Corporations Act

S.N.L. 1990, c. C-36

Newfoundland and Labrador — Consolidated Statutes

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St. John's, Newfoundland and Labrador, Canada

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RSNL1990

CHAPTER C-36

CORPORATIONS ACT

Amended:

1992 c54 s3 (Rep. before being proclaimed); 1993 c53 s4; 1994 c28 s4; 1996 cR-10.1 s20; 1996 cJ-1.1 s192;

1997 c13 s11; 2001 cN-3.1 s2; 2004 c14; 2007 cS-13.01 s107;

2007 cT-9.1 s5; 2010 c31 s6; 2018 c21 s1; 2020 c29; 2021 c26

CHAPTER C-36

AN ACT TO REVISE AND

REFORM THE LAW

RESPECTING CORPORATIONS

Analysis

Short title

Definitions

Purposes of Act

Application of Act

Certain societies exempt from Act

Prohibited associations

Affiliated corporations

Control of a body corporate

Holding and subsidiary bodies corporate

Distribution to the public

PART I

INCORPORATION

Power to incorporate

Articles of incorporation

Special majorities

Delivery of articles

Certificate of incorporation

Effect of certificate

Name of corporation

Name in any language

Designating number

Prohibited names

Directing change of name

Name of continued corporation

Revoking name

Certificate of amendment of name

Pre-incorporation contracts

PART II

CAPACITY AND POWERS

Corporate capacity

Restricted business

Effect of restricted acts

No constructive notice

Assertions of corporate incapacity

Corporate seal

PART III

REGISTERED OFFICE AND RECORDS

Registered office

Notice of registered office

Displaying name of corporation

Corporate records

Director's records

Accounting records out of province

Records of continued corporation

Form of records

Duty of care: records

Access to corporate records

Basic shareholder lists

Share options list

Use of shareholder list

45.1

Individual with significant control over corporation

45.2

45.3

Inability to identify individuals

45.4

Disclosure of information in register

45.5

Disclosure to investigative bodies

PART IV

CORPORATE FINANCE

One class of shares

Classes of shares

How shares issued

Consideration for shares

Shares non- assessable

Stated capital accounts

Open-end mutual funds

Shares in series

Pre-emptive rights

Instruments evidencing rights

When shares issued

Corporation's own shares

Holding own shares

Exception relating to Canadian ownership

Voting shares

Acquiring own shares

Other acquisition

Redemption of shares

Donated shares

Voting own shares

Reduction of stated capital

Stated capital account adjustment

Cancellation, etc. of own shares

Presumption against acquisition

Exception

Change of shares

Redemption of debt obligations, etc.

Contract to purchase own shares

Commission for sale of shares

When dividends prohibited

Payment of dividends

Illicit loans

Permitted loans

Enforceability of illicit loan

Shareholder immunity

Lien on shares

PART V

SALE OF CONSTRAINED SHARES

Sale of constrained shares by corporation

Proceeds of sale to be trust fund

PART VI

SECURITY CERTIFICATES, REGISTERS AND TRANSFERS

Transfers of securities

Rep. by 2007 cS-13.01 s107

Security certificates

Contents of share certificate

Rep. by 2007 cS-13.01 s107

Notation of constraint and failure to note

Restriction on share transfer

Particulars of class

Fractional shares

Fractional share rights

Scrip certificate rights

Securities records

Securities registers

Place of registers

Effect of registration

Branch register

Destruction of certificates

Dealings with registered holder

No duty to 3rd person

Infants

Joint holders

Transmission of securities

Overissue

Rep. by 2007 cS-13.01 s107

Rep. by 1996 cJ-1.1 s192

Rep. by 2007 cS-13.01 s107

PART VII

TRUST INDENTURES

Definitions

Application of

Part

Conflict of interest

Qualification of trustee

List of security holders

Evidence of compliance

Contents of declaration

Further evidence of compliance

Evidence of compliance upon demand of trustee

Certificate of compliance

Notice of default

Duty of care of trustee

Reliance on statement

No exculpation

PART VIII

RECEIVERS AND RECEIVER-MANAGERS

Functions of receiver

Functions of receiver- manager

Directors' powers cease

Duty under court order

Duty under instrument

Duty of care

Directions by court

Duties of receiver

PART IX

DIRECTORS AND OFFICERS

Duty to manage

Number of directors

Restrictions

Directors' amendments of by-laws

Organization meeting

Persons disqualified as directors

Share qualification

Rep. by 2021 c26 s4

Notice of directors and term of office

Cumulative voting

Directors leave office

Resignation of director

Removal of directors, etc.

Director's rights re shareholders

Filling vacancy among directors

Changing number of directors

Notice of change of directors

Meeting of directors

Notice of meeting of directors

Notice of adjourned meeting

One director meeting

Directors meeting by electronic means

Delegation of director's powers

Validity of acts

Resolution instead of meeting

Directors' liability for share issue

Other directors' liabilities

Contributions from other directors

Recovery by directors

Defence to liability of directors

Time limited for action

Interest in contract by director

Continuing disclosure

Avoidance standards

Setting contract aside

Appointment of officers

Duties of directors and officers

Dissent to acts of other directors

Indemnification by corporation

Indemnification in derivative actions

Right to indemnify

Directors' and officers' insurance

Court approval of indemnity

Remuneration of directors, etc.

