July 15, 1999

781755088/99028/tlc99028_f

E3tlc99028

Interpretation and Application

Definitions and

interpretation

In this Act:

affiliate means a corporation that is affiliated with another corporation within the meaning of

section 3;

association means an association incorporated or continued under this Act or a former Act, and includes a housing cooperative and a community service cooperative;

call includes an instalment and any other sum paid or payable or agreed to be paid for a membership share;

community service cooperative means an association referred to in

section 178.1 (1);

Company Act , 1996 means the Company Act , R.S.B.C. 1996, c. 62;

corporate purposes means, in relation to an association, any effort to

influence the voting of members, investment shareholders or debentureholders of the association at any meeting,

acquire or sell shares or debentures of the association, or

effect an amalgamation involving, or a reorganization of, the association;

court , except in sections 79, 135, 162 (1) (

b) and 202, means the Supreme Court;

director means a person who is appointed or elected to the governing body of a corporation and includes every person, by whatever name designated, who performs functions of a director, but does not include a person exempted, conditionally or unconditionally, from this definition by regulation;

electronic meeting means a fully electronic meeting or a partially electronic meeting;

eligible organization means an organization that under

section 32 may be admitted to membership in an association;

extraprovincial association means an extraprovincial corporation that is registered under

section 181 or under regulations made in accordance with

Part 11.1 as an extraprovincial association;

federal corporation means a corporation to which both of the following apply:

the most recent of the following was effected by or under

an Act of Canada:

the incorporation of the corporation;

a continuation of the corporation, or any other transfer by a similar process, into the federal jurisdiction;

iii

an amalgamation or similar process from which the corporation resulted;

the corporation has not, since that incorporation, continuation or amalgamation or similar process, been discontinued by or under

an Act of Canada;

federation means an association or extraprovincial association whose membership is comprised substantially of other associations or corporate bodies organized on a cooperative basis;

first nation means an aboriginal governing body, however organized and established by aboriginal people within their traditional territory in British Columbia or another province;

former Act means the Cooperative Association Act , R.S.B.C. 1996, c. 71, and any predecessor Act, and includes

the Agricultural Act, 1915 , S.B.C. 1915, c. 2, in relation to a subsisting association or society having a share capital that was incorporated under or was at any time subject to or governed by that Act, and

the Industrial and Provident Societies Act , R.S.B.C. 1911, c. 105;

fully electronic meeting means a meeting in which persons are entitled to participate solely by telephone or other communications medium, as set out in the notice for the meeting, if all persons attending the meeting are able to participate in it, whether by telephone or other communications medium;

housing cooperative means an association providing accommodation for persons the majority of whom are members of the association and are ordinarily resident in the accommodation;

investment share means a share in an association that is not a membership share;

investment shareholder means a person whose name is entered in the register of investment shareholders of an association as an owner of an investment share of the association;

joint member means a person who is one of 2 or more persons who jointly hold one membership in an association;

marketing board means a marketing board appointed or established under the Natural Products Marketing (BC) Act or under another Act of British Columbia, another province or Canada for the regulation of one or more natural products;

member means a member of an association and includes a joint member;

membership share means a share, in an association, of the class designated under

section 30 as the membership shares and includes the shares that under

section 213 or 214 are renamed as the membership shares;

memorandum means an association's memorandum of association, and includes the application for registration, certificate of incorporation, or a declaration or other equivalent to a memorandum of association, by whatever name called, of an association registered under this Act on its conversion under

section 29 of the Farmers and Womens Institutes Act from an institute under that Act to an association under this Act;

officer , in relation to an association, includes

the chair of the board of directors, every vice chair of the board of directors, the president, every vice president, the secretary, every assistant secretary, the treasurer and every assistant treasurer,

the general manager and every other individual designated, according to function performed for the association, as an officer by the rules or by resolution of the directors, and

every other individual who performs functions for the association similar to those performed by the officers described in paragraphs (

a) and (

b) of this definition;

ordinary resolution means a resolution of the members of an association that is

submitted to all the members who are entitled to vote on the resolution and passed by being consented to in writing by 3/4 of those members, or

passed, after the required notice of meeting under this Act, in a general meeting by a simple majority of the total votes cast by the members who are entitled to vote on the resolution, including votes cast personally and, if permitted by this Act and the association's rules, votes cast by proxy and votes cast by mail ballot;

partially electronic meeting means a meeting in which persons are entitled to participate in person or by telephone or other communications medium, as set out in the notice for the meeting, if all persons attending the meeting are able to participate in it, whether by telephone, by other communications medium or in person;

patronage return means an amount that an association allocates among and credits or pays to its members or to its member and non-member patrons based on the business done by them with or through the association;

registrar means the Registrar of Companies or an authorized individual performing the registrar's duties;

reporting association means

an association that was a reporting association under a former Act immediately before the coming into force of this definition and has not ceased under

section 2 of this Act to be a reporting association, or

a community service cooperative that is ordered to be a reporting association under

section 178.2 and has not ceased under

section 2 to be a reporting association;

rules means the rules adopted by an association, as amended from time to time;

separate resolution means a resolution of

the investment shareholders if the association has only one class of investment shares, or

the investment shareholders of a particular class of investment shares, if the association has more than one class of investment shares

that is

submitted to all the investment shareholders who are entitled to vote on the resolution and passed by being consented to in writing by all of them, or

passed after the required notice of meeting under this Act, in a meeting of the investment shareholders entitled to vote on the resolution, by a majority that the association's rules specify is required, of the votes cast, personally or by proxy, if that specified majority is at least 2/3 but not more than 3/4 of those votes or, if the association's rules do not specify the required majority, at least 3/4 of those votes;

special resolution means a resolution of the members of an association

that is submitted to all the members who are entitled to vote on the resolution and passed by being consented to in writing by all of them, or

that is

passed, after the required notice of meeting under this Act, in a general meeting by a majority that the association's rules specify is required, of the total votes cast by the members who are entitled to vote on the resolution, including votes cast personally and, if permitted by this Act and the association's rules, votes cast by proxy and votes cast by mail ballot, if the specified majority is at least 2/3, but not more than 3/4 of those votes or, if the association's rules do not specify the required majority,

at least 2/3 of those votes, in the case of an association other than a housing cooperative, or

at least 3/4 of those votes, in the case of a housing cooperative, and

if the association's rules provide as set out in

section 41 and the resolution pertains to a matter specified by the association's rules that are authorized under that section, the resolution receives at least the percentage or percentages of favourable votes specified under those rules;

special rights or restrictions , in relation to investment shares of an association, includes special rights and restrictions, whether preferred, deferred or otherwise, in regard to

redemption or return of capital,

conversion into or exchange for the same or any other number of any other kind, class or series of securities of the association or of any other corporation,

dividends,

voting,

nomination, appointment or election of directors or other control, or

any other matter;

subscriber means a person or eligible organization that makes and subscribes the memorandum that is filed with the registrar.

[Repealed 2007-7-34.]

For the purposes of the definition of "special rights or restrictions", the expressions "special rights" and "restrictions", whether used together or separately, have a corresponding meaning.

A reference in an association's memorandum or rules to an extraordinary resolution must be read as a reference to a special resolution.

[Repealed 2007-7-34.]

When status as reporting association ceases

An association ceases to be a reporting association, but continues as an association under this Act, if the registrar on application by ordinary resolution of the association orders that it ceases to be a reporting association.

In making an order under subsection (1), the registrar must take into account prescribed criteria.

Corporate relationships

For the purposes of this Act, one corporation is affiliated with another corporation if

one of them is the subsidiary of the other,

both of them are subsidiaries of the same corporation, or

each of them is controlled by the same person.

For the purposes of this Act, a corporation is a subsidiary of another corporation if

it is controlled by

that other corporation,

that other corporation and one or more corporations controlled by that other corporation, or

iii

2 or more corporations controlled by that other corporation, or

it is a subsidiary of a subsidiary of that other corporation.

For the purposes of this Act,

a corporation is controlled by a person if

shares of the corporation carrying more than 50% of the votes for the appointment or election of directors are held, other than by way of security only, by or for the benefit of that person, and

the votes carried by the shares mentioned in paragraph (

a) are sufficient, if exercised, to appoint or elect a majority of the directors of the corporation, and

an association is controlled by a person if the person has the right to exercise more than 50% of the voting rights that may be cast at an annual general meeting or to elect or appoint a majority of the directors.

For the purposes of this Act, a corporation is the holding corporation of another corporation that is its subsidiary.

Share ownership

For the purposes of this Act, shares are held for the benefit of a person if they are beneficially owned by

the person,

a corporation controlled by the person, or

an affiliate of a corporation controlled by the person.

For the purposes of this Act, a corporation is deemed to beneficially own securities that are beneficially owned by its affiliates.

Repealed

5-7

[Repealed 2007-7-35.]

Cooperative basis

An association must be organized and operated and must carry on business on a cooperative basis.

An association, other than as described in subsection (3), is organized, operated and administered on a cooperative basis if it is substantially organized, operated and administered on the following principles and methods:

membership in the association is open in a non-discriminatory manner to persons who can use the services of the association and are willing and able to accept the responsibilities of membership;

subject to sections 40 (3) and (4), 42 (1) and 45, each member or delegate has one vote;

members contribute to the capital of the association;

members receive limited or no return on capital subscribed to as a condition of membership;

surplus funds arising from the association's operations are used for any or all of the following purposes:

developing the association;

providing or improving services to members;

iii

establishing reserves;

paying dividends;

community welfare or the propagation of cooperative enterprise;

distribution among its members as a patronage return;

education is provided on the principles and techniques of cooperative enterprise.

An association having as its business or as one of its businesses the business of acting as a designated agency of one or more marketing boards, despite subsection (2) is organized, operated and administered on a cooperative basis with respect to that business, if it carries on that business on a basis the association's directors consider expedient in order to exercise and carry out the powers, duties, obligations and restrictions vested in and placed on the association by the marketing board or marketing boards, as the case may be.

