exercises the conversion privilege, option or right and delivers the share so acquired to the purchaser; or

    (b) transfers the convertible share, option or right to the purchaser.

(4) An insider who contravenes subsection (1) or (2) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

131. (1) In this section, ``insider'' means, with respect to a corporation,

    (a) the corporation;

    (b) an affiliate of the corporation;

    (c) a director or an officer of the corporation;

    (d) a person who beneficially owns more than ten per cent of the shares of the corporation or who exercises control or direction over more than ten per cent of the votes attached to the shares of the corporation;

    (e) a person employed or retained by the corporation; and

    (f) a person who receives specific confidential information from a person described in this subsection or in subsection (2), including a person described in this paragraph, and who has knowledge that the person giving the information is a person described in this subsection or in subsection (2), including a person described in this paragraph.

(2) For the purposes of this section,

    (a) if a body corporate becomes an insider of a corporation, or enters into a business combination with a corporation, a director or officer of the body corporate is deemed to have been an insider of the corporation for the previous six months or for such shorter period as he was a director or an officer of the body corporate; and

    (b) if a corporation becomes an insider of a body corporate, or enters into a business combination with a body corporate, a director or an officer of the body corporate is deemed to have been an insider of the corporation for the previous six months or for such shorter period as he was a director or officer of the body corporate.

(3) In subsection (2), ``business combination'' means an acquisition of all or substantially all the property of one body corporate by another or an amalgamation of two or more bodies corporate.

(4) An insider who, in connection with a transaction in a security of the corporation or any of its affiliates, makes use of any specific confidential information for his own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security

    (a) is liable to compensate any person for any direct loss suffered by that person as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to that person; and

    (b) is accountable to the corporation for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

(5) An action to enforce a right created by subsection (4) may be commenced

    (a) only within two years after discovery of the facts that gave rise to the cause of action; or

    (b) if the transaction was required to be reported under section 127, only within two years from the time of reporting under that section.

Clause 55: Subsections 132(3) to (5) are new. Subsection 132(2) reads as follows:

(2) Notwithstanding subsection (1), a meeting of shareholders of a corporation may be held outside Canada if all the shareholders entitled to vote at that meeting so agree, and a shareholder who attends a meeting of shareholders held outside Canada is deemed to have so agreed except when he 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.

Clause 56: Section 133 reads as follows:

133. The directors of a corporation

    (a) shall call an annual meeting of shareholders not later than eighteen months after the corporation comes into existence and subsequently not later than fifteen months after holding the last preceding annual meeting; and

    (b) may at any time call a special meeting of shareholders.

Clause 57: (1) Subsections 134(1) and (2) read as follows:

134. (1) For the purpose of determining shareholders

    (a) entitled to receive payment of a dividend,

    (b) entitled to participate in a liquidation distribution, or

    (c) for any other purpose except the right to receive notice of or to vote at a meeting,

the directors may fix in advance a date as the record date for such determination of shareholders, but such record date shall not precede by more than fifty days the particular action to be taken.

(2) For the purpose of determining shareholders entitled to receive notice of a meeting of shareholders, the directors may fix in advance a date as the record date for such determination of shareholders, but such record date shall not precede by more than fifty days or by less than twenty-one days the date on which the meeting is to be held.

(2) The relevant portion of subsection 134(3) reads as follows:

(3) If no record date is fixed,

(3) The relevant portion of subsection 134(4) reads as follows:

(4) If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice thereof shall, not less than seven days before the date so fixed, be given

Clause 58: Subsection 135(1.1) is new. Subsections 135(1) and (2) read as follows:

135. (1) Notice of the time and place of a meeting of shareholders shall be sent not less than twenty-one days nor more than fifty days before the meeting,

    (a) to each shareholder entitled to vote at the meeting;

    (b) to each director; and

    (c) to the auditor of the corporation.

(2) A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the corporation or its transfer agent on the record date determined under subsection 134(2) or (3), but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

Clause 59: (1) Subsections 137(1.1) to (1.4) are new. Subsection 137(1) reads as follows:

137. (1) A shareholder entitled to vote at an annual meeting of shareholders may

    (a) submit to the corporation notice of any matter that he proposes to raise at the meeting, hereinafter referred to as a ``proposal''; and

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

(2) Subsection 137(3) reads as follows:

(3) If so requested by the shareholder, the corporation shall include in the management proxy circular or attach thereto a statement by the shareholder of not more than two hundred words in support of the proposal, and the name and address of the shareholder.

(3) Subsection 137(5.1) is new. Subsection 137(5) reads as follows:

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

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

    (b) it clearly appears that the proposal is submitted by the shareholder primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the corporation or its directors, officers or security holders, or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes;

    (c) the corporation, at the shareholder's request, included a proposal in a management proxy circular relating to a meeting of shareholders held within two years preceding the receipt of such request, and the shareholder failed to present the proposal, in person or by proxy, at the meeting;

    (d) substantially the same proposal was submitted to shareholders in a management proxy circular or a dissident's proxy circular relating to a meeting of shareholders held within two years preceding the receipt of the shareholder's request and the proposal was defeated; or

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

(4) Subsections 137(7) and (8) read as follows:

(7) If a corporation refuses to include a proposal in a management proxy circular, the corporation shall, within ten days after receiving the proposal, notify the shareholder submitting the proposal of its intention to omit the proposal from the management proxy circular and send to him a statement of the reasons for the refusal.

(8) On the application of a shareholder claiming to be aggrieved by a corporation's refusal under subsection (7), a court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

Clause 60: Subsection 138(3.1) is new. Subsections 138(1) to (3) read as follows:

138. (1) A corporation shall prepare a list of shareholders entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of shares held by each shareholder,

    (a) if a record date is fixed under subsection 134(2), not later than ten days after that date; or

    (b) if no record date is fixed

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

      (ii) where no notice is given, on the day on which the meeting is held.

(2) Where a corporation fixes a record date under subsection 134(2), a person named in the list prepared under paragraph (1)(a) is entitled to vote the shares shown opposite his name at the meeting to which the list relates, except to the extent that

    (a) the person has transferred the ownership of any of his shares after the record date, and

    (b) the transferee of those shares

      (i) produces properly endorsed share certificates, or

      (ii) otherwise establishes that he owns the shares

    and demands, not later than ten days before the meeting or such shorter period before the meeting as the by-laws of the corporation may provide, that his name be included in the list before the meeting

in which case the transferee is entitled to vote his shares at the meeting.

(3) Where a corporation does not fix a record date under subsection 134(2), a person named in a list prepared under paragraph (1)(b) is entitled to vote the shares shown opposite his name at the meeting to which the list relates except to the extent that

    (a) the person has transferred the ownership of any of his shares after the date on which a list referred to in subparagraph (1)(b)(i) is prepared, and

    (b) the transferee of those shares

      (i) produces properly endorsed share certificates or otherwise establishes that he owns the shares, and

      (ii) demands, not later than ten days before the meeting or such shorter period before the meeting as the by-laws of the corporation may provide, that his name be included in the list before the meeting

in which case the transferee is entitled to vote his shares at the meeting.

Clause 61: New.

Clause 62: New.

Clause 63: The relevant portion of subsection 143(3) reads as follows:

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

    (a) a record date has been fixed under subsection 134(2) and notice thereof has been given under subsection 134(4);

Clause 64: Subsection 144(1) reads as follows:

144. (1) If for any reason it is impracticable to call a meeting of shareholders of a corporation in the manner in which meetings of those shareholders may be called, or to conduct the meeting in the manner prescribed by the by-laws and this Act, or if for any other reason a court thinks fit, the court, on the application of a director, a shareholder entitled to vote at the meeting or the Director, may order a meeting to be called, held and conducted in such manner as the court directs.

Clause 65: The relevant portion of subsection 145(2) reads as follows:

(2) On an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

    . . .

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

Clause 66: Section 145.1 is new. Section 146 reads as follows:

146. (1) A written agreement between two or more shareholders may provide that in exercising voting rights the shares held by them shall be voted as therein provided.

(2) An otherwise lawful written agreement among all the shareholders of a corporation, or among all the shareholders and a person who is not a shareholder, that restricts, in whole or in part, the powers of the directors to manage the business and affairs of the corporation is valid.

(3) Where a person who is the beneficial owner of all the issued shares of a corporation makes a written declaration that restricts in whole or in part the powers of the directors to manage the business and affairs of a corporation, the declaration is deemed to be a unanimous shareholder agreement.

(4) Subject to subsection 49(8), a transferee of shares subject to a unanimous shareholder agreement is deemed to be a party to the agreement.

(5) A shareholder who is a party to a unanimous shareholder agreement has all the rights, powers and duties of a director of the corporation to which the agreement relates to the extent that the agreement restricts the powers of the directors to manage the business and affairs of the corporation, and the directors are thereby relieved of their duties and liabilities, including any liabilities under section 119, to the same extent.

Clause 67: (1) and (2) The definitions ``registrant'' and '' ``solicit'' or ``solicitation'' '' in section 147 read as follows:

``registrant'' means a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;

``solicit'' or ``solicitation'' includes

      (a) a request for a proxy whether or not accompanied by or included in a form of proxy,

      (b) a request to execute or not to execute a form of proxy or to revoke a proxy,

      (c) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

      (d) the sending of a form of proxy to a shareholder under section 149,

    but does not include

      (e) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,

      (f) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,

      (g) the sending by a registrant of the documents referred to in section 153, or

      (h) a solicitation by a person in respect of shares of which he is the beneficial owner;

(3) New.

Clause 68: Subsection 149(2) reads as follows:

(2) Where a corporation has fewer than fifteen shareholders, two or more joint holders being counted as one shareholder, the management of the corporation is not required to send a form of proxy under subsection (1).

Clause 69: New.

Clause 70: Subsections 151(1) and (2) read as follows:

151. (1) On the application of an interested person, the Director may make an order on such terms as he thinks fit exempting such person from any of the requirements of section 149 or subsection 150(1), which order may have retrospective effect.

(2) The Director shall set out in the periodical referred to in section 129 the particulars of exemptions granted under this section together with the reasons therefor.

Clause 71: The relevant portion of subsection 152(3) reads as follows:

(3) Notwithstanding subsections (1) and (2), where the chairman of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what to his knowledge will be the decision of the meeting in relation to any matter or group of matters is less than five per cent of all the votes that might be cast at the meeting on such ballot, unless a shareholder or proxyholder demands a ballot,

Clause 72: Section 153 reads as follows:

153. (1) Shares of a corporation that are registered in the name of a registrant or his nominee and not beneficially owned by the registrant shall not be voted unless the registrant, forthwith after receipt of the notice of the meeting, financial statements, management proxy circular, dissident's proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy thereof to the beneficial owner and, except where the registrant has received written voting instructions from the beneficial owner, a written request for such instructions.