PART X

INSIDER TRADING

Definition of "insider"

Presumed insider

Liability of insider

Time limited on action

PART XI

SHAREHOLDERS

Meeting in province

Meetings outside province

Calling meetings

Record date

Statutory record date

Notice of record date

Notice of meetings

Special business

Waiver of notice of meeting

Shareholder "proposals"

Proposal in management proxy circular

Nomination for director in proposal

Non-compliance with s.225

Immunity re proposal

Notice of refusal

Right to restrain meeting

Right to omit proposal

Registrar entitled to notice

Shareholder list and effect

Right to examine list

Quorum at meeting

Right to vote

Representative voting

Joint shareholders voting

Voting method

Resolution instead of meeting

Requisition of meeting by shareholders

Meeting called by court

Court review of election or appointment

Pooling agreement on voting

Unanimous shareholder agreement

PART XII

PROXIES

Definitions

Appointing proxyholders

Revocation of proxy

Deposit of proxies

Mandatory solicitation

Soliciting proxies

Documents to be sent registrar

Exemption order

Attendance at meeting

Duty of non- beneficial owner

Prohibition governs

Restraining order

PART XIII

FINANCIAL DISCLOSURE

Annual financial statements

Exemption

Consolidated statements

Approval of financial statements

Copies to shareholders

Copies to registrar

Disqualification of auditor

Appointment of auditor

Dispensing with auditor

When auditor leaves office

Removal of auditor

Filling vacancy of auditor

Court appointed auditor

Auditor's right to attend meeting

Duty of auditor to attend meeting

Auditor shall submit statement

Examination by auditor and report

Right to information

Audit committee

Errors in financial statements

Auditor's privilege re defamation

PART XIV

FUNDAMENTAL CHANGES

Amending articles

Constraints on share transfers

Regulations re constrained share corporations

Validity of acts

Proposal to amend articles

Class vote on proposal

Delivery of articles

Certificate of amendment

Restated articles

Corporate amalgamations

Amalgamation agreement

Shareholder approval

Vertical short-form amalgamation

Horizontal short-form amalgamation

Articles of amalgamation

Certificate of amalgamation

Continuing imported corporation

Certificate of continuance

Rights preserved on continuation

Shares on continuation

Exporting corporation

Prior approval required

Certificate of discontinuance

Directors' borrowing powers

Extraordinary sale

Shareholders right to dissent

Demand payment by dissenter

Suspension of rights

Offer to pay

Application to court

Procedure

Powers of court

Interest

Notice

Prohibition against payment

Court ordered reorganization

Arrangements

PART XV

DISSENTING OFFEREES

Definitions

Offeror's right to acquire shares

Notice to dissenting offeree

Takeover bid notice

Delivery of share certificate

Payment for shares

Money in trust

Duty of offeree- corporation

Fixing of fair values

Venue

No security for losses

Dissenting offerees as parties

Powers of court

Additional powers of court

PART XVI

LIQUIDATION AND DISSOLUTION

Application of

Part

Revival application

Dissolution if no shares

Dissolution if no property

Dissolution where property disposed of

Articles of dissolution and effect

Proposing liquidation and dissolution

Certificate of intent to dissolve

Liquidation under supervision of court

Revocation of intent to dissolve

Articles of dissolution

Dissolution by registrar

Dissolution by court

Further grounds

Court supervision

Application to court

Powers of court

Commencement of court order

Effect of court order

Appointment of liquidator

Duties of liquidator

Powers of liquidator

Final accounts and dissolution

Right to distribution in money

Custody of records

Continuation of actions after dissolution

Unknown claimants

Vesting of property in Crown

Property automatically revests

PART XVII

INVESTIGATION

Investigation ordered

Court powers on investigation

Power of inspector

Hearing

Criminating statements

Absolute privilege

Information respecting ownership

Solicitor-client privilege

Inquiries

PART XVIII

CIVIL REMEDIES

Definitions

Derivative action

Powers of court

Rectifying oppression

Staying or dismissing action

Costs

Rectification of corporate records

Applications for directions

Notice of refusal by registrar

Appeal from registrar's decision

Restraining or compliance order

Summary application to court

Appeal

PART XIX

GENERAL AND ADMINISTRATION

Appointment of registrar

Service upon registrar

Inspection of documents

Notice to directors and shareholders

Presumption of receipt

Undelivered notices

Waiver of notice

Certificate by corporation

Evidentiary value of documents

Security certificate

Copies

Execution and filing of articles

Alteration of document

Correction of certificates

Proof of documents

Obligation to provide records

Retention of records

Certificate of registrar

Power to refuse documents

Form of filing

Service on corporation

Reservation of name

Prohibited name

Power to refuse name

Name on amalgamation

Name as condition of revival

Annual returns

408.1

Summary review

Regulations

409.1

Fees and forms

PART XX

CONTINUATION OF FORMER-ACT

COMPANIES

Rep. by 1996 cR-10.1 s20

PART XXI

CORPORATIONS WITHOUT SHARE

CAPITAL

Application of

Part

Definitions

Restriction under this

Part

Form of articles

Directors

Use of "incorporated", etc.

Number and classes of members

Admission to membership

Voting by members

Transferability of interest

Power to make by-laws re members

By-laws re groups and delegates

Disposition of property on dissolution

PART XXII

REGISTRATION OF INCORPORATED

COMPANIES

Definitions

Not applicable to co-operatives

Requirement for registration

Manner of registering

Registration of extra-provincial company

Restricting activities

Amalgamated foreign company

Requirements to register

Power of attorney

Failure of power

Capacity of attorney

Certificate of registration

Effect of registration

Rep. by 2004 c14 s9

Suspension or revocation

Cancellation of registration

Revival of registration

Authorization of previous activities

Displaying name of company

Change of name, etc.

Incapacity of unregistered company

Resumption of action upon registration

Registration, etc. fees

Application of other Parts

PART XXIII

INSURANCE CORPORATIONS

Interpretation

Application of

Part

Approval of Superintendent of Insurance

Filing of by-law

Incorporation restricted

Dissolution of incorporated insurer

Application

Incorporation

Notice of application

Capital requirements

Subscribed capital

Application

Incorporation of mutual companies

Name

Subscription book

First meeting

Directors, etc.

