Bill 60 — Fifth Session, 15Th Legislature, 15 Elizabeth Ii the Legislative Assembly of Alberta Bill 60 An Act Respecting Trust Companies the Attorney Gen.Eral (Legislature 15, Session 5)

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Alberta — Bills

1967 Bill 60 Fifth Session, 15th Legislature, 15 Elizabeth II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 60

An Act respecting Trust Companies THE ATTORNEY GEN.ERAL First Reading ............................................................. . Second Reading... . ............................................... .. Third Reading .......................................................... . Printed by L. S. Wall, Queen's Printer, Edmonton

BILL 60 1967

An Act respecting Trust Companies (Assented to , 1967) HER MAJESTY, by and with the advice. and consent of the Legislative Assembly of the ProVInce of Alberta, enacts as follows: 1. This Act may be cited as The Trust Companies Act, 1967. 2.

(1) In this Act, 1. "by-law", with reference to provincial companies incorporated otherwise than by special Act, includes articles of association; 2. "cash" includes money on deposit with a chartered bank or treasury branch; 3. "chief agency" means the principal offica or place of business in Alberta of an extra-provincial company; 4. "company" or "'trust company" means a corpora tion empowered to carryon the business of execut ing the offices of executor, administrator and trustee, either with or without other objects or powers; 5.

"company's own funds" means moneys owned by a company as the absolute and sole owner thereof and not in a trust or representative capacity or in the right of another person; 6. "company's own property" means the company's own funds and all other real and personal property owned by a company as the absolute and sole owner thereof and not in a trust or representative capacity or in the right of another person; 7. "corporation" includes a trust company; 8.

"deposits and investment moneys" means moneys received by a company before or after the com mencement of this Act as deposits or in respect of which an investment certificate is issued or en tered into; 9. "Director" means the Director of Trust Companies; UNIVERSITY OF ALBERTA UBRARY

Explanafory Notes General. This Bill repeals and replaces The Trust Companies Act, 1960, Statutes of Alberta, 19'60,

chapter 110. It is a general, ex.tensive revision of the present Act and includes a number of new provisions, including the following affecting provincial trust companies: 1. Requirements as to proxies and proxy solicitation: see sec tions 22 to 29. 2.. Limitations as to shareholdings by non-residents of Canada: see sections 64 to 67. 3. Requirement for minimum of 25 shareholders: see

section 68. 4. Insider trading provisions: see sections 70 to 76. 5. Restricted borrowing powers: see

section 96. 6. Additional restrictions and penalties as to unauthorized in vestments and loans: see especially sections 119, and 125 to 130. 7. Increased capital requirements for registration: see

section 145 (1) (d). 8. Restriction on trafficking in trust company charters: see

section 148. The provisions of the present Act regarding inspection, financial disclosure and suspension and cancellation of registration of registered companies have been extensively rewritten: see

Part 2, Divisions 2, 3 and 4. A

section reference in an explanatory note refers to the

section in the present Act that deals with the same or part of the same subject matter as that in the Bill. In Divisions 2 to 4 of

Part 1, a number of provisions have been adapt-ed from the Revised Uniform Draft Companies Act published in November, 1960, by the Conference of Commissioners on Uniformity of Legislation in Canada.

2 10. 11. 12. 13. 14. "extra-provincial company" means a trust company, other than a provincial company; "federal company" means a trust company ~n corporated by or pursuant to

an Act of the ParlIa- ment of Canada; "former Act" means The Trust Companies Act, 1960, being

chapter 110 of the Statutes of Alberta, 1960; "fully paid", with reference to anr s?~re, means a share on which there remains no lIabIlIty, actual or contingent, to the issuing corporation; "guaranteed fund" means (

i) with reference to a provincial company, the as sets ear-marked and definitely set aside by it pursuant to

section 104, or (ii) with reference to an extra-provincial company, the assets ear-marked and definitely set aside by it for the purpose of ensuring repayment of its deposits and investment moneys; 15. t'head office" means the place where the chief ex ecutive ,officers of the company ordinarily transact its business; 16. "improved real estate" means real estate (