(2) A registrant shall not vote or appoint a proxyholder to vote shares registered in his name or in the name of his nominee that he does not beneficially own unless he receives voting instructions from the beneficial owner.

(3) A person by or on behalf of whom a solicitation is made shall, at the request of a registrant, forthwith furnish the registrant at that person's expense with the necessary number of copies of the documents referred to in subsection (1) other than copies of the document requesting voting instructions.

(4) A registrant shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.

(5) If requested by a beneficial owner, a registrant shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

(6) The failure of a registrant to comply with this section does not render void any meeting of shareholders or any action taken thereat.

(7) Nothing in this section gives a registrant the right to vote shares that he is otherwise prohibited from voting.

(8) A registrant who knowingly fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

(9) Where a registrant who is a body corporate commits an offence under subsection (8), any director or officer of the body corporate who knowingly authorized, permitted or acquiesced in the commission of the offence is a party to and guilty of the offence and is liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both, whether or not the body corporate has been prosecuted or convicted.

Clause 73: The heading before section 155 reads as follows:

FINANCIAL DISCLOSURE

Clause 74: Section 156 reads as follows:

156. A corporation may apply to the Director for an order authorizing the corporation to omit from its financial statements any item prescribed, or to dispense with the publication of any particular financial statement prescribed, and the Director may, if he reasonably believes that disclosure of the information therein contained would be detrimental to the corporation, permit such omission on such reasonable conditions as he thinks fit.

Clause 75: Subsection 157(2) reads as follows:

(2) Shareholders of a corporation and their agents and legal representatives may on request therefor examine the statements referred to in subsection (1) during the usual business hours of the corporation and may make extracts therefrom free of charge.

Clause 76: Subsection 158(1) reads as follows:

158. (1) The directors of a corporation shall approve the financial statements referred to in section 155 and the approval shall be evidenced by the signature of one or more directors.

Clause 77: Section 160 reads as follows:

160. (1) A corporation any of the securities of which are or were part of a distribution to the public, remain outstanding and are held by more than one person shall send a copy of the documents referred to in section 155 to the Director

    (a) not less than twenty-one days before each annual meeting of shareholders or forthwith after the signing of a resolution under paragraph 142(1)(b) in lieu of the annual meeting; and

    (b) in any event not later than fifteen months after the last date when the last preceding annual meeting should have been held or a resolution in lieu of the meeting should have been signed.

(2) and (3) [Repealed.]

(4) If a corporation referred to in subsection (1)

    (a) sends to its shareholders, or

    (b) is required to file with or send to a public authority or a stock exchange

interim financial statements or related documents, the corporation shall forthwith send copies thereof to the Director.

(5) 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.

(6) A corporation that fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars.

Clause 78: (1) New.

(2) Subsection 161(5) reads as follows:

(5) An interested person may apply to a court for an order exempting an auditor from disqualification under this section and the court may, if it is satisfied that an exemption would not unfairly prejudice the shareholders, make an exemption order on such terms as it thinks fit, which order may have retrospective effect.

Clause 79: Subsection 163(1) reads as follows:

163. (1) The shareholders of a corporation that is not required to comply with section 160 may resolve not to appoint an auditor.

Clause 80: Subsection 168(5.1) is new. Subsection 168(6) reads as follows:

(6) The corporation shall forthwith send a copy of the statement referred to in subsection (5) to every shareholder entitled to receive notice of any meeting referred to in subsection (1) and to the Director unless the statement is included in or attached to a management proxy circular required by section 150.

Clause 81: New.

Clause 82: Subsection 171(2) reads as follows:

(2) A corporation may apply to the Director for an order authorizing the corporation to dispense with an audit committee, and the Director may, if he is satisfied that the shareholders will not be prejudiced by such an order, permit the corporation to dispense with an audit committee on such reasonable conditions as he thinks fit.

Clause 83: (1) and (2) The relevant portion of subsection 173(1) reads as follows:

173. (1) Subject to sections 176 and 177, the articles of a corporation may by special resolution be amended to

    . . .

    (b) change the place in which its registered office is situated;

    (c) add, change or remove any restriction on the business or businesses that the corporation may carry on;

Clause 84: (1) and (2) The relevant portion of subsection 174(1) reads as follow:

174. (1) Subject to sections 176 and 177, a corporation any of the issued shares of which are or were part of a distribution to the public and remain outstanding and are held by more than one person may by special resolution amend its articles in accordance with the regulations to constrain

    . . .

    (d) the issue, transfer or ownership of shares of any class or series in order to assist the corporation to comply with

      (i) section 379 of the Trust and Loan Companies Act, or

      (ii) section 411 of the Insurance Companies Act; or

Clause 85: Subsection 177(1) reads as follows:

177. (1) Subject to any revocation under subsection 173(2) or 174(5), after an amendment has been adopted under section 173, 174 or 176 articles of amendment in prescribed form shall be sent to the Director.

Clause 86: (1) and (2) Subsections 180(1) and (2) read as follows:

180. (1) The directors may at any time, and shall when reasonably so directed by the Director, restate the articles of incorporation as amended.

(2) Restated articles of incorporation in prescribed form shall be sent to the Director.

Clause 87: Subsections 183(3) and (4) read as follows:

(3) Each share of an amalgamating corporation carries the right to vote in respect of an amalgamation whether or not it otherwise carries the right to vote.

(4) The holders of shares of a class or series of shares of an amalgamating corporation are entitled to vote separately as a class or series in respect of an amalgamation if the amalgamation agreement contains a provision that, if contained in a proposed amendment to the articles, would entitle such holders to vote as a class or series under section 176.

Clause 88: (1) The relevant portion of subsection 184(1) reads as follows:

184. (1) A holding corporation and one or more of its subsidiary corporations may amalgamate and continue as one corporation without complying with sections 182 and 183 if

    . . .

    (b) the resolutions provide that

      . . .

      (ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of incorporation of the amalgamating holding corporation, and

(2) The relevant portion of subsection 184(2) reads as follows:

(2) Two or more wholly-owned subsidiary corporations of the same holding body corporate may amalgamate and continue as one corporation without complying with sections 182 and 183 if

    . . .

    (b) the resolutions provide that

      . . .

      (ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of incorporation of the amalgamating subsidiary corporation whose shares are not cancelled, and

Clause 89: Subsection 185(1) reads as follows:

185. (1) Subject to subsection 183(6), after an amalgamation has been adopted under section 183 or approved under section 184, articles of amalgamation in prescribed form shall be sent to the Director together with the documents required by sections 19 and 106.

Clause 90: Subsection 186.1(4) reads as follows:

(4) For the purposes of section 262, a notice referred to in subsection (3) is deemed to be articles that are in the prescribed form.

Clause 91: (1) Subsection 187(3) reads as follows:

(3) Articles of continuance in prescribed form shall be sent to the Director together with the documents required by sections 19 and 106.

(2) Subsection 187(11) reads as follows:

(11) Where the Director determines, on the application of a body corporate, that it is not practicable to change a reference to the nominal or par value of shares of a class or series that the body corporate was authorized to issue before it was continued under this Act, the Director may, notwithstanding subsection 24(1), permit the body corporate to continue to refer in its articles to those shares, whether issued or unissued, as shares having a nominal or par value.

Clause 92: (1) Subsections 188(1) to (2.1) read as follows:

188. (1) Subject to subsections (2) and (10), a corporation

    (a) that is authorized by the shareholders in accordance with this section, and

    (b) that establishes to the satisfaction of the Director that its proposed continuance in another jurisdiction will not adversely affect credi tors or shareholders of the corporation

may apply to the appropriate official or public body of the other jurisdiction requesting that the corporation be continued as if it had been incorporated under the laws of that other jurisdiction.

(2) A corporation to which the Investment Companies Act applies shall not apply for continuance in another jurisdiction without the prior consent of the Minister of Finance.

(2.1) A corporation that is authorized by the shareholders in accordance with this section may apply to the appropriate Minister for its continuance under the Bank Act, the Canada Cooperative Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act.

(2) Subsection 188(8) reads as follows:

(8) For the purposes of section 262, a notice referred to in subsection (7) is deemed to be articles that are in the prescribed form.

Clause 93: (1) and (2) The relevant portion of subsection 189(1) reads as follows:

189. (1) Unless the articles or by-laws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the articles of a corporation are deemed to state that the directors of a corporation may, without authorization of the shareholders,

    . . .

    (b) issue, reissue, sell or pledge debt obligations of the corporation;

    (c) subject to section 44, give a guarantee on behalf of the corporation to secure performance of an obligation of any person; and

Clause 94: (1) and (2) Paragraph 190(1)(f) is new. The relevant portion of subsection 190(1) reads as follows:

190. (1) Subject to sections 191 and 241, a holder of shares of any class of a corporation may dissent if the corporation is subject to an order under paragraph 192(4)(d) that affects the holder or if the corporation resolves to

    . . .

    (b) amend its articles under section 173 to add, change or remove any restriction on the business or businesses that the corporation may carry on;

(3) New.

Clause 95: Subsection 191(4) reads as follows:

(4) After an order referred to in subsection (1) has been made, articles of reorganization in prescribed form shall be sent to the Director together with the documents required by sections 19 and 113, if applicable.

Clause 96: (1) Paragraph 192(1)(f.1) is new. The relevant portion of subsection 192(1) reads as follows:

192. (1) In this section, ``arrangement'' includes

    . . .

    (f) an exchange of securities of a corporation held by security holders for property, money or other securities of the corporation or property, money or securities of another body corporate that is not a take-over bid as defined in section 194;

(2) Subsection 192(3) reads as follows:

(3) Where it is not practicable for a corporation that is not insolvent to effect a fundamental change in the nature of an arrangement under any other provision of this Act, the corporation may apply to a court for an order approving an arrangement proposed by the corporation.

(3) Subsection 192(6) reads as follows:

(6) After an order referred to in paragraph (4)(e) has been made, articles of arrangement in prescribed form shall be sent to the Director together with the documents required by sections 19 and 113, if applicable.

Clause 97: The heading before section 193 and sections 193 to 205 read as follows:

PROSPECTUS QUALIFICATION

193. A corporation that files or distributes in any jurisdiction a prospectus, statement of material facts, registration statement, securities exchange take-over bid circular or similar document relating to the distribution to the public of the securities of the corporation shall forthwith send to the Director a copy of any such document.

