S-11 1 37 49-50 Elizabeth II 2001

An Act to amend the

Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence

Canada Business Corporations Act and Canada Cooperatives Act and to amend other Acts in consequence,

An Act to amend the

Canada Business Corporations and Canada Cooperatives 2001 6 14 14 2001 90104

SUMMARY

This enactment amends the

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

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

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

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

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

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

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

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

It also amends the Canada Cooperatives Act in order to generally harmonize its provisions with the amendments mentioned above, repeals the definition of associate in certain Acts and makes consequential amendments to other Acts.

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

R.S., c. C-44; 1994, c. 24, s. 1(

F) CANADA BUSINESS CORPORATIONS ACT

(1) The

definitions auditor , person and unanimous shareholder agreement in subsection 2(1) of the

Canada Business Corporations Act are replaced by the following:

auditor

vérificateur

auditor includes a partnership of auditors or an auditor that is incorporated;

person

personne

person means an individual, partnership, association, body corporate, or personal representative;

unanimous shareholder agreement

convention unanime des actionnaires

unanimous shareholder agreement means an agreement described in subsection 146(1) or a declaration of a shareholder described in subsection 146(2).

(2) The definition mandataire in subsection 2(1) of the French version of the Act is replaced by the following:

mandataire

French version only

mandataire S’entend notamment de l’ayant cause.

(3) Paragraph (

c) of the definition associate in subsection 2(1) of the Act is replaced by the following:

(

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

(4) The portion of the definition associate in subsection 2(1) of the English version of the Act before paragraph (

a) is replaced by the following:

associate

liens

associate , in respect of a relationship with a person, means

(5) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:

distributing corporation

société ayant fait appel au public

distributing corporation means, subject to subsections (6) and (7), a distributing corporation as defined in the regulations;

entity

entité

entity means a body corporate, a partnership, a trust, a joint venture or an unincorporated association or organization;

going-private transaction

opération de fermeture

going-private transaction means a going-private transaction as defined in the regulations;

officer

dirigeant

officer means an individual appointed as an officer under

section 121, the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of a corporation, or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any of those offices;

personal representative

représentant personnel

personal representative means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a receiver, an agent, a liquidator of a succession, a guardian, a tutor, a curator, a mandatary or an attorney;

squeeze-out transaction

opération d’éviction

squeeze-out transaction means a transaction by a corporation that is not a distributing corporation that would require an amendment to its articles and would, directly or indirectly, result in the interest of a holder of shares of a class of the corporation being terminated without the consent of the holder, and without substituting an interest of equivalent value in shares issued by the corporation, which shares have equal or greater rights and privileges than the shares of the affected class;

(6) Subsection 2(4) of the French version of the Act is replaced by the following:

Personne morale mère

(4) Est la personne morale mère d’une personne morale celle qui la contrôle.

(7) Subsections 2(6) to (8) of the Act are replaced by the following:

Exemptions — on application by corporation

(6) On the application of a corporation, the Director may determine that the corporation is not or was not a distributing corporation if the Director is satisfied that the determination would not be prejudicial to the public interest.

Exemptions — classes of corporations

(7) The Director may determine that a class of corporations are not or were not distributing corporations if the Director is satisfied that the determination would not be prejudicial to the public interest.

Infants

(8) For the purposes of this Act, the word infant has the same meaning as in the applicable provincial law and, in the absence of any such law, has the same meaning as the word child in the United Nations Convention on the Rights of the Child, adopted in the United Nations General Assembly on November 20, 1989.

1996, c. 10, s. 212; 1999, c. 31, s. 63

Subsection 3(3) of the French version of the Act is replaced by the following:

Non-application de certaines lois

(3) Les lois suivantes ne s’appliquent pas à une société :

a) la

Loi sur les corporations canadiennes ,

chapitre C-32 des Statuts revisés du Canada de 1970;

b) la

Loi sur les liquidations et les restructurations ;

c) les dispositions de toute loi spéciale au sens de l’article 87 de la

Loi sur les transports au Canada qui sont incompatibles avec la présente loi.

(1) The portion of subsection 6(1) of the Act before paragraph (

a) is replaced by the following:

Articles of incorporation

(1) Articles of incorporation shall follow the form that the Director fixes and shall set out, in respect of the proposed corporation,

(2) Paragraph 6(1)(

b) of the Act is replaced by the following:

(

b) the province in Canada where the registered office is to be situated;

Section 8 of the Act is replaced by the following:

Certificate of incorporation

(1) Subject to subsection (2), on receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with

section 262.

Exception — failure to comply with Act

(2) The Director may refuse to issue the certificate if a notice that is required to be sent under subsection 19(2) or 106(1) indicates that the corporation, if it came into existence, would not be in compliance with this Act.

Subsection 10(3) of the Act is replaced by the following:

Alternate name

(3) Subject to subsection 12(1), the name of a corporation may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The corporation may use and may be legally designated by any such form.

Subsection 13(1) of the Act is replaced by the following:

Certificate of amendment

(1) When a corporation has had its name revoked and a name assigned to it under subsection 12(5), the Director shall issue a certificate of amendment showing the new name of the corporation and shall give notice of the change of name as soon as practicable in a publication generally available to the public.

(1) Subsection 14(1) of the Act is replaced by the following:

Personal liability

(1) Subject to this section, a person who enters into, or purports to enter 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 its benefits.

(2) Subsection 14(3) of the Act is replaced by the following:

Application to court

(3) Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order respecting the nature and extent of the obligations and liability under the contract of the corporation and the person who entered into, or purported to enter into, the contract in the name of or on behalf of the corporation. On the application, the court may make any order it thinks fit.

Section 18 of the Act is replaced by the following:

Authority of directors, officers and agents

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

(

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

(

b) the persons named in the most recent notice sent to the Director under

section 106 or 113 are not the directors of the corporation;

(

c) the place named in the most recent notice sent to the Director under

section 19 is not the registered office of the corporation;

(

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

(

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

(

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

Exception

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

Section 19 of the Act is replaced by the following:

Registered office

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

Notice of registered office

(2) A notice of registered office in the form that the Director fixes shall be sent to the Director together with any articles that designate or change the province where the registered office of the corporation is located.

Change of address

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

Notice of change of address

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

Subsection 20(5) of the Act is replaced by the following:

Records in Canada

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

When records or registers kept outside Canada

(5.1) Despite subsections (1) and (5), but subject to the Income Tax Act , the Excise Tax Act , the Customs Act and any other Act administered by the Minister of National Revenue, a corporation may keep all or any of its corporate records and accounting records referred to in subsection (1) or (2) at a place outside Canada, if

(

a) the records are available for inspection, by means of a computer terminal or other technology, during regular office hours at the registered office or any other place in Canada designated by the directors; and

(

b) the corporation provides the technical assistance to facilitate an inspection referred to in paragraph ( a ).

(1) Subsection 21(1) of the Act is replaced by the following:

Access to corporate records

(1) Subject to subsection (1.1), shareholders and creditors of a corporation, their personal representatives and the Director may examine the records described in subsection 20(1) during the usual business hours of the corporation, and may take extracts from the records, free of charge, and, if the corporation is a distributing corporation, any other person may do so on payment of a reasonable fee.

Requirement for affidavit — securities register

(1.1) Any person described in subsection (1) who wishes to examine the securities register of a distributing corporation must first make a request to the corporation or its agent, accompanied by an affidavit referred to in subsection (7). On receipt of the affidavit, the corporation or its agent shall allow the applicant access to the securities register during the corporation’s usual business hours, and, on payment of a reasonable fee, provide the applicant with an extract from the securities register.

(2) Subsection 21(3) of the Act is replaced by the following:

Shareholder lists

(3) Shareholders and creditors of a corporation, their personal representatives, the Director and, if the corporation is a distributing corporation, any other person, on payment of a reasonable fee and on sending to a corporation or its agent the affidavit referred to in subsection (7), may on application require the corporation or its agent to furnish within ten days after the receipt of the affidavit a list (in this

section referred to as the “basic list”) made up to a date not more than ten days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

(3) Subsection 21(7) of the Act is replaced by the following:

Contents of affidavit

(7) The affidavit required under subsection (1.1) or (3) shall state

(

a) the name and address of the applicant;

(

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

(

c) that the basic list and any supplemental lists obtained pursuant to subsection (4) or the information contained in the securities register obtained pursuant to subsection (1.1), as the case may be, will not be used except as permitted under subsection (9).