Application for incorporation

Members

Withdrawal from mutual

Effect of cash plan insurance

Voting

Vote where 2 or more persons

Vote of trustee member

Quorum

Persons eligible as directors

Treasurer

Meeting of directors

Assets

Establishment of branches

Rates

Liability of branch members

Expenses divided

Application

Incorporation

Investments

Limit on benefits

Borrowing power

Treasurer

Disputes

PART XXIV

TRUST, LOAN AND INVESTMENT

CORPORATIONS

Application

Approval required

Prohibition

Appeal

PART XXV

OFFENCES AND PENALTIES

Name of corporation

Abusing corporate designation

Failure to protect records

Misuse of shareholders lists

503.1

Offences respecting register of individuals with significant control over corporation

Offences with respect to reports

Misuse of security holders lists

Failure to send proxy form

Unlawfully soliciting proxies

Failure to comply with proxy directions

Default of registrant to vote shares

Failure to send financial statement

Failure to send financial documents to registrar

Default of auditor

Director's default re financial errors

Failure to produce records

Failure to report on ownership

General offences and penalty

Order to comply

Time limited for proceedings

Civil remedy not affected

Short title

This Act may be cited as the Corporations Act.

1986 c12 s1

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Definitions

In this Act

(a)

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

(b)

"affiliate" means an affiliated body within the meaning of

section 7;

(c)

"articles" means

(

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

(ii)

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

(d)

"associate" where used to indicate a relationship with a person means

(

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

(

A) under all circumstances,

(

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

(

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

(ii)

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

(iii)

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

(iv)

a spouse or child of that person, or

(

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

(e)

"auditor" includes a partnership of auditors;

(f)

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

(g)

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

(h)

"constating instrument" includes a statute other than The Companies Act,

letters patent, a memorandum of association, articles of association, certificate of incorporation, certificate of continuance, by-laws, regulations or other instrument by which a body corporate is incorporated or continued or that governs or regulates the affairs of a body corporate;

(i)

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

(j)

"court" means the Trial Division or a judge of the Trial Division;

(k)

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

(l)

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

(m)

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

(n)

"former Act" refers to

Chapter 10 of the Statutes of Newfoundland, 1899, as amended, consolidated and revised since July 19, 1899 and as contained, immediately before January 1, 1987, in The Companies Act,

being

Chapter 54 of The Revised Statutes of Newfoundland, 1970, as amended;

(o)

"former-Act company" means a body corporate

(

i) that was incorporated under

Part I of the former Act,

(ii)

registered as a company under

Part V of the former Act, or

(iii)

registered as a company under

section 242 of The Companies Act,

1899, being

Chapter 10 of the Statutes of Newfoundland, 1899;

(o.1)

[Rep. by 2021 26 s1]

(p)

"incorporator" means a person who signs articles of incorporation;

(q)

"individual" means a natural person;

(q.1)

[Rep. by 2021 c26 s1]

(q.2)

[Rep. by 2021 c26 s1]

(r)

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

(

i) section 74,

(ii)

subsection 312(2), or

(iii)

paragraph 371(3)(

f) or (g);

(s)

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

(t)

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

(u)

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

(v)

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

(v.1)

"prescribed fee", "prescribed fees" or "prescribed form" means the fee or fees set by the minister, or the form approved by the minister, for the purpose of this Act;

(w)

"redeemable share" means a share issued by a corporation

(

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

(ii)

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

(w.1)

"registered form" means registered form as defined in the Securities Transfer Act

(x)

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

(y)

"resident Canadian" means an individual who is

(

i) a Canadian citizen ordinarily resident in Canada,

(ii)

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

(iii)

a permanent resident within the meaning of the Immigration and Refugee Protection Act

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

(z)

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

(aa)

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

(bb)

"send" includes deliver;

(cc)

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

(dd)

"shareholder" includes a member of a corporation to which

Part XXI applies except where inconsistent with that Part;

(ee)

"special resolution" means a resolution

(

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

(ii)

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

(ff)

"unanimous shareholder agreement" means an agreement described in

section 245.

1986 c12 s2; 1987 c38 s1 & Sch A; 1996 cR-10.1 s20 ; 2007 cS-13.01 s107 ; 2018 c21 s1 ; 2021 c26 s1

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Purposes of Act

The purposes of this Act are

(

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

(

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

(

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

(

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

(

e) to encourage the promotion of uniformity in company law in Canada

to the extent compatible with the public interest.

1986 c12 s6

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Application of Act

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

an Act of Newfoundland or of the province.

(2) Notwithstanding subsection (1), when a provision of

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

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

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

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

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Certain societies exempt from Act

Notwithstanding subsection 4(1), this Act does not apply to a body corporate incorporated or registered under the Agricultural Societies Act

or the Co-operative Societies Act

except to the extent that those Acts make this Act apply to it.

1986 c12 s7(5)

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Prohibited associations

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

1986 c12 s9; 1987 c38 Sch A

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Affiliated corporations

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

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

1986 c12 s10

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Control of a body corporate

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

1986 c12 s11

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Holding and subsidiary bodies corporate

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

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

1986 c12 s12

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Distribution to the public

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

(

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

(

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

(2) A security of a body corporate is considered to be part of a distribution to the public where the security has been issued and a filing referred to in paragraph (1)(

a) would be required if the security were being issued currently.

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

1986 c12 s13; 1987 c38 Sch A

PART I

INCORPORATION

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Power to incorporate

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

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

(

a) is less than 19 years of age;

(

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

or elsewhere; or

(

c) has the status of a bankrupt.

1986 c12 s14

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Articles of incorporation

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

(

a) the name of the corporation;

(

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

(

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

(

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

(ii)

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

(

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

(

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

(

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

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

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

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Special majorities

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

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

section 179.

