2020 Bill 22 Second Session, 30th Legislature, 69 Elizabeth II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 22 RED TAPE REDUCTION IMPLEMENTATION ACT, 2020 THE ASSOCIATE MINISTER OF RED TAPE REDUCTION First Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Committee of the Whole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Third Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Royal Assent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 Bill 22 BILL 22 2020 RED TAPE REDUCTION IMPLEMENTATION ACT, 2020 ( A s s e n t e d t o , 2 0 2 0 ) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: Business Corporations Act Amends RSA 2000 cB-9 1(1) The Business Corporations Act is amended by this section.

(2) Section 1 is amended (

a) by adding the following after clause (b): (b.1) “agent for service” mean s an agent for service appointed by a corporation under

section 20.1 or by an extra- provincial corporation under

section 288; (

b) by adding the followi ng after clause (cc): (cc.1) “resident Albertan” means an individual who is (

i) a Canadian citizen ordinar ily resident in Alberta, or (ii) a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada) and ordinarily resident in Alberta;

1 Explanatory Notes Explanatory Notes Business Corporations Act 1(1) Amends

chapter B-9 of the Revised Statutes of Alberta 2000.

(2) Section 1 presently reads in part: 1 In this Act, (b) “affiliate” means an affiliated body corporate within the meaning of

section 2(1); (cc) “Registrar’s periodical” me ans the periodical referred to in

section 264; (dd) “resident Canadian” means an individual who is (

i) a Canadian citizen ordinarily resident in Canada, (ii) a Canadian citizen not ordi narily resident in Canada who is a member of a prescribed class of persons, or (iii) a permanent resident within the meaning of the Immigration Act (Canada) and ordinarily resident in Canada;

2 (

c) in clause (dd) by striking out “Immigration Act (Canada)” and substituting “Immigration and Refugee Protection Act (Canada)”.

(3) The heading preceding

section 20 is repealed and the following is substituted:

Part 4 Registered Office, Agent for Service, Records and Seal

(4) The following is added after

section 20: Agent for service 20.1(1) A corporation shall appoint an agent for service who is a resident Albertan.

(2) The corporation shall give to the Registrar a notice of the appointment of its agent for service, in the form required by the Registrar, together with the articles of incorporation.

(3) The corporation shall ensure that the address of its agent for service is an office that is (

a) accessible to the public d uring normal business hours, and (

b) readily identifiable from t he address or other description given in a notice under this section.

(4) The corporation shall forthwith give to the Registrar a notice of any change in the name, address or other contact information of the agent for service in the form required by the Registrar.

(5) An agent for service for a corporation who intends to resign shall give not less than 60 days’ notice to the corporation at its registered office, and the corporation shall give to the Registrar a copy of the notice.

(6) If the agent for service of a corporation dies or the agent’s appointment is revoked, the corporation shall (

a) give to the Registrar a notice to that effect, and

2 Explanatory Notes

(3) The heading preceding

section 20 presently reads:

Part 4 Registered Office, Records and Seal

(4) Agent for service; alternative agent for service.

3 (

b) forthwith appoint a new agent for service and give to the Registrar a notice of the appointment of its new agent for service in the form required by the Registrar. Alternative agent for service 20.2(1) A corporation may appoint an alternative agent for service who is a resident Albertan.

(2) Forthwith after the appointment of an alternative agent for service, the corporation shall give to the Registrar a notice of the appointment in the form required by the Registrar.

(3) The corporation shall forthwith give to the Registrar a notice of any change in the name, address or other contact information of the alternative agent for service in the form required by the Registrar.

(4) An alternative agent for service for a corporation who intends to resign shall give not less than 60 days’ notice to the corporation at its registered office, and the corporation shall give to the Registrar a copy of the notice.

(5) If the alternative agent for service of a corporation dies or the alternative agent’s appointment is revoked, the corporation shall give to the Registrar a notice to that effect.

(5) The following is added after

section 25: Transitional Provision Transitional provision 25.1 An existing corporation shall send a notice of appointment of an agent for service to the Registrar within one year after the coming into force of this section, or the Registrar may dissolve the corporation by issuing a certificate of dissolution under

section 213 or by applying to the Court for an order dissolving the corporation under

section 218. (6)

Section 105(3) is repealed.

3 Explanatory Notes

(5) Transitional provision.

(6) Section 105(3) presently reads:

(3) At least 1/4 of the directors of a corporation must be resident Canadians.

4 (7)

Section 111(1) is amended by striking out “Notwithstanding

section 114(3), a quorum” and substituting “A quorum”.

(8) Section 114(3) and (4) are repealed.

(9) Section 115 is amended (

a) in subsection (1) by striking out “, who must be a resident Canadian,”; (

b) by repealing subsection (2).

(10) Section 116(2) is repealed.

4 Explanatory Notes (7)

Section 111(1) presently reads: 111(1) Notwithstanding

section 114(3), a quorum of directors may, subject to subsections (3) and (4), fill a vacancy among the directors, except a vacancy resulting from an increase in the number or minimum number of directors or from a failure to elect the number or minimum number of directors required by the articles.

(8) Section 114(3) and (4) presently read:

(3) Directors shall not transact business at a meeting of directors unless at least 1/4 of the directors present are resident Canadians.

(4) Notwithstanding subsection (3), directors may transact business at a meeting of directors when fewer than 1/4 of the directors present are resident Canadians if (

a) a resident Canadian direct or who is unable to be present approves in writing or by electronic means, telephone or other communication device the business transacted at the meeting, and (

b) the number of resident Canadian directors present at the meeting, together with any resident Canadian director who gives that director’s approval under clause (a), totals at least 1/4 of the directors present at the meeting.

(9) Section 115 presently reads in part: 115(1) The directors of a corporation may appoint from their number a managing director, who must be a resident Canadian, or a committee of directors and delegate to the managing director or committee any of the powers of the directors.

(2) If the directors of a corporation appoint a committee of directors, at least 1/4 of the members of the committee must be resident Canadians.

(10) Section 116(2) presently reads:

(2) An act of the directors or a committee of directors is valid notwithstanding non-compliance with

section 105(3) or (4), 114(3) or 115(2).

(11) Section 256 is amended (

a) by repealing subsections (1) and (2) and substituting the following: Notice to and service on a corporation 256(1) A notice or document that is required or permitted to be sent to or served on a corporation may be (

a) delivered to its registere d office as shown in the last notice filed under

section 20, (

b) sent by registered mail to (

i) its registered office, or (ii) the post office box designated as its address for service by mail, as shown in the last noti ce filed under

section 20, (

c) delivered to its agent for service or alternative agent for service, or (

d) sent by registered mail to its agent for service or alternative agent for service at the address shown in the last notice given to the Registrar under

section 20.1 or 20.2.

(2) Notwithstanding subsection (1), in the case of a notice of intent to dissolve a corporation, the notice may be sent by ordinary mail to (

a) the registered office of the corporation as shown in the last notice filed under

section 20, (

b) the post office box designated as the corporation’s address for service by mail as shown in the last notice filed under

section 20, or (

c) the agent for service or alte rnative agent for service at the address shown in the last notice given to the Registrar under

section 20.1 or 20.2.

5 Explanatory Notes

(11) Section 256 presently reads in part: 256(1) A notice or document that is required or permitted to be sent to or served on a corporation may be (

a) delivered to its registered office, or (

b) sent by registered mail to (

i) its registered office, or (ii) the post office box designated as its address for service by mail, as shown in the last notice filed under

section 20.

(2) Notwithstanding subsection (1), in the case of a notice of intent to dissolve a corporation, the notice may be sent by ordinary mail to the corporation addressed (

a) to its registered office, or (

b) to the post office box designat ed as its address for service by mail, as shown in the last notice filed under

section 20.

(3) A notice or document sent by registered mail to the corporation in accordance with subsection (1)(

b) is deemed to be received or served at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the corporation did not receive the notice or document at that time or at all.

6 (

b) in subsection (3) by adding “or (d)” after “subsection (1)(b)”.

(12) Section 276(

b) is repealed. (13) Sections 280(2)(

c) and 285(2)(a)(ii) are amended by striking out “attorney for service” and substituting “agent for service”.

(14) Section 288 is amended (

a) in subsection (1) (

i) by striking out “attorney of an extra-provincial corporation” and substituting “agent for service of an extra-provincial corporation”; (ii) by striking out “attorney’s appointment” and substituting “agent for service’s appointment”; (iii) by striking out “attorney for service” and substituting “agent for service”; (

b) in subsection (2) by striking out “attorney” wherever it occurs and substituting “agent for service”; (

c) in subsection (3)

6 Explanatory Notes

(12) Section 276 presently reads in part: 276 In this Part, (b) “attorney for service” or “attorney” means, with reference to an extra-provincial corporation, the individual who, according to the Registrar’s records, is appointed under this Part as that extra-provincial corporation’s attorney for service; (13) Sections 280(2) and 285(2) presently read in part: 280(2) The statement shall be accompanied with (

c) the appointment of its attorney for service, in the prescribed form. 285(2) The Registrar shall not cancel the registration of an extra-provincial corporation under subsection (1) until (

a) the Registrar has given at least 120 days’ notice of the proposed cancellation with the Registrar’s reasons for it, (ii) to its attorney for servic e in accordance with

section 288,

(14) Section 288 presently reads: 288(1) If an attorney of an extra-provincial corporation dies or resigns or the attorney’s appointment is revoked, the extra-provincial corporation shall forthwith send to the Registrar an appointment in the prescribed form of an individual as its attorney for service and the Registrar shall file the appointment.

(2) An extra-provincial corporation may in the prescribed form appoint an individual as its alternative attorney if that individual is (

a) a member of a partnership of which the attorney is also a member, or (

b) an assistant manager of the extra-provincial corporation and the attorney is the manager for Alberta of the extra-provincial corporation.

7 (

i) by striking out “alternative attorney” wherever it occurs and substituting “alternative agent for service”; (ii) by striking out “attorney’s appointment” and substituting “agent for service’s appointment”; (

d) in subsection (4) by striking out “attorney” and substituting “agent for service”; (

e) in subsection (5) (

i) by striking out “An attorney shall” and substituting “An agent for service shall”; (ii) by striking out “attorney’s address” and substituting “agent for service’s address”; (

f) in subsections (6) and (7) by striking out “attorney” wherever it occurs and substituting “agent for service”; (

g) in subsection (8) (

i) by striking out “attorney’s address” and substituting “agent for service’s address”; (ii) by striking out “attorney did not receive” and substituting “agent for service did not receive”; (

h) in subsection (9) by striking out “attorney” wherever it occurs and substituting “agent for service”.

7 Explanatory Notes

(3) An extra-provincial corporation shall send to the Registrar (

a) each appointment by it of an alternative attorney, and (

b) if the alternative attorney di es or resigns or that attorney’s appointment is revoked, a notice to that effect, and the Registrar shall file the appointment or notice, as the case may be.

(4) An attorney for an extra-provincial corporation who intends to resign shall (

a) give not less than 60 days’ notice to the extra-provincial corporation at its head office, and (

b) send a copy of the notice to the Registrar who shall file it.

(5) An attorney shall forthwith send to the Registrar a notice in the prescribed form of any change of the attorney’s address and the Registrar shall file the notice.

(6) An extra-provincial corporation shall ensure that the address of its attorney is an office that is (

a) accessible to the public during normal business hours, and (

b) readily identifiable from the address or other description given in the notice referred to in subsection (5) or the appointment referred to in

section 280(2)(c).