(4) Subsection 21(8) of the French version of the Act is replaced by the following:

Cas où le requérant est une personne morale

(8) La personne morale requérante fait établir l’affidavit par un de ses administrateurs ou dirigeants.

(5) Subsection 21(9) of the Act is replaced by the following:

Use of information or shareholder list

(9) A list of shareholders or information from a securities register obtained under this

section shall not be used by any person except in connection with

(

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

(

b) an offer to acquire securities of the corporation; or

(

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

Section 23 of the Act is replaced by the following:

Corporate seal

(1) A corporation may, but need not, adopt a corporate seal, and may change a corporate seal that is adopted.

Validity of unsealed documents

(2) A document executed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.

Subsection 25(5) of the Act is replaced by the following:

Definition of property

(5) For the purposes of this section, property does not include a promissory note, or a promise to pay, that is made by a person to whom a share is issued, or a person who does not deal at arm’s length, within the meaning of that expression in the Income Tax Act , with a person to whom a share is issued.

(1) Subsection 26(3) of the Act is replaced by the following:

Exception for non-arm’s length transactions

(3) Despite subsection (2), a corporation may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the consideration that it receives in an exchange if the corporation issues shares

(

a) in exchange for

(

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

(ii)

shares of, or another interest in, a body corporate that immediately before the exchange, or that because of the exchange, did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act , or

(iii)

property of a person who, immediately before the exchange, dealt with the corporation at arm’s length within the meaning of that expression in the Income Tax Act , if the person, the corporation and all the holders of shares in the class or series of shares so issued consent to the exchange; or

(

b) pursuant to an agreement referred to in subsection 182(1) or an arrangement referred to in paragraph 192(1)(

b) or (

c) or to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate.

(2) Subsection 26(9) of the Act is replaced by the following:

Transitional

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

(3) Subsection 26(12) of the Act is replaced by the following:

Definition of open-end mutual fund

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

(1) Subsection 27(1) of the Act is replaced by the following:

Shares in series

(1) The articles may authorize, subject to any limitations set out in them, the issue of any class of shares in one or more series and may do either or both of the following:

(

a) fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series; or

(

b) authorize the directors to fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series.

(2) Subsection 27(4) of the Act is replaced by the following:

Amendment of articles

(4) If the directors exercise their authority under paragraph (1)( b ), they shall, before the issue of shares of the series, send, in the form that the Director fixes, articles of amendment to the Director to designate a series of shares.

The portion of subsection 29(1) of the French version of the Act before paragraph (

a) is replaced by the following:

Options et droits

(1) La société peut émettre des titres, notamment des certificats, constatant des privilèges de conversion, ainsi que des options ou des droits d’acquérir des valeurs mobilières de celle-ci, aux conditions qu’elle énonce :

(1) Paragraph 30(1)(

a) of the French version of the Act is replaced by the following:

a) ni détenir ses propres actions ni celles de sa personne morale mère;

(2) The portion of subsection 30(2) of the Act before paragraph (

a) is replaced by the following:

Subsidiary holding shares of its parent

(2) Subject to

section 31, a corporation shall cause a subsidiary body corporate of the corporation that holds shares of the corporation to sell or otherwise dispose of those shares within five years from the date

(1) Section 31 of the French version of the Act is replaced by the following:

Exception

(1) La société peut, en qualité de mandataire, détenir ses propres actions ou des actions de sa personne morale mère, à l’exception de celles dont l’une ou l’autre d’entre elles ou leurs filiales ont la propriété effective.

Exception

(2) La société peut détenir ses propres actions, ou des actions de sa personne morale mère, à

titre de garantie dans le cadre d’opérations conclues dans le cours ordinaire d’une activité commerciale comprenant le prêt d’argent.

(2) Section 31 of the Act is amended by adding the following after subsection (2):

Exception — subsidiary acquiring shares

(3) A corporation may permit any of its subsidiary bodies corporate to acquire shares of the corporation

(

a) in the subsidiary’s capacity as a legal representative, unless the subsidiary would have a beneficial interest in the shares; or

(

b) by way of security for the purposes of a transaction entered into by the subsidiary in the ordinary course of a business that includes the lending of money.

Exception — conditions precedent

(4) A corporation may permit any of its subsidiary bodies corporate to acquire shares of the corporation through the issuance of those shares by the corporation to the subsidiary body corporate if, before the acquisition takes place, the conditions prescribed for the purposes of this subsection are met.

Conditions subsequent

(5) After an acquisition has taken place under the purported authority of subsection (4), the conditions prescribed for the purposes of this subsection must be met.

Non-compliance with conditions

(6) (

a) a corporation permits a subsidiary body corporate to acquire shares of the corporation under the purported authority of subsection (4), and

(

b) either

(

i) one or more of the conditions prescribed for the purposes of subsection (4) were not met, or

(ii)

one or more of the conditions prescribed for the purposes of subsection (5) are not met or cease to be met,

then, notwithstanding subsections 16(3) and 26(2), the prescribed consequences apply in respect of the acquisition of the shares and their issuance.

Section 33 of the Act is replaced by the following:

Voting shares

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

(

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

(

b) has complied with

section 153.

Subsidiary body corporate

(2) A corporation shall not permit any of its subsidiary bodies corporate holding shares in the corporation to vote, or permit those shares to be voted, unless the subsidiary body corporate satisfies the requirements of subsection (1).

The portion of subsection 34(2) of the French version of the Act before paragraph (

a) is replaced by the following:

Exception

(2) La société ne peut faire aucun paiement en vue d’acheter ou d’acquérir autrement des actions qu’elle a émises s’il existe des motifs raisonnables de croire que :

(1) The portion of subsection 35(3) of the French version of the Act before paragraph (

a) is replaced by the following:

Exception

(3) La société ne peut faire aucun paiement en vue d’acheter ou d’acquérir autrement, conformément au paragraphe (1), des actions qu’elle a émises s’il existe des motifs raisonnables de croire que :

(2) Subparagraph 35(3)( b )(ii) of the Act is replaced by the following:

(ii)

the amount required for payment on a redemption or in a liquidation of all shares the holders of which have the right to be paid before the holders of the shares to be purchased or acquired, to the extent that the amount has not been included in its liabilities.

(1) Subsection 36(1) of the French version of the Act is replaced by the following:

Rachat des actions

(1) Malgré les paragraphes 34(2) ou 35(3), mais sous réserve du paragraphe (2) et de ses statuts, la société peut acheter ou racheter des actions rachetables qu’elle a émises à un prix ne dépassant pas le prix de rachat fixé par les statuts ou calculé en conformité avec ces derniers.

(2) The portion of subsection 36(2) of the French version of the Act before paragraph (

a) is replaced by the following:

Exception

(2) La société ne peut faire aucun paiement en vue d’acheter ou de racheter des actions rachetables qu’elle a émises s’il existe des motifs raisonnables de croire que :

(3) Subparagraph 36(2)( b )(ii) of the Act is replaced by the following:

(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 before the holders of the shares to be purchased or redeemed, to the extent that the amount has not been included in its liabilities.

Subsection 38(6) of the Act is repealed.

Subsection 39(12) of the French version of the Act is replaced by the following:

Acquisition et réémission de titres de créance

(12) La société qui acquiert ses titres de créance peut soit les annuler, soit, sous réserve de tout acte de fiducie ou convention applicable, les réémettre ou les donner en garantie de l’exécution de ses obligations existantes ou futures; l’acquisition, la réémission ou le fait de donner en garantie ne constitue pas l’annulation de ces titres.

Section 40 of the Act is replaced by the following:

Enforcement of contract to buy shares

(1) A corporation shall fulfil its obligations under a contract to buy shares of the corporation, except if the corporation can prove that enforcement of the contract would put it in breach of any of sections 34 to 36.