1986 c12 s16

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Delivery of articles

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

1986 c12 s17

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Certificate of incorporation

Upon receipt of articles of incorporation, the registrar shall issue a certificate of incorporation in accordance with

section 393.

1986 c12 s18

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Effect of certificate

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

1986 c12 s19

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Name of corporation

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

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

1986 c12 s20

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1986 c12 s21

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Name in any language

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

1986 c12 s22

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Designating number

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

1986 c12 s23

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Prohibited names

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

(

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

(

b) that is reserved for another corporation or intended corporation under

section 403.

1986 c12 s24

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Directing change of name

Where through inadvertence or otherwise a corporation

(

a) comes into existence or is continued with a name that contravenes

section 21; or

(

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

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

section 279.

1986 c12 s25; 1987 c38 Sch A

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Name of continued corporation

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

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

section 279.

1986 c12 s26; 1987 c38 s3

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Revoking name

Where a corporation has been directed under

section 22 or 23 to change its name and has not within 60 days from the service of the directive to that effect changed its name to a name that complies with this Act, the registrar may revoke the name of the corporation and assign to it a name, and, until changed in accordance with

section 279, the name of the corporation is afterward the name so assigned.

1986 c12 s27

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Certificate of amendment of name

(1) Where a corporation has had its name revoked and a name assigned to it under

section 24, the registrar shall issue a certificate of amendment showing the new name of the corporation and shall immediately give notice of the change of name in the Gazette.

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

1986 c12 s28

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Pre-incorporation contracts

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

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

(

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

(

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

(3) Except as provided in subsection (5), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order fixing obligations under the contract as joint or joint and individual or apportioning liability between or among the corporation and a person who purported to act in the name of or on behalf of the corporation.

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

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

1986 c12 s29

PART II

CAPACITY AND POWERS

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Corporate capacity

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

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

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

1986 c12 s30

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Restricted business

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

1986 c12 s31

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Effect of restricted acts

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

1986 c12 s32

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No constructive notice

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

1986 c12 s33

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Assertions of corporate incapacity

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

(

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

(

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

section 175 or 183 are not the directors of the corporation;

(

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

section 34 is not the registered office of the corporation;

(

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

(

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

(

f) that the financial assistance referred to in

section 78 or the sale, lease or exchange of property referred to in

section 303 was not authorized,

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

1986 c12 s34

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Corporate seal

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

1986 c12 s35

PART III

REGISTERED OFFICE AND RECORDS

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Registered office

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

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

1986 c12 s36

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Notice of registered office

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

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

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

1986 c12 s37; 1993 c53 s4

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Displaying name of corporation

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

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

(

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

(

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

1987 c38 s4

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Corporate records

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

(

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

(

b) minutes of meetings and resolutions of shareholders;

(

c) copies of all notices required by

section 175 or 183;

(

d) a securities register complying with

section 96; and

(

e) subject to subsection 45.2(7), a register of individuals with significant control over the corporation that complies with

section 45.2.

1986 c12 s38; 2021 c26 s2

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Director's records

(1) In addition to the records described in

section 36, a corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and a committee of directors.

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

1986 c12 s39

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Accounting records out of province

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

1986 c12 s40

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Records of continued corporation

For the purposes of paragraph 36(

b) and

section 37, when a body corporate is continued under this Act, "records" include similar registers and other records required by law to be maintained by the body corporate before it was continued.

1986 c12 s41

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Form of records

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

1986 c12 s42

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Duty of care: records

A corporation and its agents shall take reasonable precautions

(

a) to prevent loss or destruction of;

(

b) to prevent falsification of entries in; and

(

c) to facilitate detection and correction of inaccuracies in,

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

1986 c12 s43

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Access to corporate records

(1) Shareholders and creditors of a corporation, their agents and legal representatives and the registrar may examine the records referred to in

section 36 during the usual business hours of the corporation, and may take extracts from the records, free of charge, and, where the corporation is a distributing corporation, another person may do so upon payment of a reasonable fee.

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

1986 c12 s44

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Basic shareholder lists

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

section referred to as the "basic list") made up to a date not more than 10 days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the record of the corporation.

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

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

(

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

(

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

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

(

a) the name and address of the applicant;

(

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

(

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

section 45.

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

1986 c12 s45

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Share options list

A person requiring under

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

1986 c12 s46

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Use of shareholder list

A list of shareholders obtained under

section 43 shall not be used by a person except in connection with

(

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

(

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

(

c) other matters relating to the affairs of the corporation.

1986 c12 s47

Individual with significant control over corporation

45.1

(1)For the purposes of this Act, any of the following individuals is an individual with significant control over a corporation:

(

a) an individual who has any of the following interests or rights, or any combination of them, in respect of a significant number of shares of the corporation:

(

i) an interest as a registered holder of them,

(ii)

an interest as a beneficial owner of them, or

(iii)

direct or indirect control or direction over them;

(

b) an individual who has any direct or indirect influence that, where exercised, would result in control in fact of the corporation; or

(

c) an individual to whom prescribed circumstances apply.

(2) Two or more individuals are each considered to be an individual with significant control over a corporation where, in respect of a significant number of shares of the corporation,

(

a) an interest or right, or a combination of interests or rights, referred to in paragraph (1)(

a) is held jointly by those individuals; or

(

b) a right, or combination of rights, referred to in paragraph (1)(

a) is subject to any agreement or arrangement under which the right or rights are to be exercised jointly or in concert by those individuals.

(3) For the purposes of this section, a significant number of shares of a corporation is

(

a) any number of shares that carry 25% or more of the voting rights attached to all of the corporation's outstanding voting shares; or

(

b) any number of shares that is equal to 25% or more of all of the corporation's outstanding shares measured by fair market value.