(7) A notice or document required or permitted by law to be sent or served in Alberta on an extra-provincial corporation may be (

a) delivered to its attorney or to an individual who is its alternative attorney according to the Registrar’s records, (

b) delivered to the address, according to the Registrar’s records, of its attorney, or (

c) sent by registered mail to that address.

(8) A notice or document sent by registered mail to the attorney’s address in accordance with subsection (7)(

c) is deemed to be received or served at the time it would be delivered in the ordinary

(15) Section 293.3(d)(iv) is amended by striking out “attorneys for service” and substituting “agents for service”.

(16) This

section comes into force on Proclamation. Companies Act Amends RSA 2000 cC-21 2(1) The Companies Act is amended by this section.

(2) Section 1 is amended (

a) by adding the following before clause (a.01): (a.001) “agent for service” m eans an agent for service appointed by a company under

section 29.1; (

b) by repealing clauses (b.1), (c), (c.1), (h.01) and (i); (

c) by adding the following before clause (j): (i.1) “generally accepted acc ounting principles” means the generally accepted accounting principles as set out in the CPA Canada Handbook – Accounting by the Chartered Professional Accountants of Canada, as amended from time to time;

8 Explanatory Notes course of mail, unless there are reasonable grounds for believing that the attorney did not receive the notice or document at that time or at all.

(9) An individual whose appointment as an attorney or alternative attorney of an extra-provincial corporation is filed with the Registrar of Companies immediately before the commencement of this Act is deemed to be its attorney or an alternative attorney, as the case may be, on the commencement of this Act.

(15) Section 293.3 presently reads in part: 293.3 The Lieutenant Governor in Council may make regulations (

d) respecting the registration of and other matters pertaining to extra-provincial corporations, including, without limitation, regulations respecting (iv) changes in the name, char ter, head office, directors or attorneys for service of extra-provincial corporations,

(16) Coming into force. Companies Act 2(1) Amends

chapter C-21 of the Revised Statutes of Alberta 2000.

(2) Section 1 presently reads in part: 1 In this Act, (a.01) “articles” means (

i) the articles of associatio n prescribing regulations for a company, whether as originally framed or as altered by special resolution, and including, insofar as they apply to the company, the regulations contained, as the case may be, (

A) in Table A in the

Schedule to this Act or in the First

Schedule to The Companies Act, RSA 1955 c53 or RSA 1942 c240, or to The Companies Act, 1929, SA 1929 c14, or

9 (

d) in clause (

k) by striking out “, a company limited by guarantee and a specially limited company” and substituting “and a company limited by guarantee”; (

e) by repealing clauses (

v) and (z).

9 Explanatory Notes (

B) in Table A in the First

Schedule or in Form B in the Second

Schedule to The Companies Act, RSA 1922 c156, or to The Companies Ordinance, ONWT 1901 c20, or in any such table as alte red pursuant to any such Act or Ordinance, and (ii) the bylaws of a company incorporated under Ordinance No. 3 of 1886, being The Companies Ordinance, RONWT 1888 c30 or under The Companies Ordinance, CONWT 1898 c61, as originally framed or duly altered; (b.1) “charter” includes any Ac t, Statute, Ordinance or other provision of law, by or under which an extra-provincial company has been incorporated and any amendment thereto applying to the extra-provincial company and any memorandum of association and deed of settlement of the extra-provincial company, and any letters patent or other instrument incorporating the extra-provincial company and any licence or certificate of registration thereof; (c) “charter and regulations” includes the charter of an extra- provincial company and its articles of association, regulations, bylaws and rules; (c.1) “Commission” means the Alberta Securities Commission; (h.01) “Executive Director” means the Executive Director of the Commission as defined or otherwise provided for under the Securities Act; (i) “extra-provincial company” means a corporation (

i) incorporated otherwise than by or under

an Act of the Legislature or an Ordinance of the Northwest Territories, or (ii) incorporated by or under an Ordinance of the Northwest Territories and not subject to the legislative authority of the Legislature by

section 16 of the Alberta Act (Canada); (k) “limited company” includes a company limited by shares, a company limited by guarantee and a specially limited company; (v) “resident Albertan” means an individual who

10 (3)

Section 2(5) is repealed.

(4) Section 2.1 is repealed and the following is substituted: Limited application of Act 2.1 Notwithstanding anything in this Act, on and after February 1, 1982, no company shall be incorporated or registered under this Act except under

Part 9. (5)

Section 3(1) is amended by adding “and” at the end of clause (a), striking out “and” at the end of clause (

b) and repealing clause (c).

10 Explanatory Notes (

i) is a Canadian citizen, or (ii) has been lawfully admitted to Canada for permanent residence, and who is ordinarily resident in Alberta; (z) “specially limited company ” means a company limited by shares, the memorandum of which provides that no member is to be personally liable for the amount, if any, unpaid on the member’s shares;

(3) Section 2(5) presently reads:

(5) If a company formed under

section 15(4) or its shareholders or directors are empowered or required by this or any other Act to pass a resolution, the resolution is deemed to be passed if it is signed by the sole shareholder of the company, and any requirement to hold a meeting does not apply.

(4) Section 2.1 presently reads: 2.1 Notwithstanding anything in this Act, on and after February 1, 1982 (

a) no company shall (

i) be incorporated or regist ered under this Act except under

Part 9, (ii) be continued into Alberta under

section 174, or (iii) be continued out of Alberta under

section 175, and (

b) no extra-provincial company shall be registered under this Act.

(5) Section 3(1) presently reads: 3(1) This Act applies to existing companies in the same manner, (

a) in the case of a company limit ed by shares, as if the company had been formed and incorporated under this Act as a company limited by shares,

(6) Section 11 is amended (

a) in subsection (1) by striking out “and an extra-provincial company shall not be registered under a name,” and substituting “under a name”; (

b) in subsection (3) (

i) by striking out “or registered”; (ii) by striking out “any other corporation” and substituting “any other company”; (iii) by striking out “unless the corporation” and substituting “unless the other company”; (

c) by repealing subsection (4) and substituting the following:

(4) Where a company gives an undertaking to dissolve or change its name and the undertaking is not carried out within 6 months, the Registrar may, by notice in writing, giving the Registrar’s reasons, direct the company to change its name to one that the Registrar approves within 60 days after the date of the notice. (

d) in subsection (5) (

i) by striking out “other than an extra-provincial company”; (ii) by striking out “any other company, business or association” and substituting “any other company”; (iii) by striking out “or registered”; (

e) by repealing subsection (8).

11 Explanatory Notes (

b) in the case of a company limited by guarantee, as if the company had been formed and incorporated under this Act as a company limited by guarantee, and (

c) in the case of a specially limited company, as if the company had been formed and incorporated under this Act as a specially limited company.

(6) Section 11 presently reads in part: 11(1) A company shall not be incorporated and an extra-provincial company shall not be registered under a name, (

a) that is known by the Registrar to be the same as the name of an existing corporation, (

b) that suggests or implies a connection with the Crown or any member of the Royal family or the Government of Canada or the government of any province or territory of Canada or any department, branch, bureau, service, agency or activity of any such government without the consent in writing of the appropriate authority, (

c) that includes the word “co- operative” or any abbreviation or derivation thereof, or (

d) that in the opinion of the Registrar is objectionable.

(3) A company shall not be incorporated or registered under this Act under a name that is known to the Registrar to be similar to the name of any other corporation if the use of that name by the company would be likely to deceive, unless the corporation consents in writing to its name being given in whole or in part to the company and, if required by the Registrar, undertakes to dissolve or to change its name within 6 months after the incorporation of the company.

(4) A company shall not be incorporated or registered under this Act under a name that is known to the Registrar to be the same as or similar to the name of a business or association if the use of that name by the company would be likely to deceive, unless the business or association consents in writing to its name being given in whole or in part to the company and, if required by the Registrar, undertakes to cease to carry on its business or activities or to change its name within 6 months after the incorporation of the company.

(7) Section 12 is amended (

a) in subsection (1) (

i) by repealing clause (

a) and substituting the following: (

a) the refusal of the Registrar to incorporate a company pursuant to

section 11(1) or (3), (ii) by adding “or” at the end of clause (c), striking out “or” at the end of clause (

d) and repealing clause (e); (

b) by repealing subsection (3).

12 Explanatory Notes

(5) If a company other than an extra-provincial company, through inadvertence or otherwise, has been or is given a name that is the same as or is similar to the name of any other company, business or association that has previously been carrying on business or been incorporated or registered in Alberta or that is objectionable for any reason, the Registrar, after the Registrar has given notice to the company of the Registrar’s intention to do so, may by order change the name of the company.

(8) In this

section “business or association” means an individual carrying on business, an association or a partnership.

(7) Section 12 presently reads in part: 12(1) A person who feels aggrieved by reason of (

a) the refusal of the Registrar to incorporate a company or to register an extra-provincial company pursuant to

section 11(1), (3) or (4), (

b) the refusal of the Registra r to make an order under

section 11(5) to change the name of a company, (

c) a notice given by the Regist rar under

section 11(5) of the Registrar’s intention to make an order to change the name of a company, (

d) the refusal by the Registrar to give the Registrar’s approval under

section 32(1) to a change of the name of a company, or (

e) the approval by the Registrar under

section 192(2) to the use by an extra-provincial company of a name or title other than the name or title under which it is registered, or the refusal of the Registrar to give an approval under

section 192(2), may appeal the Registrar’s refusal, notice or approval to the Court by way of originating notice and on at least 7 days’ notice to the Registrar and to any other persons that the Court directs.

(3) Within 10 days after the entry of an order under subsection (2), the company or extra-provincial company concerned shall file with the Registrar a copy of the order certified by the clerk of the Court.

(8) Section 15 is amended (

a) in subsection (1) by adding “or” at the end of clause (a), striking out “or” at the end of clause (

b) and repealing clause (c); (

b) by repealing subsections (2) and (3); (

c) by repealing subsections (6) and (7) and substituting the following:

(6) The memorandum must (

a) contain the name and address of each subscriber, (

b) contain the number and cl ass of shares taken by each subscriber, (

c) contain the name and relationship to the company of a representative of the company authorized to sign the memorandum on behalf of the company, and (

d) be signed by the representative of the company referred to in clause (c).

(7) In the case of a company having a share capital, no subscriber of the memorandum may take less than one share.

(9) Section 16 is amended (

a) in subsection (1) by striking out “, in the prescribed form,”; (

b) by repealing subsection (5).

13 Explanatory Notes

(8) Section 15 presently reads in part: 15(1) Any 3 or more persons (or in the case of a private company, any 2 or more persons) associated for any lawful purpose permitted by this Act may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with limited liability, that is to say, (

a) a company limited by shares, (

b) a company limited by guarantee, or (

c) a specially limited company.

(2) Notwithstanding subsection (1), if a company is being formed for the purposes of a club, the Registrar may require evidence to the Registrar’s satisfaction that the club has been carried on for at least one year immediately preceding the application for incorporation and has been conducted in a proper manner.

(3) Notwithstanding subsections (1) and (2), in any event if a company is being formed for the purposes of a social club, the Registrar may, in the Registrar’s discretion, refuse incorporation.

(6) The memorandum shall be signed by each subscriber in the presence of at least one witness, who must attest the signature.