Status of contracting party

(2) Until the corporation has fulfilled all its obligations under a contract referred to in subsection (1), the other party retains the status of claimant entitled to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors and to the rights of holders of any class of shares whose rights were in priority to the rights given to the holders of the class of shares being purchased, but in priority to the rights of other shareholders.

1994, c. 24, s. 10

Section 44 of the Act is repealed.

Subsections 45(1) and (2) of the Act are replaced by the following:

Shareholder immunity

(1) The shareholders of a corporation are not, as shareholders, liable for any liability, act or default of the corporation except under subsection 38(4), 118(4) or (5), 146(5) or 226(4) or (5).

Lien on shares

(2) Subject to subsection 49(8), the articles may provide that the corporation has a lien on a share registered in the name of a shareholder or the shareholder’s personal 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.

1991, c. 47, s. 720

(1) Subsection 46(1) of the Act is replaced by the following:

Sale of constrained shares by corporation

(1) A corporation that has constraints on the issue, transfer or ownership of its shares of any class or series may, for any of the purposes referred to in paragraphs (

a) to ( c ), sell, under the conditions and after giving the notice that may be prescribed, as if it were the owner of the shares, 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 in order to

(

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

(

b) assist the corporation to comply with any prescribed law; or

(

c) attain or maintain a level of Canadian ownership specified in its articles.

(2) Subsection 46(2) of the French version of the Act is replaced by the following:

Devoir des administrateurs

(2) Les administrateurs doivent choisir les actions à vendre en vertu du paragraphe (1) de bonne foi et de manière à ne pas se montrer injuste à l’égard des autres détenteurs d’actions de la catégorie ou de la série soit en leur portant préjudice soit en ne tenant pas compte de leurs intérêts.

The definition fiduciary in subsection 48(2) of the Act is replaced by the following:

fiduciary

représentant

fiduciary means any person acting in a fiduciary capacity and includes a personal representative of a deceased person;

(1) Subsection 49(2) of the Act is replaced by the following:

Maximum fee for certificate by regulation

(2) A corporation may charge a fee, not exceeding the prescribed amount, for a security certificate issued in respect of a transfer.

(2) Subsections 49(4) and (5) of the Act are replaced by the following:

Signatures

(4) A security certificate shall be signed by at least one of the following persons, or the signature shall be printed or otherwise mechanically reproduced on the certificate:

(

a) a director or officer of the corporation;

(

b) a registrar, transfer agent or branch transfer agent of the corporation, or an individual on their behalf; and

(

c) a trustee who certifies it in accordance with a trust indenture.

1994, c. 24, par. 34(1)( c )(F)

(3) Paragraph 49(7)(

b) of the Act is replaced by the following:

(

b) the words “Incorporated under the

Canada Business Corporations Act” or “subject to the

Canada Business Corporations Act”;

1991, c. 47, s. 721

(4) Subsections 49(8) to (10) of the Act are replaced by the following:

Restrictions

(8) No restriction, charge, agreement or endorsement described in the following paragraphs is effective against a transferee of a security, issued by a corporation or by a body corporate before the body corporate was continued under this Act, who has no actual knowledge of the restriction, charge, agreement or endorsement unless it or a reference to it is noted conspicuously on the security certificate:

(

a) a restriction on transfer other than a constraint under

section 174;

(

b) a charge in favour of the corporation;

(

c) a unanimous shareholder agreement; or

(

d) an endorsement under subsection 190(10).

Limit on restriction

(9) A distributing corporation, any of the issued shares of which remain outstanding and are held by more than one person, shall not have a restriction on the transfer or ownership of its shares of any class or series except by way of a constraint permitted under

section 174.

Notation of constraint

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

(

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

(

b) the corporation to comply with any prescribed law,

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

(1) Paragraphs 51(2)(

a) and (

b) of the Act are replaced by the following:

(

a) the heir of a deceased security holder, or the personal representative of the heirs, or the personal representative of the estate of a deceased security holder;

(

b) a personal representative of a registered security holder who is an infant, an incompetent person or a missing person; or

(2) Subsection 51(5) of the Act is replaced by the following:

Persons less than eighteen years of age

(5) If a person who is less than eighteen years of age exercises any rights of ownership in the securities of a corporation, no subsequent repudiation or avoidance is effective against the corporation.

(3) Subsection 51(8) of the Act is replaced by the following:

Excepted transmissions

(8) Despite subsection (7), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a personal representative of the deceased holder is entitled, subject to any applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder, if the personal 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 personal representative or the person designated by the personal representative to become the registered holder.

Paragraph 65(1)(

d) of the English version of the Act is replaced by the following:

(

d) if a person described in paragraph (

a) is an individual and is without capacity to act by reason of death, incompetence, minority, or other incapacity, the person’s fiduciary;

Section 75 of the French version of the Act is replaced by the following:

Cas de non-responsabilité du mandataire ou dépositaire

Le mandataire ou le dépositaire de bonne foi — ayant respecté les normes commerciales raisonnables si, de par sa profession, il négocie les valeurs mobilières d’une société — qui a reçu, vendu, donné en gage ou livré ces valeurs mobilières conformément aux instructions de son mandant ne peut être tenu responsable de détournement ni de violation d’une obligation de représentant, même si le mandant n’avait pas le droit d’aliéner ces valeurs mobilières.

Subsection 82(2) of the French version of the Act is replaced by the following:

Champ d’application

(2) La présente

partie s’applique aux actes de fiducie prévoyant une émission de titres de créances par voie d’un appel public à l’épargne.

Section 102 of the Act is replaced by the following:

Duty to manage or supervise management

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

Number of directors

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

Subsection 103(1) of the French version of the Act is replaced by the following:

Règlements administratifs

(1) Sauf disposition contraire des statuts, des règlements administratifs ou de conventions unanimes des actionnaires, les administrateurs peuvent, par résolution, prendre, modifier ou révoquer tout règlement administratif portant sur les activités commerciales ou les affaires internes de la société.

(1) Subsection 105(3) of the Act is replaced by the following:

Residency

(3) Subject to subsection (3.1), at least twenty-five per cent of the directors of a corporation must be resident Canadians. However, if a corporation has less than four directors, at least one director must be a resident Canadian.

Exception — Canadian ownership or control

(3.1) If a corporation engages in an activity in Canada in a prescribed business sector or if a corporation, by

an Act of Parliament or by a regulation made under

an Act of Parliament, is required, either individually or in order to engage in an activity in Canada in a particular business sector, to attain or maintain a specified level of Canadian ownership or control, or to restrict, or to comply with a restriction in relation to, the number of voting shares that any one shareholder may hold, own or control, then a majority of the directors of the corporation must be resident Canadians.

Clarification

(3.2) Nothing in subsection (3.1) shall be construed as reducing any requirement for a specified number or percentage of resident Canadian directors that otherwise applies to a corporation referred to in that subsection.

If only one or two directors

(3.3) If a corporation referred to in subsection (3.1) has only one or two directors, that director or one of the two directors, as the case may be, must be a resident Canadian.

(2) The portion of subsection 105(4) of the Act before paragraph (

a) is replaced by the following:

Exception for holding corporation

(4) Despite subsection (3.1), not more than one third of the directors of a holding corporation referred to in that subsection need be resident Canadians if the holding corporation earns in Canada directly or through its subsidiaries less than five per cent of the gross revenues of the holding corporation and all of its subsidiary bodies corporate together as shown in

(1) Subsection 106(1) of the Act is replaced by the following:

Notice of directors

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

1994, c. 24, s. 11

(2) Subsections 106(7) and (8) of the Act are replaced by the following:

Vacancy among candidates

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

Appointment of directors

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

Election or appointment as director

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

(

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

(

b) he or she was not present at the meeting when the election or appointment took place and

(

i) he or she consented to hold office as a director in writing before the election or appointment or within ten days after it, or

(ii)

he or she has acted as a director pursuant to the election or appointment.