2021 c26 s3

45.2

(1)A corporation shall prepare and maintain, at its registered office or at any other place in the province designated by the directors, a register of individuals with significant control over the corporation that contains

(

a) the name, the date of birth and the latest known address of each individual with significant control over the corporation;

(

b) the jurisdiction of residence for income tax purposes of each individual with significant control over the corporation;

(

c) the date on which each individual became or ceased to be an individual with significant control over the corporation, as the case may be;

(

d) a description of how each individual is an individual with significant control over the corporation, including, as applicable, a description of the individual's interests and rights in respect of shares of the corporation;

(

e) any other prescribed information; and

(

f) a description of each step taken in accordance with subsection (2).

(2) At least once during each financial year of a corporation, the corporation shall take reasonable steps, including any prescribed steps,

to ensure that it has identified all individuals with significant control over the corporation and that the information in the register is accurate, complete and up-to-date.

(3) Where a corporation becomes aware of any information referred to in paragraphs (1)(

a) to (

e) as a result of steps taken in accordance with subsection (2) or through any other means, the corporation shall record that information in the register within 15 days of becoming aware of it.

(4) Where a corporation requests information referred to in any of paragraphs (1)(

a) to (

e) from one of its shareholders, the shareholder shall, to the best of the shareholder's knowledge, reply accurately and completely as soon as practicable.

(5) Within one year after the sixth anniversary of the date on which an individual ceases to be an individual with significant control over the corporation, the corporation shall, subject to any other Act or Act of Parliament that provides for a longer retention period, dispose of in a secure manner any of that individual's personal information, as defined in subsection 2(1) of the Personal Information Protection and Electronic Documents Act

(Canada), that is recorded in the register.

(6) A corporation that, without reasonable cause, contravenes this

section is guilty of an offence and liable on

summary conviction to a fine not exceeding $5,000.

(7) This

section does not apply to a corporation that

(

a) is a reporting issuer under the Securities Act

(

b) is listed on a designated stock exchange as defined in subsection 248(1) of the Income Tax Act

(Canada); or

(

c) is a member of a prescribed class.

2021 c26 s3

Inability to identify individuals

45.3

A corporation to which

section 45.2 applies shall take the prescribed steps where it is unable to identify any individuals with significant control over the corporation.

2021 c26 s3

Disclosure of information in register

45.4

(1)A corporation to which

section 45.2 applies shall disclose to the registrar, on request, any information in its register of individuals with significant control over the corporation.

(2) Shareholders and creditors of the corporation or their personal representatives, on sending to the corporation or its agent the affidavit referred to in subsection (3), may on application require the corporation or its agent to

(

a) allow the applicant access to the register of the corporation referred to in subsection 45.2(1) during the usual business hours of the corporation; and

(

b) on payment of a reasonable fee, provide the applicant with an extract from that register.

(3) The affidavit required under subsection (2) shall contain

(

a) the name and address of the applicant;

(

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

(

c) a statement that any information obtained under subsection (2) shall not be used except as permitted under subsection (5).

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

(5) Information obtained under subsection (2) shall not be used by any person except in connection with

(

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

(

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

(

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

(6) A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable on

summary conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 6 months, or to both.

2021 c26 s3

Disclosure to investigative bodies

45.5

(1) In this

section

(a)

"investigative body" means a police agency, regulator or taxing authority;

(b)

"police agency" means the Royal Newfoundland Constabulary and the Royal Canadian Mounted Police;

(c)

"regulator" means

(

i) the Superintendent of Securities appointed under the Securities Act

(ii)

the Financial Transactions and Reports Analysis Centre of Canada established under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act

(Canada), or

(iii)

a prescribed public officer, corporation, agency or other entity whose authority to regulate is based on a law of the province or of Canada; and

(d)

"taxing authority" means the Canada Revenue Agency or the department of the government of the province that is responsible for administering or enforcing a law of the province that provides for the imposition of a tax, royalty or duty.

(2) On request by an investigative body, a corporation to which

section 45.2 applies shall, as soon as practicable after the request is served on the corporation or is deemed to be received by it, and in the manner specified by the investigative body

(

a) provide the investigative body with a copy of the register of the corporation referred to in subsection 45.2(1); or

(

b) disclose to the investigative body any information specified by the investigative body that is in the register of the corporation referred to in subsection 45.2(1).

(3) A police agency may make a request under subsection (2) only for the following purposes:

(

a) conducting an investigation in Canada

(

i) that is undertaken with a view to a law enforcement proceeding, or

(ii)

from which a law enforcement proceeding is likely to result;

(

b) policing and criminal intelligence operations in Canada;

(

c) assisting another law enforcement agency in Canada for a purpose described in paragraph (

a) or (b); or

(

d) providing information contained in the register to a law enforcement agency in a jurisdiction outside of Canada to assist the agency in a law enforcement proceeding where the assistance is authorized under an arrangement, written agreement, treaty or law of the province or of Canada.

(4) A regulator may make a request under subsection (2) only for the following purposes:

(

a) administering or enforcing a law for which the regulator is responsible;

(

b) assisting another agency in Canada in the administration or enforcement of a law that is similar to a law for which the regulator is responsible; or

(

c) providing information contained in the register to an agency outside of Canada to assist the agency in the administration or enforcement of a law that is similar to a law for which the regulator is responsible where this assistance is authorized under an arrangement, written agreement, treaty or law of the province or of Canada.

(5) A taxing authority may make a request under subsection (2) only for the following purposes:

(

a) administering or enforcing

(

i) a law of the province or of Canada that provides for the imposition or collection of a tax, royalty or duty, or

(ii)

a prescribed law of the province or of Canada that is related to a law referred to in subparagraph (i); or

(

b) providing information contained in the register to another jurisdiction inside or outside of Canada to assist the jurisdiction in the administration or enforcement of a law of that jurisdiction that provides for the imposition or collection of a tax, royalty or duty, where the assistance is authorized under an arrangement, written agreement, treaty or law of the province or of Canada.