(7) In the case of a company having a share capital, (

a) no subscriber of the me morandum may take less than one share, and (

b) each subscriber must write opposite to the subscriber’s name the number and class of shares the subscriber takes.

(9) Section 16 presently reads in part: 16(1) In the case of a company limited by shares, the memorandum shall, in the prescribed form, state (

a) the name of the company, with “Limited” or “Ltd.” as the last word thereof, (

b) the objects of the company, (

c) that the liability of the members is limited, and

14 (10)

Section 17(1) is amended by striking out “, in the prescribed form,”.

(11) Section 19 is repealed.

14 Explanatory Notes (

d) particulars of the share capital with which the company proposes to be incorporated, which may be (

i) divided into shares of a fixed amount, (ii) divided into shares wit hout nominal or par value, or (iii) divided into shares comprised partly of one of the foregoing classes and partly of the other.

(5) Notwithstanding subsection (1)(c), the memorandum of a company the objects of which include the objects contained in the

schedule to the Chartered Accountants Act or Legal Profession Act shall state that the liability of the members is limited except in the circumstances described in

section 55(1) of the Chartered Accountants Act,

section 116(1) of the Legal Profession Act or

section 67(1) of the Medical Profession Act.

(10) Section 17(1) presently reads: 17(1) In the case of a company limited by guarantee the memorandum shall, in the prescribed form, state (

a) the name of the company, with “Limited” or “Ltd.” as the last word in its name, (

b) the objects of the company, (

c) that the liability of the members is limited, and (

d) that each member undertakes to contribute to the assets of the company in the event of its being wound up while he or she is a member, or within one year afterwards, for payment of the debts and liabilities of the company contracted before he or she ceases to be a member, and of the costs, charges and expenses of winding-up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.

(11) Section 19 presently reads: 19 In the case of a specially limited company the memorandum shall, in the prescribed form, state (

a) the name of the company, with “Limited (Non-personal Liability)” as the last words in its name,

(12) Section 20 is amended (

a) in subsection (1) (

i) by striking out “other than a specially limited company”; (ii) by repealing clause (l); (

b) by repealing subsections (2) and (3).

15 Explanatory Notes (

b) that the objects of the com pany are restricted to prospecting for, locating, acquiring, managing, developing, working, and selling mines, mineral claims, and mining properties, and the winning, getting, treating, refining, and marketing of minerals therefrom, and to the exercise of the powers mentioned in

section 20(3), (

c) that the liability of the me mbers is limited and no personal liability will attach to any member, and (

d) the amount of s hare capital with which the company proposes to be registered and the division thereof into shares of fixed amount.

(12) Section 20 presently reads in part: 20(1) For the purpose of carrying out its objects, a company other than a specially limited company has the following powers, except those of them expressly excluded by the memorandum: (

l) the power to sell or di spose of the undertaking of the company or any part thereof for a consideration the company thinks fit, and in particular for shares, debentures, or securities of any other company wheresoever incorporated, having objects altogether or in part similar to those of the company, and the power to distribute any of the property of the company among the members in specie; (2) Subsection (1) only applies to an existing company if the company passes a resolution to that effect.

(3) For the purposes of carrying out its objects, a specially limited company has the following powers, except those of them expressly excluded by the memorandum, and except as in this Act expressed, a specially limited company has no greater powers: (

a) the power to acquire by pur chase, lease, hire, discovery, location or otherwise and to hold mines, mineral claims, mineral leases, mining lands, prospects, licences and mining rights of every description, including petroleum claims and land and natural gas claims and land, and the power to work, develop, operate, turn to account, sell, or otherwise dispose of them or any of them or any interest therein; (

b) the power to dig, drill or bor e for, raise, crush, wash, smelt, reduce, refine, amalgamate, assay, analyze and otherwise

16 Explanatory Notes treat gold, silver, copper, lead , iron, coal, petroleum, natural gas and any other ore deposit, metal or mineral whatsoever, whether belonging to the company or not, and the power to render it merchantable, and to buy, sell, and deal in it or any product thereof; (

c) the power to engage in any branch of mining, smelting, milling, and refining minerals; (

d) the power to acquire by pur chase, lease, hire, exchange or otherwise, timber land, leases or claims, rights to cut timber, surface rights and rights of way, water rights and privileges, patents, patent rights and concessions, and other real or personal property; (

e) the power to acquire by pur chase, lease, hire, exchange or otherwise, and to construct, operate, maintain or alter, trails, roads, ways, tramways, reservoirs, dams, flumes, race and other ways, watercourses, canals, aqueducts, pipelines, wells, tanks, bridges, wharves, piers, mills, pumping plants, factories, foundries, furnaces, coke-ovens, crushing works, smelting works, concentrating works, refining works, hydraulic, electrical, and other works and appliances, power devices and plants of every kind, laboratories, warehouses, boarding-houses, dwellings, buildings, machinery, plants, and other works and conveniences, and the power to buy, sell, manufacture, and deal in all kinds of goods, stores, provisions, implements, chattels and effects required by the company or its workers or servants; (

f) the power to build, purchase, lease, hire, charter, navigate, use and operate cars, wagons and other vehicles, boats, ships and other vessels for the purposes of the company; (

g) the power to sell, or otherwis e dispose of, ore, metal, oil, gas, or mineral product, and the power to take contracts for mining work of all kinds, and to accept as the consideration shares, stock, debentures, or other securities of any limited company, wheresoever incorporated and carrying on any business, directly or indirectly, conducive to the objects of a specially limited company if those shares (except the shares of a company having non-personal liability), stock, debentures or other securities are fully paid up, and the power to sell or otherwise dispose thereof;

17 Explanatory Notes (

h) the power to enter into any arrangement for sharing profits, for union of interests or for co-operation with any person or company, wheresoever incorporated, carrying on or about to carry on any business, transaction or undertaking that a specially limited company is authorized to carry on; (

i) the power to acquire and undertake the whole or any part of the business, property and liabilities of any person or company, wheresoever incorporated, carrying on any business permitted to, or possessed of property suitable for, the purposes of a specially limited company; (

j) the power to draw, make, ac cept, endorse, discount, execute and issue promissory notes, bills of exchange, bills of lading, warrants and other negotiable or transferable instruments; (

k) the power to borrow, raise or secure the payment of money in any manner it thinks fit, and in particular by the issue of debentures charged on all or any part of the property, including uncalled capital, so, however, that the total amount borrowed, raised, or secured and outstanding will not, without the sanction of a general meeting of the company, exceed 25% of the capital for the time being paid up, but nothing in this clause limits or affects any power of borrowing vested in the directors under the memorandum or articles; (

l) the power to distribute in specie among the members any of the property of the company; (

m) the power to sell, improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account or otherwise deal with the undertaking or the whole or any part of the property and rights of the company, and the power to accept as consideration therefor shares, stock, debentures or other securities of any limited company, wheresoever incorporated and carrying on any business, directly or indirectly, conducive to the objects of a specially limited company if those shares (except the shares of a company having non-personal liability), stock, debentures or other securities are fully paid up; (

n) the power to procure th e registration, licensing or recognition of the company in any part of Canada or in any other country, and the power to accept rights and powers to carry on its business therein;

18 Explanatory Notes (

o) the power to do all or any of the above things as principals, agents, contractors or otherwise, and by or through trustees, agents, or otherwise, and either alone or in conjunction with others.

(13) Section 21 is repealed and the following is substituted: Articles of association 21(1) The articles of association of a company shall be registered with the memorandum.

(2) The articles must (

a) contain the name of each subscriber to the memorandum, (

b) contain the name and relationship to the company of a representative of the company authorized to sign the articles on the company’s behalf, and (

c) be signed by the representative of the company referred to in clause (b).

(14) Sections 23 and 24 are repealed.

19 Explanatory Notes

(13) Section 21 presently reads: 21(1) Articles of association prescribing regulations for the company, (

a) in the case of a company having a share capital and limited by guarantee, shall be registered with the memorandum, and (

b) in the case of any other co mpany having a share capital, may be registered with the memorandum, and the articles may adopt all or any of the regulations contained in Table A in the Schedule.

(2) The regulations contained in Table A in the

Schedule (

a) if articles are not registered, or (

b) if articles are registered, then in so far as they do not exclude or modify the regulations in Table A, are so far as applicable the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.

(3) When Table A in the

Schedule is adopted by a private company or becomes the regulations of a private company in whole or in part, (

a) Article 3 of Table A has no application in respect of the private company, and (

b) Article 17 of Table A, if adopted or if applied to a private company, shall be read as if the words “not being fully paid shares” did not occur therein.

(14) Sections 23 and 24 presently read: 23 The articles shall be printed or typewritten and divided into paragraphs which shall be numbered consecutively.

(15) Section 25 is amended (

a) in subsection (1) (

i) by striking out “, if any,”; (ii) by striking out “retain and”; (

b) by repealing subsection (2) and substituting the following:

(2) An application for incorporation must be accompanied by (

a) a notice of the appointment of the company’s agent for service in the form required by the Registrar, and (

b) the documents relating to corporate names that are prescribed by the regulations.

(16) Section 26 is amended (

a) by repealing subsection (1) and substituting the following: Certificate of incorporation 26(1) On the registration of the memorandum of a company, the Registrar shall issue a certificate showing that the company is incorporated. (

b) in subsection (2) by striking out “, if any,”.

20 Explanatory Notes 24 The articles, if any, shall be signed by each subscriber to the memorandum of association in the presence of at least one witness, who shall attest the signature.

(15) Section 25 presently reads: 25(1) The applicants for incorporation shall deliver the memorandum and the articles, if any, to the Registrar, and if all other requirements of this Act precedent to incorporation have been complied with, the Registrar shall retain and register them.

(2) An application for incorporation shall be accompanied by documents relating to corporate names that are prescribed by the regulations and by any information respecting the subscribers that may be required by regulations under the Agricultural and Recreational Land Ownership Act and

section 35 of the Citizenship Act (Canada) in the form and manner prescribed by those regulations.

(16) Section 26 presently reads: 26(1) On the registration of the memorandum of a company, the Registrar shall issue a certificate under the Registrar’s seal of office, showing that the company is incorporated, and (

a) in the case of a company lim ited by shares, that the company is limited, (

b) in the case of a specially limited company, that the company is specially limited, or (

c) in the case of a company limited by guarantee, that the company is limited by guarantee and shall, at the cost of the applicants for incorporation, publish a notice of the incorporation in The Alberta Gazette.

(2) If the memorandum and the articles, if any, of the company as registered by the Registrar under

section 25 do not in fact comply with all the requirements of this Act and the Registrar by

21 (17)

Section 29(1) is amended by striking out “, when registered,”.

(18) The following is added after

section 29: Division 4 Agent for Service Agent for service 29.1(1) A company shall appoint an agent for service who shall be a resident Albertan.

(2) The company shall ensure that the address of its agent for service is an office that is (

a) accessible to the public d uring normal business hours, and (

b) readily identifiable from t he address or other description given in a notice under subsection (3) or

section 25(2)(a).

(3) The company shall forthwith give to the Registrar a notice of any change in the name, address or other contact information of the agent for service in the form required by the Registrar.

(4) An agent for service for a company who intends to resign shall give not less than 60 days’ notice to the company at its registered office, and the company shall give to the Registrar a copy of the notice.