TAKE-OVER BIDS

194. In this Part,

``exempt offer'' means an offer

      (a) to fewer than fifteen shareholders to purchase shares by way of separate agreements,

      (b) to purchase shares through a stock exchange or in the over-the-counter market in such circumstances as may be prescribed,

      (c) to purchase shares of a corporation that has fewer than fifteen shareholders, two or more joint holders being counted as one shareholder,

      (d) exempted under section 204, or

      (e) by a corporation to repurchase its own shares to be held under section 32;

``offer'' includes an invitation to make an offer;

``offeree'' means a person to whom a take-over bid is made;

``offeree corporation'' means a corporation whose shares are the object of a take-over bid;

``offeror'' means a person, other than an agent, who makes a take-over bid, and includes two or more persons who, directly or indirectly,

      (a) make take-over bids jointly or in concert, or

      (b) intend to exercise jointly or in concert voting rights attached to shares for which a take-over bid is made;

``share'' means a share carrying voting rights under all circumstances or by reason of the occurrence of an event that has occurred and that is continuing, and includes

      (a) a security currently convertible into such a share, and

      (b) currently exercisable options and rights to acquire such a share or such a convertible security;

``take-over bid'' means an offer, other than an exempt offer, made by an offeror to shareholders at approximately the same time to acquire shares that, if combined with shares already beneficially owned or controlled, directly or indirectly, by the offeror or an affiliate or associate of the offeror on the date of the take-over bid, would exceed ten per cent of any class of issued shares of an offeree corporation and includes every offer, other than an exempt offer, by an issuer to repurchase its own shares.

195. Where a take-over bid is for all the shares of any class,

    (a) shares deposited pursuant to the take-over bid, if not taken up by the offeror, may be withdrawn by or on behalf of an offeree at any time after sixty days following the date of the take-over bid;

    (b) the offeror shall not take up shares deposited pursuant thereto until ten days after the date of the take-over bid; and

    (c) the offeror, if he so intends, shall state in the take-over bid circular that he intends to invoke the right under section 206 to acquire the shares of offerees who do not accept the take-over bid and that the offeree is entitled to dissent and to demand the fair value of his shares.

196. (1) Where a take-over bid is for less than all the shares of any class,

    (a) the offeror shall not take up shares deposited pursuant thereto until twenty-one days after the date of the take-over bid;

    (b) the period of time within which shares may be deposited pursuant to the take-over bid or any extension thereof shall not exceed thirty-five days from the date of the take-over bid; and

    (c) if a greater number of shares is deposited pursuant to the take-over bid than the offeror is bound or willing to take up and pay for, the shares taken up by the offeror shall be taken up rateably, disregarding fractions, according to the number of shares deposited by each offeree.

(2) Where a take-over bid for all the shares of any class is converted by amendment or otherwise to a bid for less than all the shares of a class, the take-over bid is deemed to be a take-over bid to which subsection (1) applies.

197. Whether a take-over bid is for all or less than all the shares of any class,

    (a) shares deposited pursuant to the take-over bid may be withdrawn by or on behalf of an offeree at any time within ten days after the date of the take-over bid;

    (b) shares deposited pursuant to the take-over bid shall, if the terms stipulated by the offeror and not subsequently waived by him have been complied with, be taken up and paid for within fourteen days after the last day within which shares may be deposited pursuant to the take-over bid;

    (c) the period of time within which shares may be deposited pursuant to a take-over bid shall not be less than twenty-one days after the date of the take-over bid;

    (d) if the terms of the take-over bid are amended by increasing the consideration offered for the shares, the offeror shall pay the increased consideration to each offeree whose shares are taken up pursuant to the take-over bid whether or not such shares have been taken up by the offeror before the amendment of the take-over bid;

    (e) if the offeror intends to purchase shares to which the take-over bid relates in the market during the period of time within which shares may be deposited pursuant to the take-over bid, the offeror shall so state in the take-over bid circular; and

    (f) if the offeror purchases shares to which a take-over bid relates other than pursuant to the take-over bid during the period of time within which shares may be deposited pursuant to the take-over bid,

      (i) the payment other than pursuant to the take-over bid of an amount for a share that is greater than the amount offered in the take-over bid is deemed to be an amendment of the take-over bid to which paragraph (d) applies,

      (ii) the offeror shall immediately notify the offerees of the increased consideration being offered for the shares,

      (iii) the shares acquired other than pursuant to the take-over bid shall be counted to determine whether a condition as to minimum acceptance has been fulfilled, and

      (iv) the shares acquired other than pursuant to the take-over bid shall not be counted among the shares taken up rateably under paragraph 196(1)(c).

198. (1) A take-over bid, including a copy of the take-over bid circular in prescribed form and any amendment of the take-over bid, shall be sent concurrently to each director of the offeree corporation, to each shareholder of the offeree corporation resident in Canada and to the Director.

(2) A take-over bid is deemed to be dated as of the date on which it is sent.

(3) For the purposes of this section and section 201, a shareholder of an offeree corporation is deemed to be resident in Canada if his latest address as shown in the securities register of the offeree corporation is an address within Canada.

199. Where a take-over bid states that the consideration for the shares deposited pursuant thereto is to be paid in money or partly in money, the offeror shall make adequate arrangements to ensure that funds are available to make the required money payment for such shares.

200. Where a take-over bid states that the consideration for the shares of the offeree corporation is to be, in whole or in part, securities of the offeror or any other body corporate, the take-over bid circular shall be in prescribed form.

201. (1) The directors of an offeree corporation shall send a directors' circular in prescribed form to each director of the offeree corporation, to each shareholder of the offeree corporation resident in Canada, to the offeror and to the Director.

(2) Unless the directors of an offeree corporation send a directors' circular under subsection (1) within ten days of the date of the take-over bid, the directors shall forthwith notify the offerees and the Director that a directors' circular will be sent and may recommend that the offerees do not tender their shares pursuant to the take-over bid until they receive the directors' circular.

(3) The notice required by subsection (2) shall be in prescribed form.

(4) The directors shall send the directors' circular required by subsection (1) to each offeree and to the Director at least seven days before the date the take-over bid terminates or before the sixtieth day of the take-over bid, whichever is earlier.

(5) Where a director of an offeree corporation is of the opinion that a take-over bid is not advantageous to the shareholders of the offeree corporation or where a director disagrees with any statement in a directors' circular, he is entitled to indicate his opinion or disagreement in the directors' circular required by subsection (1) and, if he indicates his opinion or disagreement, he shall include in that circular a statement setting out the reasons for his opinion or disagreement.

202. (1) A report, opinion or statement of a solicitor, auditor, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by him shall not be included in a take-over bid circular or a directors' circular unless that person has consented in writing to the use of the report, opinion or statement.

(2) On the demand of the Director, a person referred to in subsection (1) shall forthwith send to the Director a copy of any report, opinion or statement referred to in that subsection that is made by that person together with a copy of his consent.

203. (1) When a take-over bid is made by or on behalf of a body corporate, the directors of the body corporate shall approve the take-over bid and the take-over bid circular, and the approval shall be evidenced on the circular by the signature of one or more directors.

(2) The directors of an offeree corporation shall approve a directors' circular that contains the recommendations of a majority of the directors, and the approval shall be evidenced by the signature of one or more directors.

204. (1) Any interested person may apply to a court having jurisdiction in the place where the offeree corporation has its registered office for an order exempting a take-over bid from any of the provisions of this Part, and the court may, if it is satisfied that an exemption would not unfairly prejudice a shareholder of the offeree corporation, make an exemption order on such terms as it thinks fit, which order may have retrospective effect.

(2) An applicant under subsection (1) shall give the Director notice of the hearing of an application under that subsection, and the Director is entitled to appear and be heard in person or by counsel.

(3) The Director shall set out in the periodical referred to in section 129 the particulars of exemptions granted under this section.

205. (1) An offeror who, without reasonable cause, fails to comply with this Part or the regulations is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

(2) Where an offeror who is a body corporate commits an offence under subsection (1), any director or officer of the body corporate who knowingly authorized, permitted or acquiesced in the commission of the offence is a party to and guilty of the offence and is liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both, whether or not the body corporate has been prosecuted or convicted.

(3) Where in connection with a take-over bid a person does not comply with this Act or the regulations, the Director or any interested person may apply to a court and on such application the court may make any order it thinks fit, including, without limiting the generality of the foregoing,

    (a) an order restraining the distribution of a take-over bid circular, a directors' circular or other document used in connection with the take-over bid;

    (b) an order, if the take-over bid is to continue, requiring correction of the take-over bid circular, directors' circular or other document and distribution of the corrected document to each offeree;

    (c) an order varying the dates and times referred to in sections 195 to 197;

    (d) an order requiring any person to comply with this Act or the regulations;

    (e) an order compensating an aggrieved person;

    (f) an order rescinding a transaction;

    (g) an order requiring an offeror to dispose of shares acquired pursuant to the take-over bid; and

    (h) an order prohibiting an offeror from voting shares acquired pursuant to a take-over bid.

(4) For the purposes of subsection (3), ``interested person'' includes

    (a) an offeree whether or not he deposits shares pursuant to a take-over bid;

    (b) an offeree corporation;

    (c) an offeror; and

    (d) a rival offeror.

Clause 98: New.

Clause 99: (1) The relevant portion of subsection 206(1) reads as follows:

206. (1) In this section,

(2) The definition ``take-over bid'' in subsection 206(1) reads as follows:

``take-over bid'' includes

      (a) an offer to purchase shares of a class of shares to which no voting rights are attached if the offer complies with sections 195 to 203, and

      (b) an offer to purchase shares, including shares to which no voting rights are attached, of a corporation having fewer than fifteen shareholders if the offer is made to all shareholders in the prescribed form and manner.

(3) New.

(4) and (5) The relevant portion of subsection 206(3) reads as follows:

(3) An offeror may acquire shares held by a dissenting offeree by sending by registered mail within sixty days after the date of termination of the take-over bid and in any event within one hundred and eighty days after the date of the take-over bid, an offeror's notice to each dissenting offeree and to the Director stating that

    (a) the offerees holding more than ninety per cent of the shares to which the bid relates accepted the take-over bid;

    . . .

    (d) a dissenting offeree who does not notify the offeror in accordance with subparagraph (c)(ii) is deemed to have elected to transfer his shares to the offeror on the same terms that the offeror acquired the shares from the offerees who accepted the take-over bid; and

(6) Subsection 206(5.1) is new. Subsections 206(5) and (6) read as follows:

(5) A dissenting offeree to whom an offeror's notice is sent under subsection (3) shall, within twenty days after he receives that notice, send his share certificates of the class of shares to which the take-over bid relates to the offeree corporation.

(6) Within twenty days after the offeror sends an offeror's notice under subsection (3), the offeror shall pay or transfer to the offeree corporation the amount of money or other consideration that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (3)(c)(i).

(7) New.

(8) Subsections 206(8) and (9) read as follows:

(8) Within thirty days after the offeror sends an offeror's notice under subsection (3), the offeree corporation shall

    (a) issue to the offeror a share certificate in respect of the shares that were held by dissenting offerees;

    (b) give to each dissenting offeree who elects to accept the take-over bid terms under subparagraph (3)(c)(i) and who sends his share certificates as required under subsection (5) the money or other consideration to which he is entitled, disregarding fractional shares, which may be paid for in money; and

    (c) send to each dissenting shareholder who has not sent his share certificates as required under subsection (5) a notice stating that

      (i) his shares have been cancelled,

      (ii) the offeree corporation or some designated person holds in trust for him the money or other consideration to which he is entitled as payment for or in exchange for his shares, and

      (iii) the offeree corporation will, subject to subsections (9) to (18), send that money or other consideration to him forthwith after receiving his shares.

