Short title

        1. This Act may be cited as the Corporations Act.

1986 c12 s1

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Definitions

        2. In this Act

             (a)  "affairs" means the relationship among a corporation, its affiliates and the shareholders, directors and officers of bodies corporate, but does not include business activities carried on by the bodies corporate;

             (b)  "affiliate" means an affiliated body within the meaning of section 7;

             (c)  "articles" means

                      (i)  the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of dissolution and articles of revival, and

                     (ii)  a statute, letters patent, a memorandum of association, certificate of incorporation, or other constating instrument evidencing the corporate existence of a body corporate continued as a corporation under this Act;

             (d)  "associate" where used to indicate a relationship with a person means

                      (i)  a body corporate of which that person beneficially owns or controls, directly or indirectly, shares or other securities currently convertible into shares, that carry more than 10% of the voting rights

                            (A)  under all circumstances,

                            (B)  because of the occurrence of an event that has occurred and is continuing, or

                            (C)  because of a currently exercisable option or right to purchase those shares or those convertible securities,

                     (ii)  a partner of that person acting on behalf of the partnership of which they are partners,

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

                    (iv)  a spouse or child of that person, or

                     (v)  a relative of that person or of his or her spouse where that relative has the same residence as that person;

             (e)  "auditor" includes a partnership of auditors;

              (f)  "beneficial interest" or "beneficial ownership" includes ownership through a trustee, legal representative, agent or other intermediary;

             (g)  "body corporate" includes an incorporated company or other body corporate however or wherever incorporated, other than a corporation sole;

             (h)  "constating instrument" includes a statute other than The Companies Act, letters patent, a memorandum of association, articles of association, certificate of incorporation, certificate of continuance, by-laws, regulations or other instrument by which a body corporate is incorporated or continued or that governs or regulates the affairs of a body corporate;

              (i)  "corporation" means a body corporate incorporated or continued under this Act;

              (j)  "court" means the Trial Division or a judge of the Trial Division;

             (k)  "debt obligation" means a bond, debenture, note or other evidence of indebtedness or guarantee of a corporation whether secured or unsecured;

              (l)  "director" in relation to a body corporate means a person occupying in a body corporate the position of director by whatever name that person is called and "directors" and "board of directors" includes a single director;

            (m)  "distributing corporation" means a corporation any of the issued shares of which are part of a distribution to the public, remain outstanding and are held by more than 1 person;

             (n)  "former Act" refers to Chapter 10 of the Statutes of Newfoundland, 1899, as amended, consolidated and revised since July 19, 1899 and as contained, immediately before January 1, 1987, in The Companies Act, being Chapter 54 of The Revised Statutes of Newfoundland, 1970, as amended;

             (o)  "former-Act company" means a body corporate

                      (i)  that was incorporated under Part I of the former Act,

                     (ii)  registered as a company under Part V of the former Act, or

                    (iii)  registered as a company under section 242 of The Companies Act, 1899, being Chapter 10 of the Statutes of Newfoundland, 1899;

             (p)  "incorporator" means a person who signs articles of incorporation;

             (q)  "individual" means a natural person;

              (r)  "liability" in respect of a corporation includes a debt of the corporation that arises under

                      (i)  section 74,

                     (ii)  subsection 312(2), or

                    (iii)  paragraph 371(3)(f) or (g);

             (s)  "minister" means the member of the Executive Council charged with the administration of this Act;

              (t)  "ordinary resolution" means a resolution passed by a majority of the votes cast by the shareholders who voted in respect of that resolution;

             (u)  "person" includes an individual, body corporate, partnership, association and a trustee, executor, administrator or legal representative of a person;

             (v)  "prescribed", except when used with reference to fees and forms, means prescribed by the regulations;

          (v.1)  "prescribed fee", "prescribed fees" or "prescribed form" means the fee or fees set by the minister, or the form approved by the minister, for the purpose of this Act;

            (w)  "redeemable share" means a share issued by a corporation

                      (i)  that the corporation may purchase or redeem upon demand of the corporation, or

                     (ii)  that the corporation is required by its articles to purchase or redeem at a specified time or upon demand of a shareholder;

         (w.1)  "registered form" means registered form as defined in the Securities Transfer Act ;

             (x)  "registrar" means the Registrar of Companies established under this Act and includes the registrar's deputies appointed in the manner provided by law;

             (y)  "resident Canadian" means an individual who is

                      (i)  a Canadian citizen ordinarily resident in Canada ,

                     (ii)  a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons, or

                    (iii)  a permanent resident within the meaning of the Immigration Act (Canada) and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than 1 year after the time at which he or she first became eligible to apply for Canadian citizenship;

             (z)  "security" means a share of a class or series of shares of a corporation or a debt obligation of a corporation and includes a certificate evidencing a share or debt obligation;

           (aa)  "security interest" means an interest in or charge upon the property of a corporation by way of mortgage, lien, pledge or otherwise and taken by a creditor to secure payment of an obligation of the corporation;

          (bb)  "send" includes deliver;

           (cc)  "series" in relation to shares means a division of a class of shares;

          (dd)  "shareholder" includes a member of a corporation to which Part XXI applies except where inconsistent with that Part;

           (ee)  "special resolution" means a resolution

                      (i)  passed by a majority of not less than 2/3 of the votes cast by the shareholders who voted in respect of that resolution, or

                     (ii)  signed by all the shareholders entitled to vote on that resolution; and

            (ff)  "unanimous shareholder agreement" means an agreement described in section 245.

1986 c12 s2; 1987 c38 s1 & Sch A; 1996 cR-10.1 s20; 2007 cS-13.01 s107

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Purposes of Act

        3. The purposes of this Act are

             (a)  to revise and reform the law under which corporations are to be incorporated and governed within the province;

             (b)  to require companies incorporated or registered under the former Act to be continued under this Act;

             (c)  to provide for the registration of bodies corporate incorporated within the province by special Act;

             (d)  to provide for the registration of bodies corporate carrying on business or other activities within the province that are incorporated under the laws of another jurisdiction; and

             (e)  to encourage the promotion of uniformity in company law in Canada to the extent compatible with the public interest.

1986 c12 s6

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Application of Act

        4. (1) This Act, except where it is otherwise expressly provided, applies to every body corporate, whether incorporated under this Act, the former Act or an Act of Newfoundland or of the province.

             (2)  Notwithstanding subsection (1), when a provision of Part XXI is inconsistent with or repugnant to another provision of this Act, the provision of that Part, in so far as it affects a body corporate to which this Act applies, prevails over the other provisions of this Act.

             (3)  Notwithstanding subsection (1), when it is expressly provided in this Act that a Part applies to a particular type or class of body corporate, that Part shall prevail over the other provisions of this Act.

             (4)  Notwithstanding subsection (1), this Act does not apply to a body corporate incorporated under a statute other than this Act or the former Act that the registrar determines was created for a government or municipal purpose, unless the incorporating statute expressly provides for the application of all or part of this Act.

1986 c12 s7; 1987 c38 s2; 2001 cN-3.1 s2; 2004 c14 s1

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Certain societies exempt from Act

        5. Notwithstanding subsection 4(1), this Act does not apply to a body corporate incorporated or registered under the Agricultural Societies Act or the Co-operative Societies Act except to the extent that those Acts make this Act apply to it.

1986 c12 s7(5)

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Prohibited associations

        6. A company, association, society or partnership consisting of more than 20 persons may not be formed for the purpose of carrying on an activity that has for its object the acquisition of gain by the company, association or partnership, or by the individual members of the company, association or partnership, unless it is incorporated under this Act or is formed under some other Act of the Legislature.

1986 c12 s9; 1987 c38 Sch A

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Affiliated corporations

        7. (1) One body corporate is affiliated with another body corporate where 1 of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person.

             (2)  Where 2 bodies corporate are affiliated with the same body corporate at the same time, they are affiliated with each other.

1986 c12 s10

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Control of a body corporate

        8. A body corporate is controlled by a person where shares of the body corporate carrying voting rights sufficient to elect a majority of the directors of the body corporate are held, directly or indirectly, except by way of security only, by or on behalf of that person.

1986 c12 s11

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Holding and subsidiary bodies corporate

        9. (1) A body corporate is the holding body corporate of another where that other body corporate is its subsidiary.

             (2)  A body corporate is a subsidiary of another body corporate where it is controlled by that other body corporate.

1986 c12 s12

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Distribution to the public

      10. (1) A security of a body corporate is part of a distribution to the public, where in respect of the security

             (a)  there has been a filing of a prospectus, statement of material facts, registration statement, securities exchange takeover bid circular or similar document under the laws of this province or another jurisdiction within or outside Canada; or

             (b)  the security is listed for trading on a stock exchange wherever situated.

             (2)  A security of a body corporate is considered to be part of a distribution to the public where the security has been issued and a filing referred to in paragraph (1)(a) would be required if the security were being issued currently.

             (3)  The securities of a corporation that are issued upon a conversion of other securities or in exchange for other securities are securities that are considered to be part of the original distribution to the public if any of those others were part of a distribution to the public.

1986 c12 s13; 1987 c38 Sch A

PART I
INCORPORATION

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Power to incorporate

      11. (1) One or more individuals or 1 or more bodies corporate may incorporate a corporation by signing and sending articles of incorporation to the registrar.

             (2)  Notwithstanding subsection (1), an individual may not incorporate a corporation who

             (a)  is less than 19 years of age;

             (b)  is a mentally incompetent person and has been so found by a tribunal in Canada or elsewhere; or

             (c)  has the status of a bankrupt.

1986 c12 s14

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Articles of incorporation

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

             (a)  the name of the corporation;

             (b)  the place in the province and the address including street name and number where the registered office is to be situated;

             (c)  the classes and any maximum number of shares that the corporation is authorized to issue and

                      (i)  where there will be 2 or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares, and

                     (ii)  where any class of shares may be issued in series, the authority given to the directors to fix the number of shares in, and to determine the designation of, and the rights, privileges, restrictions and conditions attaching to, the shares of each series;

             (d)  where the right to transfer shares of the corporation is to be restricted, a statement that the right to transfer shares is restricted and the nature of the restrictions;

             (e)  the number of directors or, where required by paragraph 176(a), the minimum and maximum number of directors of the corporation; and

              (f)  a restriction on the business that the corporation may carry on.