(6) A request by an investigative body under subsection (2) shall be served on the corporation by leaving the request at the corporation's registered office as shown in the last notice filed under

section 34 or sent to the corporation by registered mail to that registered office and, where sent, is deemed to be received 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 request at that time or at all.

(7) A corporation that, without reasonable cause, contravenes subsection (2) is guilty of an offence and liable on

summary conviction to a fine not exceeding $5,000.

2021 c26 s3

PART IV

CORPORATE FINANCE

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

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

1986 c12 s48

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One class of shares

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

(

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

(

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

(

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

1986 c12 s49

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Classes of shares

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

(

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

(

b) the rights set out in

section 47 shall be attached to at least 1 class of share but all those rights need not be attached to more than the 1 class of shares.

1986 c12 s50

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How shares issued

Subject to the articles, the by-laws, a unanimous shareholder agreement and

section 55, shares may be issued at the times and to the persons and for the consideration that the directors may determine.

1986 c12 s51

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Consideration for shares

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

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

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

1986 c12 s52

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Shares non- assessable

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

1986 c12 s53

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Stated capital accounts

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

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

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

(

a) in exchange for

(

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

( Canada

), or

(ii)

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

(Canada); or

(

b) under an agreement referred to in subsection 289(1) or an arrangement referred to in paragraph 315(1)(

b) or (

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

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

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

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

(

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

(

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

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

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

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

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

(9) For the purposes of subsection 62(2), sections 67 and 76, paragraph 78(2)(

b) and paragraph 293(2)(a), where a body corporate is continued under this Act, its stated capital is considered to include the amount that would have been included in stated capital had the body corporate been incorporated under this Act.

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

1986 c12 s54

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Open-end mutual funds

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

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

1986 c12 s55

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Shares in series

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

(2) Where cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

(3) Rights, privileges, restrictions or conditions attached to a series of shares authorized under this

section do not confer upon a series a priority in respect of dividends or return of capital over other series of shares of the same class that are then outstanding.

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

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

section 393.

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

1986 c12 s56

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Pre-emptive rights

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

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

(

a) for a consideration other than money;

(

b) as a share dividend; or

(

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

1986 c12 s57

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Instruments evidencing rights

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

(

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

(

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

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

1986 c12 s58

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When shares issued

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

1986 c12 s59

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Corporation's own shares

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

(

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

(

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

(2) Notwithstanding subsection (1), a corporation shall cause a subsidiary body corporate of the corporation that holds shares of the corporation to sell or otherwise dispose of those shares within 5 years from the date

(

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

(

b) that the corporation was continued under this Act.

1986 c12 s60

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Holding own shares

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

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

1986 c12 s61

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Exception relating to Canadian ownership

(1) A corporation may, for the purpose of helping the corporation or an affiliate or an associate to qualify under a prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control, hold shares in itself that

(

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

(

b) are shares into which shares held under paragraph (

a) were converted by the corporation that are constrained for the purpose of helping the corporation to qualify and that were not previously held by the corporation.

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

(3) A corporation that, without reasonable cause, fails to comply with subsection (2) is guilty of an offence and liable on

summary conviction to a fine not exceeding $5,000.

(4) Where a corporation commits an offence under subsection (3), then, whether or not the corporation has been prosecuted or convicted, a director of the corporation who knowingly authorizes, permits or acquiesces in the commission of the offence is guilty of an offence and liable on

summary conviction to a fine not exceeding $5,000, to imprisonment for a term not exceeding 6 months or to both.

(5) Where shares held under subsection (1) are transferred by a corporation, sections 49 and 50, paragraph 189(3)(

c) and

section 192 apply, with the necessary changes, in respect of the transfer as if the transfer were an issue.

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

1987 c38 s5

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Voting shares

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

(

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

(

b) has complied with

section 255.

1987 c38 s5

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Acquiring own shares

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

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

(

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

(

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

1986 c12 s62

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Other acquisition

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

(

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

(

b) to eliminate fractional shares; or

(

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

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

(

a) to satisfy the claim of a shareholder who dissents under

section 304; or

(

b) to comply with an order under

section 371.

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

(

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

(

b) the realizable value of the corporation's assets would after the payment be less than the aggregate of its liabilities and the amount required for payment on a redemption or in a liquidation of all shares the holders of which have the right to be paid prior to the holders of the shares to be purchased or acquired.

1986 c12 s63

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Redemption of shares

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

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

(

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

(

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

(

i) its liabilities, and

(ii)

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

1986 c12 s64

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Donated shares

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

section 67.

1986 c12 s65

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Voting own shares

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

(

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

(

b) has complied with

section 255.

1986 c12 s66

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Reduction of stated capital

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

(

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

(

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

(

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

(2) A special resolution under this

section shall specify the stated capital account from which the reduction of stated capital effected by the special resolution will be deducted.

(3) Notwithstanding subsection (1), a corporation shall not reduce its stated capital under paragraph (1)(

a) or (

b) where there are reasonable grounds for believing that

(

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

(

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

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

(

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

(

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

(5) An action to enforce a liability imposed by this

section may not be started after 2 years from the date of the act complained of.

(6) This

section does not affect liability that arises under

section 192 or 193.

1986 c12 s67

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Stated capital account adjustment

(1) Upon a purchase, redemption or other acquisition by a corporation under

section 62, 63, 64, 82 or 304 or paragraph 371(3)(

f) of shares or fractions of shares issued by it, the corporation shall deduct from the stated capital account maintained for the class or series of shares purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series or fractions of the shares purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

(2) A corporation shall deduct the amount of a payment made by the corporation to a shareholder under paragraph 371(3)(

g) from the stated capital account maintained for the class or series of shares in respect of which the payment was made.