(9) If a dissenting offeree has elected to demand payment of the fair value of his shares under subparagraph (3)(c)(ii), the offeror may, within twenty days after it has paid the money or transferred the other consideration under subsection (6), apply to a court to fix the fair value of the shares of that dissenting offeree.

(9) Subsection 206(13) reads as follows:

(13) A dissenting offeree is not required to give security for costs in an application made under subsection (9) or (10).

(10) The relevant portion of subsection 206(14) reads as follows:

(14) On an application under subsection (9) or (10)

    (a) all dissenting offerees referred to in subparagraph (3)(c)(ii) whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and

(11) The relevant portion of subsection 206(18) reads as follows:

(18) In connection with proceedings under this section, a court may make any order it thinks fit and, without limiting the generality of the foregoing, it may

    (a) fix the amount of money or other consideration that is required to be held in trust under subsection (7);

Clause 100: New.

Clause 101: (1) and (2) Subsection 208 reads as follows:

208. (1) This Part does not apply to a corporation that is insolvent within the meaning of the Bankruptcy and Insolvency Act or that is a bankrupt within the meaning of that Act.

(2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a corporation shall be stayed if the corporation is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be insolvent within the meaning of that Act.

Clause 102: Subsections 209(3.1), (5) and (6) are new. Subsections 209(2) to (4) read as follows:

(2) Articles of revival in prescribed form shall be sent to the Director.

(3) On receipt of articles of revival, the Director shall issue a certificate of revival in accordance with section 262.

(4) A body corporate is revived as a corporation under this Act on the date shown on the certificate of revival, and thereafter the corporation, subject to such reasonable terms as may be imposed by the Director and to the rights acquired by any person after its dissolution, has all the rights and privileges and is liable for the obligations that it would have had if it had not been dissolved.

Clause 103: (1) The relevant portion of subsection 210(3) reads as follows:

(3) A corporation that has property or liabilities or both may be dissolved by special resolution of the shareholders or, where it has issued more than one class of shares, by special resolutions of the holders of each class whether or not they are otherwise entitled to vote, if

    . . .

    (b) the corporation has distributed any property and discharged any liabilities before it sends articles of dissolution to the Director pursuant to subsection (4).

(2) Subsection 210(4) reads as follows:

(4) Articles of dissolution in prescribed form shall be sent to the Director.

Clause 104: (1) Subsection 211(4) reads as follows:

(4) A statement of intent to dissolve in prescribed form shall be sent to the Director.

(2) The relevant portion of subsection 211(7) reads as follows:

(7) After issue of a certificate of intent to dissolve, the corporation shall

    . . .

    (b) forthwith publish notice thereof once a week for four consecutive weeks in a newspaper published or distributed in the place where the corporation has its registered office and take reasonable steps to give notice thereof in each province in Canada where the corporation was carrying on business at the time it sent the statement of intent to dissolve to the Director;

(3) Subsection 211(10) reads as follows:

(10) At any time after issue of a certificate of intent to dissolve and before issue of a certificate of dissolution, a certificate of intent to dissolve may be revoked by sending to the Director a statement of revocation of intent to dissolve in prescribed form, if such revocation is approved in the same manner as the resolution under subsection (3).

(4) Subsection 211(14) reads as follows:

(14) Articles of dissolution in prescribed form shall be sent to the Director.

Clause 105: (1) Subsection 212(1) reads as follows:

212. (1) Subject to subsections (2) and (3), where a corporation

    (a) has not commenced business within three years after the date shown in its certificate of incorporation,

    (b) has not carried on its business for three consecutive years, or

    (c) is in default for a period of one year in sending to the Director any fee, notice or document required by this Act,

the Director may dissolve the corporation by issuing a certificate of dissolution under this section or he may apply to a court for an order dissolving the corporation, in which case section 217 applies.

(2) The relevant portion of subsection 212(2) reads as follows:

(2) The Director shall not dissolve a corporation under this section until he has

    . . .

    (b) published notice of that decision in the Canada Gazette and in the periodical referred to in section 129.

(3) Subsection 212(3.1) is new. Subsection 212(3) reads as follows:

(3) Unless cause to the contrary has been shown or an order has been made by a court under section 246, the Director may, after the expiration of the period referred to in subsection (2), issue a certificate of dissolution in prescribed form.

Clause 106: Subsection 213(4) reads as follows:

(4) On receipt of an order under this section, section 212 or 214, the Director shall

    (a) if the order is to dissolve the corporation, issue a certificate of dissolution in prescribed form; or

    (b) if the order is to liquidate and dissolve the corporation under the supervision of the court, issue a certificate of intent to dissolve in prescribed form and publish notice of such order in the Canada Gazette and in the periodical referred to in section 129.

Clause 107: (1) and (2) The relevant portion of subsection 214(1) reads as follows:

214. (1) A court may order the liquidation and dissolution of a corporation or any of its affiliated corporations on the application of a shareholder,

    (a) if the court is satisfied that in respect of a corporation or any of its affiliates

      . . .

      (ii) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner, or

Clause 108: The relevant portion of section 217 reads as follows:

217. In connection with the dissolution or the liquidation and dissolution of a corporation, the court may, if it is satisfied that the corporation is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit including, without limiting the generality of the foregoing,

    . . .

    (b) an order appointing a liquidator, with or without security, fixing his remuneration and replacing a liquidator;

Clause 109: The relevant portion of section 221 reads as follows:

221. A liquidator shall

    . . .

    (b) forthwith publish notice in the Canada Gazette and in the periodical referred to in section 129 and by insertion once a week for two consecutive weeks in a newspaper published or distributed in the place where the corporation has its registered office and take reasonable steps to give notice thereof in each province where the corporation carries on business, requiring any person

Clause 110: Subsection 222(2) reads as follows:

(2) A liquidator is not liable if he relies in good faith on

    (a) financial statements of the corporation represented to him by an officer of the corporation or in a written report of the auditor of the corporation to reflect fairly the financial condition of the corpora tion; or

    (b) an opinion, a report or a statement of a lawyer, an accountant, an engineer, an appraiser or other professional adviser retained by the liquidator.

Clause 111: Subsection 223(4) reads as follows:

(4) A liquidator shall give notice of his intention to make an application under subsection (2) to the Director, each inspector appointed under section 217, each shareholder and any person who provided a security or fidelity bond for the liquidation, and he shall publish the notice in a newspaper published or distributed in the place where the corporation has its registered office or as otherwise directed by the court.

Clause 112: Subsection 226(1) reads as follows:

226. (1) In this section, ``shareholder'' includes the heirs and legal representatives of a shareholder.

Clause 113: (1) Subsections 229(1) and (2) read as follows:

229. (1) A security holder or the Director may apply, ex parte or on such notice as the court may require, to a court having jurisdiction in the place where the corporation has its registered office for an order directing an investigation to be made of the corporation and any of its affiliated corporations.

(2) If, on an application under subsection (1), it appears to the court that

    (a) the business of the corporation or any of its affiliates is or has been carried on with intent to defraud any person,

    (b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of a security holder,

    (c) the corporation or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose, or

    (d) persons concerned with the formation, business or affairs of the corporation or any of its affiliates have in connection therewith acted fraudulently or dishonestly,

the court may order an investigation to be made of the corporation and any of its affiliated corporations.

(2) Subsection 229(4) reads as follows:

(4) An applicant under this section is not required to give security for costs.

Clause 114: (1) The relevant portion of subsection 235(1) reads as follows:

235. (1) If the Director is satisfied that, for the purposes of Part XI, XIII or XVII, or for the purposes of enforcing any regulation made under section 174, there is reason to inquire into the ownership or control of a security of a corporation or any of its affiliates, the Director may require any person that he reasonably believes has or has had an interest in the security or acts or has acted on behalf of a person with such an interest to report to him or to any person he designates

(2) The relevant portion of subsection 235(3) reads as follows:

(3) The Director shall publish in the periodical referred to in section 129 the particulars of information obtained by him under this section, if the particulars

Clause 115: New.

Clause 116: The relevant portion of subsection 239(2) reads as follows:

(2) No action may be brought and no intervention in an action may be made under subsection (1) unless the court is satisfied that

    (a) the complainant has given reasonable notice to the directors of the corporation or its subsidiary of his intention to apply to the court under subsection (1) if the directors of the corporation or its subsidiary do not bring, diligently prosecute or defend or discontin ue the action;

Clause 117: (1) and (2) The relevant portion of subsection 241(2) reads as follows:

(2) If, on an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates

    . . .

    (b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner, or

    . . .

that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer, the court may make an order to rectify the matters complained of.

Clause 118: Subsection 242(3) reads as follows:

(3) A complainant is not required to give security for costs in any application made or action brought or intervened in under this Part.

Clause 119: Section 246 reads as follows:

246. A person who feels aggrieved by a decision of the Director

    (a) to refuse to file in the form submitted to him any articles or other document required by this Act to be filed by him,

    (b) to give a name, to change or revoke a name, or to refuse to reserve, accept, change or revoke a name under section 12,

    (c) to refuse to grant an exemption under subsection 2(8), 10(2), 82(3), 127(8) or 151(1), section 156 or subsection 171(2),

    (d) to refuse under subsection 187(11) to permit a continued reference to shares having a nominal or par value,

    (e) to refuse to issue a certificate of discontinuance under section 188,

    (f) to refuse to revive a corporation under section 209, or

    (g) to dissolve a corporation under section 212,

may apply to a court for an order requiring the Director to change his decision, and on such application the court may so order and make any further order it thinks fit.

Clause 120: Section 249 reads as follows:

249. An appeal lies to the court of appeal from any order made by a court under this Act.

Clause 121: New.

Clause 122: Subsection 253(4) reads as follows:

(4) If a corporation sends a notice or document to a shareholder in accordance with subsection (1) and the notice or document is returned on three consecutive occasions because the shareholder cannot be found, the corporation is not required to send any further notices or documents to the shareholder until he informs the corporation in writing of his new address.

Clause 123: Subsection 257(3) reads as follows:

(3) An entry in a securities register of, or a security certificate issued by, a corporation is, in the absence of evidence to the contrary, proof that the person in whose name the security is registered is owner of the securities described in the register or in the certificate.

Clause 124: Sections 258.1 and 258.2 read as follows:

258.1 (1) Subject to the regulations, notices and documents that are sent to or issued by the Director pursuant to this Act may be sent or issued in electronic or other form in any manner specified by the Director.

(2) For the purposes of this Act, any notice or document that is sent or issued in accordance with subsection (1) is deemed to have been received at the time and date provided by the regulations.