             (2)  The articles may set out provisions permitted by this Act or by law to be set out in the by-laws of the corporation.

1986 c12 s15; 1987 c38 Sch A; 1997 c13 s11

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Special majorities

      13. (1) Where the articles or a unanimous shareholder agreement require a greater number of votes of directors or shareholders than that required by this Act to effect an action, the provisions of the articles or of the unanimous shareholder agreement prevail.

             (2)  Notwithstanding subsection (1), the articles may not require a greater number of votes of shareholders to remove a director than the number specified in section 179.

1986 c12 s16

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Delivery of articles

      14. An incorporator shall send to the registrar with the articles of incorporation the documents required by sections 34 and 175.

1986 c12 s17

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Certificate of incorporation

      15. Upon receipt of articles of incorporation, the registrar shall issue a certificate of incorporation in accordance with section 393.

1986 c12 s18

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Effect of certificate

      16. A corporation comes into existence on the date shown in the certificate of incorporation.

1986 c12 s19

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Name of corporation

      17. (1) The word "Limited", "Limitee", "Incorporated", "Incorporee" or "Corporation" or the abbreviation "Ltd.", "Ltee", "Inc." or "Corp." shall be part of the name of every corporation but a corporation may use and may be legally designated by either the full or the abbreviated form.

             (2)  The registrar may exempt a body corporate continued as a corporation under this Act from subsection (1).

1986 c12 s20

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English- French form of name

      18. 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 the corporation may use and may be legally designated by that form.

1986 c12 s21

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Name in any language

      19. A corporation may set out its name in its articles in any language form and it may use and may be legally designated by that form.

1986 c12 s22

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Designating number

      20. Where requested to do so by the incorporators or a corporation, the registrar shall assign to the corporation as its name a designating number determined by the registrar.

1986 c12 s23

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Prohibited names

      21. Notwithstanding sections 18 and 19, a corporation shall not be incorporated with or have a name

             (a)  that is prohibited or refused under sections 404 to 407; or

             (b)  that is reserved for another corporation or intended corporation under section 403.

1986 c12 s24

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Directing change of name

      22. Where through inadvertence or otherwise a corporation

             (a)  comes into existence or is continued with a name that contravenes section 21; or

             (b)  upon an application to change its name, is granted a name that contravenes this section,

the registrar may direct the corporation to change its name in accordance with section 279.

1986 c12 s25; 1987 c38 Sch A

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Name of continued corporation

      23. (1) Notwithstanding sections 21 and 22, a corporation that is continued under this Act is entitled to be continued with the name it had before that continuance unless that name is identical with or confusingly similar to the name of an existing body corporate.

             (2)  Where a corporation described in subsection (1) has a designating number as its name, the registrar may direct the corporation to change its name to a name other than a designating number in accordance with section 279.

1986 c12 s26; 1987 c38 s3

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Revoking name

      24. Where a corporation has been directed under section 22 or 23 to change its name and has not within 60 days from the service of the directive to that effect changed its name to a name that complies with this Act, the registrar may revoke the name of the corporation and assign to it a name, and, until changed in accordance with section 279, the name of the corporation is afterward the name so assigned.

1986 c12 s27

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Certificate of amendment of name

      25. (1) Where a corporation has had its name revoked and a name assigned to it under section 24, the registrar shall issue a certificate of amendment showing the new name of the corporation and shall immediately give notice of the change of name in the Gazette.

             (2)  The articles of incorporation are amended accordingly on the date shown in the certificate of amendment.

1986 c12 s28

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Pre-incorporation contracts

      26. (1) 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 of it.

             (2)  A corporation may, within a reasonable time after it comes into existence, by an action or conduct signifying its intention to be bound by it, adopt a written contract made before it came into existence in its name or on its behalf, and, upon that adoption,

             (a)  the corporation is bound by the contract and is entitled to the benefits of it as if the corporation had been in existence at the date of the contract and had been a party to the contract; and

             (b)  a person who purported to act in the name of or on behalf of the corporation stops, except as provided in subsection (3), being bound by or entitled to the benefits of the contract.

             (3)  Except as provided in subsection (5), 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 individual 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.

             (4)  Upon an application made under subsection (3) the court may make an order it thinks appropriate.

             (5)  Where expressly so provided in the written contract, a person who purported to act in the name of or on behalf of the corporation before it came into existence is not bound by the contract or entitled to the benefits of it.

1986 c12 s29

PART II
CAPACITY AND POWERS

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Corporate capacity

      27. (1) A corporation has the capacity, and the rights, powers and privileges of a natural person.

             (2)  A corporation has the capacity to carry on its business, conduct its affairs and exercise its powers in another jurisdiction to the extent that the laws of that jurisdiction permit.

             (3)  It is not necessary for a by-law to be passed in order to confer a particular power on a corporation or its directors.

1986 c12 s30

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Restricted business

      28. A corporation shall not carry on a business or exercise a power that it is restricted by its articles from carrying on or exercising, nor shall a corporation exercise its powers in a manner contrary to its articles.

1986 c12 s31

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Effect of restricted acts

      29. An act of a corporation, including a transfer of property to or by a corporation, is not invalid by reason only that the act or transfer is contrary to its articles or this Act.

1986 c12 s32

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No constructive notice

      30. A person is not affected by or considered to have notice or knowledge of the contents of a document concerning a corporation by reason only that the document has been filed with the registrar or is available for inspection at an office of the corporation.

1986 c12 s33

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Assertions of corporate incapacity

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

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

             (b)  that the persons named in the most recent notice sent to the registrar under section 175 or 183 are not the directors of the corporation;

             (c)  that the place named in the most recent notice sent to the registrar under section 34 is not the registered office of the corporation;

             (d)  that a person held out by a corporation as a director, an officer or an agent of the corporation has not been properly 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 that director, officer or agent;

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

              (f)  that the financial assistance referred to in section 78 or the sale, lease or exchange of property referred to in section 303 was not authorized,

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

1986 c12 s34

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Corporate seal

      32. 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 placed on it.

1986 c12 s35

PART III
REGISTERED OFFICE AND RECORDS

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Registered office

      33. (1) A corporation shall have a registered office in the province in the place specified in its articles.

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

1986 c12 s36

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Notice of registered office

      34. (1) A notice of registered office in prescribed form shall be sent to the registrar together with articles that designate or change the place in the province in which the registered office of the corporation is to be situated.

             (2)  A corporation shall send to the registrar, within 15 days of a change of address of its registered office, a notice in prescribed form, which the registrar shall file.

             (3)  Where the location of a registered office of a corporation is changed by reason of the annexation or amalgamation of the place in which the registered office is situated, to or with another municipality, that change does not constitute a change within the meaning of subsection (1).

1986 c12 s37; 1993 c53 s4

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Displaying name of corporation

      35. (1) A corporation carrying on an undertaking in the province shall, in a conspicuous place and in easily legible letters, paint or affix, and keep painted or affixed, its name on the outside of its head office in the province.

             (2)  A corporation carrying on an undertaking in the province shall, in the transaction of its undertaking within the province, have its name mentioned in legible characters in

             (a)  all contracts, bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the corporation; and

             (b)  all bills of parcels, invoices, receipts and letters of credit of the corporation.

1987 c38 s4

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Corporate records

      36. A corporation shall prepare and maintain, at its registered office or at another place in the province designated by the directors, records containing

             (a)  the articles and the by-laws, and all amendments to the articles and the by-laws, and a copy of a unanimous shareholder agreement;

             (b)  minutes of meetings and resolutions of shareholders;

             (c)  copies of all notices required by section 175 or 183; and

             (d)  a securities register complying with section 96.

1986 c12 s38

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Director's records

      37. (1) In addition to the records described in section 36, a corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and a committee of directors.

             (2)  The records described in subsection (1) shall be kept at the registered office of the corporation or at another place in the province that the directors think appropriate and shall at reasonable times be open to inspection by the directors.

1986 c12 s39

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Accounting records out of province

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

1986 c12 s40

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Records of continued corporation

      39. For the purposes of paragraph 36(b) and section 37, when a body corporate is continued under this Act, "records" include similar registers and other records required by law to be maintained by the body corporate before it was continued.

1986 c12 s41

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Form of records

      40. All records required by this Act to be prepared and maintained may be in a bound or loose-leaf form or in a photographic film form, or may be entered or recorded by a system of mechanical or electronic data processing or another information storage device that is capable of reproducing required information in intelligible written form within a reasonable time.

1986 c12 s42

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Duty of care: records

      41. A corporation and its agents shall take reasonable precautions

             (a)  to prevent loss or destruction of;

             (b)  to prevent falsification of entries in; and

             (c)  to facilitate detection and correction of inaccuracies in,

the records required by this Act to be prepared and maintained.

1986 c12 s43

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Access to corporate records

      42. (1) Shareholders and creditors of a corporation, their agents and legal representatives and the registrar may examine the records referred to in section 36 during the usual business hours of the corporation, and may take extracts from the records, free of charge, and, where the corporation is a distributing corporation, another person may do so upon payment of a reasonable fee.

             (2)  A shareholder of a corporation is entitled upon request and without charge to 1 copy of the articles and by-laws and of a unanimous shareholder agreement.

1986 c12 s44

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Basic shareholder lists

      43. (1) Shareholders and creditors of a corporation, their agents and legal representatives, the registrar and, where the corporation is a distributing corporation, another person upon payment of a reasonable fee and upon sending to a corporation or its transfer agent the affidavit referred to in subsection (4) may upon application require the corporation or its agent to provide within 10 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 10 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 record of the corporation.