i) upon which there exists a building used or cap able of being used for residential, commercial, industrial, educational, religious, charitable or recreational purposes, or (ii) upon which such a building is being COn structed, or (iii) which is provided with the utilities necessary to serve such a building with electric power, water and sewers but only when the land is being mortgaged for the purpose of financing the construction of such a building, or (iv) on which actual farming or ranching opera tions ara being conducted; 17. "investment certificate" means (

i) with reference to a provincial company, an agreement made b€!tween the company and an other person pursuant to

section 100 of this Act or

section 68 of the former Act, or (ii) with reference to an extra-provincial company, an agreement made between the company and another person before or after the commence ment of this Act of similar purport to an agreement mentioned in

section 100, and includes an instrument commonly known as a guaranteed investment certificate, guaranteed trust certificate or savings certificate;

This Bill is divided into Parts and Divisions as shown in the following table of contents: Table of Contents

Short title . . . . . . . . . . . ....................................

Interpretation .......................................... . Application of other Acts ..... . Director of Trust Companies Application of

Part 1

PART 1 PROVINCIAL COMPANIES .................................. Division 1. Incorporation and Organization ..................... . Division 2. Internal Regulations .............................. . By-laws ........................................... . General Meetings of Shareholders .................. . Proxies and Proxy Solicitation ..................... . Directors .......................................... . Division 3. Capital Stock and Shares ........................... . Capitalization ...................................... . Liabilities of Shareholders .......................... .

Share Certificates ............................ ...... . Transfer and Transmission of Shares ................ . Insider Trading .................................... . Division 4. Records C!lnd Financial Disclosure ..................... . Accounts and Records .............................. . Shareholders' Audit: ............................... . Financial Disclosure to Shareholders ............... . Division 5. Powers of Provincial Companies ..................... . General powers .................................... . Borrowing Powers ................................ .

Common Trust Funds .............................. . Division 6. Deposits and Ivestment Moneys

Section 1 2 3 4,5 6 7-12 13-45 13-16 17-21 22-29 30-45 46-76 46-49 50-54 55-56 57-69 70-76 77-91 77-88 89-90 91 92-98 92-95 96-97 98 99-107 Division 7.

Investments, Loans and Real Estate ................... 108-134 Introductory ........................................ 108-110 Securities and 'Mortgages ........................... 111-113 Limitations and Prohibitions Respecting Securities and Mortgages ............ 114-120 Real Estate ........................................ 121-124 Prohibited Transactions ............................. 125-126 Liability for Unauthorizd Investments and Loans ...... 127-130 Miscellaneous ....................................... 131-134 Division S. Amalgamation and Purchase and Sale of Assets Division 9. Regulations 139

PART 2 REGISTERED TRUST COMPANIES Division 1. Registration of Trust Companies ........ 140-151 Introductory ........................................ 140-144 Registration of Provincial Companies ................ 145-148 Registration of Extra-provincial Companies ........... 149-153 2

18. "Minister" means the member of the Executive Council charged with the administration of this Act; 19. "paid in", as applied to the capital stock of a com pany or to any of its shares, means the amount paid to it on its shares, n'Ot including the premium, if any, paid on such shares, whether such shares are or are not fully paid; 20. :'provincial company" means a trust company in corporated by a special Act or incorporated in Al berta under the Companies Ordinance before April 13, 1918; 21. "real estate" means an estate in fee simple in land, and does not include any lesser estate or interest therein; 22.

"registered", with reference to a company, means registered under this Act; 23. "special Act" means

an Act 'Of the Legislature of Alberta to incorporate a trust company; 24. 25. 26. 27.