An association that is substantially organized, operated and administered on the principles and methods set out in subsection (2) but, by its rules restricts the classes of persons to whom membership is available, is organized, operated and administered on a cooperative basis, despite the restrictions, if the restrictions are consistent with applicable laws with respect to human rights and are reasonable in relation to

any business restrictions set out in the memorandum or rules of the association, and

the association's ability to compete commercially in offering services to members and prospective members.

Patronage returns

An association may allocate among and credit or pay to the members, as a patronage return, all or a part of the surplus arising from the operations of the association in a financial year in proportion to the business done by the members with or through the association in that financial year, calculated in the manner described in subsection (2) at a rate set by the directors.

For the purpose of subsection (1), the directors of an association may calculate the amount of the business done by each member with or through the association in a financial year by taking into account

the quantity, quality, kind and value of things bought, sold, handled, marketed or dealt in by the association,

the services rendered

by the association on behalf of or to the member, and

by the member on behalf of or to the association, and

differences that are, in the opinion of the directors, appropriate for different classes, grades or qualities of things and services.

The association's rules may provide that an association may allocate among and credit or pay to persons who use the services of the association but who are not members a share of any surplus at a rate that is equal to or less than the rate at which the surplus is distributed to members.

If an association allocates among and credits or pays to persons referred to in subsection (3) a share of any surplus, the directors must calculate the business done by the non-member patrons in the manner described in subsection (2).

Incorporation

Formation of Associations

Formation of association

Any 3 or more persons, eligible organizations or both may be incorporated as an association under this Act to carry on any lawful business or activity on a cooperative basis.

An association must not carry on business without at least 3 members but, if at any time it does so for more than 6 months, every director and officer of the association during the time that it so carries on business is jointly and separately liable for the payment of the whole of the debts of the association contracted during that time.

Filing memorandum and rules

The persons, eligible organizations or both wishing to form an association must

make and subscribe, in duplicate,

a memorandum in a form established by the registrar, and

the rules adopted by the subscribers,

file with the registrar 2 copies of the memorandum and rules and fulfill the requirements of sections 12 and 13, and

at the time of filing, pay the prescribed fee.

Memorandum requirements

The memorandum must

show opposite the name of every subscriber the number of membership shares taken by the subscriber,

show opposite the name of every subscriber the number of each class of investment shares, if any, taken by the subscriber and, for each class taken, whether the shares are without par value or the par value of those shares,

contain every restriction, if any, on the business to be carried on by the association or on the powers of the association,

state the purpose of the association,

if applicable, state that

section 173 of the Cooperative Association Act applies to the association and identify that statement as an unalterable provision, or

section 196 (1) of the Cooperative Association Act applies to the association and, if applicable, identify that statement as an unalterable provision,

e.1

if the association is a community service cooperative, comply with

section 178.1 (1),

state the par value of its membership shares or that its membership shares are without par value,

state

the maximum number of membership shares that the association is permitted to issue, or

that the association is permitted to issue an unlimited number of membership shares, and

be consistent with

section 49.

Rules

Subject to subsection (2), the rules adopted by an association may be in the prescribed form.

The rules adopted by an association must provide for each of the prescribed matters.

The association's rules may allow for joint members and if so

must set out the rights of joint members,

must require the joint members to jointly own the membership shares held by the joint membership,

may set out whether the membership shares held by the members jointly are to be held

in joint tenancy or tenancy in common, or

in either joint tenancy or tenancy in common, at the option of the members applying for the joint membership shares, and

must be consistent with the requirements of sections 42 and 49.

If the association's rules allow for joint membership, but are silent as to the matters described in subsection (3) (c), the membership shares held by the members jointly are to be held in joint tenancy.

If the association's rules under subsection (3) (

c) allow for joint tenancy or tenancy in common at the option of the members applying, but the members do not specify, the membership shares held by the members jointly are to be held in joint tenancy.

List of directors

At the time of filing the memorandum and rules of an association under

section 11, the persons wishing to form an association must also file with the registrar each of the following:

a list of the persons named as the first directors of the association under

section 73, stating their full names and addresses;

a notice setting out the address of the registered office of the association as required by

section 27.

Registration documents

After receiving the material required to be filed with the registrar under sections 11 and 14, the registrar, if the memorandum appears to the registrar to comply with this Part, must

file the memorandum and rules and enter the name of the association in the registrar's records,

issue a certificate of incorporation showing that the association is incorporated under this Act, and

publish, in the Gazette or in any other prescribed manner, notice of the incorporation of the association together with a statement of the purpose of the association.

The registrar must retain one copy of the memorandum and rules and return the other copy, certified as having been filed with the registrar, to the applicants.

Conclusiveness of certificate

A certificate of incorporation given by the registrar for an association is conclusive evidence

of compliance with the requirements of this Act for incorporation, and

that the association has been incorporated in accordance with this Act.

Incorporation from date of certificate

On and after the date of the certificate of incorporation, the subscribers and other persons who may become members of the association, are a corporation by the name described, subject to this Act.

Effect of memorandum and rules

The memorandum and rules, when filed, bind the association, its members and its investment shareholders to the same extent as if the memorandum and rules

had each been signed and sealed by the association, each member and each investment shareholder, and

each contained covenants on the part of each member and investment shareholder to observe the memorandum and rules.

Power and capacity

An association has the capacity and the rights, powers and privileges of an individual of full capacity.

Restricted business and powers

An association must not carry on a business that it is restricted from carrying on by its memorandum.

An association must not exercise

a power that it is restricted from exercising by its memorandum, or

any of its powers in a manner inconsistent with the restrictions in its memorandum.

An act of an association, including any transfer of property to or by an association, is not invalid merely because the act or transfer is contrary to the association's memorandum or rules or to this Act.

No constructive notice

In proceedings by or against an association, a person is not affected by or deemed to have notice or knowledge of the contents of a document or other record concerning the association merely because the document or other record has been filed with the registrar or is available for inspection at an office of the association.

Name

Name reservation

On request, the registrar may reserve a name

for a period of 56 days from the date of reservation,

for an intended association,

for an association about to change its name, and

iii

for an extraprovincial corporation intending to

apply for registration as an extraprovincial association, or

change its name, and

for the period the registrar allows, for an association or extraprovincial association intending to amalgamate with another.

Form of name

An association must include the word "cooperative", "co-operative", "coop", "co-op" or "coopérative", or another grammatical form of any of those words, as part of its name.

An association may include only one of the following words in its name:

"association";

"society";

"union";

"exchange";

a similar word approved by the registrar.

An association must not include in its name the words "not for profit" or "non profit" or any words of similar import unless it is

a housing cooperative to which

section 173 applies, or

a community service cooperative.

An association must not include in its name either the word "company" or the word "limited".

Registrar's discretion as to name

An association must not be incorporated under

section 10, a corporation must not be continued under

section 185 and an extraprovincial corporation must not be registered as an extraprovincial association under

section 181 or under regulations made in accordance with

Part 11.1 under a name that

the registrar for a good and valid reason disapproves, or

does not comply with the applicable requirements of this Division.

Use of "cooperative" and its derivatives in business name restricted

A person must not carry on any business or activity under any name that includes the word "cooperative", "co-operative", "coop", "co-op" or "coopérative", or another grammatical form of any of those words, or adopt any new name including that word, or grammatical form, unless the person is

an association,

incorporated under

an Act of Canada as a cooperative association, insurance company or credit society,

a corporation incorporated under another Act that at the time this

section comes into force is the subject of a subsisting approval of the superintendent under a former Act, or

an extraprovincial association.

Publication of name

An association must do the following:

display its name, and keep its name displayed, in legible letters in a conspicuous position at each place in which its business is carried on;

have its name engraved in legible characters on its seal, if any;

have its name mentioned in legible characters

on all notices, advertisements and other official publications of the association,

on all commercial paper or goods purporting to be signed by or on behalf of the association, and

iii

on all bills or parcels, invoices, receipts and letters of credit of the association.

Registered Office

Registered office

An association must

have a registered office in British Columbia to which all communications and notices may be delivered, and

file with the registrar notice of every change in its address.

Service of documents

A document or other record may be served on an association by

leaving it at, or mailing it by registered mail to, the registered office of the association as recorded under this Act, or

personally serving a director or officer of the association.

Membership and Voting

Membership

Membership

The members of an association are the subscribers and the persons and eligible organizations admitted to membership in the association according to its rules.

Membership share requirement

An association, in its rules, must designate a class of shares as the membership shares and provide, as a condition of the admission of a person or eligible organization as a member of the association, that the person or eligible organization subscribe for a minimum number of membership shares.

Members under 19 years of age

An association may provide in its rules for the admission to membership in the association of persons under 19 years of age who are at least 16 years of age.

Rules referred to in subsection (1) are subject to subsection (3).

Despite the Infants Act , the Age of Majority Act or the common law and subject to subsection (4) of this section, an individual admitted to membership in an association who is under 19 years of age and who is at least 16 years of age

has the same obligations, rights and legal capacity as a member of the association who has reached 19 years of age, and

may be sued,

but only in respect of membership in an association and of any indebtedness or obligation to the association.

An individual under 18 years of age is not eligible to be a director or officer of an association.

Government, first nations and corporations as members

Each of the following may be admitted to membership in an association and represented by an individual authorized on its behalf:

the government;

a first nation;

a corporation.

Withdrawal from membership

An association

must permit the withdrawal of members from the association, and

subject to

section 38 (1) and paragraph (

a) of this subsection, may provide in the association's rules for the withdrawal of members from the association and the transfer of their membership shares.

Withdrawal from membership in an association is subject to any rules of the association that are made in accordance with subsection (1) (b).

Termination of membership in an association other than a housing cooperative

This

section applies only to an association other than a housing cooperative.

An association may provide in its rules for the termination of the membership of a member.

Rules referred to in subsection (2) are subject to this

section and sections 36 to 39.

Subject to any rules of an association for termination of membership, and to subsections (5) and (6) of this

section and sections 36 to 39, an association may terminate the membership of a member if

the member has engaged in conduct detrimental to the association,

the member has not paid money due by the member to the association within a reasonable time after receiving written notice to do so from the association, or

in the opinion of the directors, based on reasonable grounds, the member

has breached a material condition of an agreement with the association, and

has not rectified the breach within a reasonable time after receiving written notice to do so from the association.