             (2)  A person requiring a corporation to supply a basic list may, where the person states in the affidavit referred to in subsection (4) that the person requires supplemental lists, require the corporation or its agent upon payment of a reasonable fee to provide supplemental lists setting out changes from the basic list in the names or addresses of the shareholders and the number of shares owned by each shareholder for each business day following the date to which the basic list is made up.

             (3)  The corporation or its agent shall provide a supplemental list required under subsection (2)

             (a)  on the date the basic list is provided, where the information relates to changes that took place before that date; and

             (b)  on the business day following the day to which the supplemental list relates, where the information relates to changes that take place on or after the date the basic list is provided.

             (4)  The affidavit required under subsection (1) shall state

             (a)  the name and address of the applicant;

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

             (c)  that the basic list and supplemental lists obtained under subsection (2) will not be used except as permitted under section 45.

             (5)  Where the applicant is a body corporate, the affidavit referred to in subsection (4) shall be made by a director or officer of the body corporate.

1986 c12 s45

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Share options list

      44. A person requiring under section 43 that a corporation supply a basic list or a supplemental list may also require the corporation to include in that list the name and address of a known holder of an option or right to acquire shares of the corporation.

1986 c12 s46

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Use of shareholder list

      45. A list of shareholders obtained under section 43 shall not be used by a 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)  other matters relating to the affairs of the corporation.

1986 c12 s47

PART IV
CORPORATE FINANCE

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Shares

      46. (1) Shares of a corporation are to be in registered form and without nominal or par value.

             (2)  When a body corporate is continued under this Act, a share with nominal or par value issued by the body corporate before it was continued is, for the purpose of subsection (1), considered to be a share without nominal or par value.

1986 c12 s48

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One class of shares

      47. When a corporation has only 1 class of shares, the rights of the holders are equal in all aspects and include

             (a)  the right to vote at a meeting of shareholders;

             (b)  the right to receive a dividend declared by the corporation; and

             (c)  the right to receive the remaining property of the corporation on dissolution.

1986 c12 s49

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Classes of shares

      48. The articles may provide for more than 1 class of shares and where they so provide

             (a)  the rights, privileges, restrictions and conditions attaching to the shares of each class shall be set out in the shares of that class; and

             (b)  the rights set out in section 47 shall be attached to at least 1 class of share but all those rights need not be attached to more than the 1 class of shares.

1986 c12 s50

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How shares issued

      49. Subject to the articles, the by-laws, a unanimous shareholder agreement and section 55, shares may be issued at the times and to the persons and for the consideration that the directors may determine.

1986 c12 s51

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Consideration for shares

      50. (1) A share shall not be issued until it is fully paid in money or in property or past services that is the fair equivalent of the money that the corporation would have received had the share been issued for money.

             (2)  In determining whether property or past service is the fair equivalent of a money consideration, the directors may take into account reasonable charges and expenses of organization and reorganization and payments for property and past services reasonably expected to benefit the corporation.

             (3)  For the purposes of this section, "property" does not include a promissory note from or a promise to pay by the person acquiring a share.

1986 c12 s52

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Shares non- assessable

      51. Shares issued by a corporation are non-assessable and the holders are not liable to the corporation or to its creditors in respect of them.

1986 c12 s53

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Stated capital accounts

      52. (1) A corporation shall maintain a separate stated capital account for each class and series of shares that it issues.

             (2)  A corporation shall add to the appropriate stated capital account the full amount of consideration that it receives for shares that it issues.

             (3)  Notwithstanding subsection 50(1) and subsection (2), where a corporation issues shares

             (a)  in exchange for

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

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

             (b)  under an agreement referred to in subsection 289(1) or an arrangement referred to in paragraph 315(1)(b) or (d) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate,

the corporation may add to the stated capital accounts maintained for the shares of the classes or series issued the whole or a part of the amount of the consideration it received in the exchange.

             (4)  Notwithstanding subsection (3), on the issue of a share a corporation shall not add to a stated capital account in respect of the share it issues an amount greater than the amount of the consideration it received for the share.

             (5)  Notwithstanding subsection (6), where a corporation proposes to add an amount to a stated capital account it maintains in respect of a class or series of shares, where

             (a)  the amount to be added was not received by the corporation as consideration for the issue of shares; and

             (b)  the corporation has issued outstanding shares of more than 1 class or series,

the addition to the stated capital account shall be approved by special resolution unless all the issued and outstanding shares are shares of not more than 2 classes of convertible shares referred to in subsection 68(5).

             (6)  When a body corporate is continued under this Act, it may add to a stated capital account consideration received by it for a share it issued and a corporation may add to a stated capital account an amount it credited to a retained earnings or other surplus account.

             (7)  When a body corporate is continued under this Act, subsection (2) does not apply to the consideration received by it before it was continued unless the share in respect of which the consideration is received is issued after the corporation is continued.

             (8)  When a body corporate is continued under this Act, an amount unpaid in respect of a share issued by the body corporate before it was continued and paid after it was continued shall be added to the stated capital account maintained for the shares of that class or series.

             (9)  For the purposes of subsection 62(2), sections 67 and 76, paragraph 78(2)(b) and paragraph 293(2)(a), where a body corporate is continued under this Act, its stated capital is considered to include the amount that would have been included in stated capital had the body corporate been incorporated under this Act.

           (10)  A corporation shall not reduce its stated capital or a stated capital account except in the manner provided in this Act.

1986 c12 s54

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Open-end mutual funds

      53. (1) Section 52 and another provision of this Act relating to stated capital do not apply to an open-end mutual fund.

             (2)  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 upon the demand of a shareholder.

1986 c12 s55

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Shares in series

      54. (1) The articles may authorize the issue of a class of shares in 1 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)  Where cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

             (3)  Rights, privileges, restrictions or conditions attached to a series of shares authorized under this section do not confer upon a series a priority in respect of dividends or return of capital over other series of shares of the same class that are then outstanding.

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

             (5)  Upon receipt of articles of amendment designating a series of shares, the registrar shall issue a certificate of amendment in accordance with section 393.

             (6)  The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.

1986 c12 s56

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Pre-emptive rights

      55. (1) Where the articles so provide, shares of a class shall not be issued unless the shares have first been offered to the shareholders holding the shares of that class, and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at the price and on the terms that those shares are to be offered to others.

             (2)  Notwithstanding that the articles provide the pre-emptive right referred to in subsection (1), shareholders have no pre-emptive right in respect of shares to be issued

             (a)  for a consideration other than money;

             (b)  as a share dividend; or

             (c)  under the exercise of conversion privileges, options or rights previously granted by the corporation.

1986 c12 s57

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Instruments evidencing rights

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

             (a)  in the certificates, warrants or other evidences; or

             (b)  in certificates evidencing the securities to which the conversion privileges, options or rights are attached.

             (2)  Conversion privileges, options and rights to acquire securities of a corporation may be made transferrable or non-transferrable, and options and rights to acquire may be made separable or inseparable from securities to which they are attached.

1986 c12 s58

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When shares issued

      57. Where a corporation has granted privileges to convert securities issued by the corporation into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, where the articles limit the number of authorized shares, the corporation shall reserve and continue to reserve sufficient authorized shares to meet the exercise of the conversion privileges, options and rights.

1986 c12 s59

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Corporation's own shares

      58. (1) Except as provided in sections 59 to 64, a corporation

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

             (b)  shall not permit any of its subsidiary bodies corporate to acquire shares of the corporation.

             (2)  Notwithstanding subsection (1), 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 5 years from the date

             (a)  that the body corporate became a subsidiary of the corporation; or

             (b)  that the corporation was continued under this Act.

1986 c12 s60

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Holding own shares

      59. (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.

1986 c12 s61

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Exception relating to Canadian ownership

      60. (1) A corporation may, for the purpose of helping the corporation or an affiliate or an associate to qualify under a 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, hold shares in itself that

             (a)  are not constrained for the purpose of helping the corporation or an affiliate or an associate to qualify; or

             (b)  are shares into which shares held under paragraph (a) were converted by the corporation that are constrained for the purpose of helping the corporation to qualify and that were not previously held by the corporation.

             (2)  A corporation shall not transfer shares held under subsection (1) to a person unless the corporation is satisfied, on reasonable grounds, that the ownership of the shares as a result of the transfer would help the corporation or an affiliate or an associate to achieve the purpose set out in subsection (1).

             (3)  A corporation that, without reasonable cause, fails to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

             (4)  Where a corporation commits an offence under subsection (3), then, whether or not the corporation has been prosecuted or convicted, a director of the corporation who knowingly authorizes, permits or acquiesces in the commission of the offence is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000, to imprisonment for a term not exceeding 6 months or to both.

             (5)  Where shares held under subsection (1) are transferred by a corporation, sections 49 and 50, paragraph 189(3)(c) and section 192 apply, with the necessary changes, in respect of the transfer as if the transfer were an issue.

             (6)  A transfer of shares by a corporation shall not be void or voidable solely because the transfer is in contravention of subsection (2).

1987 c38 s5

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Voting shares

      61. 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 255.

1987 c38 s5

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Acquiring own shares

      62. (1) Subject to its articles, a corporation may purchase or otherwise acquire shares issued by it.

             (2)  Notwithstanding subsection (1), a corporation shall not make a payment to purchase or otherwise acquire shares issued by it where there are reasonable grounds for believing that

             (a)  the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

             (b)  the realizable value of the corporation's assets would after the payment be less than the aggregate of its liabilities and stated capital of all classes.

1986 c12 s62

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Other acquisition

      63. (1) Notwithstanding subsection 62(2), but subject to subsection (3) and to its articles, a corporation may purchase or otherwise acquire shares issued by it

             (a)  to settle or compromise a debt or claim asserted by or against the corporation;

             (b)  to eliminate fractional shares; or

             (c)  to fulfil the terms of a non-assignable agreement under which the corporation has an option or is obliged to purchase shares owned by a director, an officer or an employee of the corporation.