"Supreme Court" means the Supreme Court of Alberta and "Trial Division" and "Appellate Di vision" mean the respective divisions of that Court; "trust or representative capacity" means the capa city of a trustee, executor, administrator, ~ailee, agent, receiver, liquidator, sequestrator,. assIgnee, custodian trustee in bankruptcy, guardIan of the estate of' an infant, committee of the estate of a mentally incompetent pers'On, or any other similar capacity; "unauthorized investment or loan" means an invest ment or loan of a company's own funds or its de posits and investment moneys that is not authorized by or is expressly prohibited by this Act or is made in contravention of any limitations prescribed by this Act; "unimpaired paid-up capital" means that part of the subscribed and paid in permanent capital stock of a c'Orporation that is unimpaired; 28.

"vote of the shareholders" means a v'Ote of the shareholders present at, or represented by proxy at, a general meeting of shareholders.

(2) For the purposes of this Act, one corporation is associated with another if (

a) one of the corporati'Ons controls the other, (

b) both of the corporations are controlled by the same person or group of persons, (

c) each of the corporations is contr'Olled by one person ~nd the person who controls one of the corporations IS related to the person who controls the other, and 3

Section Division 2. Returns and Statements to the Director ............ 154-157 Division 3. Inspection and Report by the Director ................ 158-165 Division 4. Suspension and Cancellation of Registration, Receivership and Liquidation ................................... .166-174 Special Report to Minister by Director . . . . . . . . . . . . . . . . 166 Receiver and Manager .............................. 167-168 Winding-up ........................................ 169-170 Suspension and Cancellation of Registration .......... 171-174 Division 5.

Regulations and Forms ............................. 175-176 Division 6. Miscellaneous ..................................... 177-181 Division 7. Offences and Penalties ............................. 182-190

PART 3 TRANSITIONAL AND REPEAL Transitional ............................................ 191 Repeal. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Commencement of Act .................................. 193

Schedule (Model Act) 2.

(1) Definitions. (2) to

(7) Rules for determining associated corporations. These rules are the same as those in the federal Income Tax Act and Ontario legislation.

(8) Location of securities and real estate mortgages. 3

one of those persons owns directly or indirectly one or more shares of the capital stock of each of the corpora tions, (

d) one of the corporations is controlled by one per son and that person is related to each member of a group of persons that controls the other corpor ation, and one of those persons owns directly or indirectly one or more shares of the capital stock of each of the corporations, or (

e) each of the corporations is controlled by a related group and each of the members of one of the related groups is related to all of the members of the other related group, and one of the members of one of the related groups owns directly or indirectly one or more shares of the capital stock of each of the cor porations.

(3) For the purposes of subsections (2) and (5) and this subsection, "related persons", or persons related to each other, are 4 (

a) individuals connected by blood relationship, mar riage or adoption, (

b) a corporation and (

i) a person who controls the corporation, if it is controlled by one person, or (ii) a person who is a member of a related group that controls the corporation, or (iii) any person related to a person described by subclause (

i) or (ii), (

c) any two corporations, (

i) if they are controlled by the same person or group of persons, or (ii) if each of the corporations is controlled by one person and the person who controls one of the corporations is related to the person who con trols the other corporation, or (iii) if one of the corporations is controlled by one person and that person is related to any mem ber of a related group that controls the other corporation, or (iv) if one of the corporations is controlled by one person and that person is related to each mem ber of an unrelated group that controls the other corporation, or (

v) if any member of a related group that controls one of the corporations is related to each mem ber of an unrelated group that controls the other corporation, or (vi) if each member of an unrelated group that con controls one of the corporations is related to

at least one member of an unrelated group that controls the other corporation.

(4) Where two corporations are related to the same cor poration within the meaning of subsection (3), they shall, for the purposes of subsection (3), be deemed to be related to each other.

(5) In subsections (3) and (6) and this subsection, (a) "related group" means a group of persons each member of which is related to every other member of the group, and (

b) Hunrelated group" means a group of persons that is not a related group.

(6) For the purpose of subsection (3), (

a) where a related group is in a position to control a corporation, it shall be deemed to be a related group that controls the corporation whether or not it is part of a larger group by whom the corporation is in fact controlled, and (

b) a person who has a right under a contract, in equity or otherwise, either immediately or in the future or either absolutely or contingently, to, or to acquire, shares in a corporation, or to control the voting rights of shares in a corporation, shall be deemed to have had the same position in relation to the control of the corporation as if he owned the shares.