Paragraphs 107(

g) and (

h) of the English version of the Act are replaced by the following:

(

g) a director may be removed from office only if the number of votes cast in favour of the director’s removal is greater than the product of the number of directors required by the articles and the number of votes cast against the motion; and

(

h) the number of directors required by the articles may be decreased only if the votes cast in favour of the motion to decrease the number of directors is greater than the product of the number of directors required by the articles and the number of votes cast against the motion.

Section 109 of the Act is amended by adding the following after subsection (3):

Resignation (or removal)

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

Exception

(5) Subsection (4) does not apply to

(

a) an officer who manages the business or affairs of the corporation under the direction or control of a shareholder or other person;

(

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

(

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

Subsections 111(1) to (3) of the Act are replaced by the following:

Filling vacancy

(1) Despite subsection 114(3), but subject to subsections (3) and (4), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number or the minimum or maximum number of directors or a failure to elect the number or minimum number of directors provided for in the articles.

Calling meeting

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

Class director

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

(

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

(

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

Subsection 113(1) of the Act is replaced by the following:

Notice of change of director or director’s address

(1) A corporation shall, within fifteen days after

(

a) a change is made among its directors, or

(

b) it receives a notice of change of address of a director referred to in subsection (1.1),

send to the Director a notice, in the form that the Director fixes, setting out the change, and the Director shall file the notice.

Director’s change of address

(1.1) A director shall, within fifteen days after changing his or her address, send the corporation a notice of that change.

(1) Subsections 114(3) and (4) of the Act are replaced by the following:

Canadian directors present at meetings

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

(

a) if the corporation is subject to subsection 105(3), at least twenty-five per cent of the directors present are resident Canadians or, if the corporation has less than four directors, at least one of the directors present is a resident Canadian; or

(

b) if the corporation is subject to subsection 105(3.1), a majority of directors present are resident Canadians or if the corporation has only two directors, at least one of the directors present is a resident Canadian.

Exception

(4) Despite subsection (3), directors may transact business at a meeting of directors where the number of resident Canadian directors, required under that subsection, is not present if

(

a) a resident Canadian director who is unable to be present approves in writing, or by telephonic, electronic or other communication facility, the business transacted at the meeting; and

(

b) the required number of resident Canadian directors would have been present had that director been present at the meeting.

(2) Subsection 114(9) of the Act is replaced by the following:

Participation

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

(1) Subsection 115(2) of the Act is repealed.

(2) Paragraphs 115(3)(

b) and (

c) of the Act are replaced by the following:

(

b) fill a vacancy among the directors or in the office of auditor, or appoint additional directors;

(

c) issue securities except as authorized by the directors;

( c.1 )

issue shares of a series under

section 27 except as authorized by the directors;

(3) Paragraph 115(3)(

f) of the Act is replaced by the following:

(

f) pay a commission referred to in

section 41 except as authorized by the directors;

Section 117 of the Act is amended by adding the following after subsection (2):

Evidence

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

(1) Subsection 118(1) of the English version of the Act is replaced by the following:

Directors’ liability

(1) Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under

section 25 for a consideration other than money are jointly and severally, or solidarily, liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution.

(2) Subsection 118(2) of the Act is replaced by the following:

Further directors’ liabilities

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

(

a) a purchase, redemption or other acquisition of shares contrary to

section 34, 35 or 36;

(

b) a commission contrary to

section 41;

(

c) a payment of a dividend contrary to

section 42;

(

d) a payment of an indemnity contrary to

section 124; or

(

e) a payment to a shareholder contrary to

section 190 or 241.

(3) Subsection 118(4) of the Act is replaced by the following:

Recovery

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

section 34, 35, 36, 41, 42, 124, 190 or 241.

(4) Paragraph 118(5)(

a) of the Act is replaced by the following:

(

a) order a shareholder or other recipient to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to

section 34, 35, 36, 41, 42, 124, 190 or 241;

(1) Subsection 119(1) of the English version of the Act is replaced by the following:

Liability of directors for wages

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

(2) Subsection 119(5) of the French version of the Act is replaced by the following:

Subrogation de l’administrateur

(5) L’administrateur qui acquitte les dettes visées au paragraphe (1), dont l’existence est établie au cours d’une procédure soit de liquidation et de dissolution, soit de faillite, a droit à toute priorité qu’aurait pu faire valoir l’employé et, le cas échéant, est subrogé aux droits constatés dans le jugement.

Section 120 of the Act is replaced by the following:

Disclosure of interest

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

(

a) is a party to the contract or transaction;

(

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

(

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

Time of disclosure for director

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

(

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

(

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

(

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

(

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

Time of disclosure for officer

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

(

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

(

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

(

c) if an individual who is interested in a contract later becomes an officer, immediately after he or she becomes an officer.

Time of disclosure for director or officer

(4) If a material contract or material transaction, whether entered into or proposed, is one that, in the ordinary course of the corporation’s 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 it entered in the minutes of meetings of directors or of meetings of committees of directors, the nature and extent of his or her interest immediately after he or she becomes aware of the contract or transaction.

Voting

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

(

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

(

b) is for indemnity or insurance under

section 124; or

(

c) is with an affiliate.

Continuing disclosure

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

(

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

b) or ( c );

(

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

(

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

Access to disclosures

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

Avoidance standards

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

(

a) disclosure of the interest was made in accordance with subsections (1) to (6);

(

b) the directors approved the contract or transaction; and

(

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

Confirmation by shareholders

(7.1) Even if the conditions of subsection (7) are not met, a director or officer, acting honestly and in good faith, is not accountable to the corporation or to its shareholders for any profit realized from a contract or transaction for which disclosure is required under subsection (1), and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction, if

(

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

(

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

(

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

Application to court

(8) If a director or an officer of a corporation fails to comply with this section, a court may, on application of the corporation or any of its shareholders, set aside the contract or transaction on any terms that it thinks fit, or require the director or officer to account to the corporation for any profit or gain realized on it, or do both those things.

Paragraph 121(

a) of the French version of the Act is replaced by the following:

a) pour les administrateurs, de créer des postes de dirigeants, d’y nommer des personnes pleinement capables, de préciser leurs fonctions et de leur déléguer le pouvoir de gérer les activités commerciales et les affaires internes de la société, sauf les exceptions prévues au paragraphe 115(3);

Subsection 123(4) of the Act is replaced by the following:

Defence — reasonable diligence

(4) A director is not liable under

section 118 or 119, and has complied with his or her duties under subsection 122(2), if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(

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

(

b) a report of a person whose profession lends credibility to a statement made by the professional person.

Defence — good faith

(5) A director has complied with his or her duties under subsection 122(1) if the director relied in good faith on

(

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

(

b) a report of a person whose profession lends credibility to a statement made by the professional person.

Section 124 of the Act is replaced by the following:

Indemnification

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

Advance of costs

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

Limitation

(3) A corporation may not indemnify an individual under subsection (1) unless the individual

(

a) acted honestly and in good faith with a view to the best interests of the corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the corporation’s request; and

(

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

Indemnification in derivative actions

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

Right to indemnity

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

(

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

(

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

Insurance

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

(

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

(

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

Application to court

(7) A corporation, an individual or an entity referred to in subsection (1) may apply to a court for an order approving an indemnity under this

section and the court may so order and make any further order that it sees fit.

Notice to Director

(8) An applicant under subsection (7) shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel.

Other notice

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

1994, c. 24, s. 14(F)

(1) The definition distributing corporation in subsection 126(1) of the Act is repealed.

(2) The

definitions insider and officer in subsection 126(1) of the Act are replaced by the following:

insider

initié

insider means, except in

section 131,

(

a) a director or officer of a distributing corporation;

(

b) a director or officer of a subsidiary of a distributing corporation;

(

c) a director or officer of a body corporate that enters into a business combination with a distributing corporation; and

(

d) a person employed or retained by a distributing corporation;

officer

dirigeant

officer means the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of an entity, or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices;

(3) Subsection 126(1) of the Act is amended by adding the following in alphabetical order:

business combination

regroupement d’entreprises

business combination means an acquisition of all or substantially all the property of one body corporate by another, or an amalgamation of two or more bodies corporate, or any similar reorganization between or among two or more bodies corporate;

(4) Paragraph 126(2)(

a) of the Act is replaced by the following:

(

a) a director or an officer of a body corporate that beneficially owns, directly or indirectly, shares of a distributing corporation, or that exercises control or direction over shares of the distributing corporation, or that has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the distributing corporation not including shares held by the body corporate as underwriter while those shares are in the course of a distribution to the public is deemed to be an insider of the distributing corporation;

(5) Subsections 126(3) and (4) of the Act are repealed.