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

(4) Upon a conversion of issued shares of a class into shares of another class or upon a change under

section 279, 314 or 371 of issued shares of a corporation into shares of another class or series, a corporation shall

(

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

(

b) add the result obtained under paragraph (

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

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

1986 c12 s68

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Cancellation, etc. of own shares

Notwithstanding

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

1986 c12 s69

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Presumption against acquisition

For the purposes of sections 68 and 69, a corporation holding shares in itself as permitted by

section 59 is to be presumed not to have purchased, redeemed or otherwise acquired those shares.

1986 c12 s70

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Exception

For the purposes of sections 68, 69 and 70, a corporation holding shares in itself under paragraph 60(1)(

a) is considered not to have purchased, redeemed or otherwise acquired the shares at the time they were acquired, but

(

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

(

b) shares into which any of those shares were converted by the corporation and held under paragraph 60(1)(

b) that are held by the corporation at the expiration of 2 years after the shares from which they were converted were acquired

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

1987 c38 s6

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Change of shares

(1) Shares issued by a corporation and converted or changed under

section 279, 314 or 371 into shares of another class or series become issued shares of the class or series of shares into which the shares have been converted or changed.

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

1986 c12 s71

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Redemption of debt obligations, etc.

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

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

1986 c12 s72

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Contract to purchase own shares

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

section 62 or 63.

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

section 62 or 63.

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

1986 c12 s73; 1986 c38 Sch A

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Commission for sale of shares

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

1986 c12 s74

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When dividends prohibited

Notwithstanding

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

(

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

(

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

1986 c12 s75

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Payment of dividends

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

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

1986 c12 s76

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Illicit loans

(1) Except as permitted under

section 79, where circumstances prejudicial to the corporation exist, a corporation or a corporation with which it is affiliated may not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise

(

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

(

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

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

(

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

(

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

1986 c12 s77

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Permitted loans

Notwithstanding

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

(

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

(

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

(

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

(

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

(

e) to employees of the corporation or an affiliate

(

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

(ii)

in accordance with a plan for the purchase of shares of the corporation or an affiliate to be held by a trustee.

1986 c12 s78

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Enforceability of illicit loan

A contract made by a corporation contrary to

section 78 may be enforced by the corporation or by a lender for value in good faith without notice of the contravention.

1986 c12 s79

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Shareholder immunity

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

2010 c31 s6

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Lien on shares

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

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

1986 c12 s81

PART V

SALE

OF CONSTRAINED SHARES

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Sale

of constrained shares by corporation

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

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

(3) Where shares are sold by a corporation under subsection (1), the owner of the shares immediately prior to the sale shall by that sale be divested of his or her interest in the shares, and the person who, but for the sale, would be the registered owner of the shares or a person who satisfies the corporation that, but for the sale, he or she could properly be treated as the registered owner or registered holder of the shares under

section 102 shall, from the time of the sale, be entitled to receive only the net proceeds of the sale, together with income earned on it from the beginning of the month next following the date of the receipt by the corporation of the proceeds of the sale, less taxes and costs of administration of a trust fund constituted under subsection 84(1) in relation to it.

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

1987 c38 s7

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Proceeds of sale to be trust fund

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

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

(3) A corporation may transfer a trust fund referred to in subsection (1), and the administration of it, to a trust company in Canada

registered as such under the laws of Canada

or a province, and the corporation is then discharged of all further liability in respect of the trust fund.

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

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

1987 c38 s7

PART VI

SECURITY CERTIFICATES, REGISTERS AND TRANSFERS

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Transfers of securities

Except as otherwise provided in this Act and the Judgment Enforcement Act

, the transfer or transmission of a security shall be governed by the Securities Transfer Act

2007 cS-13.01 s107

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Rep. by 2007 cS-13.01 s107

[Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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Security certificates

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

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

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

(4) A security certificate shall be signed manually by at least 1 director or officer of the corporation or by or on behalf of a registrar, transfer agent or branch transfer agent of the corporation, or by a trustee who certifies it in accordance with a trust indenture, and additional signatures required on a security certificate may be printed or otherwise mechanically reproduced on it.

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

(

a) a security certificate representing

(

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

(ii)

a fractional share, or

(iii)

an option or a right to acquire a security; or

(

b) a scrip certificate.

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

1986 c12 s84

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Contents of share certificate

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

(

a) the name of the corporation;

(

b) the words "Incorporated under the laws of Newfoundland

and Labrador

" or words of the same effect;

(

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

(

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

1986 c12 s85; 2001 cN-3.1 s2

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Rep. by 2007 cS-13.01 s107

[Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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Notation of constraint and failure to note

(1) Where the articles of a corporation constrain the issue, transfer or ownership of shares of a class or series or shares convertible into that class or series in order to help the corporation or an affiliate or an associate to qualify under a prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control, that constraint or a reference to it shall be noted conspicuously on a security certificate of the corporation evidencing a share that is subject to the constraint where the security certificate is issued after the day on which the share becomes subject to the constraint under this Act.

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

1987 c38 s8; 2007 cS-13.01 s107

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Restriction on share transfer

A corporation may not restrict the transfer of its shares otherwise than by way of a constraint under

section 280 when any of the issued shares of the corporation are or were part of a distribution to the public, remain outstanding and are held by more than 1 person.

1986 c12 s87

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Particulars of class

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

(

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

(

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

(

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

(ii)

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

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

(

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

(

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

1986 c12 s88; 1987 c38 Sch A

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Fractional shares

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

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

(

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

(

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

1986 c12 s89; 1987 c38 Sch A

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Fractional share rights

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

(

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

(

b) the articles of the corporation otherwise provide.