21 Explanatory Notes inadvertence issues a certificate under subsection (1), the company shall on the Registrar’s request file with the Registrar any documents the Registrar requires, and thereupon the Registrar may correct the register and issue a corrected certificate.

(17) Section 29(1) presently reads: 29(1) The memorandum and articles, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member, and contained covenants on the part of each member, the member’s heirs, executors, and administrators, and in the case of a corporation, its successors, to observe all the provisions of the memorandum and of the articles, subject to the provisions of this Act.

(18) Agent for service; alternative agent for service.

(5) If the agent for service of a company dies or the agent’s appointment is revoked, the company shall (

a) give to the Registrar a notice to that effect, and (

b) forthwith appoint a new agent for service and give to the Registrar a notice of the appointment of its new agent for service in the form required by the Registrar. Alternative agent for service 29.2(1) A company may appoint an alternative agent for service who shall be a resident Albertan.

(2) Forthwith after the appointment of an alternative agent for service, the company shall give to the Registrar a notice of the appointment in the form required by the Registrar.

(3) The company shall forthwith give to the Registrar a notice of any change in the name, address or other contact information of the alternative agent for service in the form required by the Registrar.

(4) An alternative agent for service for a company who intends to resign shall give not less than 60 days’ notice to the company at its registered office, and the company shall give to the Registrar a copy of the notice.

(5) If the alternative agent for service of a company dies or the alternative agent’s appointment is revoked, the company shall give to the Registrar a notice to that effect.

(19) Section 32(2) is amended by adding “issue a certificate showing the change of name” after “the Registrar shall” and repealing clauses (a), (

b) and (c).

22 Explanatory Notes (19)

Section 32(2) presently reads:

(2) When the special resolution has been filed with the Registrar and all lawful requirements of the Registrar in respect of returns or reports due from the company under this Act have been complied with, the Registrar shall (

a) enter the new name on the register in place of the former name, (

b) issue under the Registrar’s seal of office a certificate showing the change of name, and

23 (20)

Section 33(3) is amended by striking out “under the Registrar’s seal of office”.

(21) Section 34 is amended (

a) in subsection (1) by striking out “confirmed by an order of the Court”; (

b) by repealing subsection (2) and substituting the following:

(2) Notwithstanding subsection (1), a company may by ordinary resolution alter its memorandum so as to include or exclude any or all of the powers authorized by

section 20(1) but no such resolution takes effect until the Registrar issues a certificate showing the alteration effected by the resolution. (

c) by repealing subsections (3), (4), (5) and (6); (

d) in subsection (7) by striking out “, under the Registrar’s seal of office, certify the registration of the order and the memorandum as altered” and substituting “register the order and the memorandum as altered and issue a certificate”; (

e) by repealing subsection (8).

23 Explanatory Notes (

c) cause a notice setting out the new name and the former name of the company to be published in The Alberta Gazette or the Registrar’s periodical at the expense of the company.

(20) Section 33(3) presently reads:

(3) A resolution under this

section does not take effect until a copy has been filed with the Registrar and when the resolution has been so filed the Registrar shall issue under the Registrar’s seal of office a certificate showing the alteration effected by the resolution.

(21) Section 34 presently reads in part: 34(1) Subject to this section, a company may, by special resolution confirmed by an order of the Court, alter the provisions of its memorandum with respect to the objects of the company, so far as may be required to enable it (

a) to carry on its busine ss more economically or more efficiently, (

b) to attain its main purpos e by new or improved means, (

c) to carry on some business that, under existing circumstances, may conveniently or advantageously be combined with the business of the company, or (

d) to restrict or abandon any of the objects specified in the memorandum.

(2) Notwithstanding subsection (1), a company may by ordinary resolution alter its memorandum of association so as to include or exclude any or all of the powers authorized by

section 20(1), but no such resolution takes effect until a copy has been filed with the Registrar, who shall thereupon issue under the Registrar’s seal of office a certificate showing the alteration effected by the resolution, and shall at the cost of the company publish in The Alberta Gazette or the Registrar’s periodical a statement of the alteration.

(3) Before confirming the resolution the Court must be satisfied (

a) that sufficient notice has been given to every holder of debentures of the company, and to any persons whose interest will, in the opinion of the Court, be affected by the alteration, and

24 (22)

Section 36(4) is amended by striking out “under the Registrar’s seal of office”.

24 Explanatory Notes (

b) with respect to every creditor who, in the opinion of the Court, is entitled to object and who signifies an objection in the manner directed by the Court, that either the creditor’s consent to the alteration has been obtained or the creditor’s debt or claim has been discharged or has determined, or has been secured to the satisfaction of the Court, but the Court may, in the case of any person or class, for special reasons, dispense with the notice required by this section.

(4) The Court may make an order confirming the resolution either wholly or in part, and on any terms and conditions it thinks fit.

(5) The Court shall, in exercising its discretion under this section, have regard to the rights and interests of the members of the company or of any class of them, as well as to the rights and interests of the creditors, and may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Court for the purchase of the interests of dissentient members, and the Court may give any directions and make any orders it thinks expedient for facilitating or carrying into effect the arrangement, but no part of the capital of the company may be expended in any such purchase.

(6) When an order is made under this

section the company shall, within 15 days from the date of the order or within a further time that the Court may allow, file with the Registrar an office copy thereof, together with a copy of the memorandum as altered, and the resolution as confirmed by the order does not take effect until the copies are filed.

(7) The Registrar shall, under the Registrar’s seal of office, certify the registration of the order and the memorandum as altered, and the Registrar’s certificate is conclusive proof that all the requirements of this Act with respect to the alteration and the confirmation of the resolution have been complied with, and thenceforward the memorandum so altered is the memorandum of the company.

(8) The Registrar shall cause a statement of the alteration in the objects of the company to be published in The Alberta Gazette or the Registrar’s periodical at the cost of the company.

(22) Section 36(4) presently reads:

(4) A resolution under this

section does not take effect until a copy has been filed with the Registrar, and the proper fees paid to him,

(23) Section 37 is amended (

a) in subsection (2) by striking out “and the annual list of members to be filed with the Registrar”; (

b) in subsection (3) by striking out “under the Registrar’s seal of office”.

(24) Section 38 is amended (

a) in subsection (1) (

i) by striking out “by special resolution confirmed by an order of the Court,”; (ii) in clause (

a) by striking out “may modify the provisions” and substituting “may, by special resolution, modify the provisions”; (iii) in clause (

b) by striking out “may alter its memorandum” and substituting “may, by special resolution, alter its memorandum”; (

b) by repealing subsection (2); (

c) by repealing subsection (3) and substituting the following:

(3) The Registrar shall issue a certificate showing the alteration effected by the resolution.

25 Explanatory Notes and when the resolution has been so filed and the fees paid, the Registrar shall issue under the Registrar’s seal of office a certificate showing the alteration effected by the resolution.

(23) Section 37 presently reads in part:

(2) When a company having a share capital has converted any of its shares into stock, all the provisions of this Act that are applicable to shares only cease to apply as to so much of the share capital as it converted into stock, and the register of members of the company and the annual list of members to be filed with the Registrar shall be altered accordingly.

(3) A resolution under this

section does not take effect until a copy has been filed with the Registrar, and when the resolution has been so filed the Registrar shall issue under the Registrar’s seal of office a certificate showing the alteration effected by the resolution.

(24) Section 38 presently reads: 38(1) A company having a share capital by special resolution confirmed by an order of the Court, (

a) may modify the provisions contained in its memorandum so as to reorganize its share capital in any way, and without prejudice to the generality of the foregoing power may modify or alter its memorandum so as to (

i) consolidate shares of different classes, (ii) divide its shares into shares of different classes, (iii) vary the rights attached to any class of shares, (iv) subject to

section 81, c onvert shares of a fixed amount into shares without nominal or par value, or (

v) convert shares without nominal or par value into shares of a fixed amount, but no preference or special privilege attached to or belonging to any class of shares shall be interfered with except by a resolution passed by a majority in number of shareholders of that class and holding 75% of the share capital of that class, and every resolution so passed binds all shareholders of the class, and

(25) Section 40 is amended (

a) in subsection (2) by striking out “an office copy thereof” and substituting “a copy of the order”; (

b) in subsection (3) by striking out “The Registrar shall certify under the Registrar’s seal of office the registration of the order and minute” and substituting “When the order and minute have been registered, the Registrar shall issue a certificate”.

26 Explanatory Notes (

b) may alter its memorandum so as to reduce its share capital in any way, and without prejudice to the generality of the foregoing power may modify or alter its memorandum so as to (

i) extinguish or reduce the liab ility on any of its shares in respect of share capital not paid up, (ii) either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital that is lost or unrepresented by available assets, or (iii) either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital that is in excess of the wants of the company.

(2) When an order is made under this section, an office copy thereof shall be filed with the Registrar within 15 days from the date of the order or a further time that the Court may allow, and the resolution as confirmed by the order does not take effect until the copy has been so filed.

(3) The Registrar shall issue under his or her seal of office a certificate showing the alteration effected by the resolution as so confirmed.

(25) Section 40 presently reads in part:

(2) When an order is made under this section, the company shall file with the Registrar, within 15 days from the date of the order or within a further time that the Court may allow, an office copy thereof and of a minute which shall be approved by the Court, showing with respect to the share capital of the company, as altered by the order, the amount of the share capital, the number of shares into which it is divided, the amount of each share and the amount, if any, at the date of the registration deemed to be paid up on each share, and the resolution as confirmed by the order does not take effect until the copies have been so filed.

(3) The Registrar shall certify under the Registrar’s seal of office the registration of the order and minute, and the Registrar’s certificate is conclusive proof that all the requirements of this Act with respect to reduction of share capital have been complied with, and that the share capital of the company is such as is stated in the minute.

27 (26) Sections 44(2) and 46 are repealed.

(27) Section 47(1) is repealed.

(28) Section 48 is amended (

a) in subsection (1) (

i) by adding “and” at the end of clause (a); (ii) in clause (

b) by striking out “in the prescribed form”; (iii) by repealing clauses (

c) and (d); (

b) by repealing subsection (3); (

c) in subsection (4) by striking out “to (d)”.

27 Explanatory Notes (26) Sections 44(2) and 46 presently read: 44(2)

Section 104(2) does not apply with respect to a purchase by a company of any share issued by it. 46 A private company that purchases shares issued by it shall notify the Registrar, within 30 days of the date of the purchase, of the date, the number and the class or kind of shares that it has purchased.

(27) Section 47(1) presently reads: 47(1) A public company which under this Division purchases shares issued by it shall be deemed to be an insider for the purposes of

Part 6, Division 3.

(28) Section 48 presently reads in part: 48(1) Unless all of the shareholders at the date of the purchase have unanimously agreed in writing to the proposed purchase, a company that proposes to purchase shares issued by it shall (

a) make its offer to purchase to every shareholder resident in Canada who holds shares of the class or kind to be purchased, (

b) deliver or mail, in the manner prescribed in the articles of the company for sending a notice of a meeting of the shareholders, a copy of the offering circular in the prescribed form to each shareholder of record at the time of the offer who is resident in Canada, stating the number and the class or kind of shares which the company proposes to purchase, (

c) in the case of a private company, file a copy of the offering circular with the Registrar within 15 days of the date that it is first delivered or mailed to the shareholders of the company, and (

d) in the case of a public com pany, file a copy of the offering circular with the Executive Director within 5 days of the date that it is first delivered or mailed to the shareholders resident in Canada.