Sections 127 to 129 of the Act are repealed.

Sections 130 and 131 of the Act are replaced by the following:

Prohibition of short sale

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

Calls and puts

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

Exception

(3) Despite subsection (1), an insider may sell a security they do not own if they own another security convertible into the security sold or an option or right to acquire the security sold and, within ten days after the sale, they

(

a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or

(

b) transfer the convertible security, option or right to the purchaser.

Offence

(4) An insider who contravenes subsection (1) or (2) is guilty of an offence and liable on

summary conviction to a fine not exceeding the greater of one million dollars and three times the profit made, or to imprisonment for a term not exceeding six months or to both.

Definitions

(1) In this section, insider means, with respect to a corporation,

(

a) the corporation;

(

b) an affiliate of the corporation;

(

c) a director or an officer of the corporation or of any person described in paragraph ( b ), (

d) or ( f );

(

d) a person who beneficially owns, directly or indirectly, shares of the corporation or who exercises control or direction over shares of the corporation, or who has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the corporation not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;

(

e) a person, other than a person described in paragraph ( f ), employed or retained by the corporation or by a person described in paragraph ( f );

(

f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the corporation;

(

g) a person who received, while they were a person described in any of paragraphs (

a) to ( f ), material confidential information concerning the corporation;

(

h) a person who receives material confidential information from a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph; and

(

i) a prescribed person.

Expanded definition of security

(2) For the purposes of this section, the following are deemed to be a security of the corporation:

(

a) a put, call, option or other right or obligation to purchase or sell a security of the corporation; and

(

b) a security of another entity, the market price of which varies materially with the market price of the securities of the corporation.

Deemed insiders

(3) For the purposes of this section, a person who proposes to make a take-over bid (as defined in the regulations) for securities of a corporation, or to enter into a business combination with a corporation, is an insider of the corporation with respect to material confidential information obtained from the corporation and is an insider of the corporation for the purposes of subsection (6).

Deemed insiders

(3.1) An insider of a person referred to in subsection (3), and an affiliate or associate of such a person, is an insider of the corporation referred to in that subsection. Paragraphs (1)(

b) to (

i) apply in determining whether a person is such an insider except that references to “corporation” in those paragraphs are to be read as references to “person described in subsection (3)”.

Insider trading — compensation to persons

(4) An insider who purchases or sells a security of the corporation with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the corporation is liable to compensate the seller of the security or the purchaser of the security, as the case may be, for any damages suffered by the seller or purchaser as a result of the purchase or sale, unless the insider establishes that

(

a) the insider reasonably believed that the information had been generally disclosed;

(

b) the information was known, or ought reasonably to have been known, by the seller or purchaser; or

(

c) the purchase or sale of the security took place in the prescribed circumstances.

Insider trading — compensation to corporation

(5) The insider is accountable to the corporation for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances described in paragraph (4)( a ).

Tipping — compensation to persons

(6) An insider of the corporation who discloses to another person confidential information with respect to the corporation that has not been generally disclosed and that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the corporation is liable to compensate for damages any person who subsequently sells securities of the corporation to, or purchases securities of the corporation from, any person that received the information, unless the insider establishes

(

a) that the insider reasonably believed that the information had been generally disclosed;

(

b) that the information was known, or ought reasonably to have been known, by the person who alleges to have suffered the damages;

(

c) that the disclosure of the information was necessary in the course of the business of the insider, except if the insider is a person described in subsection (3) or (3.1); or

(

d) if the insider is a person described in subsection (3) or (3.1), that the disclosure of the information was necessary to effect the take-over bid or the business combination, as the case may be.

Tipping — compensation to corporation

(7) The insider is accountable to the corporation for any benefit or advantage received or receivable by the insider as a result of a disclosure of the information as described in subsection (6) unless the insider establishes the circumstances described in paragraph (6)( a ), (

c) or ( d ).

Measure of damages

(8) The court may assess damages under subsection (4) or (6) in accordance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in a situation involving a security of a distributing corporation, the court must consider the following:

(

a) if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security over the twenty trading days immediately following general disclosure of the information; and

(

b) if the plaintiff is a seller, the average market price of the security over the twenty trading days immediately following general disclosure of the information, less the price that the plaintiff received for the security.

Liability

(9) If more than one insider is liable under subsection (4) or (6) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

Limitation

(10) An action to enforce a right created by subsections (4) to (7) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Subsection 132(2) of the Act is replaced by the following:

Meeting outside Canada

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

Exception

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

Participation in meeting by electronic means

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

Meeting held by electronic means

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

Section 133 of the Act is replaced by the following:

Calling annual meetings

(1) The directors of a corporation shall call an annual meeting of shareholders

(

a) not later than eighteen months after the corporation comes into existence; and

(

b) subsequently, not later than fifteen months after holding the last preceding annual meeting but no later than six months after the end of the corporation’s preceding financial year.

Calling special meetings

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

Order to delay calling of annual meeting

(3) Despite subsection (1), the corporation may apply to the court for an order extending the time for calling an annual meeting.

(1) Subsections 134(1) and (2) of the Act are replaced by the following:

Fixing record date

(1) The directors may, within the prescribed period, fix in advance a date as the record date for the purpose of determining shareholders

(

a) entitled to receive payment of a dividend;

(

b) entitled to participate in a liquidation distribution;

(

c) entitled to receive notice of a meeting of shareholders;

(

d) entitled to vote at a meeting of shareholders; or

(

e) for any other purpose.

(2) The portion of subsection 134(3) of the Act before paragraph (

a) is replaced by the following:

No record date fixed

(2) If no record date is fixed,

(3) The portion of subsection 134(4) of the Act before paragraph (

a) is replaced by the following:

When record date fixed

(3) If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given within the prescribed period

Subsections 135(1) and (2) of the Act are replaced by the following:

Notice of meeting

(1) Notice of the time and place of a meeting of shareholders shall be sent within the prescribed period to

(

a) each shareholder entitled to vote at the meeting;

(

b) each director; and

(

c) the auditor of the corporation.

Exception — not a distributing corporation

(1.1) In the case of a corporation that is not a distributing corporation, the notice may be sent within a shorter period if so specified in the articles or by-laws.

Exception — shareholders not registered

(2) A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the corporation or its transfer agent on the record date determined under paragraph 134(1)(

c) or subsection 134(2), but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

(1) Subsection 137(1) of the Act is replaced by the following:

Proposals

(1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that are entitled to be voted at an annual meeting of shareholders may

(

a) submit to the corporation notice of any matter that the person proposes to raise at the meeting (a “proposal”); and

(

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

Persons eligible to make proposals

(1.1) To be eligible to submit a proposal, a person

(

a) must be, for at least the prescribed period, the registered holder or the beneficial owner of at least the prescribed number of outstanding shares of the corporation; or

(

b) must have the support of persons who, in the aggregate, and including or not including the person that submits the proposal, have been, for at least the prescribed period, the registered holders, or the beneficial owners of, at least the prescribed number of outstanding shares of the corporation.

Information to be provided

(1.2) A proposal submitted under paragraph (1)(

a) must be accompanied by the following information:

(

a) the name and address of the person and of the person’s supporters, if applicable; and

(

b) the number of shares held or owned by the person and the person’s supporters, if applicable, and the date the shares were acquired.

Information not part of proposal

(1.3) The information provided under subsection (1.2) does not form part of the proposal or of the supporting statement referred to in subsection (3) and is not included for the purposes of the prescribed maximum word limit set out in subsection (3).

Proof may be required

(1.4) If requested by the corporation within the prescribed period, a person who submits a proposal must provide proof, within the prescribed period, that the person meets the requirements of subsection (1.1).