             (2)  Notwithstanding subsection 62(2), a corporation may purchase or otherwise acquire shares issued by it

             (a)  to satisfy the claim of a shareholder who dissents under section 304; or

             (b)  to comply with an order under section 371.

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

             (a)  the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

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

1986 c12 s63

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Redemption of shares

      64. (1) Notwithstanding subsection 58(2), or subsection 63(3), but subject to subsection (2) and to its articles, a corporation may, at prices not exceeding the redemption price of shares stated in the articles or calculated according to a formula stated in the articles, purchase or redeem redeemable shares issued by it.

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

             (a)  the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

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

                      (i)  its liabilities, and

                     (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.

1986 c12 s64

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Donated shares

      65. A corporation may accept from a shareholder a share of the corporation surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on the share except in accordance with section 67.

1986 c12 s65

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Voting own shares

      66. 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 255.

1986 c12 s66

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Reduction of stated capital

      67. (1) A corporation may by special resolution reduce its stated capital by

             (a)  extinguishing or reducing a liability in respect of an amount unpaid on a share;

             (b)  returning an amount in respect of consideration the corporation received for an issued share, whether or not the corporation purchases, redeems or otherwise acquires a share or fraction of a share it issued; and

             (c)  declaring its stated capital to be reduced by an amount that is not represented by realizable assets.

             (2)  A special resolution under this section shall specify the stated capital account from which the reduction of stated capital effected by the special resolution will be deducted.

             (3)  Notwithstanding subsection (1), a corporation shall not reduce its stated capital under paragraph (1)(a) or (b) where there are reasonable grounds for believing that

             (a)  the corporation is, or would after the reduction be, unable to pay its liabilities as they become due; or

             (b)  the realizable value of the corporation's assets would as a result be less than the aggregate of its liabilities.

             (4)  A creditor of a corporation is entitled to apply to a court for an order compelling a shareholder or other recipient

             (a)  to pay to the corporation an amount equal to a liability of the shareholder that was extinguished or reduced contrary to this section; or

             (b)  to pay or deliver to the corporation money or property that was paid or distributed to the shareholder or other recipient as a consequence of a reduction of capital made contrary to this section.

             (5)  An action to enforce a liability imposed by this section may not be started after 2 years from the date of the act complained of.

             (6)  This section does not affect liability that arises under section 192 or 193.

1986 c12 s67

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Stated capital account adjustment

      68. (1) Upon a purchase, redemption or other acquisition by a corporation under section 62, 63, 64, 82 or 304 or paragraph 371(3)(f) of shares or fractions of shares issued by it, the corporation shall deduct from the stated capital account maintained for the class or series of shares purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series or fractions of the shares purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

             (2)  A corporation shall deduct the amount of a payment made by the corporation to a shareholder under paragraph 371(3)(g) from the stated capital account maintained for the class or series of shares in respect of which the payment was made.

             (3)  A corporation shall adjust its stated capital account in accordance with a special resolution referred to in subsection 67(2).

             (4)  Upon a conversion of issued shares of a class into shares of another class or upon a change under section 279, 314 or 371 of issued shares of a corporation into shares of another class or series, a corporation shall

             (a)  deduct from the stated capital account maintained for the class or series of shares changed or converted an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of the class or series changed or converted, divided by the number of issued shares of that class or series immediately before the change or conversion; and

             (b)  add the result obtained under paragraph (a) and additional consideration received by the corporation under the change or conversion to the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been changed or converted.

             (5)  For the purpose of subsection (4), when a corporation issues 2 classes of shares and there is attached to each of the classes a right to convert a share of the 1 class into a share of the other class, then, where a share of 1 class is converted into a share of the other class, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of issued shares of both classes immediately before the conversion.

1986 c12 s68

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Cancellation, etc. of own shares

      69. Notwithstanding section 65, shares or fractions of shares issued by a corporation and purchased, redeemed or otherwise acquired by it shall be cancelled or, where the articles limit the number of authorized shares, shall be restored to the status of authorized but unissued shares.

1986 c12 s69

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Presumption against acquisition

      70. For the purposes of sections 68 and 69, a corporation holding shares in itself as permitted by section 59 is to be presumed not to have purchased, redeemed or otherwise acquired those shares.

1986 c12 s70

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Exception

      71. For the purposes of sections 68, 69 and 70, a corporation holding shares in itself under paragraph 60(1)(a) is considered not to have purchased, redeemed or otherwise acquired the shares at the time they were acquired, but

             (a)  those shares that are held by the corporation at the expiration of 2 years; and

             (b)  shares into which any of those shares were converted by the corporation and held under paragraph 60(1)(b) that are held by the corporation at the expiration of 2 years after the shares from which they were converted were acquired

are considered to have been acquired at the expiration of 2 years.

1987 c38 s6

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Change of shares

      72. (1) Shares issued by a corporation and converted or changed under section 279, 314 or 371 into shares of another class or series become issued shares of the class or series of shares into which the shares have been converted or changed.

             (2)  Where the articles limit the number of authorized shares of a class or series of shares of a corporation and issued shares of that class or series have become, under subsection (1), issued shares of another class or series, the number of unissued shares of the first-mentioned class or series shall, unless the articles of amendment or reorganization otherwise provide, be increased by the number of shares that, under subsection (1), became shares of another class or series.

1986 c12 s71

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Redemption of debt obligations, etc.

      73. (1) Debt obligations issued, pledged or deposited by a corporation are not redeemed by reason only that the indebtedness evidenced by the debt obligations or in respect of which the debt obligations are issued, pledged or deposited is repaid.

             (2)  Debt obligations issued by a corporation and purchased, redeemed or otherwise acquired by it may be cancelled or, subject to an applicable trust indenture or other agreement, may be reissued, pledged or deposited to secure an obligation of the corporation then existing or afterward incurred, and the acquisition and reissue, pledge or deposit is not a cancellation of the debt obligations.

1986 c12 s72

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Contract to purchase own shares

      74. (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 being in breach of section 62 or 63.

             (2)  In an action brought on a contract referred to in subsection (1), the corporation has the burden of proving that performance of it is prevented by section 62 or 63.

             (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, in a liquidation, to be ranked subordinate to the rights of creditors but in priority to the shareholders.

1986 c12 s73; 1986 c38 Sch A

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Commission for sale of shares

      75. Directors acting honestly and in good faith with a view to the best interests of the corporation may authorize the corporation to pay a commission to a person in consideration of the person's purchasing or agreeing to purchase shares of the corporation from the corporation or from another person, or procuring or agreeing to procure purchasers for the shares.

1986 c12 s74

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When dividends prohibited

      76. Notwithstanding section 77, a corporation shall not declare or pay a dividend where there are reasonable grounds for believing that

             (a)  the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

             (b)  the realizable value of the corporation's assets would be less than the aggregate of its liabilities and stated capital of all classes.

1986 c12 s75

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Payment of dividends

      77. (1) A corporation may pay a dividend by issuing fully paid shares of the corporation and a corporation may pay a dividend in money or property.

             (2)  Where shares of a corporation are issued in payment of a dividend, the value of the dividend stated as an amount in money shall be added to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend.

1986 c12 s76

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Illicit loans

      78. (1) Except as permitted under section 79, where circumstances prejudicial to the corporation exist, a corporation or a corporation with which it is affiliated may not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise

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

             (b)  to a person for the purpose of or in connection with a purchase of a share issued or to be issued by the corporation or a corporation with which it is affiliated.

             (2)  Circumstances prejudicial to the corporation exist in respect of financial assistance mentioned in subsection (1) where there are reasonable grounds for believing that

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

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

1986 c12 s77

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Permitted loans

      79. Notwithstanding section 78, a corporation may give financial assistance to a person by means of a loan, guarantee or otherwise

             (a)  in the ordinary course of business, where the lending of money is part of the ordinary business of the corporation;

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

             (c)  to a holding body corporate where 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 an affiliate

                      (i)  to enable or help 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 an affiliate to be held by a trustee.

1986 c12 s78

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Enforceability of illicit loan

      80. A contract made by a corporation contrary to section 78 may be enforced by the corporation or by a lender for value in good faith without notice of the contravention.

1986 c12 s79

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Shareholder immunity

      81. The shareholders of a corporation are not, as shareholders, liable for a liability, act or default of the corporation except under subsection 67(4), subsection 245(8) or subsection 355(5).

2010 c31 s6

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Lien on shares

      82. (1) The articles may provide that the corporation has a lien on a share registered in the name of a shareholder or the shareholder's 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.

             (2)  A corporation may enforce a lien referred to in subsection (1) in accordance with its by-laws.

1986 c12 s81

PART V
SALE OF CONSTRAINED SHARES

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Sale of constrained shares by corporation

      83. (1) A corporation that has constraints on the issue, transfer or ownership of its shares of any class or series in order to help the corporation or an affiliate or an associate to qualify under a 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 may, for that purpose or for the purpose of attaining or maintaining a level of Canadian ownership or control specified in its articles, under the conditions and after giving the notice that may be prescribed, sell, as if it were the owner, any of those constrained shares that are owned, or that the directors determine, in the manner that 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.

             (3)  Where shares are sold by a corporation under subsection (1), the owner of the shares immediately prior to the sale shall by that sale be divested of his or her interest in the shares, and the person who, but for the sale, would be the registered owner of the shares or a person who satisfies the corporation that, but for the sale, he or she could properly be treated as the registered owner or registered holder of the shares under section 102 shall, from the time of the sale, be entitled to receive only the net proceeds of the sale, together with income earned on it from the beginning of the month next following the date of the receipt by the corporation of the proceeds of the sale, less taxes and costs of administration of a trust fund constituted under subsection 84(1) in relation to it.

             (4)  Sections 103 to 105 apply in respect of the person who is entitled under subsection (3) to receive the proceeds of a sale of shares under subsection (1) as if the proceeds were a security and the person were a registered holder or owner of the security.