258.2 In the prescribed circumstances, the Director may, by order made subject to any conditions that the Director considers appropriate, exempt from the application of any provision of this Act requiring notices or documents to be sent to the Director such notices or documents or classes of notices or documents containing information similar to that contained in notices or documents required to be made public pursuant to any other Act of Parliament or to any Act of the legislature of a province as are specified in the order.

Clause 125: Section 261 reads as follows:

261. (1) Subject to subsections (2) and (3), the Governor in Council may make regulations

    (a) prescribing any matter required or authorized by this Act to be prescribed;

    (b) requiring the payment of a fee in respect of the filing, examination or copying of any document, or in respect of any action that the Director is required or authorized to take under this Act, and prescribing the amount thereof;

    (c) prescribing the contents and electronic or other forms of notices and documents required to be sent to or issued by the Director;

    (c.1) respecting the sending or issuance of notices and documents in electronic or other form, including

      (i) the notices and documents that may be sent or issued in electronic or other form,

      (ii) the persons or classes of persons by whom they may be sent or issued,

      (iii) their signature in electronic or other form or their execution, adoption or authorization in a manner that pursuant to the regulations is to have the same effect for the purposes of this Act as their signature, and

      (iv) the time and date when they are deemed to be received;

    (d) prescribing rules with respect to exemptions permitted by this Act; and

    (e) prescribing that, for the purpose of paragraph 155(1)(a), the standards as they exist from time to time, of an accounting body named in the regulations shall be followed.

(2) Subject to subsection (3), the Minister shall publish in the Canada Gazette and in the periodical referred to in section 129 at least sixty days before the proposed effective date thereof a copy of every regulation that the Governor in Council proposes to make under this Act and a reasonable opportunity shall be afforded to interested persons to make representations with respect thereto.

(3) The Minister is not required to publish a proposed regulation if the proposed regulation

    (a) grants an exemption or relieves a restriction;

    (b) establishes or amends a fee;

    (c) has been published pursuant to subsection (2) whether or not it has been amended as a result of representations made by interested persons as provided in that subsection; or

    (d) makes no material substantive change in an existing regulation.

Clause 126: New.

Clause 127: (1) and (2) The relevant portion of subsection 262(2) reads as follows:

(2) Where this Act requires that articles or a statement relating to a corporation be sent to the Director,

    . . .

    (b) on receiving the articles or statement in the prescribed form, any other required documents and the prescribed fees, the Director shall

      . . .

      (iv) send the certificate and the articles or statement, or a copy, image or photographic, electronic or other reproduction of the certificate and of the articles or statement, to the corporation or its representative, and

      (v) publish a notice of the issuance of the certificate in the Canada Gazette or in the periodical referred to in section 129.

Clause 128: New.

Clause 129: Section 263.1 is new. Section 263 reads as follows:

263. (1) Every corporation shall, on the prescribed date, send to the Director an annual return in prescribed form and the Director shall file it.

(2) The Director may furnish any person with a certificate that a corporation has sent to the Director a document required to be sent to him under this Act.

Clause 130: Section 265.1 is new. Sections 265 and 266 read as follows:

265. (1) If a certificate containing an error is issued to a corporation by the Director, the directors or shareholders of the corporation shall, on the request of the Director, pass the resolutions and send to him the documents required to comply with this Act, and take such other steps as the Director may reasonably require, and the Director may demand the surrender of the certificate and issue a corrected certificate.

(2) A certificate corrected under subsection (1) shall bear the date of the certificate it replaces.

(3) If a corrected certificate issued under subsection (1) materially amends the terms of the original certificate, the Director shall forthwith give notice of the correction in the Canada Gazette or in the periodical referred to in section 129.

266. (1) A person who has paid the prescribed fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, except a report sent to him under subsection 230(2), and to make copies of or extracts therefrom.

(2) The Director shall furnish any person with a copy or a certified copy of a document required by this Act or the regulations to be sent to the Director, except a report sent to him under subsection 230(2).

Clause 131: Subsection 267(3) reads as follows:

(3) The Director is not required to produce any document, other than a certificate and attached articles or statement filed under section 262, after six years from the date he receives it.

Clause 132: Subsection 267.1 reads as follows:

267.1 Information or notices required by this Act to be summarized in a periodical available to the public or published by the Director may be made available to the public or published by any system of mechanical or electronic data processing or by any other information storage device that is capable of reproducing any required information or notice in intelligible form within a reasonable time.

Clause 133: (1) and (2) Subsections 268(6) and (7) read as follows:

(6) The Governor in Council may, by order, require that a body corporate incorporated by or under an Act of Parliament to which Part I or II of the Canada Corporations Act does not apply, other than

    (a) a bank,

    (b) a company or society to which the Insurance Companies Act applies, or

    (c) a company to which the Trust and Loan Companies Act applies,

shall apply for a certificate of continuance under section 187 within such period as may be prescribed.

(7) A body corporate to which Part IV of the Canada Corporations Act applies, other than a body corporate that carries on a business referred to in paragraph (6)(b) or (c), may apply for a certificate of continuance under section 187.

(3) Subsection 268(11) reads as follows:

(11) A body corporate that is incorporated under a Special Act, as defined in section 87 of the Canada Transportation Act, may apply for a certificate of continuance under section 187.

Clause 135: The schedule contains technical amendments to the English version of the Act to render the language of the Act gender neutral.

Canada Cooperatives Act

Clause 136: (1) The definitions ``distributing cooperative'', ``member loan'', ``person'' and ``security'' in subsection 2(1) read as follows:

``distributing cooperative'' means a cooperative any of whose issued securities, other than membership shares or member loans, are or were part of a distribution to the public and remain outstanding and are held by more than one person.

``member loan'' means a loan required by the cooperative from its members as a condition of membership or to continue membership in the cooperative, and, for the purpose of Parts 8, 16, 17, and 19 and subsection 163(2), a member loan is deemed to be a membership share issued at par value.

``person'' means an individual or an entity and includes a legal representative.

``security'' includes an investment share, a debt obligation of a cooperative and a certificate evidencing such a share or debt obligation and, for the purposes of Part 19, includes a membership share.

(2) New.

(3) Subsection 2(3) reads as follows:

(3) For the purposes of this Act, a document, notice or other information may be sent or otherwise given electronically only if it is sent in accordance with the prescribed requirements and if the by-laws or articles do not provide otherwise.

Clause 137: Subsections 4(4) to (6) read as follows:

(4) For the purposes of this Act, securities of a cooperative issued on a conversion of, or in exchange for, other securities are deemed to be securities that are part of a distribution to the public if those other securities were part of a distribution to the public.

(5) Subject to subsection (6), for the purposes of this Act, a security of a body corporate

    (a) is part of a distribution to the public if, in respect of the security, there has been a filing of a prospectus, statement of material facts, registration statement, securities exchange take-over bid circular or similar document under the laws of Canada, a province or a jurisdiction outside Canada; or

    (b) is deemed to be part of a distribution to the public if the security has been issued and a filing referred to in paragraph (a) would be required if the security were being issued currently.

(6) On the application of a cooperative, the Director may determine that a security of the cooperative is not or was not part of a distribution to the public if the Director is satisfied that the determination would not prejudice any security holder of the cooperative.

Clause 138: Subsection 8(1) reads as follows:

8. (1) An application for incorporation of a cooperative may be made by a minimum of three persons, or by one or more federations, who intend to be members of the cooperative.

Clause 139: New. The relevant portion of subsection 12(1) reads as follows:

12. (1) The Director must issue a certificate of incorporation for a cooperative if the Director is satisfied that

Clause 140: (1) and (2) The relevant portion of subsection 15(2) reads as follows:

(2) The by-laws of a cooperative may provide for

    (a) the representation of members by delegates and, if so,

      (i) the designation of the classes of members, if any, who may be represented by delegates,

      (ii) the procedure for altering classes of members, if applicable, and

      . . .

    (b) the division of members into classes and, if so,

      (i) the qualifications for membership in each class,

      (ii) the conditions precedent to membership in each class,

      (iii) the method, time and manner of withdrawing from a class or transferring membership from one class to another and any applicable conditions on a transfer, and

      (iv) the conditions on which membership in a class ends;

Clause 141: The relevant portion of section 16 reads as follows:

16. The articles and by-laws of a cooperative bind it and its members to the same extent as if they

    . . .

    (b) contained undertakings by every member and the successors, assigns, mandataries and legal representatives of every member to observe all the provisions of the articles and by-laws.

Clause 142: The relevant portion of subsection 19(4) reads as follows:

(4) Whether or not a cooperative has adopted a contract, the court may, on application by a party to the contract,

    (a) make an order respecting the nature and extent of the obligations and liability under the contract of the cooperative and the person who purported to enter into the contract by or on behalf of the cooperative; and

Clause 143: Subsections 20(4) and (5) read as follows:

(4) The name of a cooperative may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the form meets any criteria contained in a regulation made under subsection (5). The cooperative may use and be legally designated by any such form.

(5) The Director may make regulations prescribing the criteria for what constitutes an English form and a French form, and a combined English and French form, of the names of cooperatives.

Clause 144: (1) The relevant portion of subsection 28(1) reads as follows:

28. (1) No cooperative and no guarantor of an obligation of a cooperative may assert against a person dealing with the cooperative or against a person who acquired rights from the cooperative that

    . . .

    (f) any financial assistance referred to in section 160 was not authorized; or

    (g) a sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized.

(2) Subsection 28(2) reads as follows:

(2) Subsection (1) does not apply in respect of a person who has, or ought to have, knowledge to that effect by virtue of their relationship to the cooperative.

Clause 145: Subsection 31(3) reads as follows:

(3) A cooperative may keep all or any of the records mentioned in paragraphs (1)(a), (b), (c) and (f) and (2)(a) and (b) at a place other than its registered office if the records are available for inspection during regular office hours at the registered office or another office in Canada by means of electronic technology and if to do so would not contravene any other law in Canada. The cooperative must provide technical assistance to persons who wish to use the electronic technology.

Clause 146: Subsection 32(4) reads as follows:

(4) Members, creditors and shareholders of the cooperative, their legal representatives and the Director may examine the records referred to in paragraphs 31(1)(a), (b), (c) and (f) during the usual business hours of the cooperative and may take extracts from the records, free of charge, or have copies of them made after payment of a reasonable fee.

Clause 147: Subsection 33(1) reads as follows:

33. (1) Members, shareholders and creditors of a cooperative and their legal representatives and, where the cooperative is a distributing cooperative, any other person, may request that the cooperative provide them with a list of members or shareholders, no later than ten days after the cooperative receives the affidavit referred to in subsection (2) and after payment of a reasonable fee.

Clause 148: Subsection 48(3.1) is new. Subsection 48(3) of Act reads as follows:

(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.

Clause 149: Subsection 50(3) reads as follows:

(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.

Clause 150: (1) Subsection 51(1) reads as follows:

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.

(2) Subsections 51(3) and (4) read as follows:

(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.

(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.