(2) Subsection 137(3) of the Act is replaced by the following:

Supporting statement

(3) If so requested by the person who submits a proposal, the corporation shall include in the management proxy circular or attach to it a statement in support of the proposal by the person and the name and address of the person. The statement and the proposal must together not exceed the prescribed maximum number of words.

(3) Subsection 137(5) of the Act is replaced by the following:

Exemptions

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

(

a) the proposal is not submitted to the corporation at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in connection with the previous annual meeting of shareholders;

(

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

( b.1 )

it clearly appears that the proposal does not relate in a significant way to the business or affairs of the corporation;

(

c) not more than the prescribed period before the receipt of a proposal, a person failed to present, in person or by proxy, at a meeting of shareholders, a proposal that at the person’s request, had been included in a management proxy circular relating to the meeting;

(

d) substantially the same proposal was submitted to shareholders in a management proxy circular or a dissident’s proxy circular relating to a meeting of shareholders held not more than the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or

(

e) the rights conferred by this

section are being abused to secure publicity.

Corporation may refuse to include proposal

(5.1) If a person who submits a proposal fails to continue to hold or own the number of shares referred to in subsection (1.1) up to and including the day of the meeting, the corporation is not required to set out in the management proxy circular, or attach to it, any proposal submitted by that person for any meeting held within the prescribed period following the date of the meeting.

(4) Subsections 137(7) and (8) of the Act are replaced by the following:

Notice of refusal

(7) If a corporation refuses to include a proposal in a management proxy circular, the corporation shall, within the prescribed period after the day on which it receives the proposal or the day on which it receives the proof of ownership under subsection (1.4), as the case may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the management proxy circular and of the reasons for the refusal.

Person may apply to court

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

Subsections 138(1) to (3) of the Act are replaced by the following:

List of shareholders entitled to receive notice

(1) A corporation shall prepare an alphabetical list of its shareholders entitled to receive notice of a meeting, showing the number of shares held by each shareholder,

(

a) if a record date is fixed under paragraph 134(1)( c ), not later than ten days after that date; or

(

b) if no record date is fixed, on the record date established under paragraph 134(2)( a ).

Voting list — if record date fixed

(2) If a record date for voting is fixed under paragraph 134(1)( d ), the corporation shall prepare, no later than ten days after the record date, an alphabetical list of shareholders entitled to vote as of the record date at a meeting of shareholders that shows the number of shares held by each shareholder.

Voting list — if no record date fixed

(3) If a record date for voting is not fixed under paragraph 134(1)( d ), the corporation shall prepare, no later than ten days after a record date is fixed under paragraph 134(1)(

c) or no later than the record date established under paragraph 134(2)( a ), as the case may be, an alphabetical list of shareholders who are entitled to vote as of the record date that shows the number of shares held by each shareholder.

Entitlement to vote

(3.1) A shareholder whose name appears on a list prepared under subsection (2) or (3) is entitled to vote the shares shown opposite their name at the meeting to which the list relates.

Section 141 of the Act is amended by adding the following after subsection (2):

Electronic voting

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

Voting while participating electronically

(4) Unless the by-laws otherwise provide, any person participating in a meeting of shareholders under subsection 132(4) or (5) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the corporation has made available for that purpose.

Section 142 of the Act is amended by adding the following after subsection (2):

Evidence

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

Paragraph 143(3)(

a) of the Act is replaced by the following:

(

a) a record date has been fixed under paragraph 134(1)(

c) and notice of it has been given under subsection 134(3);

Subsection 144(1) of the Act is replaced by the following:

Meeting called by court

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

(

a) it is impracticable to call the meeting within the time or in the manner in which those meetings are to be called;

(

b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or

(

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

Paragraph 145(2)(

c) of the French version of the Act is replaced by the following:

c) ordonner une nouvelle élection ou une nouvelle nomination en donnant des directives pour la conduite, dans l’intervalle, des activités commerciales et des affaires internes de la société;

1994, c. 24, s. 15(F)

Section 146 of the Act is replaced by the following:

Pooling agreement

145.1

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

Unanimous shareholder agreement

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

Declaration by single shareholder

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

Constructive party

(3) A purchaser or transferee of shares subject to a unanimous shareholder agreement is deemed to be a party to the agreement.

When no notice given

(4) If notice is not given to a purchaser or transferee of the existence of a unanimous shareholder agreement, in the manner referred to in subsection 49(8) or otherwise, the purchaser or transferee may, no later than 30 days after they become aware of the existence of the unanimous shareholder agreement, rescind the transaction by which they acquired the shares.

Rights of shareholder

(5) To the extent that a unanimous shareholder agreement restricts the powers of the directors to manage, or supervise the management of, the business and affairs of the corporation, parties to the unanimous shareholder agreement who are given that power to manage or supervise the management of the business and affairs of the corporation have all the rights, powers, duties and liabilities of a director of the corporation, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under

section 119, to the same extent.

Discretion of shareholders

(6) Nothing in this

section prevents shareholders from fettering their discretion when exercising the powers of directors under a unanimous shareholder agreement.

(1) The definition registrant in

section 147 of the Act is repealed.

(2) The definition solicit or solicitation in

section 147 of the Act is replaced by the following:

solicit or solicitation

sollicitation

solicit or solicitation

(

a) includes

(

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

(ii)

a request to execute or not to execute a form of proxy or to revoke a proxy,

(iii)

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

(iv)

the sending of a form of proxy to a shareholder under

section 149; but

(

b) does not include

(

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

(ii)

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

(iii)

the sending by an intermediary of the documents referred to in

section 153,

(iv)

a solicitation by a person in respect of shares of which the person is the beneficial owner,

(

v) a public announcement, as prescribed, by a shareholder of how the shareholder intends to vote and the reasons for that decision,

(vi)

a communication for the purposes of obtaining the number of shares required for a shareholder proposal under subsection 137(1.1), or

(vii)

a communication, other than a solicitation by or on behalf of the management of the corporation, that is made to shareholders, in any circumstances that may be prescribed;

(3) Section 147 of the Act is amended by adding the following in alphabetical order:

intermediary

intermédiaire

intermediary means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes

(

a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;

(

b) a securities depositary;

(

c) a financial institution;

(

d) in respect of a clearing agency, a securities dealer, trust company, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominees hold securities of an issuer;

(

e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act ;

(

f) a nominee of a person referred to in any of paragraphs (

a) to ( e ); and

(

g) a person who carries out functions similar to those carried out by individuals or entities referred to in any of paragraphs (

a) to (

e) and that holds a security registered in its name, or in the name of its nominee, on behalf of another person who is not the registered holder of the security.

Subsection 149(2) of the Act is replaced by the following:

Exception

(2) The management of the corporation is not required to send a form of proxy under subsection (1) if it

(

a) is not a distributing corporation; and

(

b) has fifty or fewer shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder.

Section 150 of the Act is amended by adding the following after subsection (1):

Exception — solicitation to fifteen or fewer shareholders

(1.1) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the corporation, without sending a dissident’s proxy circular, if the total number of shareholders whose proxies are solicited is fifteen or fewer, two or more joint holders being counted as one shareholder.

Exception — solicitation by public broadcast

(1.2) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the corporation, without sending a dissident’s proxy circular if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication.

Subsections 151(1) and (2) of the Act are replaced by the following:

Exemption

(1) On the application of an interested person, the Director may exempt the person, on any terms that the Director thinks fit, from any of the requirements of

section 149 or subsection 150(1), which exemption may have retrospective effect.

Publication

(2) The Director shall set out in a publication generally available to the public the particulars of exemptions granted under this

section together with the reasons for the exemptions.

The portion of subsection 152(3) of the Act before paragraph (

a) is replaced by the following:

Show of hands

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

Section 153 of the Act is replaced by the following:

Duty of intermediary

(1) Shares of a corporation that are registered in the name of an intermediary or their nominee and not beneficially owned by the intermediary must not be voted unless the intermediary, without delay after receipt of the notice of the meeting, financial statements, management proxy circular, dissident’s proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy of the document to the beneficial owner and, except when the intermediary has received written voting instructions from the beneficial owner, a written request for such instructions.