An association may exercise the powers under this

section to terminate the membership of a member only by a resolution of the directors requiring a majority of at least 3/4 of all the directors and passed at a meeting of the directors called to consider the resolution.

Sections 156 and 208 do not apply to termination of a membership in an association on the grounds described in subsection (4) (

b) or (c).

Termination of membership in a housing cooperative

A housing cooperative may provide in its rules for the termination of the membership of a member.

Rules referred to in subsection (1) and the rules that a housing cooperative may adopt under subsection (3) of this

section are subject to this

section and sections 36 to 39.

A housing cooperative by its rules may adopt either of the following grounds as constituting grounds for termination of the membership of a member who has a right to possession or occupancy of residential premises that is dependent on the member's membership:

the member has not paid rent, occupancy charges or other money due by the member to the housing cooperative in respect of the residential premises and has not rectified the nonpayment within a reasonable time after receiving written notice to do so from the housing cooperative;

the member

has not paid rent, occupancy charges or other money due by the member to the housing cooperative in respect of the residential premises, or

in the opinion of the directors, based on reasonable grounds, has breached a material condition of an agreement between the member and the housing cooperative relating to the member's

possession or occupancy of the residential premises, or

use of the property of which those premises form part,

and has not rectified the nonpayment or breach within a reasonable time after receiving written notice to do so from the housing cooperative.

Subject to any rules of a housing cooperative for termination of membership, and to subsections (5) and (6), a housing cooperative may terminate the membership of a member if the member has engaged in conduct detrimental to the housing cooperative.

A housing cooperative may exercise the powers under this

section to terminate the membership of a member only by a resolution of the directors requiring a majority of at least 3/4 of all the directors and passed at a meeting of the directors called to consider the resolution.

Sections 156 and 208 do not apply to termination under this

section of a membership in a housing cooperative.

Rules of association respecting termination of rights or membership

35.1

In this section:

agreement means an agreement between an association and a member, and includes an occupancy agreement;

occupancy agreement means an agreement, between a housing cooperative and a member, relating to the member's

possession or occupancy of residential premises, or

use of the property of which those premises form part.

Despite any provision to the contrary in an agreement or in the rules of an association,

a breach by a member of an association of an agreement or of the rules of the association does not constitute a termination of the member's membership, whether or not the rules of the association or the terms of the agreement provide that the breach constitutes a deemed withdrawal of the member's membership, and

if the membership of a member referred to in paragraph (

a) is to be terminated, it must be terminated under

section 34 or 35, as the case may be, and sections 36 to 39.

Without limiting subsection (2) of this section, if a member of a housing cooperative has, as a result of that membership, a right to possession or occupancy of residential premises, the housing cooperative must not terminate the member's right to possession or occupancy unless the member's membership is first terminated in accordance with sections 35 and 36 to 39.

If an association's rules contain a provision that does not accord with this section, the association must amend the provision at its next general meeting so that the provision accords with this

section or, if that next general meeting is to take place within one month after the coming into force of this section, at the general meeting to follow that next general meeting.

Notices respecting termination of membership

A person whose membership in an association is proposed to be terminated by a resolution of the directors

is entitled to at least 7 days' notice of the meeting at which the resolution is to be considered, together with a statement of the grounds on which the person's membership is proposed to be terminated, and

may attend the meeting, either personally or by or with an agent or counsel, to make submissions.

Within 7 days after the date on which a proposed resolution to terminate a membership referred to in subsection

(1) is withdrawn,

is defeated because it does not receive the required majority, or

is passed by the required majority,

the directors must,

subject to paragraph (e), deliver written notice of the outcome to the person, or

serve written notice of the outcome on the person and cause the housing cooperative to comply with other prescribed conditions if

membership in a housing cooperative is being terminated for non-payment of rent, occupancy charges or other money due by the member to the housing cooperative in respect of residential premises, and

the resolution is passed by the required majority.

The notice referred to in subsection (2) (

e) must be accompanied by a notice in the prescribed form of the person's right to appeal the termination under

section 37 (3).

Appeal from termination of membership

If the directors of an association resolve under

section 36 to terminate a person's membership in the association, the person may, unless the person is a member of a housing cooperative whose membership was terminated for non-payment of rent, occupancy charges or other money due by the member to the housing cooperative in respect of residential premises, appeal the termination at the next meeting of the association by delivering a notice of appeal to the association within 7 days after delivery of written notice referred to in

section 36 (2) (d).

A person whose membership in an association is terminated and who, being entitled to do so under subsection (1), appeals the termination of the membership under and within the time limited by subsection (1), continues, despite the resolution of the directors terminating the membership, to be a member of the association unless the members at the general meeting to which the appeal is brought confirm the termination of the membership

in the case of a membership in an association other than a housing cooperative,

if the membership is terminated for any of the reasons referred to in

section 34 (4) (

b) or (c), by a resolution requiring a simple majority or, if provided by the association's rules, a greater majority, or

if the membership is terminated for the reason referred to in

section 34 (4) (a), by a special resolution, or

in the case of a membership in a housing cooperative,

if the membership is terminated for a reason referred to in

section 35 (3) (b) (ii), by a resolution requiring a simple majority or, if provided by the housing cooperative's rules, a greater majority, or

if the membership is terminated for the reason referred to in

section 35 (4), by a special resolution.

2.1

If the members of a housing cooperative confirm the termination of a person's membership under subsection (2) (b), the housing cooperative must

promptly serve the person with

a notice that the resolution or special resolution confirming the termination was passed by the members, and

a notice in the prescribed form of the person's right to appeal the termination under subsection (3), and

comply with other prescribed conditions.

If a person's membership in a housing cooperative is terminated, the person may appeal the termination to the court

within the following time period:

if the membership was terminated for non-payment of rent, occupancy charges or other money due by the member to the housing cooperative in respect of residential premises, within 30 days after the date on which the notice referred to in

section 36 (2) (

e) was served on the person;

if the membership was terminated for any other reason, within 30 days after the date on which the notice referred to in subsection (2.1) (a) (

i) of this

section was served on the person, and

on any one or more of the following grounds:

the housing cooperative failed to observe the principles of natural justice in terminating the membership;

the decision of the housing cooperative is not reasonably supported by the facts;

iii

the decision of the housing cooperative is not authorized by

section 35.

3.1

Despite

section 171, a person who has commenced an appeal in accordance with subsection (4) of this

section continues to be a member of the association for the purposes of an application under

section 172.1, and may include with the appeal an application under

section 172.1 for an order of possession.

An appeal to the court under subsection (3) must be commenced in accordance with Rule 18-3 of the Supreme Court Civil Rules by notice of appeal in Form 73 or 74, as the case may be,

filed in a registry of the court before expiry of the 30 day period referred to in subsection (3), and

served on the housing cooperative before expiry of the 14 day period beginning on the day after the notice of appeal is filed in the registry of the court.

4.1

If a person commences an appeal under subsection (3) from a decision of a housing cooperative to terminate that person's membership, the housing cooperative may file an application under

section 172 (1) with its notice of interest under Rule 18-3 (8) of the Supreme Court Civil Rules.

4.2

If an appeal is commenced under this section,

any application by the housing cooperative for an order under

section 172 (1) must be filed with the appearance, and

any application by the member under

section 172.1 must be filed with the notice of appeal

so that the court may determine at the same time all the issues between the parties relating to the termination.

An appeal to the court under subsection (3) may be a new hearing and the court may hear all the evidence the court considers relevant, including, but not limited to, the evidence of the housing cooperative and of the person, and the court

must do one of the following:

despite

section 39, restore the membership in the housing cooperative of the person whose membership was terminated, with the restoration to be effective on and after a date specified by the court, and, if an application has been made under

section 172.1, make an order of possession in favour of the member;

confirm the resolution by which the termination was effected or confirmed, and, if an application has been made under

section 172, make an order of possession in favour of the housing cooperative, and

may make any other order that the court considers appropriate.

An appeal from a decision of the court under subsection (5) lies to the Court of Appeal with leave of a justice of the Court of Appeal.

Requirement to redeem shares on membership withdrawal or termination

A person who withdraws from membership in an association is entitled, subject to

section 66 (2), to require the association to redeem

the person's membership shares, and

any of the person's investment shares in classes restricted for distribution to members only

within a period and on conditions the association may establish under its rules, or immediately and unconditionally, if the association's rules do not establish any period or conditions.

A person whose membership in an association is terminated under this Division is entitled, subject to

section 66 (2), to require the association to redeem

the person's membership shares, and

any of the person's investment shares in classes restricted for distribution to members only.

The entitlement, described in subsections (1) and (2), of a person who withdraws from membership in a housing cooperative or whose membership in a housing cooperative is terminated, is postponed until the person has given up the actual possession and occupancy of any residential premises in which the person had a right to possession or occupancy dependent on the person's membership.

In the case of

a community service cooperative, or

an association to which

section 173 or 196 (2) applies,

the refund on account of membership shares must not exceed the amount paid up on the member's membership shares.

Special resolution for readmission

A person whose membership is terminated under this Division must not be again admitted to membership except by special resolution of the association.

Voting by Members

Right to vote

Subject to this Division and to Division 3 of this Part, a member has one vote on all matters to be decided by the members.

A member's right to vote derives from membership and not membership shares.

An association may provide in its rules that on an equality of votes, the chair at any meeting of members has a casting or second vote.

A member in arrears with a call on the member's membership shares may not exercise any right to vote on the member's own behalf or on behalf of any other person.

Special voting rights for classes of membership

An association with more than one class of membership may provide in its rules that a special resolution that pertains to a matter specified by the association's rules does not pass unless in addition to receiving the majority for passage required under paragraph (b) (

i) of the definition of "special resolution", the percentage of votes cast in favour of the resolution by the members of each class is at least the percentage, if any, specified in the association's rules for that class on that matter.

Joint members

Joint members of an association are together entitled to only one vote unless the association's rules provide for each of the joint members to have one vote.