1987 c38 s7

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Proceeds of sale to be trust fund

      84. (1) The proceeds of a sale by a corporation under subsection 83(1) constitute a trust fund in the hands of the corporation for the benefit of the person entitled under subsection 83(3) to receive the proceeds of the sale, and the trust fund may be commingled by the corporation with other trust funds and shall be invested in the manner that may be prescribed.

             (2)  Reasonable costs of administration of a trust fund referred to in subsection (1) may be deducted from the trust fund and income earned on it.

             (3)  A corporation may transfer a trust fund referred to in subsection (1), and the administration of it, to a trust company in Canada registered as such under the laws of Canada or a province, and the corporation is then discharged of all further liability in respect of the trust fund.

             (4)  A receipt signed by a person entitled under subsection 83(3) to receive the proceeds of a sale that constitute a trust fund under subsection (1) shall be a complete discharge of the corporation and of a trust company to which a trust fund is transferred under subsection (3), in respect of the trust fund and income earned on it paid to that person.

             (5)  A trust fund described in subsection (1), together with income earned on it, less taxes on the trust fund and costs of administration, that has not been claimed by a person entitled under subsection 83(3) to receive the proceeds of a sale that constitute the trust fund for a period of 10 years after the date of the sale vests in the Crown in right of Canada.

1987 c38 s7

PART VI
SECURITY CERTIFICATES, REGISTERS AND TRANSFERS

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Transfers of securities

      85. Except as otherwise provided in this Act and the Judgment Enforcement Act , the transfer or transmission of a security shall be governed by the Securities Transfer Act .

2007 cS-13.01 s107

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Rep. by 2007 cS-13.01 s107

      86. [Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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Security certificates

      87. (1) A security holder is entitled at the security holder's option to a security certificate that complies with this Act or a non-transferable written acknowledgement of the security holder's right to obtain a security certificate from a corporation in respect of the securities of that corporation held by the security holder.

             (2)  A corporation may charge a fee of not more than $3 for a security certificate issued in respect of a transfer.

             (3)  A corporation is not required to issue more than 1 security certificate in respect of securities held jointly by several persons, and delivery of a certificate to 1 of several joint holders is sufficient delivery to all.

             (4)  A security certificate shall be signed manually by at least 1 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 additional signatures required on a security certificate may be printed or otherwise mechanically reproduced on it.

             (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.

             (6)  Where a security certificate contains a printed or mechanically reproduced signature of a person, the corporation may issue the security certificate, notwithstanding that the person has stopped being a director or an officer of the corporation, and the security certificate is as valid as if the person were a director or an officer at the date of its issue.

1986 c12 s84

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Contents of share certificate

      88. The face of each share certificate, issued by a corporation, shall state

             (a)  the name of the corporation;

             (b)  the words "Incorporated under the laws of Newfoundland and Labrador " or words of the same effect;

             (c)  the name of the person to whom it was issued; and

             (d)  the number and class of shares and the designation of a series that the certificate represents.

1986 c12 s85; 2001 cN-3.1 s2

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Rep. by 2007 cS-13.01 s107

      89. [Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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Notation of constraint and failure to note

      90. (1) Where the articles of a corporation constrain the issue, transfer or ownership of shares of a class or series or shares convertible into that class or series in order to help the corporation or an affiliate or an associate to qualify under a 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, that constraint or a reference to it shall be noted conspicuously on a 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.

             (2)  The failure to note a constraint or a reference to it under subsection (1) shall not invalidate a share or security certificate and shall not render a constraint ineffective against an owner, holder or transferee of the share or security certificate.

1987 c38 s8; 2007 cS-13.01 s107

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Restriction on share transfer

      91. A corporation may not restrict the transfer of its shares otherwise than by way of a constraint under section 280 when any of the issued shares of the corporation are or were part of a distribution to the public, remain outstanding and are held by more than 1 person.

1986 c12 s87

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Particulars of class

      92. (1) A share certificate issued by a corporation that is authorized to issue shares of more than 1 class or series shall state legibly

             (a)  the rights, privileges, restrictions and conditions attached to the shares of each class and series that exists when the share certificate is issued; or

             (b)  that the class or series of shares that it represents has rights, privileges, restrictions or conditions attached to it and that the corporation will provide to a shareholder, on demand and without charge, a full copy of the text of

                      (i)  the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series where the rights, privileges, restrictions and conditions have been fixed by the directors; and

                     (ii)  the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series.

             (2)  Where a share certificate issued by a corporation contains the statement mentioned in paragraph (1)(b), the corporation shall provide to a shareholder on demand and without charge a full copy of the text of

             (a)  the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series where the rights, privileges, restrictions and conditions have been fixed by the directors; and

             (b)  the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series.

1986 c12 s88; 1987 c38 Sch A

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Fractional shares

      93. (1) A corporation may issue a certificate for a fractional share or may issue in place of it scrip certificates in bearer form that entitle the holder to receive a certificate for a full share by exchanging scrip certificates aggregating a full share.

             (2)  The directors may attach conditions to scrip certificates issued by a corporation, including conditions

             (a)  that the scrip certificates become void if not exchanged for a share representing a full share before a specified date; and

             (b)  that a share for which the scrip certificates are exchangeable may, notwithstanding a pre-emptive right, be issued by the corporation to a person and the proceeds of it distributed rateably to the holders of the scrip certificates.

1986 c12 s89; 1987 c38 Sch A

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Fractional share rights

      94. A holder of a fractional share issued by a corporation is not entitled to exercise voting rights or to receive a dividend in respect of the fractional shares, unless

             (a)  the fractional share results from a consolidation of shares; or

             (b)  the articles of the corporation otherwise provide.

1986 c12 s90

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Scrip certificate rights

      95. A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate.

1986 c12 s91

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Securities records

      96. A corporation shall maintain a securities register to record the securities issued by it in registered form, showing with respect to each class or series of securities

             (a)  the names, alphabetically arranged, and the latest known address of each person who is or has been a security holder;

             (b)  the number of securities held by each security holder; and

             (c)  the date and particulars of the issue and transfer of each security.

1986 c12 s92

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Securities registers

      97. A corporation may appoint an agent to maintain a central securities register and branch securities registers.

1986 c12 s93

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Place of registers

      98. A central securities register shall be maintained by a corporation at its registered office or at an office in the province of a trust company designated by the directors and which meets the requirements of section 3 of the Trust and Loan Corporations Act and branch securities registers may be kept at a place in or out of the province and designated by the directors.

1986 c12 s94; 2007 cT-9.1 s5

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Effect of registration

      99. Registration of the issue or transfer of a security in the central securities register or in a branch securities register is complete and valid registration for all purposes.

1986 c12 s95

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Branch register

   100. (1) A branch securities register shall only contain particulars of securities issued or transferred at that branch.

             (2)  Particulars of each issue or transfer of a security registered in a branch securities register shall also be kept in the corresponding central securities register.

1986 c12 s96

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Destruction of certificates

   101. A corporation, its agent or a trustee defined in section 145 is not required to produce

             (a)  a cancelled security certificate, in registered form, an instrument referred to in subsection 56(1) that is cancelled or a like cancelled instrument in registered form, 6 years after the date of its cancellation;

             (b)  a cancelled security certificate, in bearer form, an instrument referred to in subsection 56(1) that is cancelled or a like cancelled instrument in bearer form, after the date of its cancellation; or

             (c)  an instrument referred to in subsection 56(1) or a like instrument, irrespective of its form, after the date of its expiry.

1986 c12 s97

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Dealings with registered holder

   102. (1) A corporation or a trustee defined in Part VII may, subject to sections 218, 219, 221 and 223, and the Judgment Enforcement Act treat the registered owner of the security as the person exclusively entitled to vote, to receive notices, to receive an interest, dividend or other payments in respect of the security, and otherwise to exercise all the rights and powers of an owner of the security.

             (2)  Notwithstanding subsection (1), a corporation whose articles restrict the right to transfer its securities shall, and another corporation may, treat a person as a registered security holder entitled to exercise all the rights of the security holder that person represents, where that person provides evidence as described in subsection 88(3) of the Securities Transfer Act to the corporation that

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

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

             (c)  the person is a liquidator of, or a trustee in bankruptcy for, a registered security holder.

             (3)  Where a person upon whom the ownership of a security devolves by operation of law, other than a person described in subsection (2), provides proof of his or her authority to exercise rights or privileges in respect of a security of the corporation that is not registered in his or her name, the corporation shall treat that person as entitled to exercise those rights or privileges.

1986 c12 s98; 2007 cS-13.01 s107

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No duty to 3rd person

   103. A corporation is not required to inquire into the existence of, or see to the performance or observance of, a duty owed to a 3rd person by a registered holder of its securities or by anyone whom it treats, as permitted or required by section 102, as the owner or registered holder of any of its securities.

1986 c12 s99

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Infants

   104. Where an infant exercises rights of ownership in the securities of a corporation, a subsequent repudiation or avoidance is ineffective against the corporation.

1986 c12 s100

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Joint holders

   105. A corporation may treat as owner of a security the survivors of persons to whom the security was issued as joint holders, where it receives proof satisfactory to it of the death of that joint holder.

1986 c12 s101

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Transmission of securities

   106. (1) Subject to an applicable law relating to the collection of taxes, a person referred to in paragraph 102(2)(a) is entitled to become a registered holder, where that person deposits with the corporation or its transfer agent

             (a)  the original grant of probate or of letters of administration, or a copy of it certified to be a true copy by

                      (i)  the court that granted the probate or letters of administration,

                     (ii)  a trust company incorporated under the laws of Canada or a province, or

                    (iii)  a lawyer or notary acting on behalf of the person referred to in paragraph 102(2)(a); or in the case of transmission by notarial will in Quebec , a copy of it authenticated under the laws of that province; and

             (b)  the following documents, namely:

                      (i)  an affidavit or declaration of transmission made by a person referred to in paragraph 102(2)(a) stating the particulars of the transmission, and

                     (ii)  the security certificate that was owned by the deceased holder

                            (A)  in the case of a transfer to a person referred to in paragraph 102(2)(a), with or without the endorsement of the person, and

                            (B)  in the case of a transfer to another person, endorsed in accordance with section 30 of the Securities Transfer Act ,

and accompanied by an assurance the corporation may require under section 88 of the Securities Transfer Act .