(7) For the purpose of clause (

a) of subsection (3), (

a) persons are connected by blood relationship if one is the child or other descendant of the other or one is the brother or sister of the other, (

b) persons are connected by marriage if one is married to the other or to a person who is so connected by blood relationship to the other, and (

c) persons are connected by adoption if one has been adopted,either legally or in fact, as the child of the other or as the child of a person who is so con nected by blood relationship, other than as a brother or sister, to the other.

(8) For the purposes of this Act, securities are located where they are physically located and mortgages of real estate are located where the real estate is located. 3.

(1) Unless otherwise provided in the regulations, The Companies 1ct does not apply to a provincial company in corporated In Alberta under the Companies Ordinance before October 1, 1929.

(2) Notwithst.a~ding

section 5 of The Companies Act, non~ of. the prOVISlOns of that Act apply to provincial com pr~llles In~orporated by a special Act except where other WIse prOVIded by this Act. 5

3. Application of Companies Act to provincial trust companies. 5

(3) .With respect to a provincial company incorporated by a specIal Act before the commencement of the former Act the provisions of this Act supersede and prevail over any provision of its special Act. Director of Trust Companies 4.

(1) There shall be a Director of Trust Companies who shall be appointed pursuant to The Public Service Act, 1962.

(2) The Director shall perform such duties as are as signed to him by this Act or as may be assigned to him by the Lieutenant Governor in Council or the Minister.

(3) The Director shall have a seal of office, which shall bear upon its face the words "Director of Trust Com panies". 5.

(1) For the purposes of his duties ~he Dir~ctor. may require to be made, or may take and receIve, affIdavIts or depositions and may examine witnesses upon oath.

(2) The evidence and proceedings in any matter before the Director may be reported by a stenographer who has taken an oath before the Director faithfully to report the same.

PART 1 PROVINCIAL COMPANIES 6. Except as otherwise provided in this Act, this Part applies only to provincial companies. DIVISION 1 Incorporation and Organization 7.

(1) No trust company shall be incorporated in Alberta otherwise than by

an Act of the Legislature.

(2) An Act for the incorporation of a trust company shall be in the form of the Model Act in the Schedule. 8.

(1) The number of provisional directors of a company shall be not less than five, a majority of whom constitutes a quorum.

(2) Notwit~standin.g. anything in a company's special Act, a per~on IS not ~llgIble to act as a provisional director unles.s he IS a subscrIber for stock of the company for and on hIS ?wn .be~al~, .so as to become the absolute and sole owner In !llS Ind.IvIdual right of such stock and not as trustee or In the rIght of another on which sub . t' .t less than ,scrIp IOn no 6

4. Director of Trust Companies. The office of Director will re place that of Registrar of Trust Companies. Cf.

section 93. 5. Evidence obtained by Director.

Section 95 (2) and (3). 6. Application of

Part 1. 7. Incorporation of provincial trust companies. Sections 4 (1) and 5 (1). 8. Provisional directors.

Section 6. Subsection (2) is new. 6

(a) $3,000 have been paid in, where the paid in capital stock of the company is $1,000,000 or less, or (b) $4,000 have been paid in, where the paid in capital stock of the company is over $1,000,000 and does not exceed $3,000,000, or (c) $5,000 have been paid in, where the paid in capital stock of the company exceeds $3,000,000. 9.

(1) For the purpose of organizing the company, the provisional directors shall, after giving notice thereof by advertisement in one or more newspapers published at the place where the head office of the company is situated and in the Gazette, cause stock books to be opened, in which shall be recorded the subscriptions of the persons who have sub scribed for shares of the capital stock of the company.

(2) The provisional directors may keep the stock books open for such time as they c'onsider necessary and may pro cure subscriptions for shares, make calls in respect of shares not fully paid, and do generally whatever may be necessary to organize the company.