(3) If, in response to the offer contained in the offering circular, the shareholders agree to sell a greater number of shares than the company offered to buy, the company shall make its purchase from

(29) Section 49 is repealed and the following is substituted: Exception 49 A public company whose shares are listed on a Canadian stock exchange or traded in the over-the-counter market in Canada is not required to comply with

section 48.

(30) Section 50 is repealed.

(31) Section 51 is amended by striking out “the Executive Director or”.

28 Explanatory Notes all of the shareholders who offered to sell as nearly as possible on a prorated basis, disregarding fractions.

(4) Notwithstanding subsection (1)(a), a company may make its offer to purchase shares issued by it to every shareholder who holds shares of the class or kind to be purchased, wherever resident, in which case subsection (1)(

b) to (

d) applies with all necessary modifications.

(29) Section 49 presently reads: 49 A public company whose shares are listed on a Canadian stock exchange, or traded in the over-the-counter market in Canada, is not required to comply with

section 48 if (

a) the shares it proposes to purchase are bought through the facilities of a stock exchange or in the over-the-counter market, (

b) there has been no solicita tion of the shareholders by the company, and (

c) its purchases do not exceed in any single month more than 1% of the class or kind of shares which were issued and outstanding on the first day of that month.

(30) Section 50 presently reads: 50 On an application by a company the Commission may, subject to any terms and conditions it may impose, exempt the company from the requirements of any provision of this Division if in the opinion of the Commission it would not be prejudicial to the public interest to do so.

(31) Section 51 presently reads: 51 If, in connection with an offer by a company to purchase shares issued by it, the company or its directors do not comply with this Act or the regulations, the Executive Director or any interested person may apply to the Court by way of originating notice and on the application the Court may make an order (

a) approving the contents of the offering circular with or without variation and requiring distribution of the corrected document to each shareholder entitled to receive it, (

b) restraining the distributi on of the offering circular,

(32) Sections 54 and 55(2) and (3) are repealed.

(33) The following heading preceding

section 56 is repealed: Company Limited by Shares to Specially Limited Company

(34) Section 56 is repealed.

(35) The heading preceding

section 57 and sections 57 and 58 are repealed.

29 Explanatory Notes (

c) requiring any person to comply with this Act or the regulations, or (

d) rescinding the offer.

(32) Sections 54 and 55(2) and (3) presently read: 54 An application to the Court under this Division shall be heard by a judge designated by the Chief Justice of the Court. 55(2) A copy of every special resolution and of every ordinary resolution to which this

section applies and passed by the company under the authority of or affecting the contents of the articles shall, so long as the resolution is in force, be embodied in or annexed to every copy of the articles issued after the passing of the resolution.

(3) Any company that defaults in embodying in or annexing to a copy of its articles a copy of a resolution required by this

section to be so embodied or annexed is guilty of an offence.

(33) The heading preceding

section 56 presently reads: Company Limited by Shares to Specially Limited Company

(34) Section 56 presently reads: 56 Subject to anything contained in the memorandum or articles, a company limited by shares and established for the principal object of mining may, for the purpose of converting itself into a specially limited company, alter the conditions of its memorandum by special resolution, so that its memorandum will comply with the requirements of this Act for a specially limited company.

(35) The heading preceding

section 57 and sections 57 and 58 presently read: Specially Limited Company to Company Limited by Shares 57 Subject to anything contained in the memorandum or articles, a specially limited company may, for the purpose of converting itself into a company limited by shares, alter its memorandum by special resolution, so that its memorandum will comply with the requirements of this Act for a company limited by shares. 58(1) When a company exercises the powers conferred by either

section 56 or 57,

30 (36)

Section 60(2) is repealed and the following is substituted:

(2) The resolution does not take effect until the Registrar issues a certificate that the company has been converted from a private company to a public company.

(37) Section 61(1)(

a) is repealed.

(38) Section 64 is amended by striking out “, and on its registration shall be entered as members in its register of members”.

30 Explanatory Notes (

a) the company shall by its special resolution make any alterations in its articles that may be necessary for the purposes of its conversion, (

b) the company shall file with the Registrar a copy of the special resolution, together with a copy of its memorandum as altered, and shall surrender to the Registrar its certificate of incorporation, which the Registrar shall cancel, and (

c) the Registrar shall issue under the Registrar’s seal of office a new certificate showing in what respects the constitution of the company is altered, and thereupon the conversion of the company takes effect according to the tenor of the resolution.

(2) Whenever any such exercise involves an alteration of the provisions of its memorandum with respect to the objects of the company, the company shall comply with

section 34. (36)

Section 60(2) presently reads:

(2) The resolution shall be filed with the Registrar but does not take effect until the Registrar issues under the Registrar’s seal of office a certificate that the company has been converted from a private company to a public company.

(37) Section 61(1) presently reads in part: 61(1) If the company fails to comply with the provisions that are included in its memorandum or articles and that constitute it a private company, it ceases to be entitled to the privileges and exemptions conferred on private companies under the sections of this Act relating (

a) to the making of an annual return in the form of a balance sheet (section 162), and thereupon those sections apply to the company as if it were not a private company.

(38) Section 64 presently reads: 64 The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members.

31 (39)

Section 65(1) is repealed and the following is substituted: Copy of memorandum and articles and resolutions 65(1) A company shall send to a member, at the member’s request, a copy of the memorandum and articles of the company and a copy of any special or ordinary resolution passed by the company.

(40) Section 66(1)(

a) is amended by striking out “, alphabetically arranged or alphabetically indexed,”.

(41) Sections 67 and 68(4) are repealed.

(42) Section 69 is amended (

a) in subsection (1) by striking out “free of charge, and to the inspection of any other person on payment of 25¢, or any

31 Explanatory Notes (39)

Section 65(1) presently reads: 65(1) Every company shall send to every member thereof, at the member’s request, a copy of the memorandum and of the articles, if any, (

a) on payment of $1 or any less sum that the company may prescribe, when the memorandum and articles are printed, or (

b) for a written or typewritten copy, on payment of 10¢ for every 100 words required to be copied, and on payment of 50¢ or any less sum that the company may prescribe, a copy of any special or ordinary resolution passed by the company.

(40) Section 66(1) presently reads in part: 66(1) Every company shall keep in one or more books a register of its members, and shall enter therein the following particulars: (

a) the full names, alphabetica lly arranged or alphabetically indexed, and addresses of the subscribers of the memorandum and of every other person who agrees to become a member of the company and of every person described in the register as representing a named mortgagor, another person or an estate;

(41) Sections 67 and 68(4) presently read: 67 On the application of the transferor of any share or interest in a company, the company shall enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee. 68(4) The Court, when making an order for rectification of the register, shall by its order direct that notice of the rectification be given to the Registrar.

(42) Section 69 presently reads in part: 69(1) The register of members, commencing from the date of the registration of the company, shall be kept at the registered office of the company, and, except when closed under the provisions of this Act, shall during business hours (subject to any reasonable

32 less sum that the company may prescribe, for each inspection” and substituting “or any other person free of charge”; (

b) in subsection (2) by striking out “, on payment of 25¢, or any less sum that the company may prescribe, for every 100 words or fractional part thereof required to be copied”.

(43) Section 73(2) to (6) are repealed.

32 Explanatory Notes restrictions that the company in general meeting may impose, so that not less than 2 hours in each day is allowed for inspection) be opened to the inspection of any member free of charge, and to the inspection of any other person on payment of 25¢, or any less sum that the company may prescribe, for each inspection.

(2) A member or other person may require a copy of the register, or of any part thereof, or of the annual list of members and

summary, or of any part thereof, on payment of 25¢, or any less sum that the company may prescribe, for every 100 words or fractional part thereof required to be copied.

(43) Section 73(2) to (6) presently read:

(2) The company shall give to the Registrar notice of each location of an office where the register is kept, and of any change in its situation, and of the discontinuance of the office in the event of its being discontinued.

(3) The register shall be deemed to be part of the company’s register of members (hereinafter referred to as “the principal register”), and shall be kept in the same manner in which the principal register is by this Act required to be kept, except that the advertisement before closing the register shall be inserted in some newspaper circulating in the district wherein the register is kept.

(4) A copy of every entry in the register shall, as soon as possible after the entry is made, be transmitted to the registered office of the company, and the company shall from time to time cause it to be entered up in the principal register or a duplicate of the register, and a duplicate shall for all the purposes of this Act be deemed to be part of the principal register.

(5) The company may discontinue to keep any such register, and thereupon all entries in that register shall be transferred to some other register kept by the company in the same province, state, or country, or to the principal register.

(6) Subject to this Act, any company may by its articles make any provisions it thinks fit respecting the keeping of a register outside Alberta.

33 (44)

Section 75(2) is amended by striking out “complete and”.

(45) Section 81(5) is amended by striking out “(including an extra-provincial company)”.

(46) Section 82(2) is amended by striking out “confirmed by an order of the Court”. (47) Sections 83(10) and (13), 84 and 85 are repealed.

33 Explanatory Notes (44)

Section 75(2) presently reads:

(2) Unless the conditions of the issue of the shares otherwise provide, every company shall, within 2 months after the allotment of any of its shares and within 2 months after the date of lodgment of a transfer of any of its shares, complete and have ready for delivery the certificates of all shares allotted or transferred.

(45) Section 81(5) presently reads:

(5) For the purpose of the computation of the prescribed fees, the memorandum or articles may state the maximum price or consideration for which shares without nominal or par value may be issued, and the authorized capital of every company (including an extra-provincial company) having shares without nominal or par value, shall, for the purpose of this and all other Acts, be the capital as ascertained under the regulations.

(46) Section 82(2) presently reads:

(2) If at any time the share capital is divided into different classes of shares, the rights attached to any class, unless otherwise provided by the terms of issue of the shares of that class, may be varied by a special resolution confirmed by an order of the Court, with the consent in writing of the holders of 75% of the issued shares of that class, or with the sanction of a resolution passed with the majority required for the passing of a special resolution at a separate general meeting of the holders of the shares of the class. (47) Sections 83(10) and (13), 84 and 85 presently read: 83(10) Subsection (9) does not apply to the acceptance by a company of the surrender of mutual fund shares pursuant to

section 84.

(13) Nothing in this

section in any way interferes with the discretion of the Court to sanction any scheme for reduction of capital under

section 38, whether the scheme does or does not involve the cancellation, payment or redemption of preference shares. 84(1) In this

section “mutual fund shares” means shares having conditions attached thereto that include conditions requiring the company issuing the shares to accept, at the demand of the holder thereof and at prices determined and payable in accordance with the conditions, the surrender of the shares, or fractions or parts thereof, that are fully paid.

34 Explanatory Notes

(2) If the only undertaking of a company is the business of investing the funds of the company, its memorandum may provide for the issuing of mutual fund shares, in which case the memorandum shall set out the conditions governing (

a) the surrender of fully paid mutu al fund shares or any fraction or parts thereof that are fully paid, and (

b) the determination of the price to be paid therefor and the manner and time of payment thereof.

(3) Section 83(3) does not apply to the surrender or redemption of mutual fund shares.

(4) Any mutual fund shares or fractions or parts thereof surrendered to the company pursuant to the conditions attached to those shares shall be deemed to be no longer outstanding and shall not be reissued by the company.