An association may provide in its rules for the exercise by joint members of their voting right under subsection (1).

Subject to any rules of an association under subsection (2), if 2 or more persons are joint members of an association who are entitled to one vote between or among them, the joint member whose name appears as the first of 2 or more joint members on the association's register of members is entitled to cast the vote, but if that joint member does not do so, the joint member whose name next appears on the register is entitled to cast the vote, and so on if there are more than 2 joint members.

Joint members of an association are jointly and separately liable for all assessments, levies, dues, fees, payments and other charges imposed or payable in respect of the membership.

If membership shares are held jointly by more than one person,

an association is not required to issue more than one share certificate in respect of those membership shares, and

delivery of a share certificate to one of the joint owners is sufficient delivery to them all.

Proxy voting

Except as permitted under this section,

an association may not permit its members to vote by proxy at meetings of the members, and

the members may not vote by proxy at meetings of the members.

Subject to subsection (3), a member of an association may vote by proxy at a meeting of the association, or any adjournment of that meeting, that is not an electronic meeting if the member's residence, as determined from the register of members of the association, is more than 80 km, or more than a distance specified in the association's rules,

from the place of the meeting, if there is only one meeting place, or

from the place of the meeting closest to the member's residence, if there are 2 or more meeting places.

An association in its rules may

specify the distance for the purpose of subsection (2),

further restrict proxy voting permitted under this section,

provide for the form and manner of proxy voting permitted under subsection (2), or

entirely prohibit membership proxy voting.

A proxy is invalid if

it does not specify a particular meeting at which the proxy may be exercised, or

it is given for more than one meeting and any adjournment of that meeting.

A proxy is valid only at the meeting specified in the proxy or any adjournment of that meeting.

Proxies under this

section may be given only to a member of the association and the member to whom the proxy is given may not vote the proxy except in person at the meeting specified in the proxy or any adjournment of that meeting.

A member may not vote more than 3 membership proxies.

Voting choices for a member

An association may provide in its rules to allow its members to vote in an election of directors and on special resolutions and ordinary resolutions by voting personally at a general meeting or voting by mail ballot, whichever method the member chooses.

Corporate membership — equitable voting

If the members of an association are corporate bodies organized on a cooperative basis, the association may provide in its rules for an equitable system of voting that will give representation in relation to the number of persons who are members of each member body and to the patronage of the association by its members.

Delegate System of Voting

Rules may provide for a delegate system

Despite any other provision of this Act, an association may provide in its rules for a system of delegate voting by members including the following or similar provisions:

division of the territory in which the association has members into districts, and the formation in each district of

a local organization comprising all members of the association resident within the district, or

2 or more local organizations comprising the members of the association resident within the area of each of the local organizations;

number of directors to be elected from each district, and the election of those directors either directly by the members of the local organizations or by district delegates;

election of district delegates by each local organization to attend general meetings of the association as delegates from the district, and the number to be so elected by each local organization;

delegation to the district delegates of all or any of the powers that may be exercised by the members of the association at a general meeting;

method of forming new districts, either as additions to or substitutions for the existing districts, and redetermining the number of directors and local organizations;

method of summoning district delegates to attend general meetings of the association, the number of delegates to constitute a quorum and the persons who may call meetings, including a provision for the calling of special general meetings at any time at the request of at least 25% of the district delegates;

obtaining the opinion of the members of the association on any question of general concern to the members, and the mode of obtaining that opinion by a vote of the members.

Each member of an association that has a delegate system of voting may vote

only at the meetings of the local organization of which the member of an association is a member, and

only on questions submitted to the vote of the members under the provisions of rules made under subsection (1) (g).

Only the district delegates are entitled to attend and vote at general meetings of the association, each delegate having one vote.

Executive committee

An association that has a delegate system of voting may provide in its rules for

the formation of an executive committee and the exercise by that committee of all or any of the functions and powers of the directors, and

the remuneration of district delegates and of members of the executive committee.

Finance

Share Capital Structure

Capital — membership and investment shares

The authorized share capital of an association consists of

a single class of membership shares, with or without par value, regardless of whether or not the association has more than one class of membership, and

if authorized by the association's memorandum, one or more classes of investment shares, with or without par value.

If the authorized investment share capital of an association consists of investment shares both with and without par value, the investment shares with par value must be a class or classes of shares distinct from the shares without par value.

Every investment share of a class of investment shares without par value must be equal to every other investment share of that class, and are subject to special rights or restrictions attached to the investment shares of that class.

A share in an association is personal estate.

Investment shares — provisions in memorandum and rules

An association may provide in its memorandum for the association to issue investment shares, and if the memorandum so provides, the memorandum of the association must be consistent with the requirements for investment shares in

section 48, and

the memorandum must set out for every class of investment shares

whether the number of investment shares that may be issued is unlimited and, if not, the maximum number of investment shares that may be issued, and

the par value of the shares or a statement that the shares are without par value, and

the rules must set out

the designation of each class of investment shares and the special rights and restrictions attached to each class, and

if applicable, that investment shares may be issued to non-members.

Repealed

[Repealed 2000-5-14.]

Consideration for membership and investment shares

The consideration for a share with par value issued or allotted by an association, whether it is a membership share or investment share, must be equal to or greater than the par value of the share.

The consideration for a share without par value issued or allotted by an association, whether it is a membership share or investment share, must be set

in the manner required by the association's rules, or

by special resolution of the association if its rules do not set out the manner in which the consideration is to be set.

All membership shares and investment shares in an association must be paid for in money, except as permitted by subsection (4), and must not be issued at a discount.

An association may issue membership shares or investment shares in consideration or partial consideration for the acquisition of

shares or other securities of an association having a purpose similar to its own,

assets to be used in its business, or

all or part of the business of another person if the business is consistent with the association's own purpose.

Issue of membership and investment shares

An association must not issue or allot membership shares or investment shares until the shares are fully paid, except, in the case of membership shares with par value, as permitted by the association's rules under subsection (2).

An association whose membership shares are shares with par value may provide in its rules for either or both of the following:

that the membership shares in the association may be payable on call;

that the membership shares may be forfeited for default in payment.

Payments to joint shareholders

Unless otherwise agreed between an association and its joint membership shareholders or joint investment shareholders, as the case may be,

payments, including redemption amounts and interest and dividends, must be made to the shareholders jointly, and

payment by an association in accordance with this

section is an effective discharge of the association, with respect to a demand by a person against it, up to the amount so paid.

Member share dividends or interest

A member must not receive any dividend or interest on membership shares, except in proportion to the amount paid up on them, if they are membership shares with par value.

Liability of members and investment shareholders

The liability of a member or investment shareholder of an association for the debts, obligations and acts of the association is limited to the amount, if any, unpaid on the shares held by the member or investment shareholder.

Money payable by a member or investment shareholder to an association under its memorandum or rules is a debt due from the member or investment shareholder to the association of the nature of a debt due by instrument under seal.

Association's lien on membership or investment shares

An association has a lien on the membership shares or investment shares of the person who holds the shares for a debt due to the association by that person, and the lien extends to any dividend or interest credited to that person for the membership shares or investment shares, as the case may be.

Membership or investment share certificates

A person whose name is entered in an association's register of investment shareholders or in the association's register of members is entitled, without payment, to a certificate of the association, specifying the investment shares of each class or the membership shares that are held by the person and the amount paid up on them.

A certificate referred to in subsection (1) is evidence of the person's title to the membership shares or investment shares described in the certificate.

Despite subsection (1), an association's rules may require that the association not issue membership share certificates.

Particulars of issue on investment share certificates

If an association has more than one class of investment shares, the association must ensure that

a full text of the special rights or restrictions attached to any class of investment shares is contained in or permanently attached to every share certificate representing that class of investment shares, or

every share certificate representing investment shares of a particular class of investment shares includes a statement on it that

there are special rights or restrictions attached to that class of investment shares, and

a free copy of the full text of the special rights or restrictions may be obtained at the registered office of the association.

An association must

keep at its registered office a copy of the full text of the special rights or restrictions attached to any class of investment shares, and

provide a free copy of that text to any person who requests one.

Voting by Investment Shareholders

Investment shareholder voting rights and restrictions

Subject to this section, no right to vote on a matter that is the subject of a special or ordinary resolution of the members of an association attaches to an investment share in the association.

The rules of an association may provide that investment shares, or if there are classes of investment shares, investment shares of a specified class, confer on their holders the right

to vote on an election of directors because of the occurrence of a contingency that has occurred and is continuing, or

to elect a set number or a percentage of the directors.

A right referred to in subsection (2) is exercisable at a separate meeting of the investment shareholders or of the holders of the investment shares of the specified class, as the case may be.

Despite subsection (2) of this section, the rules must not provide

contrary to

section 72, or

that the investment shareholders have the right to elect more than 20% of the directors.

Separate resolution rights not affected

Section 59 does not affect the right of investment shareholders of an association to vote on any separate resolution under this Act.

One investment share, one vote

If holders of investment shares have the rights referred to in

section 59 or the right in accordance with this Act to vote on a separate resolution,

each investment share entitles the holder to only one vote, and

each investment share held jointly by 2 or more holders entitles the holders considered together to only one vote.

An association may provide in its rules that on an equality of votes, the chair at any meeting of investment shareholders has a casting or second vote.

Proxy voting by investment shareholders

If holders of investment shares have the rights referred to in

section 59 or the right in accordance with this Act to vote on a separate resolution, a holder of any of the investment shares may vote by proxy, and the proxy may be any person appointed by the investment shareholder.

An association may provide in its rules for proxy voting by investment shareholders.

Rules referred to in subsection (2) are subject to subsection (1).

Members holding investment shares

Despite

section 40, a member who holds an investment share in an association may exercise any voting rights attached to that investment share.

Joint Investment Shares

Joint investment shares

Unless an association's rules provide otherwise, if 2 or more persons are joint holders of investment shares in an association, the joint shareholder whose name appears as the first of 2 or more joint shareholders on the share certificate for the investment share or investment shares held by the joint shareholders is entitled to cast the vote.