(3) Not less than 30 days'. notice shall be given of any .call, and any notice of call may 'be given by sending the notice by registered letter to the latest known address of each subscriber as contained in the books of the company.

(4) Any subscriber may advance all or any part of the money due upon the shares held by him beyond the sums actually called for. 10.

(1) The provisional directors may call a meeting of the subscribers, in this

section called the "statutory meet ing", to be held at the place named in the special Act where the head office of the company is to be situated, when not less than $1,000,000 of the .capital stock of the company has been bona fide subscribed by at least 25 subscribers for the shares of the company, reckoned in accordance with

section 68.

(2) At the statutory meeting (

a) only a subscriber who has paid in cash not less than 50 per cent of the amount of the shares sub scribed for by him is qualified to vote, and (

b) each subscriber so qualified is entitled to a number of votes equal to the number of shares of the capital stock of the co~pany.that wo~ld be fully paid up by the amount paId on hIS subscrIption.

(3) The subscribers s'o qualified shall, at the statutory meeting, (

a) determin~ the day upon which the first annual gen eral meetIng of the company is to be held , 7

9. Initial subscriptions for shares. Sections 7 and 8. 10. Initial organizational meeting of subscribers.. Sections 9, 10, 11 and 12. The minimum subscription in subsection (1) is in creased from the present $750,000. 7

(b) ~lect not less than five directors qualified under this Act to hold office until the first annual general meeting of the shareholders, and (

c) appoint a firm of chartered accountants as the company's auditors to hold office until the first an nual general meeting of the shareholders.

(4) Upon the election of directors the functions of the provisional directors cease. 11. Until it is registered and has received its certificate of registration, a company shall not commence business and shall not exercise any of its powers except for purposes in connection with its organization under this Division and its application for registration. 12. Where a company (

a) fails to apply for registration within one year of its incorporation, or (

b) having applied for registration within one year of its incorporation, fails to become registered after the completion of a review and appeal under

section 147 or upon the expiry of the time limited under that

section for requesting a review or commencing an appeal, as the case may be, the company's special Act ceases to be in force except for the purpose of winding up the affairs of the company and re turning to the subscribers the amounts paid by them upon the subscribed stock or so much thereof as they are entitled to. DIVISION 2 I nterna I Regu lations By-laws 13.

(1) The shareholders of a provincial company may, at any annual general meeting or at any special general meeting duly called for the purpose, make by-laws respect ing the following matters, namely: 8 (

a) the changing of the place where the head office of the company is situated, which place shall be in Al berta; (

b) the day on which the annual general meeting shall be held which shall be a day not more than 12 months after the holding of the last annual general meeting; (

c) the record to be kept of proxies and the time not exceeding 48 hours, excluding Saturdays and holidays, within which proxies must be deposited with the company or an agent thereof prior to a meeting in order to entitle the holder to vote there on;

II. Powers limited prior to registration.

Section 13. lZ. ::SpecIal Act ceases to be effective in the event of failure to obtain registration.

Section 15 (2) (3). The period for applying for registration is now one year instead of two years, and there is no longer provision for an extension by order in council. . 13. Shareholders' by-laws. The present

section 22 gives a gen eral power to make "such ... by-laws ... as the m'ajority of the shareholders ... deem proper". Clause (

j) replaces the present

section 71. 8

(

d) the number of directors, which shall be an even number of not less than six nor more than 20; (

e) subj ect to the provisions of this Division, the qualifications of directors; (

f) the method of filling vacancies in the board of directors; (

g) the time and proceedings for the election of direct ors in case of a failure 'Of any election on the day apP'Ointed for it; (

h) the remuneration of the chairman, vice-chairman, president, vice-presidents and other directors; (

i) the exercise of the borrowing powers of the com pany; (

j) the establishment of guarantee and pension funds for the employees and former employees of the company, or its predecessors in business and the dependants of those persons, and the making of contributions thereto out of the company's own property; (

k) any other by-laws authorized to be made by the shareholders by this or any other Act; (

l) any other matter incidental to the management and administration of the affairs of the company.