             (2)  Notwithstanding subsection (1), where 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 an applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder, where the legal representative 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 the legal representative designated to become the registered holder.

             (3)  Deposit of the documents required by subsection (1) or (2) empowers a corporation or its agent to record in a securities register the transmission of a security from the deceased holder to a person referred to in paragraph 102(2)(a) or to the person that the person referred to in that paragraph may designate and, afterward, to treat the person who thus becomes a registered holder as the owner of those securities.

1986 c12 s102; 2007 cS-13.01 s107

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Overissue

   107. (1) Where there has been an overissue within the meaning of the Securities Transfer Act and the corporation subsequently amends its articles or trust indenture to which it is a party, to increase its authorized securities to a number equal to or in excess of the number of securities previously authorized plus the amount of the overissued securities, the overissued securities are valid from the date of their issue.

             (2)  Subsection (1) does not apply if the issuer has purchased and delivered a security in accordance with subsection 68(2) or (3) of the Securities Transfer Act.

             (3)  A purchase or payment in accordance with subsection 68(2) or (3) of the Securities Transfer Act is not a payment to which section 62, 63, 64, 68, 69, 70, 71 or 72 applies.

2007 cS-13.01 s107

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2007 cS-13.01 s107

PART VII
TRUST INDENTURES

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Definitions

   145. In this Part

             (a)  "event of default" means an event specified in a trust indenture on the occurrence of which

                      (i)  a security interest constituted by the trust indenture becomes enforceable, or

                     (ii)  the principal, interest and other money payable under the trust indenture become or may be declared to be payable before maturity,

but the event is not an event of default until all conditions prescribed in the trust indenture in connection with that event for the giving of notice or the lapse of time or otherwise have been satisfied;

             (b)  "trust indenture" means a deed, indenture or other instrument, including a supplement or amendment to it, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations issued under it; and

             (c)  "trustee" means a person appointed as trustee under the terms of a trust indenture to which a corporation is a party and includes a successor trustee.

1986 c12 s141

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Application of Part

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

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

1986 c12 s142

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Conflict of interest

   147. (1) A person may not be appointed as trustee where there is a material conflict of interest between the person's role as trustee and the person's role in another capacity.

             (2)  A trustee shall, within 90 days after the trustee becomes aware that a material conflict of interest exists,

             (a)  eliminate the conflict of interest; or

             (b)  resign from office.

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

             (4)  Where a trustee contravenes subsection (1) or (2), an interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on those terms that it considers appropriate.

1986 c12 s143

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Qualification of trustee

   148. A trustee, or at least 1 of the trustees where more than 1 is appointed, shall be a trust company which meets the requirements of section 3 of the Trust and Loan Corporations Ac.

1986 c12 s144; 2007 cT-9.1 s5

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List of security holders

   149. (1) A holder of debt obligations issued under a trust indenture may, upon payment to the trustee of a reasonable fee, require the trustee to provide, within 15 days after delivering to the trustee the statutory declaration referred to in subsection (4), a list setting out

             (a)  the names and addresses of the registered holders of the outstanding debt obligations;

             (b)  the principal amount of outstanding debt obligations owned by each holder; and

             (c)  the aggregate principal amount of debt obligations outstanding,

as shown on the records maintained by the trustee on the day that the statutory declaration is delivered to that trustee.

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

             (3)  Where the person requiring the trustee to provide a list under subsection (1) is a body corporate, the statutory declaration required under that subsection shall be made by a director or officer of the body corporate.

             (4)  The statutory declaration required under subsection (1) shall state

             (a)  the name and address of the person requiring the trustee to provide the list and, where the person is a body corporate, the address for service of the body corporate; and

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

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

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

             (b)  an offer to acquire debt obligations; or

             (c)  other matters relating to the debt obligations or the affairs of the issuer or guarantor of the debt obligations.

1986 c12 s145

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Evidence of compliance

   150. (1) An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall, before doing an act that is described in paragraph (a), (b) or (c), provide the trustee with evidence of compliance with the conditions in the trust indenture relating to

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

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

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

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

1986 c12 s146

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Contents of declaration

   151. Evidence of compliance as required by section 150 shall consist of

             (a)  a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that section have been complied with;

             (b)  where the trust indenture requires compliance with conditions that are subject to review by legal counsel, an opinion of legal counsel that those conditions have been complied with; and

             (c)  where the trust indenture requires compliance with conditions that are subject to review by an auditor or accountant, an opinion or report of the auditor of the issuer or guarantor, or another accountant that the trustee may select, that those conditions have been complied with.

1986 c12 s147

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Further evidence of compliance

   152. The evidence of compliance referred to in section 151 shall include a statement by the person giving the evidence

             (a)  declaring that he or she has read and understands the conditions of the trust indenture described in section 150;

             (b)  describing the nature and scope of the examination or investigation upon which he or she based the certificate, statement or opinion; and

             (c)  declaring that he or she has made the examination or investigation that he or she believes necessary to enable him or her to make the statements or give the opinions contained or expressed in it.

1986 c12 s148

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Evidence of compliance upon demand of trustee

   153. Upon the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall provide the trustee with evidence in the form that the trustee may require as to compliance with a condition of it relating to an action required or permitted to be taken by the issuer or guarantor under the trust indenture.

1986 c12 s149

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Certificate of compliance

   154. At least once in each 12 month period beginning on the date of the trust indenture and at other times upon the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall provide the trustee with a certificate that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, where there has been failure to so comply, giving particulars of the failure.

1986 c12 s150

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Notice of default

   155. The trustee shall give to the holders of debt obligations issued under a trust indenture, within 30 days after the trustee becomes aware of the occurrence of it, notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs the issuer and guarantor in writing.

1986 c12 s151

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Duty of care of trustee

   156. A trustee in exercising his or her powers and discharging his or her duties shall

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

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

1986 c12 s152

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Reliance on statement

   157. Notwithstanding section 156, a trustee is not liable where the trustee relies in good faith upon statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

1986 c12 s153

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No exculpation

   158. A term of a trust indenture or of an agreement between a trustee and the holders of debt obligations issued under it or between the trustee and the issuer or guarantor does not operate to relieve a trustee from the duties imposed upon the trustee by section 156.

1986 c12 s154

PART VIII
RECEIVERS AND RECEIVER-MANAGERS

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Functions of receiver

   159. A receiver of property of a corporation may, subject to the rights of secured creditors,

             (a)  receive the income from the property;

             (b)  pay the liabilities connected with the property; and

             (c)  realize the security interest of those on behalf of whom the receiver is appointed,

but, except to the extent permitted by a court, the receiver shall not carry on the business of the corporation.

1986 c12 s155

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Functions of receiver- manager

   160. A receiver of a corporation may, where the receiver is also appointed receiver-manager of the corporation, carry on a business of the corporation to protect the security interest of those on behalf of whom the receiver is appointed.

1986 c12 s156

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Directors' powers cease

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

1986 c12 s157

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Duty under court order

   162. A receiver or receiver-manager appointed by a court shall act in accordance with the directions of the court.

1986 c12 s158

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Duty under instrument

   163. A receiver or receiver-manager appointed under an instrument shall act in accordance with that instrument and a direction of a court made under section 165.

1986 c12 s159

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Duty of care

   164. A receiver or receiver-manager of a corporation appointed under an instrument shall

             (a)  act honestly and in good faith; and

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

1986 c12 s160

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Directions by court

   165. Upon an application by a receiver or receiver-manager, whether appointed by a court or under an instrument, or upon an application by an interested person, a court may make an order it thinks appropriate including

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

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

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

             (d)  an order requiring the receiver or receiver-manager, or a person by or on behalf of whom the receiver or receiver-manager is appointed, to make good a default in connection with the receiver's or receiver-manager's custody or management of the property and business of the corporation, or to relieve a person from a default on the terms that the court thinks appropriate, and to confirm an act of the receiver or receiver-manager; and

             (e)  an order giving directions on a matter relating to the duties of the receiver or receiver-manager.

1986 c12 s161; 1987 c38 Sch A

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Duties of receiver

   166. A receiver or receiver-manager shall

             (a)  immediately notify the registrar of his or her appointment and discharge;

             (b)  take into his or her custody and control the property of the corporation in accordance with the court order or instrument under which the receiver or receiver-manager is appointed;

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

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

             (e)  keep accounts of his or her administration, which shall be available during usual business hours for inspection by the directors of the corporation;

              (f)  prepare at least once in every 6 month period after the date of his or her appointment financial statements of his or her administration where practicable in the form required by section 258;

             (g)  upon completion of his or her duties, render a final account of his or her administration in the form adopted for interim accounts under paragraph (f); and

             (h)  file with the registrar a copy of a financial statement mentioned in paragraph (f) and a final account mentioned in paragraph (g) within 15 days of the preparation of the financial statement or rendering of the final account.

1986 c12 s162

PART IX
DIRECTORS AND OFFICERS

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Duty to manage

   167. Subject to a unanimous shareholder agreement, the directors of a corporation shall

             (a)  exercise the powers of the corporation directly or indirectly through the employees and agents of the corporation; and

             (b)  direct the management of the business and affairs of the corporation.

1986 c12 s163

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Number of directors

   168. A corporation shall have 1 or more directors but a corporation, any of the issued securities of which are or were part of a distribution to the public, shall have no fewer than 3 directors, at least 2 of whom are not officers or employees of the corporation or its affiliates.

1986 c12 s164

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Restrictions

   169. Where the articles restrict in whole or in part the powers of the directors to manage the business and affairs of the corporation, the shareholders have all the rights, powers and duties of the directors to the extent the articles restrict the powers of the directors, and the directors are as a result relieved of their duties and liabilities to the same extent.