If a joint holder of an investment share in an association entitled under subsection (1) to cast the vote does not do so, the joint shareholder whose name next appears on the share certificate is entitled to cast the vote, and so on if there are more than 2 joint shareholders.

If investment shares are held jointly by more than one person,

an association is not required to issue more than one share certificate in respect of those investment shares, and

delivery of a share certificate to one of the joint shareholders is sufficient delivery to them all.

Joint tenancy or tenancy in common

A joint investment share in an association may be held in joint tenancy or tenancy in common, and if the joint shareholders do not specify which to the association, the joint investment share is deemed to be held in joint tenancy.

Share Capital Redemption and Reduction

Redeeming shares, loans to members, paying dividends

Subject to its memorandum or its rules, an association

may redeem and reissue its own membership shares or investment shares,

on the security of property, may advance money to or guarantee the contracts of its members,

may pay dividends at rates not exceeding 8% yearly, or higher limits that the association may set out in its rules, on membership shares that are paid up, and

may pay dividends on investment shares that are paid up.

An association must not exercise its powers to redeem membership shares or investment shares, prepay loans made to the association by its members or pay dividends if there are reasonable grounds for believing that

the association is unable to pay its liabilities as they become due in the ordinary course of business, or

exercising one or more of the association's powers to redeem membership shares or investment shares, to prepay loans made to the association by its members or to pay dividends would

render the association unable to pay its liabilities as they become due in the ordinary course of business, or

cause the realizable value of the association's assets to be less than its liabilities.

The court, on the application of a director of an association, may declare that, in view of all the circumstances, there are reasonable grounds for believing that

the association is unable to pay its liabilities as they become due in the ordinary course of business, or

exercising one or more of the association's powers to redeem membership shares or investment shares, to prepay loans made to the association by its members or to pay dividends would

render the association unable to pay its liabilities as they become due in the ordinary course of business, or

cause the realizable value of the association's assets to be less than its liabilities.

Reduction of capital

An association may reduce its membership share capital or investment share capital, whether issued or unissued, in any way by special resolution confirmed by the court and, without limiting this, may

extinguish or reduce the liability on any of its partly paid shares in respect of capital not paid up,

either with or without extinguishing or reducing the liability on any of its partly paid shares, cancel any paid up capital that is lost or unrepresented by available assets, or

either with or without extinguishing or reducing the liability on any of its partly paid shares, pay off any paid up capital that is in excess of the needs of the association.

every creditor of the association who the court considers is entitled to object to the reduction has consented to it, or

the debt or claim

has been discharged,

has determined, or

iii

has been secured.

A resolution under subsection (1) does not take effect until certified copies of the resolution and the court order have been filed with the registrar.

If a resolution under subsection (1) has the effect of diminishing the authorized share capital of an association,

the resolution must alter the memorandum accordingly, and

the association must file a copy of its memorandum, as altered, with any material required by the registrar under subsection (3).

If the association making application for confirmation of a resolution referred to in subsection (1) is an association registered under

Part 2 of the Employee Investment Act , the court must not confirm the resolution until the association has presented satisfactory proof that any amount payable to the Minister of Finance under

section 31 or 32 of that Act has been paid.

Debentures

Enforcement of contract to take debentures

67.1

A contract with an association to take up and pay for a debenture of the association may be enforced by an order for specific performance.

Validity of perpetual debenture

67.2

Despite any rule of equity to the contrary, no condition contained in a debenture, or in a deed for securing a debenture, is invalid merely because the debenture is made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long.

Issue of redeemed debenture

67.3

If an association redeems a debenture that was previously issued as one of a series,

unless an express or implied provision to the contrary is contained in

the debenture,

the rules, or

iii

a contract entered into by the association, or

unless the association has, by a resolution of the members, manifested its intention that the debenture be cancelled,

the association has, and is deemed always to have had, power to reissue the debenture, either by reissuing the same debenture or by issuing another debenture in its place, and

if the debenture so states, or

if the debenture was first issued before January 1, 1977,

on the reissue, the person entitled to the debenture has, and is deemed always to have had, the same priority as if the debenture had never been redeemed.

If an association redeems a debenture and has the power to reissue that debenture, particulars of that debenture must be included in the balance sheet of the association.

If an association has issued or deposited a debenture created by it to secure advances on current account or otherwise, the debenture is not deemed to have been redeemed merely because any of the advances are repaid, or that the account of the association ceases to be in debit, while the debenture remains issued or deposited.

The reissue of a debenture or the issue of another debenture in its place under this

section is deemed not to be the issue of a new debenture for the purpose of a provision limiting the amount or number of debentures to be issued.

Evidence of old register of debentureholders

67.4

A register of debentureholders prepared under the Company Act , 1996, or an earlier Companies Act , as it applied for the purposes of a former Act, is evidence of any matters directed or authorized under the applicable Act to be inserted in it.

Association Alterations

Amendments to Memorandum and Rules

Amendment of memorandum and rules

Subject to subsection (2) of this

section and to sections 70, 173, 178.1 and 196 (2), an association may amend its memorandum and rules to do any of the following:

change its name to a name approved by the registrar;

add, alter or remove any restriction on

the business that the association may carry on, or

the powers of the association;

create a class or classes of investment shares;

alter the name or designation of all or any of its shares;

create, define and attach special rights or restrictions to investment shares of any class, whether issued or unissued;

vary or abrogate any special rights or restrictions attached to investment shares of any class, whether issued or unissued;

divide the members into classes of membership with rights, obligations and limitations that may be different for the different classes;

create new classes of membership with rights, obligations and limitations for each new class that may be different from those for the other classes of membership;

redefine the rights, obligations and limitations applicable to a class of membership;

establish a maximum number of

membership shares, or

investment shares in a class of investment shares;

subdivide its membership shares without par value or its investment shares of any class without par value into membership shares or investment shares, as the case may be, so that the number of those shares is increased;

subdivide its membership shares with par value or its investment shares of any class with par value into membership shares or investment shares, as the case may be, with lesser par value;

consolidate all or any of its shares with par value into shares of greater par value;

consolidate all or any of its shares without par value so that the number of those shares is reduced;

change all or any of its shares with par value into shares without par value;

change all or any of its shares without par value into shares with par value;

extend, reduce or eliminate the maximum number of membership shares that the association is permitted to issue;

extend, reduce or eliminate the maximum number of investment shares of any class of investment shares that the association is permitted to issue;

eliminate a class of investment shares if

none of the shares of that class have been allotted or issued, or

none of the shares allotted or issued out of that class remain outstanding;

eliminate a class of membership if

no persons have become members of the association in that class of membership, or

no members of the association remain in that class of membership;

add, alter or remove any other provision of the memorandum or rules.

An amendment under subsection (1) must be authorized by special resolution.

The proportion between the amounts paid and unpaid on any issued shares must be the same after an amendment described in subsection (1) (

k) to (

p) as before the amendment.

Effective date of amendment

A special resolution for a purpose referred to in

section 68 (1) does not take effect until a certified copy of it has been filed with the registrar.

On the registrar filing a certified copy of a special resolution changing the name of an association, the registrar must issue a certificate showing the change of name and the date the change is effective.

The registrar must publish, in the Gazette or in any other prescribed manner, notice of a change of name.

A change of the name of an association does not affect any of its rights or obligations, or render defective any legal proceedings by or against it, and any legal proceedings that may have been continued or commenced against it under its former name may be continued or commenced against it under its new name.

A certificate of the registrar under subsection (2) is conclusive evidence of compliance with this Act in relation to the change of name.

No interference with class rights without consent

A right or special right attached to issued investment shares of any class must not be prejudiced or interfered with under the association's memorandum or rules unless investment shareholders holding investment shares of that class consent by a separate resolution.

The rights, obligations and limitations applicable to a class of membership in an association with more than one class of membership must not be prejudiced or interfered with under the association's memorandum or rules unless members of that class of membership, in a separate vote of those members, consent by the majority required for a special resolution of the association.

Substantial Disposition of Association's Undertaking

No pledge or disposition of association's undertaking without consent

Unless the association's rules otherwise provide, an association, unless authorized to do so by a special resolution of the members, must not secure the repayment of money borrowed by the association by means of a charge on the whole or substantially the whole of the undertaking of the association.

An association must not dispose of the whole or substantially the whole of the undertaking of the association unless

the disposition is authorized by a special resolution of the members, and

if there are outstanding investment shares in the association of one or more classes, the investment shareholders of each class of investment shares approve the disposition by a separate resolution.

Management

Directors Generally

Directors

An association must have at least 3 directors and

a majority of the directors of the association must be individuals ordinarily resident in Canada, and

one of the directors of the association must be an individual ordinarily resident in British Columbia.

Subject to subsections (3) and (4) of this section, all of the directors of the association must be members of the association or individuals authorized under

section 32.

An association may provide in its rules for the election or appointment of directors who are neither members nor individuals authorized under

section 32.

The number of the directors described in subsection (3) must not exceed 1/5 of the total number of directors provided for in the association's rules.

If 2 or more persons are joint members of an association, only one of the joint members may be a director of the association at any time unless the association's rules otherwise provide.

First directors

The first directors of an association must be appointed in writing by a majority of the subscribers.

The first directors hold office until the first general meeting.

Election or appointment of directors

An association must provide in its rules for the election or appointment of the directors of the association other than the first directors.

Subject to the association's rules under subsection (1), if investment shareholders have a right to elect one or more directors, they meet separately from the members for the purpose of the election or appointment of the directors.

No election or appointment of a person as a director is valid unless

the person consented to act as a director in writing before the election or appointment, or

if elected or appointed at a meeting, the person was present and did not refuse at the meeting to act as a director.

A consent in writing given under subsection (3) (

a) is only effective until the next following annual election or appointment of directors unless the consent states it is effective until

revoked, or

a date or time stated in it.

Remuneration of directors

The association in general meeting must determine the remuneration of the directors, and what will be allowed to them for expenses.

Directors' responsibility to manage association

The directors must manage or supervise the management of the business of the association and may exercise all the powers of the association.

The directors may delegate any of their powers to committees of the directors and set terms of reference for the committees that are binding on them in exercising the delegated powers.