(5) Notwithstanding

section 83(1) or anything to the contrary in the company’s memorandum or in the certificate for any mutual fund shares, all mutual fund shares shall be deemed to contain the condition that, on the surrender of any fully paid mutual fund shares, or any fractions or parts thereof that are fully paid, the price to be paid therefor may be paid out of the company’s assets, including its capital.

(6) If in any memorandum of association the expression “redemption” or “purchase for cancellation”, or an expression of like import, is used in relation to any shares of a company, the expression shall, in relation to mutual fund shares of the company, be deemed to be a reference to acceptance by the company of the surrender of those shares.

(7) A company incorporated before April 17, 1967 and whose only undertaking is the business of investing the funds of the company shall be deemed to have always had the power to issue mutual fund shares under subsection (2) and this

section applies also to that company and any mutual fund shares issued by it before that date. 85(1) Any company having a share capital, if so authorized by its articles, may, with respect to any fully paid-up shares, issue under its common seal a warrant (in this Act called “a share warrant”) stating that the bearer of the warrant is entitled to the shares therein specified, and may provide, by coupons or otherwise, for the

35 Explanatory Notes payment of the future dividends on the shares included in the warrant.

(2) A share warrant entitles the bearer thereof to the shares therein specified, and the shares may be transferred by delivery of the warrant.

(3) The bearer of a share warrant, subject to the articles of the company, is entitled on surrendering it for cancellation to have the bearer’s name entered as a member in the register of members, and the company is responsible for any loss incurred by any person by reason of the company entering in its register the name of a bearer of a share warrant in respect of the shares therein specified without the warrant being surrendered and cancelled.

(4) The bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, either to the full extent or for any purposes defined in the articles, except that the bearer is not qualified in respect of the shares specified in the warrant to be a director or manager of the company in cases where such a qualification is required by the articles.

(5) On the issue of a share warrant the company shall strike out of the register of members the name of the member then entered therein as holding the shares specified in the warrant as if the member had ceased to be a member, and shall enter in the register the following particulars: (

a) the fact of the issue of the warrant; (

b) a statement of the shar es included in the warrant; (

c) the date of the issue of the warrant.

(6) Until the warrant is surrendered, the particulars specified in subsection (5) shall be deemed to be the particulars required by this Act to be entered in the register of members, and, on the surrender, the date of the surrender shall be entered as if it were the date at which a person ceased to be a member.

36 (48)

Section 87(1)(

c) is repealed and the following is substituted: (

c) shall set out its name in l egible characters in or on all contracts, invoices, negotiable instruments and orders for goods and services issued or made by or on behalf of the company.

(49) Section 90 is amended (

a) by repealing subsection (1); (

b) by repealing subsection (2) and substituting the following:

(2) The meetings of a board of directors may be held at any place within or outside Alberta. (

c) by repealing subsections (3), (6) and (7).

(50) Section 93 is amended (

a) in subsection (1) (

i) by striking out “and managers” wherever it occurs; (ii) by striking out “or manager” wherever it occurs; (

b) in subsection (2) (

i) by striking out “, in the prescribed form,”; (ii) by striking out “or managers” wherever it occurs; (iii) by striking out “the change in the prescribed form” and substituting “the change”.

36 Explanatory Notes (48)

Section 87(1) presently reads in part: 87(1) Every company (

c) shall have its name set fort h in legible characters in all notices, advertisements, and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of the company, and in all bills of parcels, invoices, receipts, and letters of credit of the company.

(49) Section 90 presently reads in part: 90(1) At least 50% of the members of the board of every company shall be resident Albertans.

(2) The meetings of a board of directors may be held at any place within or outside Alberta, but in any year a majority of the meetings of a board of directors shall be held at a place within Canada.

(3) No business of a company shall be transacted at a meeting of a board of directors unless at least 50% of the members of the board of directors present at that meeting are resident Albertans.

(6) This

section does not apply to an extra-provincial company or a non-resident company.

(7) The Lieutenant Governor in Council may exempt a company from the application of subsection (1), (2) or (3).

(50) Section 93 presently reads in part: 93(1) Every company shall keep at its registered office a register of its directors and managers, and enter therein the following particulars: (

a) the full names and addresses of the directors and managers; (

b) the date on which each director or manager was appointed; (

c) the date on which each di rector or manager ceased to hold office as director or manager.

(2) Every company shall file with the Registrar a notice, in the prescribed form, of its first directors or managers within 15 days

(51) Section 94 is amended (

a) in subsection (1) by striking out “free of charge and to the inspection of any other person on payment of 25¢, or any less sum that the company may prescribe, for each inspection” and substituting “or any other person free of charge”; (

b) in subsection (2) by striking out “, on payment of 25¢ or any less sum that the company may prescribe, for every 100 words or fractional part thereof required to be copied”.

(52) Divisions 3 and 4 of

Part 6 are repealed.

37 Explanatory Notes after their appointment, and within 15 days after any change among the directors or managers is made shall also file with the Registrar a notice of the change in the prescribed form.

(51) Section 94 presently reads in part: 94(1) The register of directors and managers, commencing from the date of the registration of the company, shall during business hours (subject to any reasonable restrictions as the company in general meeting may impose, so that not less than 2 hours in each day is allowed for inspection) be open to the inspection of any member free of charge and to the inspection of any other person on payment of 25¢, or any less sum that the company may prescribe, for each inspection.

(2) Any member or other person may require a copy of the register, or of any part thereof, on payment of 25¢ or any less sum that the company may prescribe, for every 100 words or fractional part thereof required to be copied.

(52) Divisions 3 and 4 of

Part 6 presently read: Division 3 Insider Trading 95(1) In this Division, (a) “affiliate” means an affiliated company within the meaning of

section 2(3); (b) “associate”, when used to indicate a relationship with any person, means (

i) any company of which t hat person beneficially owns, directly or indirectly, equity shares carrying more than 10% of the voting rights attached to all equity shares of the company for the time being outstanding, (ii) any trust or estate in wh ich that person has a substantial beneficial interest or as to which that person serves as trustee or in a similar capacity, or (iii) any relative or spouse or adult interdependent partner of that person or any relative of that spouse or adult interdependent partner who, in any such case, has the same home as that person;

38 Explanatory Notes (c) “capital security” means any share of any class of shares of a company or any bond, debenture, note or other obligation of a company, whether secured or unsecured; (d) “equity share” means any shar e of any class of shares of a company carrying voting rights under all circumstances and any share of any class of shares carrying voting rights by reason of the occurrence of any contingency that has occurred and is continuing; (e) “insider” or “insider of a company” means (

i) any director or senior offic er of a public company that has 15 or more shareholders, 2 or more persons who are the joint registered owners of one or more shares being counted as one shareholder, (ii) any person who beneficially owns, directly or indirectly, equity shares of such a company carrying more than 10% of the voting rights attached to all equity shares of the company for the time being outstanding, but in computing the percentage of voting rights attached to equity shares owned by an underwriter there shall be excluded any equity shares that have been acquired by the person as underwriter in the course of distribution to the public of those shares, but the exclusion ceases to have effect on completion or cessation of the distribution to the public by the person, or (iii) any person who exercises control or direction over the equity shares of such a company carrying more than 10% of the voting rights attached to all equity shares of the company for the time being outstanding; (f) “senior officer” means (

i) the chairman or any vi ce-chairman of the board of directors, the president, any vice-president, the secretary, the treasurer or the general manager of a company or any other individual who performs functions for the company similar to those normally performed by an individual occupying any such office, and (ii) each of the 5 highes t paid employees of a company, including any individual referred to in clause (i);

39 Explanatory Notes (g) “underwriter” has the same me aning as in the Securities Act.

(2) For the purposes of this Division, (

a) every director or senior officer of a corporation that is itself an insider of a company shall be deemed to be an insider of that company, (

b) an individual shall be deemed to own beneficially capital securities beneficially owned by a company controlled by the individual or by an affiliate of that company, (

c) a company shall be deemed to own beneficially capital securities beneficially owned by its affiliates, and (

d) the acquisition or disposition by an insider of a put, call or other transferable option with respect to a capital security shall be deemed a change in the beneficial ownership of the capital security to which that transferable option relates.

(3) For the purpose of reporting under

section 96 or 97, ownership shall be deemed to pass at the time that an offer to sell is accepted by the purchaser or the purchaser’s agent or an offer to buy is accepted by the vendor or the vendor’s agent. 96(1) A person who becomes an insider of a company shall, within 10 days after the end of the month in which the person becomes an insider, file with the Executive Director a report as of the day on which the person became an insider, of his or her direct or indirect beneficial ownership of or control or direction over capital securities of the company.

(2) If a person who is an insider of a company, but has no direct or indirect beneficial ownership of or control or direction over capital securities of the company, acquires direct or indirect beneficial ownership of or control or direction over any such securities, the person shall, within 10 days after the end of the month in which the person acquired that direct or indirect beneficial ownership or that control or direction, file with the Executive Director a report, as of the date of the acquisition, of his or her direct or indirect beneficial ownership of or control or direction over capital securities of the company.

(3) A person who has filed or was or is required to file a report under this

section and whose direct or indirect beneficial ownership of or control or direction over capital securities of the company

40 Explanatory Notes changes from that shown or required to be shown in that report or in the last report filed by the person under this

section shall, within 10 days following the end of the month in which the change takes place, if the person was an insider of the company at any time during that month, file with the Executive Director a report of the person’s direct or indirect beneficial ownership of or the person’s control or direction over capital securities of the company at the end of that month and the change or changes therein that occurred during the month giving the details of each transaction required by the regulations. 97(1) In this

section “offeror” means a person, other than an agent, who makes a take-over bid as defined in

Part 13 of the Securities Act, and includes 2 or more persons (

a) whose take-over bids are m ade jointly or in concert, or (

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

(2) If an offeror becomes an insider under this Division and through purchases effected through the facilities of a stock exchange or in the over-the-counter market becomes the beneficial owner, directly or indirectly, of equity shares of a company carrying 20% or more of the voting rights attached to all equity shares of the company for the time being outstanding, the offeror within 3 days of acquiring that 20% ownership, shall file with the Executive Director a report as of the day on which the offeror attained that ownership.

(3) An offeror required to file a report under subsection (2) shall, within 3 days of purchasing further equity shares carrying an additional 5% of the voting rights through the facilities of a stock exchange or in the over-the-counter market, file with the Executive Director a report as of the day on which the offeror attained the additional 5% of the voting rights and thereafter each time the offeror acquires a further 5%.

(4) If the facts required to be reported by this

section are identical to those required under

section 96, a separate report under

section 96 is not required. 98 All reports filed with the Executive Director under

section 96 shall be available for public inspection at the offices of the Commission during normal business hours of the Commission, and any person may make extracts from the reports.

41 Explanatory Notes 99(1) Every person who is required to file a report under

section 96 or 97 and who fails to do so is guilty of an offence and is liable to a fine of not more than $1000, and, if that person is a company, every director or officer of that company who authorized, permitted or acquiesced in the failure is also guilty of an offence and is liable to a like fine.

(2) Every person who files a report under

section 96 or 97 that is false or misleading by reason of the misstatement or omission of a material fact is guilty of an offence and is liable to a fine of not more than $1000, and, if that person is a company, every director or officer of that company who authorized, permitted or acquiesced in the filing of the false or misleading report is also guilty of an offence and is liable to a like fine.