(3) The relevant portion of subsection 51(6) reads as follows:

(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

Clause 151: Subsection 52(1.1) is new. Subsection 52(1) reads as follows:

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.

Clause 152: (1) Subsections 58(2.1) to (2.4) are new. Subsections 58(2) and (3) read as follows:

(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.

(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.

(2) to (4) The relevant portion of subsection 58(4) reads as follows:

(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 coopera tive 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

(5) New.

Clause 153: Subsections 60(1) and (2) read as follows:

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.

(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.

Clause 154: New.

Clause 155: Section 67 reads as follows:

67. An entry in the minutes of a cooperative of a vote taken under section 65 or a resolution made under section 66 is, in the absence of evidence to the contrary, proof of the outcome of the vote or resolution.

Clause 156: Section 70 reads as follows:

70. (1) A member or a director, or a shareholder who is entitled to vote at a meeting of the cooperative, may call the meeting if it is not called within the time required by the Act, the articles, the by-laws or any unanimous agreement.

(2) A meeting called, held and conducted under this section is for all purposes a meeting duly called, held and conducted.

Clause 157: The relevant portion of subsection 71(1) reads as follows:

71. (1) A court, on the application of a director or a person who is entitled to vote at a meeting, may order a meeting of a cooperative to be called, held and conducted within the time and in the manner that the court directs, if

    (a) it is not feasible to call the meeting within the time and in the manner in which those meetings are to be called;

    (b) it is not feasible to conduct the meeting in the manner required by this Act, the by-laws and any unanimous agreement; or

Clause 158: Subsection 78(4) reads as follows:

(4) A majority of the directors must be resident in Canada.

Clause 159: Subsections 83(6) and (7) read as follows:

(6) No election or appointment of an individual as a director is valid unless

    (a) the individual consents in writing no later than ten days after their election or appointment; or

    (b) in the case of a director who is elected or appointed at a meeting, the individual did not refuse at the meeting to act as a director.

(7) A consent in writing referred to in paragraph (6)(a) is effective during the individual's term of office unless the consent states that it is valid until the date stated in the consent or until she or he revokes the consent.

Clause 160: (1) The relevant portion of subsection 85(1) reads as follows:

85. (1) Subject to subsection (3), if there is a vacancy on the board of directors, except a vacancy because of an increase in number or minimum number of directors or because of a failure to elect or appoint the number of directors required by the articles, and there is still a quorum on the board, the remaining directors may

(2) Subsection 85(6) reads as follows:

(6) If all of the directors have resigned or been removed without replacement, a person who manages or supervises the management of the business and affairs of the cooperative is, subject to any unanimous agreement, deemed to be a director for the purposes of this Act.

Clause 161: (1) to (3) The relevant portion of section 97 reads as follows:

97. (1) To constitute a quorum, a majority of the directors at the meeting must be

    (a) resident in Canada; and

    (b) members of the cooperative, or representatives of members that are entities or members of members that are cooperative entities.

(2) Despite subsection (1), a meeting of directors may be held without the required majority of directors who are resident in Canada if

    . . .

    (b) the required majority would have been present had that director been present at the meeting.

Clause 162: Subsection 98(1) reads as follows:

(1) Subject to the by-laws, a director may attend a meeting of directors by means of a telephonic, electronic or other communication facility if it permits all persons participating in the meeting to communicate adequately with each other during the meeting.

Clause 163: Subsection 100(3) reads as follows:

(3) An entry in the minutes of a cooperative of a vote taken, including one taken in a meeting held in accordance with section 98, or a resolution made under subsection (1) is, in the absence of evidence to the contrary, proof of the outcome of the vote or resolution.

Clause 164: The relevant portion of subsection 101(3) reads as follows:

(3) Directors who vote for or consent to resolutions authorizing any of the following matters are jointly and severally, or solidarily, liable to restore to the cooperative any amounts so distributed or paid and not otherwise recovered by the cooperative:

    . . .

    (d) financial assistance contrary to this Act;

Clause 165: (1) Subsection 102(2) reads as follows:

(2) A director is not liable under this section for any amount in respect of statutory or contractual termination of employment, for severance pay or for any punitive damages related to termination of employment.

(2) Subsection 102(7) reads as follows:

(7) If a director pays a debt owed under this section and the debt is proven in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to and, if judgment is obtained, is entitled to an assignment of the judgment.

Clause 166: Subsection 103(7) reads as follows:

(7) The members and shareholders may, by unanimous agreement, modify the procedural requirements of this section and sections 104 to 107.

Clause 167: Subsection 104(1) reads as follows:

104. (1) A director who is interested in a contract or transaction referred to in subsection 103(1) may not be present for the vote or vote on any resolution to approve the contract or transaction.

Clause 168: Section 106.1 is new. Sections 106 and 107 read as follows:

106. A contract or transaction for which disclosure must be made under section 103 is not invalid, and the director or officer is not accountable to the cooperative, its members or its shareholders for any profit realized from the contract or transaction, by reason only of the interest of the director or officer in the contract or transaction, if

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

    (b) disclosure of the interest was not made in accordance with this Act but

      (i) disclosure of the interest was made,

      (ii) the contract or transaction is approved by a majority of the members of the cooperative or a majority of the members present at a meeting of the members, and

      (iii) the contract or transaction was reasonable and fair to the cooperative at the time it was approved.

107. If a director or officer of a cooperative fails to disclose an interest in a material contract or transaction in accordance with section 103, or otherwise fails to comply with sections 103 to 106, a court may, on the application of the cooperative or a member or shareholder, set aside the contract or transaction on any terms that it thinks fit or order that the director or officer account to the cooperative, its members or its shareholders for any profit realized from the contract or transaction.

Clause 169: (1) and (2) Paragraph 109(3)(j) is new. The relevant portion of subsection 109(3) reads as follows:

(3) The directors may delegate to a managing director or a committee composed of at least three directors any powers of the directors, except the power to

    . . .

    (g) pay a commission referred to in section 128;

Clause 170: Section 111 reads as follows:

111. A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the failure to fulfil their duties, including reliance in good faith on financial statements of the cooperative, on the reports of experts and on information presented by officers or professionals.

Clause 171: (1) Subsection 113(2) reads as follows:

(2) A cooperative may advance moneys to a director, officer or other individual for the costs of a proceeding referred to in subsection (1). The individual must repay the moneys if the court determines that the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

(2) The relevant portion of subsection 113(5) reads as follows:

(5) An individual referred to in subsection (1) is entitled to indemnity from the cooperative for the costs, charges and expenses referred to in that subsection if the individual

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

Clause 172: (1) Subsection 115(1) reads as follows:

115. (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), that discretion and those powers, is valid.

(2) Subsections 115(3) to (8) read as follows:

(3) Subject to this section but despite subsection 183(2), any purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement.

(4) If notice is not given to the purchaser or transferee of the existence of a unanimous agreement, the purchaser or transferee may, no later than thirty days after they become aware of its existence, rescind the transaction by which they acquired the investment shares.

(5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent.

(6) A unanimous agreement may contain provisions respecting the rules and procedures governing meetings under this Act and provisions that eliminate the need for annual meetings of shareholders and meetings of directors.

(7) If there is to be no annual meeting of shareholders because of a provision in a unanimous agreement, the cooperative must send a copy of the documents referred to in section 247 to any shareholder who requests it.

(8) A notice of the initial execution or the termination of a unanimous agreement, in the form that the Director fixes, must be sent to the Director at the same time as the annual return referred to in section 374.

Clause 173: Subsection 123(1) reads as follows:

123. (1) A cooperative has a charge on a membership share or any amount standing to the credit of a member or the legal representative of a member for a debt of that member to the cooperative.

Clause 174: The relevant portion of subsection 126(1) reads as follows:

126. (1) The articles may authorize, subject to any limitations set out in them and subject to subsection (2), the issue of any class of investment shares in one or more series and may

Clause 175: Subsection 129(1) reads as follows:

129. (1) Subject to subsection 183(2), the articles may provide that the cooperative has a charge on an investment share registered in the name of a shareholder or the legal representative of a shareholder for a debt of the shareholder to the cooperative, including an amount unpaid as of the date a body corporate was continued under this Act, in respect of an investment share issued by it.

Clause 176: (1) and (2) The relevant portion of subsection 130(1) reads as follows:

130. (1) Subject to subsection 290(3), a cooperative that has issued investment shares that are or were part of a distribution to the public, remain outstanding and are held by more than one person may, by special resolution of the members and by a separate special resolution of the shareholders of each class, amend its articles to constrain

    . . .

    (d) the issue, transfer or ownership of any investment share to assist the cooperative to comply with

      (i) section 379 of the Trust and Loan Companies Act, or

      (ii) section 411 of the Insurance Companies Act; or

Clause 177: (1) and (2) The relevant portion of subsections 131(1) and (2) read as follows:

131. (1) A cooperative that has constraints on the issue, transfer or ownership of any class of investment shares may, in accordance with any regulations, sell any of the investment shares that are owned, or that the directors determine may be owned, contrary to those constraints, as if it owned the investment shares, for the purposes of

    . . .

    (b) complying with section 379 of the Trust and Loan Companies Act, section 411 of the Insurance Companies Act or Part X.3 of the Income Tax Act.

(2) The directors must select the investment shares to be sold under subsection (1) in good faith and in a manner that does not unfairly prejudice or disregard the interests of the holders of the investment shares in the constrained class as a whole.

Clause 178: (1) and (2) The relevant portion of section 137 reads as follows:

137. Unless the articles, the by-laws or a unanimous agreement provide otherwise, the articles of a cooperative are deemed to state that the directors may, subject to subsection 126(2), without the authorization of the members or shareholders,

    . . .

    (c) subject to section 160, give guarantees;

Clause 179: (1) and (2) Subparagraph 138(3)(a)(iii) is new. The relevant portion of subsection 138(3) reads as follows:

(3) Despite subsection (2), a cooperative may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the money, or the value of the things and services, it receives in an exchange if the cooperative issues shares

    (a) in exchange for

      (i) property of a person who immediately before the exchange did not deal with the cooperative at arm's length within the meaning of that expression in the Income Tax Act, or

      (ii) shares of, or another interest in, an entity that immediately before the exchange, or that because of the exchange, did not deal with the cooperative at arm's length within the meaning of that expression in the Income Tax Act; or

(3) Subsection 138(6) reads as follows:

(6) For greater certainty, if a cooperative issues membership shares with a par value, the cooperative is deemed, for the purposes of subsection 147(2), sections 151 and 154 and paragraphs 160(1)(d) and 299(2)(d), to have a stated capital account for its membership shares that includes each amount that has been received by the cooperative for the membership shares.

Clause 180: Subsection 139(4) reads as follows:

(4) For the purposes of subsection 147(2), sections 151 and 154 and paragraphs 160(1)(d) and 299(2)(d), when a cooperative is continued under this Act, its stated capital account is deemed to include the amount that would have been included if the cooperative had been incorporated under this Act.