No limitation or restriction on the powers or functions of the directors is effective against a person who does not have knowledge of the limitation or restriction.

Meetings of directors

A director of an association may participate in and vote at a meeting of directors

in person, or

unless the association's rules provide otherwise, by telephone or other communications medium if all directors attending the meeting are able to participate in it, whether by telephone, other communications medium or in person.

1.1

If a meeting of directors is a fully electronic meeting, subsection (1) (

a) does not apply to the meeting.

A director who participates in a meeting in a manner contemplated by subsection (1) (

b) is deemed for all purposes of this Act and the association's rules to be present at the meeting.

Unless the association's rules provide otherwise, a resolution of the directors may be passed without a meeting if each of the directors entitled to vote on the resolution consents to the resolution in writing.

The consents referred to in subsection (3) must be kept with the minutes of proceedings of directors.

Association to file notice as to directors

Every association, within 15 days after the appointment or election of a director, must file with the registrar a notice, in a form established by the registrar, of the appointment or election.

A filing under subsection (1) is unnecessary if a director ceases to be a director and is re-elected or reappointed on the same day.

Persons disqualified as directors

A person must not become or act as a director of an association unless that person is an individual who is qualified to do so.

An association may provide in its rules for qualifications or disqualifications of directors in addition to those in this section.

An individual who is not a member of an association or an individual authorized under

section 32 is not qualified to become or act as a director of an association other than as a non-member director of the association, if the association's rules allow non-member directors in accordance with

section 72.

An individual is not qualified to become or act as a director of an association if that individual is

under the age of 18 years,

found by a court, in Canada or elsewhere, to be incapable of managing the individual's own affairs, unless a court, in Canada or elsewhere, subsequently finds otherwise,

b.1

a person in respect of whom a certificate of incapability is issued under the Adult Guardianship Act , unless the certificate is subsequently cancelled under

section 37 (4) of that Act,

an undischarged bankrupt, or

convicted in or out of British Columbia of an offence in connection with the promotion, formation or management of a corporation or of an offence involving fraud, unless

the court orders that the individual continues to be qualified to become or act as a director of an association,

5 years have elapsed since the last to occur of

the expiration of the period set for suspension of the passing of sentence without a sentence having been passed or without a fine having been imposed,

the conclusion of the term of any imprisonment, and

the conclusion of the term of any probation imposed, or

iii

a pardon was granted or issued, or a record suspension was ordered, under the Criminal Records Act (Canada) and the pardon or record suspension, as the case may be, has not been revoked or ceased to have effect.

Director ceasing to hold office

A director of an association ceases to hold office if

the term of office of that director expires in accordance with the association's rules or this Act,

the director dies or resigns,

the director is removed in accordance with

section 82, or

the association's rules, or

the director ceases to be qualified under

section 79 to be or act as a director.

Effective date of director's resignation

A resignation of a director becomes effective as follows:

subject to paragraphs (

b) to (d), the time that a resignation record is received by the association by being received

at the registered office of the association, or

by a director or officer of the association or a lawyer acting for the association;

if a date but no time is specified in the resignation record, the beginning of the day on the date specified;

if a time, whether by reference to an event or otherwise, but no date is specified, the time specified;

if both a date and time are specified, the date and time specified.

Removal of director

Subject to the association's rules, a director of an association may be removed before the expiration of the director's term of office by a special resolution, one or more separate resolutions or a combination of both, depending on whether the persons who would be entitled to vote if an election of that director were being held comprise, at the time of removal, only the members, only holders of one or more classes of investment shares, or a combination of both the members and those holders of investment shares.

Subject to the association's rules, a vacancy on the board of directors because of the removal of a director under subsection (1) may be filled by a resolution or resolutions of the members or holders of investment shares described in subsection (1), requiring a simple majority for passage.

Notice of cessation

Every association, within 15 days after the resignation or removal of a director or the association becoming aware of a director of the association not being qualified, must file with the registrar a notice, in a form established by the registrar, of a director ceasing to hold office.

No filing is necessary for a director who ceases to be a director and is re-elected or reappointed the same day.

Duties of directors

Every director of an association, in exercising the director's powers and performing the director's functions, must

act honestly and in good faith with a view to the best interests of the association,

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

act in accordance with this Act and the regulations, and

subject to paragraphs (

a) to (c), act in accordance with the association's memorandum and rules.

This

section is in addition to, and not in derogation of, any enactment or rule of law or equity relating to the duties or liabilities of directors of corporations.

No provision in a contract or in an association's rules or memorandum relieves a director of the association from

the duty to act in accordance with this Act and the regulations, or

liability that by virtue of any enactment or rule of law or equity would otherwise attach to that director in respect of any negligence, default, breach of duty or breach of trust of which the director may be guilty in relation to the association.

A director of an association who receives or has charge of money of the association must give security before entering on the director's duties, as may be considered necessary by the directors.

Validity of acts of directors

Every act of a director of an association is valid, despite any defect in the director's appointment, election or qualification.

Disclosure and Conflict of Interest Rules — Directors and Officers

Disclosable interest

For the purposes of this Division, a director or officer of an association holds a disclosable interest in a contract or transaction if

the contract is a material contract, or the transaction is a material transaction, to the association,

the association is or proposes to become a party to the contract or has entered into or proposes to enter into the transaction,

one of the following applies to the director or officer:

the director or officer has a material interest in the contract or transaction;

the director or officer is a director or officer of, or has a material interest in, a person who has a material interest in the contract or transaction, and

the interest is known by the director or officer or reasonably ought to have been known.

For the purposes of subsection (1) and this Division, a director or officer of an association does not hold a disclosable interest in a contract or transaction if the interest referred to in subsection (1) (

c) arose before the coming into force of this Act and was not one for which disclosure was required under

a former Act, or

the Company Act , 1996, or an earlier Companies Act , as it applied for the purposes of a former Act.

For the purposes of subsection (1) and this Division, a director or officer of an association does not hold a disclosable interest in a contract or transaction merely because

the contract or transaction is an arrangement by way of security for money loaned to, or obligations undertaken by, the director or officer, or a person in whom the director or officer has a material interest, for the benefit of the association or an affiliate of the association,

the contract or transaction relates to an indemnity under

section 98 or to insurance under

section 103,

the contract or transaction relates to the remuneration of the director or officer in that person's capacity as director, officer, employee or agent of the association or of an affiliate of the association,

the contract or transaction relates to a loan to the association, and the director or officer, or a person in whom the director or officer has a material interest, has guaranteed or joined in guaranteeing the repayment of the loan or any part of the loan,

the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the association and the director or officer is also a director or officer of that corporation,

the contract or transaction is between the association and its wholly owned subsidiary,

the contract or transaction is between the association and another association in which the association is a member and of which the director or officer is a director or officer.

Director and officer to disclose interest

A director or officer of an association, in accordance with

section 88, must disclose the nature and extent of any disclosable interest held by that person in a contract or transaction unless, before the coming into force of this Act, the disclosable interest was disclosed in the manner and within the time required under

a former Act, or

the Company Act , 1996, or an earlier Companies Act , as it applied for the purposes of a former Act.

The disclosure required from a director or officer under subsection (1) must be made promptly after the last to occur of

the date on which the director or officer becomes a director or officer,

the date on which the director or officer becomes aware of having the disclosable interest, and

the date on which the director or officer becomes aware of any of the following:

the contract or transaction is to be considered at a meeting of the directors or is to be the subject of a consent directors' resolution;

the association is to become a party to the contract or is to enter into the transaction;

iii

the contract or transaction has been considered at a meeting of the directors or has been the subject of a consent directors' resolution;

the association has become a party to the contract or has entered into the transaction.

Means of making disclosure

The disclosure required by

section 87 is sufficiently given if

it is entered in the minutes of a directors' meeting or of a general meeting,

it appears in a resolution that under this Act is permitted to be passed without a meeting,

it is contained in a record of disclosure provided to the association in relation to the particular contract or transaction, or

it is made in a general notice given in accordance with subsection (2) of this section.

A general written notice given by a director or officer of an association to the directors of the association is a sufficient disclosure of a disclosable interest for the purpose of this Division in relation to any contract or transaction that the association has entered into or proposes to enter into with a person if

the notice

declares that the director or officer giving the notice

is a director or officer of, or has a material interest in, the person with whom the association has entered, or proposes to enter, into a contract or transaction, and

is to be regarded as interested in any contract or transaction entered into or to be entered into by the association with that person, and

states the nature and extent of that interest, and

at the time disclosure would otherwise be required under

section 87, the extent of the director's or officer's interest in the person is not materially greater than that stated in the notice.

Deviations in facts or circumstances from those set out in a general written notice given by a director or officer under subsection (2) that do not affect its substance or are not calculated to mislead do not invalidate the notice.

Obligation to account for profits

Subject to this

section and unless the court declares otherwise under

section 93, a director or officer is liable to account to the association for any profit that accrues to the director or officer under or as a result of a contract or transaction in which the director or officer holds a disclosable interest.

A director or officer is not obliged to account for and may retain the profit referred to in subsection (1) if

the disclosable interest was disclosed before the coming into force of this Act in the manner and within the time required, at the time of the disclosure, under

a former Act, or

the Company Act , 1996, or an earlier Companies Act , as it applied for the purposes of a former Act,

and the contract or transaction was approved

iii

in the manner and within the time required under the applicable Act, or

in accordance with

section 90 of this Act,

the disclosable interest is disclosed in the manner and within the time required by this Act and the contract or transaction is approved in accordance with

section 90,

whether or not the contract or transaction is approved in accordance with

section 90,

the disclosable interest is disclosed in the manner and within the time required by this Act,

the association entered into the contract or transaction before the director or officer became a director or officer of the association, and

iii

the director or officer does not participate in, and, in the case of a director, vote as a director on, any decision or resolution touching on the contract or transaction, or

whether or not the disclosable interest is disclosed, or the contract or transaction is approved, in accordance with this Division, the contract or transaction is determined by the court or by the members, by special resolution, to be fair and reasonable to the association.