1986 c12 s165

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Directors' amendments of by-laws

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

             (2)  The directors shall submit a by-law, or an amendment or a repeal of a by-law, made under subsection (1) to the shareholders at the next meeting of shareholders, and the shareholders may, by ordinary resolution, confirm, reject or amend the by-law or its amendment or repeal.

             (3)  A by-law, or an amendment or a repeal of a by-law, is effective from the date of the resolution of the directors under subsection (1) until

             (a)  it is confirmed, confirmed as amended or rejected by the shareholders under subsection (2); or

             (b)  it stops being effective under subsection (4),

and, where the by-law is confirmed or confirmed as amended, it continues in effect in the form in which it was so confirmed.

             (4)  Where a by-law or an amendment or a repeal of a by-law is rejected by the shareholders, or where the directors do not submit a by-law or an amendment or a repeal of a by-law to the shareholders as required under subsection (2), the by-law or amendment or repeal of a by-law stops being effective and no subsequent resolution of the directors to make, amend or repeal a by-law having substantially the same purpose or effect is effective until it is confirmed or confirmed as amended by the shareholders.

             (5)  A shareholder entitled to vote at an annual meeting of shareholders may, in accordance with sections 224 to 232, make a proposal to make, amend or repeal a by-law.

1986 c12 s166

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Organization meeting

   171. (1) After issue of the certificate of incorporation, a meeting of the directors of the corporation shall be held at which the directors may

             (a)  make by-laws;

             (b)  adopt forms of security certificates and corporate records;

             (c)  authorize the issue of securities;

             (d)  appoint officers;

             (e)  appoint an auditor to hold office until the 1st annual meeting of shareholders;

              (f)  make banking arrangements; and

             (g)  transact other business.

             (2)  An incorporator or a director may call the meeting of directors referred to in subsection (1) by giving not less than 5 days' notice of it by mail to each director, stating the time and place of the meeting.

             (3)  Subsection (1) does not apply to a corporation to which a certificate of amalgamation has been issued under section 294 or to which a certificate of continuance has been issued under section 296.

1986 c12 s167

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Persons disqualified as directors

   172. The following persons are disqualified from being a director of a corporation, a person who

             (a)  is less than 19 years of age;

             (b)  is mentally incompetent and has been so found by a court in Canada or elsewhere;

             (c)  is not an individual; and

             (d)  has the status of a bankrupt.

1986 c12 s168

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Share qualification

   173. Unless the articles otherwise provide, a director of a corporation is not required to hold shares issued by the corporation.

1986 c12 s169

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Residency requirement

   174. (1) At least 25% of the directors of a corporation shall be resident Canadians.

             (2)  [Rep. by 2004 c14 s2]

             (3)  A body corporate incorporated under The Companies Act and continued under this Act shall be exempted from the provisions of subsection (1) where the body corporate maintains the same proportion of non-resident directors after January 1, 1987 as that body corporate had before January 1, 1987 .

             (4)  Subsection (1) does not apply to a body corporate that earns no income in Canada .

1986 c12 s170; 1987 c38 s9; 1990 c52 s1; 2004 c14 s2

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Notice of directors and term of office

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

             (2)  A director named in the notice referred to in subsection (1) holds office from the issue of the certificate of incorporation until the 1st meeting of shareholders.

             (3)  Shareholders of a corporation shall, by ordinary resolution at the 1st meeting of shareholders and at each succeeding annual meeting at which an election of directors is required, elect directors to hold office for a term expiring not later than the close of the 3rd annual meeting of shareholders following the election.

             (4)  The directors elected at a meeting of shareholders need not hold office for the same term.

             (5)  A director not elected for an expressly stated term stops holding office at the close of the 1st annual meeting of shareholders following the director's election.

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

             (7)  Where a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles because of the disqualification, incapacity or death of candidates, the directors elected at that meeting may exercise the powers of the directors where the number of directors so elected constitutes a quorum.

1986 c12 s171

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Cumulative voting

   176. Where the articles provide for cumulative voting, the following rules apply:

             (a)  the articles shall require a fixed number and not a minimum and maximum number of directors;

             (b)  each shareholder entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected, and the shareholder may cast all votes in favour of 1 candidate or distribute them among the candidates in any manner;

             (c)  a separate vote of shareholders shall be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting 2 or more persons to be elected by a single resolution;

             (d)  where a shareholder has voted for more than 1 candidate without specifying the distribution of the shareholder's votes among the candidates, the shareholder has distributed his or her votes equally among the candidates for whom the shareholder voted;

             (e)  where the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled;

              (f)  each director stops holding office at the close of the 1st annual meeting of shareholders following his or her election;

             (g)  notwithstanding subsection 179(1), a director may not be removed from office where the votes cast against the director's removal would be sufficient to elect the director and those 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)  notwithstanding subsection 182(1) or paragraph 279(1)(m), the number of directors required by the articles may not be decreased where the votes cast against the motion to decrease would be sufficient to elect a director and those 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.

1986 c12 s172

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Directors leave office

   177. A director of a corporation stops holding office when

             (a)  the director dies or resigns;

             (b)  the director is removed in accordance with section 179; or

             (c)  the director becomes disqualified under section 172.

1986 c12 s173

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Resignation of director

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

1986 c12 s174

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Removal of directors, etc.

   179. (1) The shareholders of a corporation may by ordinary resolution at a special meeting remove directors from office.

             (2)  Where the holders of a class or series of shares of a corporation have an exclusive right to elect 1 or more directors, a director so elected may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series.

             (3)  A vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed, or if not so filled, may be filled under section 181.

1986 c12 s175

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Director's rights re shareholders

   180. (1) A director of a corporation is entitled to receive notice of and to attend and be heard at meetings of shareholders.

             (2)  A director who

             (a)  resigns;

             (b)  receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing the director from office; or

             (c)  receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of his or her resignation or removal or because his or her term of office has expired or is about to expire,

is entitled to submit to the corporation a written statement giving the reasons for his or her resignation or the reasons why the director opposes a proposed action or resolution.

             (3)  A corporation shall immediately send a copy of the statement referred to in subsection (2) to shareholders entitled to receive notice of a meeting referred to in subsection (1) and, where the corporation is a distributing corporation, to the registrar unless the statement is included in or attached to a management proxy circular required by section 251.

             (4)  A corporation or person acting on its behalf does not incur liability by reason only of circulating a director's statement in compliance with subsection (3).

1986 c12 s176

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Filling vacancy among directors

   181. (1) Notwithstanding subsection 184(3), 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)  Where there is not a quorum of directors, or where there has been a failure to elect the number or minimum number of directors required by the articles, the directors then in office shall immediately call a special meeting of shareholders to fill the vacancy and, where they fail to call a meeting or where there are no directors then in office, the meeting may be called by a shareholder.

             (3)  Notwithstanding subsection (1), where the holders of a class or series of shares of a corporation have an exclusive right to elect 1 or more directors and a vacancy occurs among those directors

             (a)  then 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)  where there are no such remaining directors, a holder of shares of that class or series may call a meeting of the holders of that class or series for the purpose of filling the vacancy.

             (4)  Notwithstanding subsection (1) and paragraph 3(a), the articles may provide that a vacancy among the directors be filled only

             (a)  by a vote of the shareholders; or

             (b)  by a vote of the holders of a class or series of shares having an exclusive right to elect 1 or more directors, where the vacancy occurs among the directors elected by that class or series.

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

1986 c12 s177

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Changing number of directors

   182. (1) Notwithstanding paragraph 279(1)(m), the shareholders of a corporation may amend the articles to increase or to decrease the number of directors, or the minimum or maximum number of directors, but no decrease shortens the term of an incumbent director.

             (2)  Where the shareholders adopt an amendment to the articles of a corporation to increase the number or minimum number of directors, the shareholders may, at the meeting at which they adopt the amendment, elect the additional number of directors authorized by the amendment, and for that purpose, notwithstanding subsection 286(2) and subsection 393(3), on the issue of a certificate of amendment the articles are considered to be amended as of the date the shareholders adopt the amendment to the articles.

1986 c12 s178

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Notice of change of directors

   183. (1) Within 15 days after a change is made among its directors, a corporation shall send to the registrar a notice in the prescribed form setting out the change and the registrar shall file the notice.

             (2)  An interested person, or the registrar, may apply to a court for an order to require a corporation to comply with subsection (1), and the court may so order and make a further order it thinks appropriate.

             (3)  Notwithstanding subsection (1), a corporation without share capital may send to the registrar a notice of a change in its directors  with the annual return, required under section 408, for the year in which the change occurs.

1986 c12 s179; 2004 c14 s3

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Meeting of directors

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

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

             (3)  Directors shall not transact business at a meeting of directors unless at least 25% of directors present are resident Canadians.

             (4)  Notwithstanding subsection (3), directors may transact business at a meeting of directors where less than 25% of the directors present are resident Canadians, where

             (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)  at least 25% of the directors at the meeting would have been resident Canadians had that director been present at the meeting.

1986 c12 s180; 2004 c14 s4

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Notice of meeting of directors

   185. (1) A notice of a meeting of directors shall specify a matter referred to in subsection 189(3) that is to be dealt with at the meeting but, unless the by-laws otherwise provide, the notice need not specify the purpose of or the business to be transacted at the meeting.

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

1986 c12 s181; 1987 c38 Sch A

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Notice of adjourned meeting

   186. Notice of an adjourned meeting of directors is not required to be given where the time and place of the adjourned meeting is announced at the original meeting.

1986 c12 s182

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One director meeting

   187. Where a corporation has only 1 director, that director may constitute a meeting.

1986 c12 s183

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Meeting by telephone

   188. (1) Subject to the by-laws, a director may, where all the directors of the corporation consent, participate in a meeting of directors or of a committee of directors by means of the telephone or other communications facilities that permit all persons participating in the meeting to hear each other.

             (2)  A director participating in a meeting by the means that are described in subsection (1) is, for the purpose of this Act, present at that meeting.