Clause 181: The relevant portion of subsection 147(2) reads as follows:

(2) A cooperative may not make a payment to acquire investment shares if there are reasonable grounds to believe that

Clause 182: Section 160 and the heading before it read as follows:

Loans and Guarantees

160. (1) Subject to subsection (2) and any additional restrictions set out in the articles, a cooperative or any of its affiliates may not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise

    (a) to any member, shareholder, director, officer or employee of the cooperative or of an affiliate or to an associate of any such person for any purpose, or

    (b) to any person for the purpose of or in connection with a purchase of a share issued or to be issued by a cooperative or affiliate,

if there are reasonable grounds for believing that

    (c) the cooperative is or, after giving the financial assistance, would be unable to pay its liabilities as they become due, or

    (d) the realizable value of the cooperative's assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, after giving the financial assistance, would be less than the aggregate of the cooperative's liabilities and stated capital of all classes.

(2) A cooperative may give financial assistance by means of a loan, guarantee or otherwise

    (a) to any person in the ordinary course of business if the lending of money is part of the ordinary business of the cooperative;

    (b) to any person on account of expenditures incurred or to be incurred on behalf of the cooperative;

    (c) to a subsidiary of the cooperative;

    (d) to employees of the cooperative or of any of its affiliates

      (i) to enable or assist them to purchase or erect living accommodation for their own occupation, or

      (ii) in accordance with a plan for the purchase of shares of the cooperative or any of its affiliates to be held by a trustee; and

    (e) to members, or members of members, if the financial assistance is available to all members on similar terms.

(3) A contract made by a cooperative in contravention of this section may be enforced by the cooperative or by a lender for value in good faith without notice of the contravention.

Clause 183: The definitions ``intermediary'' and '' ``solicit'' or ``solicitation'' '' in subsection 163(1) read as follows:

``intermediary'' means a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction and includes

      (a) a securities depositary;

      (b) a financial institution;

      (c) in respect of a clearing agency, a securities dealer, trust company, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominees hold securities of an issuer;

      (d) a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act;

      (e) a nominee of a person referred to in any of paragraphs (a) to (d); and

      (f) a person who carries out functions similar to those carried out by individuals or entities referred to in any of paragraphs (a) to (d) and that holds a security registered in its name, or in the name of its nominee, on behalf of another person who is not the registered holder of the security.

``solicit'' or ``solicitation'' includes

      (a) a request for a proxy whether or not accompanied by or included in a form of proxy,

      (b) a request to execute or not to execute a form of proxy or to revoke a proxy,

      (c) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

      (d) the sending of a form of proxy to a shareholder under section 165,

    but does not include

      (e) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,

      (f) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,

      (g) the sending by an intermediary of the documents referred to in section 169,

      (h) a solicitation by a person in respect of shares of which they are the beneficial owner,

      (i) a public announcement by a shareholder of how the shareholder intends to vote and the reasons for that decision,

      (j) anything that would be a solicitation under this definition but is conveyed by public broadcast, speech or publication, if a proxy circular in final form is sent to the cooperative and is filed with the Director, or

      (k) a communication, other than a solicitation by or on behalf of the management of the cooperative, that is made to shareholders, in any circumstances that may be prescribed.

Clause 184: (1) Subsection 164(2) reads as follows:

(2) For a proxy to be valid, it must be executed by the shareholder or by their legal representative authorized in writing.

(2) The relevant portion of subsection 164(4) reads as follows:

(4) A shareholder may revoke a proxy

    (a) by depositing a document in writing executed by the shareholder or by their legal representative authorized in writing

Clause 185: Subsection 166(4.1) is new. Subsection 166(4) reads as follows:

(4) A person may, despite subsection (1), commence a solicitation if they have filed a preliminary proxy circular with the cooperative and the Director, as long as the form of proxy is not sent before the proxy circular in final form is sent.

Clause 186: Subsection 167(1) reads as follows:

167. (1) On the application of any interested person, the Director may, even retrospectively, exempt, on any terms that the Director thinks fit, the person from any of the requirements of section 165 or subsection 166(1).

Clause 187: (1) Subsection 169(2) reads as follows:

(2) An intermediary may not vote or appoint a proxyholder to vote shares registered in the name of the intermediary or in the name of a nominee of the intermediary that the intermediary does not beneficially own unless the intermediary receives voting instructions from the beneficial owner.

(2) Subsection 169(5) reads as follows:

(5) If requested by a beneficial owner, an intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

Clause 188: (1) The definitions ``business combination'', ``insider'' and ``officer'' in subsection 171(1) read as follows:

``business combination'' means an acquisition of all or substantially all the property of one entity by another or an amalgamation of two or more entities.

``insider'' means

      (a) a director or officer of a distributing cooperative;

      (b) a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of a distributing cooperative;

      (c) a person who beneficially owns more than ten per cent of the shares of a distributing cooperative or who exercises control or direction over more than ten per cent of the votes attached to shares of a distributing cooperative, excluding shares owned by a securities underwriter under an underwriting agreement while those shares are in the course of a distribution to the public;

      (d) a distributing cooperative that acquires shares, except for the purpose of redemption; and

      (e) a distributing cooperative that acquires or sells shares issued by any of its affiliates.

``officer'' means

      (a) the chairperson of the board of directors, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices; and

      (b) each of the five highest paid employees of a distributing cooperative, including any individual mentioned in paragraph (a).

(2) The relevant portion of subsection 171(2) reads as follows:

(2) For the purposes of this Part,

    (a) a director or an officer of an entity, or an individual acting in a similar capacity, that is an insider of a distributing cooperative is deemed to be an insider of the distributing cooperative;

(3) and (4) Subsections 171(3) and (4) read as follows:

(3) For the purposes of this Part, the sale of membership shares to members or the making of a member loan to a cooperative is not a distribution to the public.

(4) For the purposes of this Part, a director or an officer of an entity, or an individual acting in a similar capacity, or a member or a holder of a share of the entity who is a person referred to in paragraph (b) or (c) of the definition ``insider'' in subsection (1) is deemed to have been an insider of the distributing cooperative for the previous six months or for any shorter period during which the person was a director, an officer, such an individual or such a member or holder of the entity if

    (a) the entity becomes an insider of the distributing cooperative or enters into a business combination with a distributing cooperative; or

    (b) the distributing cooperative becomes an insider of the entity or enters into a business combination with an entity.

Clause 189: Section 172 reads as follows:

172. (1) No insider shall knowingly sell, directly or indirectly, a share of the distributing cooperative or any of its affiliates if the insider selling the share does not own or has not fully paid for the share to be sold.

(2) No insider shall knowingly, directly or indirectly, buy a put or sell a call in respect of a share of the cooperative or any of its affiliates.

(3) Despite subsection (1), an insider may sell a share that the insider does not own if the insider owns another share convertible into the share sold or an option or right to acquire the share sold and, no later than ten days after the sale, the insider

    (a) exercises the conversion privilege, option or right and delivers the share so acquired to the purchaser; or

    (b) transfers the convertible share, option or right to the purchaser.

Clause 190: Section 173 reads as follows:

173. (1) In this section, ``insider'', with respect to a cooperative, means

    (a) the cooperative;

    (b) an affiliate of the cooperative;

    (c) a director or an officer of the cooperative;

    (d) a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of the cooperative;

    (e) a person who beneficially owns more than ten per cent of the shares of the cooperative or who exercises control or direction over more than ten per cent of the votes attached to the shares of the cooperative;

    (f) a person employed or retained by the cooperative; and

    (g) an individual who receives specific confidential information from a person described in this subsection or in subsection (2), including from an individual described in this paragraph, and who has knowledge that the information is given by such a person.

(2) For the purposes of this section, a director or an officer of an entity, or an individual acting in a similar capacity, is deemed to have been an insider of a cooperative for six months, or any shorter period during which the individual was a director or an officer of the entity, or acted in a similar capacity, before

    (a) the entity becomes an insider of a cooperative or enters into a business combination with a cooperative; or

    (b) the cooperative becomes an insider of the entity.

(3) An insider who, in connection with a transaction in a security of the cooperative or any of its affiliates, makes use of any specific confidential information for their own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security

    (a) is liable to compensate any person for any direct loss suffered by them as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to them; and

    (b) is accountable to the cooperative for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

(4) An action to enforce a right created by subsection (3) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Clause 191: The definitions ``offeree cooperative'' and ``take-over bid'' in section 174 read as follows:

``offeree cooperative'' means a cooperative whose shares are the object of a take-over bid.

``take-over bid'' means an offer made by an offeror to shareholders at approximately the same time to acquire all of the shares of a class of issued shares and includes an offer made by a cooperative to repurchase all of the shares of a class of its shares.

Clause 192: (1) Subsection 175(8) reads as follows:

(8) A cooperative that is an offeror making a take-over bid to repurchase all of the shares of a class is deemed to hold in trust for the dissenting shareholders the amounts that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i), and the cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate.

(2) The relevant portion of subsection 175(9) reads as follows:

(9) Within thirty days after the offeror sends a notice under subsection (2), the offeree cooperative must

    . . .

    (c) if the payments required by subsection (6) are made and the money or things are deposited as required by subsection (7) or (8), send to each dissenting shareholder who has not sent share certificates as required by paragraph (4)(a) a notice stating that

      . . .

      (ii) the offeree cooperative or some designated person holds in trust for the dissenting shareholder the money or other consideration to which that shareholder is entitled as payment for or in exchange for the shares, and

Clause 193: Subsection 182(1) reads as follows:

182. (1) A security certificate must be signed manually by one of the following individuals, or a facsimile of the signature must be reproduced on the certificate:

    (a) at least one director or officer;

    (b) an individual on behalf of a director, transfer agent or branch transfer agent of the cooperative; or

    (c) a trustee who certifies it in accordance with a trust indenture.

Clause 194: (1) Subsections 183(2) to (4) read as follows:

(2) No restriction, charge or endorsement described in subsection (3) is effective against a transferee of a security, issued by a cooperative or by a body corporate before it is continued under this Act, who has no actual knowledge of the restriction, charge or endorsement unless it or a reference to it is noted conspicuously on the security certificate.

(3) The restrictions, charges and endorsements referred to in subsection (2) are

    (a) a restriction on transfer other than a constraint under section 130;

    (b) a charge in favour of the cooperative;

    (c) a unanimous agreement; and

    (d) an endorsement under subsection 302(10).

(4) If the issued investment shares of a cooperative are or were part of a distribution to the public, remain outstanding and are held by more than one person, the cooperative must not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 130.

(2) The relevant portion of subsection 183(5) reads as follows:

(5) A reference to a constraint on the issue, transfer or ownership of any class or series of investment shares must be noted conspicuously on every security certificate evidencing such a share that is issued after the share becomes subject to the constraint under this Act, if the constraint is one

    . . .