Unless the court declares otherwise under

section 93, if the contract or transaction referred to in subsection (1) of this

section is not one to which subsection (2) applies, a director or officer who holds a disclosable interest in the contract or transaction may retain, if the contract or transaction, after the coming into force of this subsection, is approved in accordance with

section 90, that part of the profit referred to in subsection (1) of this

section that accrues after the date of approval.

A director or officer is liable to account to the association for that part of the profit referred to in subsection (1) that the director or officer is not expressly permitted to retain by subsection (2) or (3) or by a declaration under

section 93.

Approval of contracts and transactions

For the purposes of

section 89 (2) and (3), a contract or transaction may be approved by the directors of an association or by a special resolution of the members of the association.

The directors may approve a contract or transaction by

a resolution passed at a meeting of the directors in which the director who has a disclosable interest in the contract or transaction abstains from voting on the approval, or

a consent resolution signed by all of the directors except the director who has disclosed a disclosable interest in the contract or transaction.

Unless the rules provide otherwise, a director of the association who has a disclosable interest in a contract or transaction and who is present at the meeting of the directors referred to in subsection (2) may be counted in the quorum at the meeting even though the director does not vote on any or all of the resolutions considered at the meeting.

Despite any other provision of this Act, or the rules of an association, the members, by a special resolution, may approve the contract or transaction or determine that the contract or transaction is fair and reasonable to the association, even though the directors have voted not to approve the contract or transaction.

Despite this section, the directors have no authority to approve a contract or transaction if the members, in a properly constituted general meeting, have voted not to approve the contract or transaction.

Disclosure to members and investment shareholders

This

section does not apply to associations that under the Securities Act are reporting issuers.

Subject to subsection (4), if the contract or transaction in which a director or officer holds a disclosable interest is approved by the directors under

section 90 (1), the directors, in accordance with subsection (3) of this section, must provide a brief description of the interest held by that person, including the nature and extent of the interest.

The information required under subsection (2) must be provided,

if an annual general meeting of the association is held after the date on which approval was given, but in the financial year in which that date falls,

at that annual general meeting, and

in the minutes of that meeting, or

if no such annual general meeting is held,

as an attachment to the association's financial statements issued for that financial year, or

in a record deposited in the registered office of the association.

[Repealed 2000-5-18.]

Despite subsections (2) and (3), the information referred to in subsection

(2) need not be disclosed in accordance with this

section

if disclosure is waived by the court under subsection (5), or

if, in the opinion of the directors acting reasonably, the disclosure of that information would be harmful to the business of the association or its subsidiaries, and

must be disclosed in accordance with any order of the court under subsection (5) deferring disclosure.

The court may make an order waiving or deferring disclosure

on application by an association or by a director or officer of the association, and

if the court is satisfied that

the contract or transaction is fair and reasonable to the association, and

disclosure would be harmful to the association or to the director or officer.

Powers of court

If a person who is a director or officer of an association holds a disclosable interest in a contract or transaction and fails to make the disclosure required by

section 87 or if, after the disclosure is made, the contract or transaction is not approved under

section 90, then, unless the members by special resolution determine or the court determines that the contract is fair and reasonable to the association, on the application of any member or investment shareholder of the association the court may

enjoin the association from entering into the proposed contract or transaction,

order the director or officer to account for any profit for which the director or officer is liable to account under

section 89, or

make any other or further order that the court considers appropriate.

In an application brought under subsection (1), the court must take into account the interests and rights of any persons involved in or affected by the contract or transaction in question.

Court may make declaration

On the application of any director or officer of an association, the court may make one or more of the following declarations:

whether a contract or transaction in which the director or officer has a disclosable interest is fair and reasonable to the association;

whether the director or officer is obliged to account for any profit that accrues to the director or officer under or as a result of the contract or transaction in which the director or officer has a disclosable interest;

whether the director or officer may retain any or all of the profit referred to in paragraph (b).

Validity of contracts and transactions

A contract or transaction with an association is not invalid merely because

a director or officer of the association has an interest, direct or indirect, in the contract or transaction,

a director or officer of the association has not disclosed an interest the director or officer has in the contract or transaction, or

the directors or members of the association have not approved a contract or transaction in which a director or officer of the association has an interest.

Disclosure of conflict of office or property

If a director or officer of an association holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or officer, as the case may be, of the association, the director or officer must disclose, in accordance with this section, the nature and extent of the conflict.

Section 88 applies to the disclosure required from a director or officer under subsection (1) of this

section and, in addition, a director may make the disclosure required by this

section by declaring at a meeting of the directors of the association the nature and extent of the conflict.

The disclosure required from a director or officer under subsection (1) must be made promptly

after that individual becomes a director or officer, or

if that individual is already a director or officer, after that individual begins to hold the office or possess the property, right or interest for which disclosure is required.

Limitation of obligations of directors and officers

Except as is provided in this Division, a director or officer of an association has no obligation to

disclose any direct or indirect interest that the director or officer has in a contract or transaction, or

account for any profit that accrues to the director or officer under or as a result of a contract or transaction in which the director or officer has a disclosable interest.

Indemnification of Directors and Payment of Expenses

Definitions

In this Division:

associated corporation means a corporation or entity referred to in paragraph (

b) or (

c) of the definition of "eligible party";

eligible party , in relation to an association, means an individual who is or was a director or officer of, or who holds or held a position equivalent to that of a director or officer of,

the association,

another corporation if

the corporation is or was an affiliate of the association, or

the individual acts or acted as a director or officer of the corporation at the request of the association, or

a partnership, trust, joint venture or other unincorporated entity if the individual acts or acted as or holds or held a position equivalent to that of a director or officer of that entity at the request of the association,

and includes, except in the definition of "eligible proceeding" and except in sections 101 (1) (

c) and (

d) and 103, the heirs and personal or other legal representatives of that individual;

eligible penalty means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

eligible proceeding means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, because of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the association or an associated corporation

is or may be joined as a party, or

is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

expenses includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding;

proceeding includes any legal proceeding or investigative action, whether current, threatened, pending or completed.

Indemnification and payment permitted

Subject to

section 101, an association may do one or both of the following:

indemnify an eligible party against all eligible penalties to which the eligible party is or may be liable;

after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.

Mandatory payment of expenses

Subject to

section 101, an association, after the final disposition of an eligible proceeding, must pay the expenses actually and reasonably incurred by the eligible party in respect of that proceeding if the eligible party

has not been reimbursed for those expenses, and

is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.

Authority to advance expenses

Subject to subsection (2), an association may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.

An association must not make the payments referred to in subsection (1) unless the association first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by

section 101, the eligible party will repay the amounts advanced.

Indemnification prohibited

An association must not indemnify an eligible party under

section 98 (

a) or pay the expenses of an eligible party under

section 98 (b), 99 or 100 if any of the following circumstances apply:

if the indemnity is made or proposed in accordance with an earlier agreement to indemnify and, at the time that the agreement to indemnify was made, the association was prohibited by its memorandum or rules from giving the indemnity;

if the indemnity is made or proposed otherwise than in accordance with an earlier agreement to indemnify and, at the time that the indemnity is made or proposed, the association is prohibited by its memorandum or rules from giving the indemnity;

if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the association or the associated corporation, as the case may be;

in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party's conduct in respect of which the proceeding was brought was lawful.

If an eligible proceeding is brought against an eligible party by or on behalf of the association or by or on behalf of an associated corporation,

the association must not indemnify the eligible party under

section 98 (

a) in respect of the proceeding, and

the association must not, unless the court orders otherwise, pay the expenses of the eligible party under

section 98 (b), 99 or 100 in respect of the proceeding.

Court ordered indemnification

Despite any other provision of this Division and whether or not payment of expenses or indemnification has been sought, authorized or declined under this Division, on an application by an association or an eligible party, the court may do one or more of the following:

order an association to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding other than an eligible proceeding referred to in

section 101 (2);

order an association to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;

order the enforcement of, or any payment under, an agreement of indemnification entered into by an association;

order an association to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under this section;

make any other order the court considers appropriate.

Insurance

An association may purchase and maintain insurance for the benefit of an eligible party or the heirs and personal or other legal representatives of the eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the association or an associated corporation.

Officers

Security by officers

An officer of an association who receives or has charge of money of the association must give security before entering on the officer's duties, as may be considered necessary by the directors.

Duties of officers

Every officer of an association, in exercising the officer's powers and performing the officer's functions, must

act honestly and in good faith with a view to the best interests of the association,

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

act in accordance with this Act and the regulations, and

subject to paragraphs (

a) to (c), act in accordance with the association's memorandum and rules.

This

section is in addition to, and not in derogation of, any enactment or rule of law or equity relating to the duties or liabilities of officers of corporations.

No provision in a contract or in the rules or the memorandum of an association relieves an officer of the association from

the duty to act in accordance with this Act and the regulations, or

liability that by virtue of any enactment or rule of law or equity would otherwise attach to that officer in respect of any negligence, default, breach of duty or breach of trust of which the officer may be guilty in relation to the association.

Validity of acts of officers

Every act of an officer of an association is valid, despite any defect in the officer's appointment or qualification.

Auditors

Appointment of Auditor

Repealed

[Repealed 2007-7-50.]

Auditors

Subject to

section 109 (1), every association must have an auditor.

The directors of an association may appoint the first auditor of the association to hold office until the close of the first annual general meeting.

Subject to

section 109 (1), an association, at each annual general meeting, must appoint an auditor by ordinary resolution to hold office until the close of the next annual general meeting, but if an appointment is not made at that meeting, the auditor in office continues as auditor until a successor is appointed.

The directors may fill any casual vacancy in the office of auditor.

If an association that has not waived the appointment of an auditor under

section 109 does not have an auditor, the court, on the application of a member, investment shareholder or creditor of the association, may

appoint a qualified person as auditor of the association until the close of the next annual general meeting, and

fix the remuneration to be paid by the association for the person's services as auditor.

The association must promptly give written notice to an auditor of the auditor's appointment.

Exception

An association that is not a reporting association may waive the appointment of an auditor

by a special resolution of members, and

if the association has issued investment shares, by separate resolutions of investment shareholders of each class of issued investment shares.