1986 c12 s90

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Scrip certificate rights

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

1986 c12 s91

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Securities records

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

(

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

(

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

(

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

1986 c12 s92

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Securities registers

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

1986 c12 s93

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Place of registers

A central securities register shall be maintained by a corporation at its registered office or at an office in the province of a trust company designated by the directors and which meets the requirements of

section 3 of the Trust and Loan Corporations Act

and branch securities registers may be kept at a place in or out of the province and designated by the directors.

1986 c12 s94; 2007 cT-9.1 s5

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Effect of registration

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

1986 c12 s95

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Branch register

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

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

1986 c12 s96

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Destruction of certificates

A corporation, its agent or a trustee defined in

section 145 is not required to produce

(

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

(

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

(

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

1986 c12 s97

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Dealings with registered holder

(1) A corporation or a trustee defined in

Part VII

may, subject to sections 218, 219, 221 and 223, and the Judgment Enforcement Act

treat the registered owner of the security as the person exclusively entitled to vote, to receive notices, to receive an interest, dividend or other payments in respect of the security, and otherwise to exercise all the rights and powers of an owner of the security.

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

to the corporation that

(

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

(

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

(

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

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

1986 c12 s98; 2007 cS-13.01 s107

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No duty to 3rd person

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

section 102, as the owner or registered holder of any of its securities.

1986 c12 s99

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Infants

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

1986 c12 s100

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Joint holders

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

1986 c12 s101

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Transmission of securities

(1) Subject to an applicable law relating to the collection of taxes, a person referred to in paragraph 102(2)(

a) is entitled to become a registered holder, where that person deposits with the corporation or its transfer agent

(

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

(

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

(ii)

a trust company incorporated under the laws of Canada

or a province, or

(iii)

a lawyer or notary acting on behalf of the person referred to in paragraph 102(2)(a); or in the case of transmission by notarial will in Quebec

, a copy of it authenticated under the laws of that province; and

(

b) the following documents, namely:

(

i) an affidavit or declaration of transmission made by a person referred to in paragraph 102(2)(

a) stating the particulars of the transmission, and

(ii)

the security certificate that was owned by the deceased holder

(

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

(

B) in the case of a transfer to another person, endorsed in accordance with

section 30 of the Securities Transfer Act

and accompanied by an assurance the corporation may require under

section 88 of the Securities Transfer Act

(2) Notwithstanding subsection (1), where the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a legal representative of the deceased holder is entitled, subject to an applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder, where the legal representative deposits with the corporation or its transfer agent

(

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

(

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

(3) Deposit of the documents required by subsection (1) or (2) empowers a corporation or its agent to record in a securities register the transmission of a security from the deceased holder to a person referred to in paragraph 102(2)(

a) or to the person that the person referred to in that paragraph may designate and, afterward, to treat the person who thus becomes a registered holder as the owner of those securities.

1986 c12 s102; 2007 cS-13.01 s107

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Overissue

(1)Where there has been an overissue within the meaning of the Securities Transfer Act

and the corporation subsequently amends its articles or trust indenture to which it is a party, to increase its authorized securities to a number equal to or in excess of the number of securities previously authorized plus the amount of the overissued securities, the overissued securities are valid from the date of their issue.

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

(3) A purchase or payment in accordance with subsection 68(2) or (3) of the Securities Transfer Act

is not a payment to which

section 62, 63, 64, 68, 69, 70, 71 or 72 applies.

2007 cS-13.01 s107

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Rep. by 2007 cS-13.01 s107

[Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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Rep. by 2007 cS-13.01 s107

[Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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Rep. by 2007 cS-13.01 s107

[Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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Rep. by 2007 cS-13.01 s107

[Rep. by 2007 cS-13.01 s107]

2007 cS-13.01 s107

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PART VII

TRUST INDENTURES

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Definitions

In this Part

(a)

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

(

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

(ii)

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

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

(b)

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

(c)

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

1986 c12 s141

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Application of

Part

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

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

1986 c12 s142

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Conflict of interest

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

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

(

a) eliminate the conflict of interest; or

(

b) resign from office.

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

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

1986 c12 s143

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Qualification of trustee

A trustee, or at least 1 of the trustees where more than 1 is appointed, shall be a trust company which meets the requirements of

section 3 of the Trust and Loan Corporations Ac.

1986 c12 s144; 2007 cT-9.1 s5

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List of security holders

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

(

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

(

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

(

c) the aggregate principal amount of debt obligations outstanding,

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

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

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

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

(

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

(

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

(5) A list obtained under this

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

(

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

(

b) an offer to acquire debt obligations; or

(

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

1986 c12 s145

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Evidence of compliance

(1) An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall, before doing

an act that is described in paragraph (a), (

b) or (c), provide the trustee with evidence of compliance with the conditions in the trust indenture relating to

(

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

(

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

(

c) the satisfaction and discharge of the trust indenture.

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

an act to be done by the trustee at the request of the issuer or guarantor.

1986 c12 s146

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Contents of declaration

Evidence of compliance as required by

section 150 shall consist of

(

a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that

section have been complied with;

(

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

(

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

1986 c12 s147

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Further evidence of compliance

The evidence of compliance referred to in

section 151 shall include a statement by the person giving the evidence

(

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

section 150;

(

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

(

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

1986 c12 s148

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Evidence of compliance upon demand of trustee

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

1986 c12 s149

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Certificate of compliance

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

1986 c12 s150

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Notice of default

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

1986 c12 s151

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Duty of care of trustee

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

(

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

(

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

1986 c12 s152

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Reliance on statement

Notwithstanding

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

1986 c12 s153

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No exculpation

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

section 156. Document details

Collection	Newfoundland and Labrador — Consolidated Statutes
Citation	S.N.L. 1990, c. C-36
Type	statute
Volume / chapter	c36
Language	en
Format	htm
Source	PROVINCIAL
Identifier	3d453891694b2b6b8bf298e42fb6f3efbea01f51

Source file is stored in the law ingest library (htm).