Restriction on voting

(2) An intermediary, or a proxyholder appointed by an intermediary, may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or in the name of a nominee of the intermediary unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

Copies

(3) A person by or on behalf of whom a solicitation is made shall provide, at the request of an intermediary, without delay, to the intermediary at the person’s expense the necessary number of copies of the documents referred to in subsection (1), other than copies of the document requesting voting instructions.

Instructions to intermediary

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

Beneficial owner as proxyholder

(5) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

Validity

(6) The failure of an intermediary to comply with this

section does not render void any meeting of shareholders or any action taken at the meeting.

Limitation

(7) Nothing in this

section gives an intermediary the right to vote shares that the intermediary is otherwise prohibited from voting.

Offence

(8) An intermediary who knowingly fails to comply with this

section is guilty of an offence and liable on

summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

Officers, etc., of bodies corporate

(9) If an intermediary that is a body corporate commits an offence under subsection (8), any director or officer of the body corporate who knowingly authorized, permitted or acquiesced in the commission of the offence is a party to and guilty of the offence and is liable on

summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both, whether or not the body corporate has been prosecuted or convicted.

The heading before

section 155 of the French version of the Act is replaced by the following:

PRÉSENTATION DE RENSEIGNEMENTS D’ORDRE FINANCIER

Section 156 of the Act is replaced by the following:

Exemption

The Director may, on application of a corporation, authorize the corporation to omit from its financial statements any item prescribed, or to dispense with the publication of any particular financial statement prescribed, and the Director may, if the Director reasonably believes that disclosure of the information contained in the statements would be detrimental to the corporation, permit the omission on any reasonable conditions that the Director thinks fit.

Subsection 157(2) of the Act is replaced by the following:

Examination

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

Subsection 158(1) of the Act is replaced by the following:

Approval of financial statements

(1) The directors of a corporation shall approve the financial statements referred to in

section 155 and the approval shall be evidenced by the manual signature of one or more directors or a facsimile of the signatures reproduced in the statements.

1994, c. 24, s. 17

Section 160 of the Act is replaced by the following:

Copies to Director

(1) A distributing corporation, any of the issued securities of which remain outstanding and are held by more than one person, shall send a copy of the documents referred to in

section 155 to the Director

(

a) not less than twenty-one days before each annual meeting of shareholders, or without delay after a resolution referred to in paragraph 142(1)(

b) is signed; and

(

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

Subsidiary corporation exemption

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

section if

(

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

(

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

Offence

(3) A corporation that fails to comply with this

section is guilty of an offence and is liable on

summary conviction to a fine not exceeding five thousand dollars.

(1) Section 161 of the Act is amended by adding the following after subsection (2):

Business partners

(2.1) For the purposes of subsection (2), a person’s business partner includes a shareholder of that person.

(2) Subsection 161(5) of the French version of the Act is replaced by the following:

Dispense

(5) Le tribunal, s’il est convaincu de ne pas causer un préjudice injustifié aux actionnaires, peut, à la demande de tout intéressé, dispenser, même rétroactivement, le vérificateur de l’application du présent article, aux conditions qu’il estime indiquées.

Subsection 163(1) of the Act is replaced by the following:

Dispensing with auditor

(1) The shareholders of a corporation that is not a distributing corporation may resolve not to appoint an auditor.

Subsection 168(6) of the Act is replaced by the following:

Other statements

(5.1) In the case of a proposed replacement of an auditor, whether through removal or at the end of the auditor’s term, the following rules apply with respect to other statements:

(

a) the corporation shall make a statement on the reasons for the proposed replacement; and

(

b) the proposed replacement auditor may make a statement in which he or she comments on the reasons referred to in paragraph ( a ).

Circulating statement

(6) The corporation shall send a copy of the statements referred to in subsections (5) and (5.1) without delay to every shareholder entitled to receive notice of a meeting referred to in subsection (1) and to the Director, unless the statement is included in or attached to a management proxy circular required by

section 150.

Section 170 of the Act is amended by adding the following after subsection (2):

No civil liability

(3) A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil proceeding arising from having made the communication.

Subsection 171(2) of the Act is replaced by the following:

Exemption

(2) The Director may, on the application of a corporation, authorize the corporation to dispense with an audit committee, and the Director may, if satisfied that the shareholders will not be prejudiced, permit the corporation to dispense with an audit committee on any reasonable conditions that the Director thinks fit.

(1) Paragraph 173(1)(

b) of the Act is replaced by the following:

(

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

(2) Paragraph 173(1)(

c) of the French version of the Act is replaced by the following:

c) d’ajouter, de modifier ou de supprimer toute restriction quant à ses activités commerciales;

(1) The portion of subsection 174(1) of the Act before paragraph (

a) is replaced by the following:

Constraints on shares

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

1991, c. 47, s. 722(2)

(2) Paragraph 174(1)(

d) of the Act is replaced by the following:

(

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

Subsection 177(1) of the Act is replaced by the following:

Delivery of articles

(1) Subject to any revocation under subsection 173(2) or 174(5), after an amendment has been adopted under

section 173, 174 or 176 articles of amendment in the form that the Director fixes shall be sent to the Director.

(1) Subsection 180(1) of the English version of the Act is replaced by the following:

Restated articles

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

(2) Subsection 180(2) of the Act is replaced by the following:

Delivery of articles

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

Subsections 183(3) and (4) of the Act are replaced by the following:

Right to vote

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

Class vote

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

section 176.

1994, c. 24, s. 20

(1) Subparagraph 184(1)( b )(ii) of the Act is replaced by the following:

(ii)

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

(2) Subparagraph 184(2)( b )(ii) of the Act is replaced by the following:

(ii)

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

Subsection 185(1) of the Act is replaced by the following:

Sending of articles

(1) Subject to subsection 183(6), after an amalgamation has been adopted under

section 183 or approved under

section 184, articles of amalgamation in the form that the Director fixes shall be sent to the Director together with the documents required by sections 19 and 106.

1994, c. 24, s. 21

Subsection 186.1(4) of the Act is replaced by the following:

Notice deemed to be articles

(4) For the purposes of

section 262, a notice referred to in subsection (3) is deemed to be articles that are in the form that the Director fixes.

(1) Subsection 187(3) of the Act is replaced by the following:

Articles of continuance

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

(2) Subsection 187(11) of the French version of the Act is replaced by the following:

Autorisation des mentions relatives à la valeur nominale ou au pair

(11) Au cas où le directeur, saisi par une personne morale, décide qu’il est pratiquement impossible de supprimer la référence aux actions à valeur nominale ou au pair d’une catégorie ou d’une série que celle-ci était autorisée à émettre avant sa prorogation en vertu de la présente loi, il peut, par dérogation au paragraphe 24(1), l’autoriser à maintenir, dans ses statuts, la désignation de ces actions, même non encore émises, comme actions à valeur nominale ou au pair.

1994, c. 24, s. 22; 1998, c. 1, s. 381

(1) Subsections 188(1) to (2.1) of the Act are replaced by the following:

Continuance — other jurisdictions

(1) Subject to subsection (10), a corporation may apply to the appropriate official or public body of another jurisdiction requesting that the corporation be continued as if it had been incorporated under the laws of that other jurisdiction if the corporation

(

a) is authorized by the shareholders in accordance with this

section to make the application; and

(

b) establishes to the satisfaction of the Director that its proposed continuance in the other jurisdiction will not adversely affect creditors or shareholders of the corporation.

Continuance — other federal Acts

(2) A corporation that is authorized by the shareholders in accordance with this

section may apply to the appropriate Minister for its continuance under the Bank Act , the Canada Cooperatives Act , the Insurance Companies Act or the Trust and Loan Companies Act .

(2) Subsection 188(8) of the Act is replaced by the following:

Notice deemed to be articles

(8) For the purposes of

section 262, a notice referred to in subsection (7) is deemed to be articles that are in the form that the Director fixes.