    (b) to comply with section 379 of the Trust and Loan Companies Act, section 411 of the Insurance Companies Act or Part X.3 of the Income Tax Act.

Clause 195: The heading before section 247 reads as follows:

FINANCIAL DISCLOSURE

Clause 196: Subsection 249(2) reads as follows:

(2) The members and shareholders of a cooperative and their agents, mandataries and legal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the cooperative and may take extracts from them free of charge.

Clause 197: Subsection 252(1) reads as follows:

252. (1) If any of the securities that were part of a public distribution are outstanding and are held by more than one person, a distributing cooperative must, not less than twenty-one days before each annual meeting of members, or without delay after a resolution referred to in paragraph 251(c) is signed, and in any event not later than fifteen months after the last preceding annual meeting of members was held or the resolution referred to in paragraph 251(c) in lieu of that meeting was signed, send a copy of the documents referred to in section 247 to the Director.

Clause 198: The relevant portion of subsection 255(1) reads as follows:

255. (1) A cooperative that is not required to comply with section 252 may resolve not to appoint an auditor by

Clause 199: Subsection 260(5) reads as follows:

(5) In the case of a proposed replacement of an auditor, whether through removal or at the end of the auditor's term, the following rules apply with respect to other statements:

    (a) the cooperative must make a statement on the reasons for the proposed replacement; and

    (b) the proposed replacement auditor may make a statement in which he or she comments on the reasons referred to in paragraph (a).

Clause 200: Subsection 267(1) reads as follows:

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

Clause 201: The relevant portion of subsection 289(1) reads as follows:

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

    . . .

    (j) reduce or increase its stated capital which, for the purposes of the amendment, is deemed to be set out in the articles;

Clause 202: Subsection 290(1) reads as follows:

290. (1) Subject to subsection (2), a person referred to in subsection 58(2) may make a proposal to amend the articles and section 58 applies, with any modifications that the circumstances require, to any meeting of the cooperative at which the proposal is to be considered.

Clause 203: Subsection 294(1) reads as follows:

294. (1) The directors may at any time, and must when reasonably so directed by the Director, restate the articles of incorporation as amended.

Clause 204: (1) The relevant portion of subsection 298(1) reads as follows:

298. (1) A cooperative that is a holding cooperative may amalgamate with one or more of its wholly owned subsidiary cooperatives. The cooperative and subsidiaries continue as one cooperative without complying with sections 295 to 297 if

    . . .

    (b) the resolutions provide that

      . . .

      (ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the amalgamated cooperative, and

(2) The relevant portion of subsection 298(2) reads as follows:

(2) Two or more wholly owned subsidiary cooperatives of a holding entity may amalgamate and continue as one cooperative without complying with sections 295 to 297 if

    . . .

    (b) the resolutions provide that

    . . .

      (ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the amalgamating subsidiary whose shares are not cancelled, and

Clause 205: (1) and (2) Section 307 reads as follows:

307. (1) This Part, other than sections 311 to 313, does not apply to a cooperative that is insolvent within the meaning of the Bankruptcy and Insolvency Act or that is a bankrupt within the meaning of that Act.

(2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a cooperative are stayed if the cooperative is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be insolvent within the meaning of that Act.

Clause 206: (1) The relevant portion of subsection 308(6) reads as follows:

(6) In the same manner and to the same extent as if it had not been dissolved, but subject to any reasonable terms that may be imposed by the Director and to the rights acquired by any person after its dissolution, the revived cooperative is

(2) Subsection 308(7) reads as follows:

(7) Any legal action respecting the affairs of a revived cooperative, other than those with its affiliates, taken between the time of its dissolution and its revival is valid and effective.

Clause 207: (1) The relevant portion of subsection 311(1) reads as follows:

311. (1) Subject to subsections (2) and (3), the Director may dissolve a cooperative by issuing a certificate of dissolution under this section if the cooperative

    . . .

    (d) if the cooperative is in the situation described in subsection 85(6).

(2) New.

Clause 208: The relevant portion of subsection 312(1) reads as follows:

312. (1) Any interested person may apply to a court for an order dissolving a cooperative if the cooperative has

    (a) except if a unanimous agreement contains a provision that eliminates the need for meetings of shareholders referred to in subsection 115(6), failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings;

Clause 209: The relevant portion of subsection 313(1) reads as follows:

313. (1) A court may order the liquidation and dissolution of a cooperative or any of its affiliates on the application of a member or a shareholder if the court is satisfied

    . . .

    (b) that an act or omission of the cooperative or any of its affiliates effects a result, that the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted in a manner, or that the powers of the directors of the cooperative or any of its affiliates are or have been exercised in a manner, that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member, shareholder, security holder, creditor, director or officer; or

Clause 210: Subsection 321(2) reads as follows:

(2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the failure to fulfil their duties, including reliance in good faith on financial statements of the cooperative, on the reports of experts and on information presented by officers or professionals.

Clause 211: Subsection 326(1) reads as follows:

326. (1) In this section, ``member'' and ``shareholder'' include their heirs and legal representatives.

Clause 212: Subsection 328(3) reads as follows:

(3) A vesting of land under subsection (1) is not effective against a purchaser for value of the land if the vesting occurred more than twenty years before the document evidencing the purchase is registered in the proper registry office.

Clause 213: The relevant portion of subsection 329(2) reads as follows:

(2) The court may order an investigation to be made of the cooperative and any of its affiliates if, on an application under subsection (1), it appears to the court that the application is neither frivolous nor vexatious and that

    . . .

    (d) the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised, in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member or a security holder;

Clause 214: New.

Clause 215: The relevant portion of the definition ``complainant'' in section 338 reads as follows:

``complainant'' means

      . . .

      (d) a creditor of a cooperative; or

Clause 216: The relevant portion of subsection 339(2) reads as follows:

(2) No person may bring an action and no person may intervene in an action brought under subsection (1) unless the court is satisfied that

    (a) if the directors of the cooperative or its subsidiary do not bring, diligently prosecute, defend or discontinue the action, the complain ant has given reasonable notice to the directors of the cooperative or its subsidiary of the complainant's intention to apply to the court under subsection (1);

Clause 217: Subsection 340(2) reads as follows:

(2) If the court receives an application under subsection (1) and is satisfied that an act or omission of a cooperative effects a result, that the business or affairs of the cooperative are or have been carried on or conducted in a manner, or that the powers of the director are or have been exercised in a manner, that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of a member or other security holder, creditor, director or officer of the cooperative, the court may order the rectification of the matters complained of.

Clause 218: Paragraphs 345(d.1) and (d.2) are new. The relevant portion of section 345 reads as follows:

345. A person who feels aggrieved by a decision of the Director referred to in any of paragraphs (a) to (f) may apply to a court for an order, including an order requiring the Director to change the decision:

    . . .

    (c) to refuse to grant an exemption that may be granted under this Act and the regulations;

    (d) to refuse to issue a certificate of discontinuance;

Clause 219: New.

Clause 220: Subsection 362(4) reads as follows:

(4) If a cooperative sends a notice or document to a member or shareholder in accordance with subsection (1) and the notice or document is returned on two consecutive occasions because the member or shareholder cannot be found, the cooperative is not required to send any further notices or documents to the member or shareholder until the cooperative is informed in writing of their new address.

Clause 221: Section 364 reads as follows:

364. When a notice or document is required by this Act or the regulations to be sent, the sending of the notice or document may, subject to a unanimous agreement, be waived or the time for the notice or document may be waived or abridged at any time with the consent in writing of the person who is entitled to it.

Clause 222: New.

Clause 223: (1) to (4) Paragraphs 372(1)(d.1), (d.2), (g) and (h) and subsections 372(2) and (3) are new. The relevant portion of section 372 reads as follows:

372. The Governor in Council may make regulations

    . . .

    (d) respecting the payment of any prescribed fees, including the time when and the manner in which the fees are to be paid, the additional fees that may be charged for the late payment of fees and the circumstances in which any fees previously paid may be refunded in whole or in part;

Clause 224: New.

Clause 225: (1) and (2) The relevant portion of subsection 373(2) reads as follows:

(2) When this Act requires that articles or a statement relating to a cooperative be sent to the Director,

    . . .

    (b) on receiving the articles or statement in the form that the Director has fixed, any other required documents and the prescribed fees, the Director must

      . . .

      (iv) send the certificate, articles or statement, or a copy, image or photographic, electronic or other reproduction of it, to the cooperative or its representative, and

Clause 226: Sections 376.1 and 376.2 are new. Sections 375 and 376 read as follows:

375. The Director may provide any person with a certificate that a cooperative has sent to the Director a document required to be sent, or has paid any fees prescribed.

376. (1) The Director may alter a notice or document, other than an affidavit or statutory declaration, if authorized to do so by the person who sent the document or by their representative.

(2) If a certificate that contains an error is issued to a cooperative by the Director, the directors, members or shareholders must, on the request of the Director, pass the resolutions and send the documents required to comply with this Act, and take any other steps that the Director may reasonably require. The Director may demand the surrender of the certificate and issue a corrected certificate.

(3) A certificate corrected under subsection (2) must bear the date of the certificate it replaces.

(4) If a corrected certificate issued under subsection (2) materially amends the terms of the original certificate, the Director must without delay give notice of the correction in a publication generally available to the public.

Clause 227: Subsection 377(1) reads as follows:

377. (1) A person who has paid the prescribed fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, except a report sent under subsection 330(2), and to make copies of it or take extracts from it.

Clause 228: Subsection 378(3) reads as follows:

(3) The Director is not required to produce any document, other than a certificate and attached articles or statement filed under section 373, more than six years after the date it is received.

Budget Implementation Act, 1997

Clause 231: The relevant portion of subsection 8(2) reads as follows:

(2) The following provisions of the Canada Business Corporations Act apply, with such modifications as the circumstances require, to the foundation and its directors, members, officers and employees as if the foundation were a corporation incorporated under that Act, this Part were its articles of incorporation and its members were its shareholders:

    . . .

    (n) subsections 124(1) to (4) (indemnification of directors and insurance for director's liability);

Canada Post Corporation Act

Clause 232: Section 27 reads as follows:

27. (1) The definitions ``beneficial ownership'', ``debt obligation'', ``redeemable share'', ``security'', ``security interest'' and ``special resolution'' in subsection 2(1) and sections 23 to 26, 34, 36 to 38 (except subsection 38(6)), 42 to 44 (except 44(2)(a) to (c)), 50, 172 and 257 of the Canada Business Corporations Act apply, with such modifications as the circumstances require, in respect of the Corporation as if the references therein to articles were references to the by-laws of the Corporation.

(2) For the purposes of applying subsections 34(2), 36(2) and 38(3), section 42 and subsection 44(1) of the Canada Business Corporations Act in respect of the Corporation, the assets held by the Corporation as an agent of Her Majesty in right of Canada shall be deemed to be assets of the Corporation.

Previous Page Table of Contents Next Page