(3) No person is guilty of an offence under subsection (2) if the person did not know and with the exercise of reasonable diligence could not have known that the report was false or misleading by reason of the misstatement or omission of a material fact.

(4) No prosecution shall be brought under subsection (1) or (2) without the consent of the Executive Director.

(5) If it appears to the Executive Director that any person has failed to comply with

section 96 or 97, the Executive Director may in his or her discretion apply to a judge of the Court designated by the Chief Justice of the Court for an order requiring that person to comply therewith.

(6) An appeal lies to the Court of Appeal from an order made under subsection (5). 100(1) Every insider of a company or associate or affiliate of that insider, who, in connection with a transaction relating to the capital securities of the company, makes use of any specific confidential information for the insider’s own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of those securities, (

a) is liable to compensate any person for any direct loss suffered by that person as a result of the transaction, unless the information was known or ought reasonably to have been known to that person at the time of the transaction, and

42 Explanatory Notes (

b) is also accountable to the company for any direct benefit or advantage received or receivable by that insider, associate or affiliate, as the case may be, as a result of the transaction.

(2) An action to enforce any right created by subsection (1) may be commenced only within 2 years after the date of completion of the transaction that gave rise to the cause of action. 101(1) On application by any person who was at the time of a transaction referred to in

section 100(1) or is at the time of the application an owner of capital securities of the company, a judge of the Court designated by the Chief Justice of the Court may, if satisfied that (

a) that person has reasonable grounds for believing that the company has a cause of action under

section 100, and (

b) either (

i) the company has refused or failed to commence an action under

section 100 within 60 days after receipt of a written request from that person to do so, or (ii) the company has failed to prosecute diligently an action commenced by it under

section 100, make an order, on any terms as to security for costs and otherwise that to the judge seem fit, requiring the Executive Director to commence or continue an action in the name of and on behalf of the company to enforce the liability created by

section 100.

(2) The company and the Executive Director shall be given notice of any application under subsection (1) and has the right to appear and be heard thereon.

(3) Every order made under subsection (1) shall provide that the company shall co-operate fully with the Executive Director in the institution and prosecution of the action and shall make available to the Executive Director all books, records, documents and other material or information known to the company or reasonably ascertainable by the company relevant to the action.

(4) An appeal lies to the Court of Appeal from an order made under subsection (1). 102 The Lieutenant Governor in Council may make regulations

43 Explanatory Notes (

a) prescribing the form and conten t of the reports required to be filed under

section 96 or 97; (

b) respecting any other matter necessary or advisable to carry out effectively the intent and purpose of this Division. 103(1) On the application of any interested person, the Commission may, if satisfied in the circumstances of the particular case that there is adequate justification for so doing, make an order on any terms and conditions that seem to the Commission just and expedient exempting, in whole or in part, a person from the requirements of

section 96 or 97.

(2) Section 96 or 97 does not apply to a public company to which

Part 9 applies.

(3) Sections 96, 97 and 100 do not apply to an insider, an offeror, or an insider or his or her associate or affiliate, respectively, where the company concerned is a reporting issuer as defined in the Securities Act. Division 4 Dividends 104(1) No dividend shall be declared (

a) when the company is insolvent, (

b) if the dividend renders the company insolvent, or (

c) if the dividend will impair the capital of the company.

(2) In determining the solvency of the company for the purposes of this

section no account shall be taken of any increase in the surplus or reserves of the company resulting merely from the writing-up of the value of the assets of the company, unless the writing-up was done more than 5 years before the date of the declaration of the dividend.

(3) If the directors of the company (

a) declare and pay a dividend when the company is insolvent, (

b) declare and pay a dividend that renders the company insolvent, or

44 Explanatory Notes (

c) declare and pay a dividend that impairs the capital of the company, they are jointly and severally liable to the company and to its creditors for the debts of the company then existing or thereafter contracted until repayment of the dividends so declared and paid, to the extent that the dividends and interest have not been repaid to the company.

(4) If any director present, when the dividend is declared, forthwith requests the entry on the minutes of the board of the director’s protest against it, or if any director then absent, within one week after the director becomes aware of its declaration and is able to do so, delivers to the president, secretary or other officer of the company a protest against it and within 8 days thereafter delivers or mails by registered letter a duplicate copy of the protest to the Registrar, the director may thereby and not otherwise exonerate himself or herself from that liability. 105 For the amount of any dividend that the directors may lawfully declare payable in money, the directors, if authorized to do so by the company’s articles or by a special resolution, may (

a) issue therefor shares of the company as fully paid, or (

b) credit the amount of that dividend on the shares of the company already issued but not fully paid and the liability of the holders of those shares thereon shall be reduced by the amount of the dividend. 106(1) Notwithstanding

section 104, (

a) a company of which at least 75% in value of the assets are of a wasting character, or (

b) a mining company that for the time being carries on as its principal business the business of operating producing mining properties owned or controlled by it, may declare and pay dividends out of its funds that are derived from the operations of the company notwithstanding that the paid-up capital of the company may be thereby reduced or impaired, if the payment does not reduce the value of its remaining assets so that they will be insufficient to meet all the liabilities of the company then existing exclusive of its paid-up capital.

(53) Sections 108, 109 and 110 are repealed.

45 Explanatory Notes

(2) If a dividend is declared in excess of the amount permitted by subsection (1), the directors are liable for the amount in excess of the amount permitted in the same manner and to the same extent as set out in

section 104(3). 107 The directors may deduct from the dividends payable to any shareholder all sums of money due from the shareholder to the company on account of calls or otherwise.

(53) Sections 108, 109 and 110 presently read: 108(1) Every prospectus, other than a preliminary prospectus, issued by or on behalf of a company shall be filed with the Registrar (

a) within 15 days of the date on which the prospectus is accepted by the Executive Director pursuant to the Securities Act, or by the equivalent authority in another jurisdiction, or (

b) if the prospectus is not required to be filed with the Executive Director or with an equivalent authority in another jurisdiction, within 15 days of the date of issue of the prospectus.

(2) If the prospectus is required to be filed with the Executive Director pursuant to the Securities Act, or the equivalent authority in another jurisdiction, the copy of the prospectus filed with the Registrar shall be certified by an officer of the company to be an exact copy of the prospectus filed with the Executive Director or other authority.

(3) The prospectus shall be dated and that date shall, unless the contrary is proved, be taken as the date of issue of the prospectus.

(4) Every company and person who defaults in complying with or contravenes any requirement of this

section is guilty of an offence.

(5) This

section applies to a prospectus issued in relation to an intended company or by or on behalf of any person who is or has been engaged or interested in the formation or promotion of the company or in the organization of a company. 109(1) In this section, (a) “expert” includes engineer , valuer, accountant, and any other person whose profession gives authority to a statement made by him or her;

46 Explanatory Notes (b) “promoter” means a promoter who was a party to the preparation of the prospectus, or of the portion thereof containing the untrue statement, but does not include any person by reason only of the person acting in a professional capacity for persons engaged in procuring the formation of the company.

(2) When a prospectus invites persons to subscribe for shares in or debentures of a company or to become members of a company, every person who is a director of the company at the time of the issue of the prospectus, and every person who is with the person’s consent named in the prospectus as a director or as having agreed to become a director, either immediately or after an interval of time, and every promoter of the company, and every person who has authorized the issue of the prospectus, is liable to pay compensation to all persons who subscribe for any shares or debentures or apply for membership on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement therein, or in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith, (

a) unless it is proved (

i) with respect to every un true statement not purporting to be made on the authority of an expert, or of a public official document or statement, that he or she had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures or admission to membership, as the case may be, believe, that the statement was true, (ii) with respect to every untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from a report or valuation of an expert, that it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation, but the director, person named as director, promoter, or person who authorized the issue of the prospectus, is liable to pay compensation as aforesaid if it is proved that he or she had no reasonable ground to believe that the person making the statement, report, or valuation was competent to make it, and (iii) with respect to every untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official

47 Explanatory Notes document, that it was a corr ect and fair representation of the statement or copy of or extract from the document, or (

b) unless it is proved (

i) that having consented to become a director of the company the person withdrew consent before the issue of the prospectus, and that it was issued without the person’s authority or consent, (ii) that the prospectus wa s issued without the person’s knowledge or consent, and that on becoming aware of its issue the person forthwith gave reasonable public notice that it was issued without knowledge or consent, or (iii) that after the issue of th e prospectus and before allotment thereunder, the person, on becoming aware of any untrue statement therein, withdrew consent thereto and gave reasonable public notice of the withdrawal, and of the reason therefor.

(3) Every person to whom subsection (2)(b)(ii) or (iii) applies shall file with the Registrar a copy of the public notice given by the person, within 7 days from the date of the notice.

(4) If the prospectus contains the name of a person as a director of the company or as having agreed to become a director thereof and the person has not consented to become a director or has withdrawn consent before the issue of the prospectus and has not authorized or consented to the issue thereof, the directors of the company, except any without whose knowledge or consent the prospectus was issued, and any other person who authorized the issue thereof, are liable to indemnify the person named as aforesaid against all damages, costs and expenses to which the person may be made liable by reason of the person’s name having been inserted in the prospectus, or in defending himself or herself against any action or legal proceedings brought against him or her in respect thereof.

(5) Every person who by reason of his or her being a director or of being named as a director or of having agreed to become a director, or of having authorized the issue of the prospectus, becomes liable to make any payment under this

section may recover contribution, as in cases of contract, from any other person who, if sued separately,

(54) Section 111 is amended (

a) by repealing subsection (1) and substituting the following: Prospectus when offering shares 111(1) This

section applies if a company allots or agrees to allot any shares or debentures of the company with a view to all or any of the shares or debentures being offered for sale to the public, and the whole consideration for those shares or debentures is not paid to the company at the date of the allotment or the offer for sale, whichever date is earlier. (

b) by repealing subsections (2) and (3); (

c) in subsection (4) by striking out “the prospectus is signed” and substituting “a prospectus is signed”;

48 Explanatory Notes would have been liable to make the same payment, unless the person who has become so liable was, and that other person was not, guilty of fraudulent misrepresentation. 110(1) No person shall issue any form of application or subscription for a company’s shares or debentures offered to the public unless the form is issued with a prospectus filed under

section 108 and complying with

Part 8 of the Securities Act.

(2) This

section does not apply when the form of application is issued (

a) in connection with an invitation made in good faith to a person to enter into an underwriting agreement with respect to the shares or debentures, (

b) in relation to the shares or debentures of a company not being offered to the public, or (

c) to existing members or de benture-holders of the company whether or not an applicant for shares or debentures has the right to renounce in favour of other persons.

(3) A person who acts in contravention of this

section is, without prejudice to any other liability, guilty of an offence.

(54) Section 111 presently reads: 111(1) If a company allots or agrees to allot any shares or debentures of the company with a view to all or any of the shares or debentures being offered for sale to the public, and the whole consideration for those shares or debentures is not paid to the company at the date of the allotment or the offer for sale, whichever date is the earlier, any person who, by a prospectus issued by the person with respect to all or any of those shares or debentures, makes an offer thereof to the public, shall file with the Registrar a copy of the prospectus, signed and dated by the person and that date shall, unless the contrary be proved, be taken as the date of issue of the prospectus.

(2) The prospectus referred to in subsection (1) shall be filed with the Registrar within 7 days after its issue and before any copies thereof are circulated or distributed.