(1) The portion of subsection 189(1) of the Act before paragraph (

a) is replaced by the following:

Borrowing powers

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

(2) Paragraphs 189(1)(

b) and (

c) of the Act are replaced by the following:

(

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

(

c) give a guarantee on behalf of the corporation to secure performance of an obligation of any person; and

(1) Paragraph 190(1)(

b) of the French version of the Act is replaced by the following:

b) de modifier ses statuts, conformément à l’article 173, afin d’ajouter, de modifier ou de supprimer toute restriction à ses activités commerciales;

(2) Subsection 190(1) of the Act is amended by striking out the word “or” at the end of paragraph ( d ), by adding the word “or” at the end of paragraph (

e) and by adding the following after paragraph ( e ):

(

f) carry out a going-private transaction or a squeeze-out transaction.

(3) Section 190 of the Act is amended by adding the following after subsection (2):

If one class of shares

(2.1) The right to dissent described in subsection (2) applies even if there is only one class of shares.

Subsection 191(4) of the Act is replaced by the following:

Articles of reorganization

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

(1) Paragraph 192(1)(

f) of the Act is replaced by the following:

(

f) an exchange of securities of a corporation for property, money or other securities of the corporation or property, money or securities of another body corporate;

( f.1 )

a going-private transaction or a squeeze-out transaction in relation to a corporation;

(2) Subsection 192(3) of the French version of the Act is replaced by the following:

Demande d’approbation au tribunal

(3) Lorsqu’il est pratiquement impossible pour la société qui n’est pas insolvable d’opérer, en vertu d’une autre disposition de la présente loi, une modification de structure équivalente à un arrangement, elle peut demander au tribunal d’approuver, par ordonnance, l’arrangement qu’elle propose.

(3) Subsection 192(6) of the Act is replaced by the following:

Articles of arrangement

(6) After an order referred to in paragraph (4)(

e) has been made, articles of arrangement in the form that the Director fixes shall be sent to the Director together with the documents required by sections 19 and 113, if applicable.

The heading before

section 193 and sections 193 to 205 of the Act are replaced by the following:

GOING-PRIVATE TRANSACTIONS AND SQUEEZE-OUT TRANSACTIONS

Going-private transactions

A corporation may carry out a going-private transaction. However, if there are any applicable provincial securities laws, a corporation may not carry out a going-private transaction unless the corporation complies with those laws.

Squeeze-out transactions

A corporation may not carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the articles of the corporation, the transaction is approved by ordinary resolution of the holders of each class of shares that are affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution:

(

a) affiliates of the corporation; and

(

b) holders of shares that would, following the squeeze-out transaction, be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class.

The Act is amended by adding the following before

section 206:

PART XVII

COMPULSORY AND COMPELLED ACQUISITIONS

(1) The portion of subsection 206(1) of the Act before the definition dissenting offeree is replaced by the following:

Definitions

(1) The

definitions in this subsection apply in this Part.

(2) The definition take-over bid in subsection 206(1) of the Act is replaced by the following:

take-over bid

offre d’achat visant à la mainmise

take-over bid means an offer made by an offeror to shareholders of a distributing corporation at approximately the same time to acquire all of the shares of a class of issued shares, and includes an offer made by a distributing corporation to repurchase all of the shares of a class of its shares.

(3) Subsection 206(1) of the Act is amended by adding the following in alphabetical order:

offer

pollicitation

offer includes an invitation to make an offer.

offeree

pollicité

offeree means a person to whom a take-over bid is made.

offeree corporation

société pollicitée

offeree corporation means a distributing corporation whose shares are the object of a take-over bid.

offeror

pollicitant

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

(

a) make take-over bids jointly or in concert; or

(

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

share

action

share means a share, with or without voting rights, 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.

(4) Paragraph 206(3)(

a) of the Act is replaced by the following:

(

a) the offerees holding not less than ninety per cent of the shares to which the bid relates accepted the take-over bid;

(5) Paragraph 206(3)(

d) of the Act is replaced by the following:

(

d) a dissenting offeree who does not notify the offeror in accordance with subparagraph (5)( b )(ii) is deemed to have elected to transfer the shares to the offeror on the same terms that the offeror acquired the shares from the offerees who accepted the take-over bid; and

(6) Subsections 206(5) and (6) of the Act are replaced by the following:

Share certificate

(5) A dissenting offeree to whom an offeror’s notice is sent under subsection (3) shall, within twenty days after receiving the notice,

(

a) send the share certificates of the class of shares to which the take-over bid relates to the offeree corporation; and

(

b) elect

(

i) to transfer the shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the take-over bid, or

(ii)

to demand payment of the fair value of the shares in accordance with subsections (9) to (18) by notifying the offeror within those twenty days.

Deemed election

(5.1) A dissenting offeree who does not notify the offeror in accordance with subparagraph (5)( b )(ii) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid.

Payment

(6) Within twenty days after the offeror sends an offeror’s notice under subsection (3), the offeror shall pay or transfer to the offeree corporation the amount of money or other consideration that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (5)( b )(i).

(7) Section 206 of the Act is amended by adding the following after subsection (7):

When corporation is offeror

(7.1) A corporation that is an offeror making a take-over bid to repurchase all of the shares of a class of its shares is deemed to hold in trust for the dissenting shareholders the money and other consideration that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (5)( b )(i), and the corporation shall, within twenty days after a notice is sent under subsection (3), deposit the money in a separate account in a bank or other body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board, and shall place the other consideration in the custody of a bank or such other body corporate.

(8) Subsections 206(8) and (9) of the Act are replaced by the following:

Duty of offeree corporation

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

(

a) if the payment or transfer required by subsection (6) is made, issue to the offeror a share certificate in respect of the shares that were held by dissenting offerees;

(

b) give to each dissenting offeree who elects to accept the take-over bid terms under subparagraph (5)( b )(

i) and who sends share certificates as required by paragraph (5)(

a) the money or other consideration to which the offeree is entitled, disregarding fractional shares, which may be paid for in money; and

(

c) if the payment or transfer required by subsection (6) is made and the money or other consideration is deposited as required by subsection (7) or (7.1), send to each dissenting shareholder who has not sent share certificates as required by paragraph (5)(

a) a notice stating that

(

i) the dissenting shareholder’s shares have been cancelled,

(ii)

the offeree corporation or some designated person holds in trust for the dissenting shareholder the money or other consideration to which that shareholder is entitled as payment for or in exchange for the shares, and

(iii)

the offeree corporation will, subject to subsections (9) to (18), send that money or other consideration to that shareholder without delay after receiving the shares.

Application to court

(9) If a dissenting offeree has elected to demand payment of the fair value of the shares under subparagraph (5)( b )(ii), the offeror may, within twenty days after it has paid the money or transferred the other consideration under subsection (6), apply to a court to fix the fair value of the shares of that dissenting offeree.

(9) Subsection 206(13) of the French version of the Act is replaced by the following:

Absence de cautionnement pour frais

(13) Dans le cadre d’une demande visée aux paragraphes (9) ou (10), les pollicités dissidents ne sont pas tenus de fournir de cautionnement pour les frais.

(10) Paragraph 206(14)(

a) of the Act is replaced by the following:

(

a) all dissenting offerees referred to in subparagraph (5)( b )(ii) whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and

(11) Paragraph 206(18)(

a) of the Act is replaced by the following:

(

a) fix the amount of money or other consideration that is required to be held in trust under subsection (7) or (7.1);

The Act is amended by adding the following after

section 206:

Obligation to acquire shares

206.1

(1) If a shareholder holding shares of a distributing corporation does not receive an offeror’s notice under subsection 206(3), the shareholder may

(

a) within ninety days after the date of termination of the take-over bid, or

(

b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of

(

i) the date of termination of the take-over bid, and

(ii)

the date on which the shareholder learned of the take-over bid,

require the offeror to acquire those shares.

Conditions

(2) If a shareholder requires the offeror to acquire shares under subsection (1), the offeror shall acquire the shares on the same terms under which the offeror acquired or will acquire the shares of the offerees who accepted the take-over bid.

1992, c. 27, par. 90(1)( h )

(1) Subsection 208(1) of the Act is replaced by the following:

Application of

Part

(1) This Part, other than sections 209 and 212, does not apply to a corporation that is an insolvent person or a bankrupt as th