A resolution referred to in subsection (1) is effective for one financial year of the association.

Qualifications

A person is qualified to act as an auditor of an association if not disqualified under

section 111 and only if

the person is

a member of, or is a partnership whose partners are members of, a provincial institute of chartered accountants within Canada,

a member of a provincial organization of chartered professional accountants within Canada, authorized by that organization to perform an audit,

iii

a professional accounting corporation as defined in the Chartered Professional Accountants Act , authorized by the CPABC as defined in that Act to perform an audit, or

a registered firm as defined in the Chartered Professional Accountants Act , authorized by the CPABC as defined in that Act to perform an audit,

[Repealed 2018-23-15.]

the person is a federation and acts as auditor only

for its member associations that are not operated on a not for profit basis, and

through persons who are qualified under paragraph (

a) or who perform auditing functions under the supervision of persons who are so qualified, or

in the case of an association that is a reporting issuer, the person is

a person referred to in paragraph (a), or

authorized under the Securities Act to perform the audit.

An interested person may apply to the court for an order exempting an auditor from disqualification under

section 111, and the court, if satisfied that an exemption would not unfairly prejudice the association's members and investment shareholders, may make an exemption order on the terms the court considers appropriate.

An order under subsection (2) may have retrospective effect.

Persons not qualified as auditors

A person other than a federation must not be the auditor of an association if the person is not independent of the association, its affiliates and its directors and officers.

For the purposes of this section, independence is a question of fact, but

a person is not independent if the person is a director, officer or employee of the association or of an affiliate of the association, or if the person is a partner, employer or employee of that director, officer or employee or if the person is a member of the immediate family of that director or officer,

a person is not independent if the person, a member of the person's immediate family, the person's partner or a member of the immediate family of the person's partner beneficially owns or controls, directly or indirectly, any interest in a share or a debt obligation of the association or of any of its affiliates, and

a person is not independent if the person is appointed a trustee of the estate of the association under the Bankruptcy Act (Canada) or if the person is a partner, employer of, employee of or member of the immediate family of, that trustee.

For the purposes of subsection (2),

the immediate family of the person referred to includes

the person's spouse, parent and child, and

any relative of the person, or any relative of the person's spouse, who resides with the person, and

a partner of the person referred to means any person with whom the person carries on in partnership the profession of public accounting.

Every auditor, within 90 days after becoming aware that the auditor's appointment as auditor contravenes this section, must either

eliminate the circumstances that cause the auditor to be in contravention, or

resign as auditor.

Remuneration

The remuneration of the auditor of an association must be set by ordinary resolution or, if the association so resolves, by the directors, but the remuneration of an auditor appointed before the first annual general meeting or to fill any casual vacancy may be set by the directors.

Removal of auditor

Every association, by ordinary resolution passed at a general meeting called for the purpose, may remove an auditor before the expiration of the auditor's term of office, and must by ordinary resolution at that meeting appoint another auditor in the removed auditor's place for the remainder of the removed auditor's term.

Every association, before calling a general meeting for the purpose specified in subsection (1), but at least 14 days before the mailing of the notice of the meeting, must give to the auditor

written notice of the intention to call the meeting, specifying the date on which the notice of the meeting is proposed to be mailed, and

a copy of all material proposed to be sent to members in connection with the meeting.

Every auditor has the right to make to the association, at least 5 days before the mailing of the notice of the meeting, representations in writing respecting the auditor's proposed removal as auditor, and the association, at its expense, must forward with the notice of the meeting a copy of those representations to each member entitled to receive notice of the meeting.

Notice of proposed change

113.1

The directors of a reporting association must not, unless notice is contained in the notice of the meeting, propose at an annual general meeting the appointment of an auditor other than the appointment of the incumbent auditor.

If the notice of the meeting contains the notice referred to in subsection (1),

the association must, at least 14 days before the mailing of the notice of the meeting, give to the incumbent auditor written notice of the intention of the directors not to recommend the auditor's reappointment at the annual general meeting, specifying in it the date on which the notice of the meeting is proposed to be mailed, and

the incumbent auditor has the right to make to the association, at least 3 days before the mailing of the notice of the meeting, representations in writing respecting the proposal not to reappoint the incumbent as auditor, and the association, at its expense, must forward, with the notice of the meeting, a copy of those representations to every member entitled to receive notice of the meeting.

1.1

Audit Committee

Appointment and procedures

113.2

The directors of a reporting association, from among their number, must elect at their first meeting following each annual general meeting a committee, to be known as the audit committee, composed of at least 3 directors, of whom a majority must not be officers or employees of the association or of an affiliate of the association, to hold office until the next annual general meeting.

At every meeting of the audit committee, a quorum consists of a majority of those members of the committee who are not officers or employees of the association or of an affiliate of the association.

The members of the audit committee must elect a chair from among their number and, subject to subsection (2), may determine their own procedures.

Before a financial statement that is to be submitted to an annual general meeting is considered by the directors, it must be submitted to the audit committee for review with the auditor, and, after that, the report of the audit committee on the financial statement must be submitted to the directors.

The auditor must be given notice of, and has the right to attend and be heard at, every meeting of the audit committee, and must attend a meeting of the audit committee when requested to do so by the committee.

On the request of the auditor, the chair of the audit committee must convene a meeting of the audit committee to consider any matters the auditor believes should be brought to the attention of the directors, members or investment shareholders.

Duties and Rights of Auditors

Annual audit

The auditor of an association must make an examination that will enable the auditor to report to the association's members as required under subsection (2).

The auditor must make a report to the members on the financial statement, other than the part that relates to the period referred to in

section 153 (1) (b) (ii), that is to be placed before the association at any annual general meeting during the auditor's term of office, and must state in the report whether, in the auditor's opinion,

the financial statement presents fairly the financial position of the association and the results of its operations for the period under review, and

the financial statement is in accordance with generally accepted accounting principles.

If the financial statement contains a statement of changes in net assets or a statement of cash flows, the auditor must state in the auditor's report whether, in the auditor's opinion, the statement of changes in net assets or the statement of cash flows presents fairly that information.

Negative audit report

If the report of the auditor under

section 114 does not contain the unqualified opinion required by it, the auditor must state the reasons in the report.

Audited statements of subsidiaries

Whether or not the assets and liabilities and income and expenses of any one or more subsidiaries of a holding corporation are included in the financial statement of the holding corporation, the report of the auditor of the holding corporation required by this Part may refer to the reports of the auditors of one or more of the subsidiaries, but the reference does not derogate from the duty of the auditor of the holding corporation to comply with

section 114 (1).

Auditor's attendance

Every member or investment shareholder of an association, whether or not entitled to vote at a meeting of the association, by written notice to the association given at least 5 days before a meeting at which the financial statements of the association are to be considered or the auditor is to be appointed or removed, may require the attendance of the auditor at the meeting at the expense of the association and, in that event, the auditor must attend the meeting.

Procedure

If the auditor attends a general meeting, the auditor must answer inquiries directed to the auditor concerning the financial statements of the association and the opinion on them stated in the auditor's report.

At the request of any member attending the annual general meeting, the report of the auditor must be read to the meeting.

Amendment of financial statements and report

If facts come to the attention of the officers or directors,

that could reasonably have been determined before the date of the last annual general meeting, and

that, if known before the date of the last annual general meeting, would have required a material adjustment to the financial statement presented to the meeting,

the officers or directors must communicate the facts to the auditor who reported to the members under this Part, and the directors must promptly amend the financial statement and send it to the auditor.

If facts described in subsection (1) come to the attention of the auditor and, in the auditor's opinion necessitate amendment to the auditor's report, the auditor must amend the report in respect of the financial statement presented to the last annual general meeting so that it complies with this Part, and the directors must deliver to the members a copy of the amended report and a statement explaining the effect of the amendment on the financial position and results of the operations of the association.

Access to records

The auditor of an association is entitled to access at all times to every record, document, instrument, account and voucher of the association and its subsidiaries, and is entitled to require from the directors, officers and employees of the association and its subsidiaries information and explanations necessary, in the auditor's opinion, to enable the auditor to report as required by this Part.

Information as to foreign subsidiaries

If a subsidiary referred to in

section 120 is a corporation to which this Act does not apply, the holding corporation must make available to the auditor of the holding corporation the records, documents, instruments, accounts and vouchers of that subsidiary and must require the directors, officers and employees of that subsidiary to make available to the auditor of the holding corporation the information and explanations required by

section 120.

Auditor's attendance at meetings

The auditor of an association is entitled to attend any general meeting of the association and to receive every notice and other communication relating to the meeting that a member or investment shareholder is entitled to receive, and is entitled to be heard at any general meeting that the auditor attends on any part of the business of the meeting that concerns the auditor in that capacity, or that concerns the financial statements of the association.

At the request of the directors, and subject to receiving adequate notice, the auditor of an association must attend a meeting of the directors specified by the directors in making the request.

Qualified privilege

An oral or written statement or report made under this Act by the auditor or former auditor of an association has qualified privilege.

Records

Registers

Register of members and investment shareholders

An association must keep and maintain a register of members, and a separate register of investment shareholders, and must enter the following in the appropriate register:

the names and addresses of the members and investment shareholders, the number of shares held by each member and investment shareholder and the amount paid on each membership share and investment share;

the date on which the name of any person was entered in the register as a member or investment shareholder;

the date on which any person ceased to be a member or investment shareholder.

Entry of the information referred to in subsection (1) in the register of members or register of investment shareholders is evidence of the facts stated.

Register of directors

An association must keep a register of directors

containing the names and addresses of its directors, and

showing the dates on which the directors started and ceased to act.

On the request of the registrar at any time, an association must provide the registrar with particulars of its directors.

Records Filed With the Registrar

Annual report

Subject to subsection (1.1), the association must file with the registrar an annual report, current to the end of the most recently completed financial year of the association, within 2 months after an association's annual general meeting, in a form established by the registrar.

1.1

An annual report must be filed with the registrar once in each calendar year.

Within 2 months after each anniversary of the date of an extraprovincial association's registration in British Columbia