(3) For the purposes of this

section

49 (

d) in subsection (5) by striking out “, and no subscription or application for any share or debenture shall be taken unless a copy of the prospectus has been so furnished”.

(55) Section 118 is amended by striking out “and have ready for delivery”.

(56) Section 119(1) is amended by striking out “, and the Registrar shall enter the fact in the register of mortgages”.

49 Explanatory Notes (

a) if an offer of shares or debent ures or any of them for sale to the public is made within 6 months after the allotment or agreement to allot those shares or debentures was made, or (

b) if the whole consideration to be received by the company in respect of the shares of debentures has not been received by the company at the date when the offer of the shares or debentures or any of them for sale to the public was made, it is, unless the contrary be proved, evidence that the allotment of shares or debentures or the agreement to allot the shares or debentures was made with a view to the shares or debentures being offered for sale to the public.

(4) When a person making an offer for sale to which this

section relates is a company or firm, it is sufficient for the purposes of this

section if the prospectus is signed on behalf of the company or firm by an officer of the company or a partner of the firm authorized in either case to sign the prospectus.

(5) A copy of the prospectus shall be furnished to every member of the public to whom the offer of any shares or debentures to which the prospectus relates is made at the time the offer is made, and no subscription or application for any share or debenture shall be taken unless a copy of the prospectus has been so furnished.

(55) Section 118 presently reads: 118 Unless the conditions of issue of the debentures or debenture stock otherwise provide, every company shall, within 2 months after the allotment of any of its debentures or debenture stock and within 2 months after the date of lodgment of a transfer of any of its debentures or debenture stock, complete and have ready for delivery the debentures and the certificates of all debenture stock allotted or transferred.

(56) Section 119(1) presently reads: 119(1) If a person obtains an order for the appointment of a receiver or manager of the property of a company or, under any powers contained in any instrument, appoints such a receiver or manager or takes possession of the property of a company, the person shall, within 15 days from the date of the order, the appointment or the taking of possession, as the case may be, file with the Registrar a copy of the order or a notice of having made the

50 (57)

Section 121(2)(

b) is amended by striking out “, and the Registrar shall enter the notice in the register of mortgages and charges”.

(58) The heading preceding

section 127 and

section 127 are repealed.

50 Explanatory Notes appointment or taken possession, and the Registrar shall enter the fact in the register of mortgages.

(57) Section 121(2) presently reads in part:

(2) Every receiver or manager of the property of a company who has been appointed under the powers contained in any instrument shall (

b) on ceasing to act as a re ceiver or manager pursuant to the appointment, file a notice to that effect with the Registrar, and the Registrar shall enter the notice in the register of mortgages and charges.

(58) The heading preceding

section 127 and

section 127 presently read: Reduction of Paid-up Capital by Return of Accumulated Profits 127(1) When a company having a share capital has accumulated a sum of undivided profits that, with the sanction of the shareholders, may be distributed among the shareholders in the form of a dividend or bonus, it may by special resolution return the sum or any part thereof to the shareholders in reduction of the paid-up capital of the company, the unpaid capital being thereby increased by a similar amount.

(2) The resolution does not take effect until a memorandum, showing the particulars required by this Act in the case of a reduction of share capital, has been filed with the Registrar, but the other provisions of this Act with respect to reduction of share capital do not apply to a reduction of paid-up capital under this section.

(3) On a reduction of paid-up capital pursuant to this section, any shareholder, or any one or more of several joint shareholders, may, within one month after the passing of the resolution for the reduction, require the company to retain, and the company shall retain accordingly, the whole of the money actually paid on the shares held by the shareholder either alone or jointly with any other person and that in consequence of the reduction would otherwise be returned to the shareholder or them, and thereupon those shares shall, as regards the payment of dividend, be deemed to be paid up to the same extent only as the shares on which payment has been accepted by the shareholders in reduction of paid-up capital, and the company shall invest and keep invested the money so retained in those securities authorized for investment by trustees that the

(59) The heading preceding

section 128 and

section 128 are repealed.

51 Explanatory Notes company may determine, and on the money so invested, or on so much thereof as from time to time exceeds the amount of calls subsequently made on the shares in respect of which it has been retained, the company shall pay the interest received from time to time on the securities.

(4) The amount retained and invested shall be held to represent the future calls that may be made to replace the share capital so reduced on those shares, whether the amount obtained on sale of the whole, or that proportion thereof that represents the amount of any call when made, produces more or less than the amount of the call.

(5) On a reduction of paid-up share capital pursuant to this section, the powers vested in the directors of making calls on shareholders in respect of the amount unpaid on their shares extends to the amount of the unpaid share capital as augmented by the reduction.

(6) After any reduction of share capital under this

section the company shall specify, in the annual list of members to be filed with the Registrar, the amount retained at the request of any of the shareholders pursuant to this section, and shall specify in the statements of account laid before any general meeting of the company the amount of undivided profits returned in reduction of paid-up share capital under this section.

(59) The heading preceding

section 128 and

section 128 presently read: Payment of Interest out of Capital 128(1) If any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant that cannot be made profitable for a long time, the company may pay interest, on so much of that share capital as is for the time being paid up, for the period and subject to the conditions and restrictions mentioned in this section, and may charge it to capital as part of the cost of construction of the work or building or the provision of the plant.

(2) No such payment shall be made unless it is authorized by the articles or by special resolution.

(3) No such payment, whether authorized by the articles or by special resolution, shall be made without the previous sanction of the Lieutenant Governor in Council, who before sanctioning the payment may, at the expense of the company, appoint a person to

(60) Section 133 is amended (

a) by repealing subsection (2) and substituting the following:

(2) The auditor shall make a report to the shareholders on the financial statement, to be laid before the company at any annual meeting during the auditor’s term of office, and the auditor’s report shall contain the following: (

a) a statement as to the sc ope, extent and nature of the auditor’s examination; (

b) a statement as to whether, i n the auditor’s opinion, the financial statement, including any notes to the financial statement, presents fairly the financial position of the company; (

c) a statement of any concerns or qualifications the auditor has with respect to whether the financial statement was drawn up according to generally accepted accounting principles and generally accepted auditing standards. (

b) by repealing subsection (3).

52 Explanatory Notes inquire and report to the Lieutenant Governor in Council as to the circumstances of the case, and may before making the appointment require the company to give security for the payment of the costs of the inquiry.

(4) The payment shall be made only for a period that may be determined by the Lieutenant Governor in Council and that period shall in no case extend beyond the close of the half-year next after the half-year during which the works or buildings have been actually completed or the plant provided.

(5) The rate of interest shall in no case exceed 7% or a lower rate that may be fixed by the Lieutenant Governor in Council.

(6) The payment of the interest does not operate as a reduction of the amount paid up on the shares in respect of which it is paid.

(7) The accounts of the company shall show the share capital on which, and the rate at which, interest has been paid out of capital during the period to which the accounts relate.

(60) Section 133 presently reads in part:

(2) The auditor shall make a report to the shareholders on the financial statement to be laid before the company at any annual meeting during the auditor’s term of office and shall state in the auditor’s report whether in the auditor’s opinion the financial statement referred to therein presents fairly the financial position of the company and the results of its operations for the period under review in accordance with generally accepted accounting principles.

(3) The auditor in the auditor’s report shall make appropriate statements in any case where (

a) the financial statement of th e company is not in agreement with the accounting records, (

b) the financial statement of th e company is not in accordance with the requirements of this Act, (

c) the auditor has not received all the information and explanations that the auditor has required, or (

d) proper accounting records have not been kept, so far as appears from the auditor’s examination.

(61) Section 135 is amended (

a) by repealing subsection (1) and substituting the following: Books of account and accounting records 135(1) Every company shall keep proper books of account and accounting records in respect of all financial and other transactions of the company. (

b) by repealing subsection (6).

(62) Section 136 is amended (

a) in subsection (1) (

i) in clause (a) (

A) by adding “drawn up in accordance with subsection (1.1)” after “a financial statement”; (

B) by striking out “made up of”; (

C) by repealing subclauses (i), (ii) and (iii); (ii) by repealing clause (

b) and substituting the following: (

b) in the case of a public company, a comparative financial statement drawn up in accordance with subsection (1.1) relating separately to (

i) the period that commenced on the date of incorporation and ended not more than 6 months before the annual meeting or, if the company has completed a financial year, that commenced

53 Explanatory Notes

(61) Section 135 presently reads in part: 135(1) Every company shall cause to be kept proper books of account and accounting records in respect of all financial and other transactions of the company and, without limiting the generality of the foregoing, records of (

a) all sums of money received and disbursed by the company and the matters in respect of which receipt and disbursement take place, (

b) all sales and purchases by the company, (

c) all assets and liabilities of the company, and (

d) all other transactions affec ting the financial position of the company.

(6) A copy of the resolution of the directors under subsection (5) shall be filed with the Registrar within 15 days of its date.

(62) Section 136 presently reads in part: 136(1) The directors shall lay before each annual meeting of shareholders, (

a) in the case of a private co mpany, a financial statement for the period that commenced on the date of incorporation and ended not more than 6 months before the annual meeting or, if the company has completed a financial year, that commenced immediately after the end of the last completed financial year and ended not more than 6 months before the annual meeting, as the case may be, made up of (

i) a statement of profit and loss for that period, (ii) a statement of surplus for that period, and (iii) a balance sheet as at the end of that period, (

b) in the case of a public company, a comparative financial statement relating separately to (

i) the period that commenced on the date of incorporation and ended not more than 6 months before the annual meeting or, if the company has completed a financial year, that commenced immediately after the end of the last

54 immediately after the end of the last completed financial year and ended not more than 6 months before the annual meeting, as the case may be, and (ii) the period covered by the financial year next preceding that latest completed financial year, if any, (

b) by adding the following after subsection (1):

(1.1) A financial statement or comparative financial statement referred to in subsection (1) shall (

a) include at least (

i) a balance sheet, (ii) a statement of retained earnings, (iii) an income statement, and (iv) a statement of changes in financial position, (

b) present fairly the financial position of the company, (

c) be drawn up in accordan ce with generally accepted accounting principles, and (

d) be drawn up on a basis consistent with that used for the preceding period, if any, unless a note to the financial statement indicates otherwise. (

c) by repealing subsection (2); (

d) in subsection (3) by striking out “shall be read at the annual meeting and”; (

e) by adding the following after subsection (4):

(4.1) Nothing in this

section prohibits persons who are not members of the Chartered Professional Accountants of Alberta from preparing the financial statement or comparative financial statement referred to in subsection (1). (

f) by repealing subsection (5).

54 Explanatory Notes completed financial year and ended not more than 6 months before the annual meeting, as the case may be, and (ii) the period covered by th e financial year next preceding that latest completed financial year, if any, and made up of (iii) a statement of profit and loss for each period, (iv) a statement of surplus for each period, (

v) a statement of source and application of funds for each period, and (vi) a balance sheet as at the end of each period,

(2) It is not necessary to designate the statements referred to in subsection (1) as the statement of profit and loss, statement of surplus, statement of source and application of funds, and balance sheet.

(3) The report of the auditor to the shareholders shall be read at the annual meeting and shall be open to inspection by any shareholder.

(4) Notwithstanding subsection (1)(b), the financial statement referred to in that clause may relate only to the period that ended not more than 6 months before the annual meeting if the reason for the omission of the statement in respect of the period covered by the previous financial statement is set out in the financial statement to be laid before the meeting or by way of note