1986 c12 s184

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Delegation of director's powers

   189. (1) Directors of a corporation may appoint from their number a managing director who is a resident Canadian or a committee of directors and delegate to the managing director or committee the powers of the directors.

             (2)  Where the directors of a corporation appoint a committee of directors, at least 25% of the members of the committee shall be resident Canadians.

             (3)  Notwithstanding subsection (1), a managing director and a committee of directors may not

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

             (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;

             (d)  declare dividends;

             (e)  purchase, redeem or otherwise acquire shares issued by the corporation;

              (f)  pay a commission referred to in section 75;

             (g)  approve a management proxy circular referred to in Part XII;

             (h)  approve financial statements referred to in section 258;

              (i)  approve a take-over bid circular or director's circular referred to in Part XV; or

              (j)  adopt, amend or repeal by-laws.

1986 c12 s185; 1987 c38 Sch A; 1988 c54 s9; 2004 c14 s5

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Validity of acts

   190. An act of a director or officer is valid notwithstanding an irregularity in the director's or officer's election or appointment or a defect in the director's or officer's qualification.

1986 c12 s186

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Resolution instead of meeting

   191. (1) Where a written resolution is signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors,

             (a)  the resolution is as valid as if it had been passed at a meeting of directors or committee of directors; and

             (b)  the resolution satisfies all the requirements of this Act relating to meetings of directors or a committee of directors.

             (2)  A copy of a resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or committee of directors.

1986 c12 s187

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Directors' liability for share issue

   192. Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under section 49 for a consideration other than money are jointly and individually liable to the corporation to make good an 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.

1986 c12 s188

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Other directors' liabilities

   193. 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 62, 63 or 64;

             (b)  a commission contrary to section 75;

             (c)  a payment of a dividend contrary to section 76;

             (d)  financial assistance contrary to sections 78 and 79;

             (e)  a payment of an indemnity contrary to any of the provisions of sections 205 to 209; or

              (f)  a payment to a shareholder contrary to the provisions of sections 304 to 313 or 371,

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

1986 c12 s189

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Contributions from other directors

   194. A director who has satisfied a judgment rendered under section 192 or 193 is entitled to contribution from the other directors who voted for or consented to the unlawful act upon which the judgment was founded.

1986 c12 s190

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Recovery by directors

   195. (1) A director liable under section 193 is entitled to apply to a court for an order compelling a shareholder or other recipient to pay or deliver to the director money or property that was paid or distributed to the shareholder or other recipient contrary to section 62, 63, 64, 75, 76, 78, 79, 205 to 209, 304 to 313 or 371.

             (2)  In connection with an application under subsection (1), a court may, where it is satisfied that it is equitable to do so,

             (a)  order a shareholder or other recipient to pay or deliver to a director money or property that was paid or distributed to the shareholder or other recipient contrary to section 62, 63, 64, 75, 76, 78, 79, 205 to 209, 304 to 313 or 371;

             (b)  order a corporation to return or issue shares to a person from whom the corporation has purchased, redeemed or otherwise acquired shares; and

             (c)  make a further order it thinks appropriate.

1986 c12 s191

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Defence to liability of directors

   196. A director is not liable under section 192 where the director proves that he or she did not know and could not reasonably have known that the share was issued for a consideration less than the fair equivalent of the money that the corporation would have received if the share had been issued for money.

1986 c12 s192

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Time limited for action

   197. An action to enforce a liability imposed by section 192 or 193 may not be started after 2 years from the date of the resolution authorizing the action complained of.

1986 c12 s193

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Interest in contract by director

   198. (1) A director or officer of a corporation

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

             (b)  who is a director or an officer of or has a material interest in a 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 or her 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)  where the director was not then interested in a proposed contract, at the 1st meeting after the director becomes interested;

             (c)  where the director becomes interested after a contract is made, at the 1st meeting after the director becomes interested; or

             (d)  where a person who is interested in a contract later becomes a director, at the 1st meeting after that person becomes a director.

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

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

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

             (c)  where a person who is interested in a contract later becomes an officer, immediately after that person becomes an officer.

             (4)  Where 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 or her interest immediately after the director or officer becomes aware of the contract or proposed contract.

             (5)  A director referred to in subsection (1) may vote on a resolution to approve the contract where the contract is

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

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

             (c)  a contract for indemnity or insurance under sections 205 to 209; or

             (d)  a contract with an affiliate.

1986 c12 s194

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Continuing disclosure

   199. For the purposes of section 198, a general notice to the directors by a director or officer that declares that the director or officer is a director or officer of or has a material interest in a person and is to be regarded as interested in a contract made with that person is a sufficient declaration of interest in relation to a contract so made.

1986 c12 s195

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Avoidance standards

   200. A material contract between a corporation and 1 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 a director or officer has a material interest, is neither void nor voidable

             (a)  by reason only of that relationship; or

             (b)  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,

where the director or officer disclosed his or her interest in accordance with subsections 198(2), (3), (4) or section 199, and the contract was approved by the directors or the shareholders and was reasonable and fair to the corporation at the time it was approved.

1986 c12 196

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Setting contract aside

   201. Where a director or officer of a corporation fails to disclose his or her interest in a material contract in accordance with section 198 or 199, a court may, upon the application of the corporation or a shareholder of the corporation, set aside the contract on the terms that it thinks appropriate.

1986 c12 s197

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Appointment of officers

   202. Subject to the articles, the by-laws or a 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 189(3);

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

             (c)  2 or more offices of the corporation may be held by the same person.

1986 c12 s198

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Duties of directors and officers

   203. (1) A director and officer of a corporation in exercising his or her powers and discharging his or her duties shall

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

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

             (2)  A director and officer of a corporation shall comply with this Act, the regulations, articles, by-laws and a unanimous shareholder agreement.

             (3)  A provision in a contract, the articles, the by-laws or a resolution does not relieve a director or officer from the duty to act in accordance with this Act or the regulations or relieve the director or officer from liability for a breach of this Act or the regulations.

1986 c12 s199

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Dissent to acts of other directors

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

             (a)  the director requests that his or her dissent be entered in the minutes of the meeting;

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

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

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

             (3)  A director who was not present at a meeting at which a resolution was passed or action taken is presumed to have consented to it unless within 7 days after the director becomes aware of the resolution the director

             (a)  places his or her dissent with the minutes of the meeting; or

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

1986 c12 s200; 1987 c38 Sch A

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Indemnification by corporation

   205. (1) Except in respect of an action by or on behalf of a corporation or body corporate to obtain a judgment in its favour, a corporation may indemnify

             (a)  a director or officer of the corporation;

             (b)  a former director or officer of the corporation; or

             (c)  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 or her 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 the person in respect of a civil, criminal or administrative action or proceeding to which the person is made a party because of being or having been a director or officer of that corporation or body corporate.

             (2)  Subsection (1) does not apply unless the director or officer to be indemnified

             (a)  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, had reasonable grounds for believing that his or her conduct was lawful.

1986 c12 s201

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Indemnification in derivative actions

   206. A corporation may with the approval of a court indemnify a person referred to in section 205 in respect of an action by or on behalf of the corporation or body corporate to obtain a judgment in its favour, to which the person is made a party because 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 the person in connection with the action where the person fulfils the conditions set out in paragraphs 205(2)(a) and (b).

1986 c12 s202

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Right to indemnify

   207. Notwithstanding section 205 or 206, a person described in section 205 is entitled to indemnity from the corporation in respect of costs, charges and expenses reasonably incurred by the person in connection with the defence of a civil, criminal or administrative action or proceeding to which the person is made a party because of being or having been a director or officer of the corporation or body corporate, where the person seeking indemnity

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

             (b)  qualifies in accordance with the standards set out in section 205 or 206; and

             (c)  is fairly and reasonably entitled to indemnity.

1986 c12 s203; 1987 c38 Sch A

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Directors' and officers' insurance

   208. A corporation may purchase and maintain insurance for the benefit of a person referred to in section 205 against liability incurred by the person

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

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

1986 c12 s204

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Court approval of indemnity

   209. (1) A corporation or a person referred to in section 205 may apply to a court for an order approving an indemnity under that section and the court may so order and make a further order it thinks appropriate.

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

             (3)  Upon an application under subsection (1), the court may order notice to be given to an interested person and that person is entitled to appear and be heard in person or by counsel.

1986 c12 s205

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Remuneration of directors, etc.

   210. Subject to the articles, the by-laws or a unanimous shareholder agreement, the directors of a corporation may fix the remuneration of the directors, officers and employees of the corporation.

1986 c12 s206

PART X
INSIDER TRADING

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Definition of "insider"

   211. (1) In this Part, "insider" means, in respect of a corporation,

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

             (b)  a corporation that purchases or otherwise acquires shares issued by it or by an affiliate;

             (c)  a person who beneficially owns more than 10% of the shares of the corporation or who exercises control or direction over more than 10% of the votes attached to the shares of the corporation;

             (d)  a person employed or retained by the corporation;

             (e)  an associate or affiliate of a person mentioned in paragraph (a) or (d); and

              (f)  a person who

                      (i)  receives specific confidential information from a person described in this section, including a person described in this paragraph, and

                     (ii)  has knowledge that the person giving the information is a person described in this section, including a person described in this paragraph.

             (2)  In this Part "share" means a share carrying voting rights under all circumstances or because 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.

1986 c12 s207; 1987 c38 s10

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Presumed insider

   212. (1) For the purposes of this Part,

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

             (b)  a director or officer of a body corporate that is a subsidiary is an insider of its holding corporation;

             (c)  a person is presumed to own beneficially shares beneficially owned by a body corporate controlled by the person directly or indirectly; and

             (d)  a body corporate is presumed to own beneficially shares beneficially owned by its affiliates.

             (2)  For the purposes of this Part,

             (a)  where 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 presumed to have been an insider of the corporation for the previous 6 months or for the shorter period that the director or officer of the body corporate was a director or an officer of the body corporate; and