(2) Where at the commencement of this Act, a company's by-laws prescribe an odd number of directors, clause (

d) of subsection (1) does not apply to the company until the commencement of the company's annual general meeting in 1968. 14.

(1) The directors of a company may make by-laws not contrary to law 'Or this Act or any by-law passed by the shar~holders (

a) regulating the allotment and issue of shares, the making of calls thereon, the payment thereof, the issue and registration of certificates of shares, the issue of share warrants, the forfeiture of shares for non-payment, the disposal of forfeited shares and of the proceeds thereof, and the transfer of shares, (

b) the declaration and payment of dividends, (

c) setting aside out of premiums on shares or of profits a reserve fund, hereinafter called the "re serve", (

d) the appointment, functions, duties and removal of agents, officers and employees of the company and their remuneration, ' (

e) the calling of meetings of the directors and the procedure at such meetings, (

I) determining the company's fiscal year, which shall close on the last day of October, November or De cember, whichever the by-law sp~cifies, and 9

14. Directors' by-laws. Sections 26 (2), (3), (4) and 27. Clause (

c) of subsection (1) replaces the present

section 73. 9

(

g) the conduct in all other particulars of the affairs of the company.

(2) Every by-law made by the directors and every repeal, amendment or re-enactment therof, unless in the meantime confirmed at a general meeting 'Of the company duly called for that purpose, has force only until the next annual meet ing of the company, and in default of confirmation thereat ceases, at and from that time, to have force, and in that case no new by-law to the same or the like effect or Ie-enactment thereof has any force until confirmed at a general meeting.

(3) The shareholders may, at a general meeting duly called for the purpose or at an annual meeting, repeal, amend, vary or otherwise deal with any by-law passed by the directors, but no act done or right acquired under any by-law is prejudicially affected by any such repeal, amend ment, variation, or other dealing. 15.

(1) Every by-law shall be reduced to writing and shall have affixed thereto the seal of the company, and shall be admitted in evidence with'Out proof of the seal or of the signature or of the official character of the person or per sons appearing to have signed it, and without further proof thereof.

(2) The by-law shall be forthwith recorded in a book to be kept by the company for that purpose and to be known as the "by-law book".

(3) The by-law book shall, without the payment of any fee or charge, be open during business hours for inspection by any shareholder, depositor or holder of an investment certificate, by himself 'Or his agent, and any such person may make extracts therefrom. 16. Every company shall deliver to the Director within one month after the passing thereof a certified copy of its by-laws and of every repeal, or addition to, or amendment, re-enactment, or consolidation thereof. General Meeting of Shareholders 17.

(1) A general meeting of the shareholders shall be held at least once in each year for the purpose of (

a) considering the financial statement of the company, (

b) the election of directors and auditors, and (

c) the transaction of such other business as is proper at sU,ch general meeting under the law of Alberta and the by-laws of the company.

(2) The annual general meeting shall be held at the place where the head office of the company is situated or at such other place in Alberta as the directors may determine. 10

IS. By-laws as evidence. By-law book. Sections 23 and 24. 16. Delivery of copy of by-law to Director.

Section 25. 17. Annual general meeting.

Section 16. 10

(3) Notice of the time and place of the holdin f th annual general meeting of the shareholders shall ~e 0 deliv~ ered to, or sent by mail to, each common shareholder or on request, to his attorney authorized in writing, at his iast address as shown on the books of the company, and the notice of the meeting shall be so delivered or sent at least 20 days before the time fixed for holding the meeting. 18.

(1) The directors may at any time by resolution call a special general meeting of the shareholders for the trans action of any business specified in the resolution.

(2) One-tenth

part in value of the shareholders of the company are, by requisition delivered to the manager, act ing manager or secretary of the .company, at all times en titled to have a special general meeting called by that officer for the transaction of any business specified in the requisition.

(3) Notice of the holding of a special general meeting of the shareholders, specifying the time and place of the meet ing and the business to be transacted thereat, shall be de livered to, or sent by ordinary mail to, the address of each shareholder, so far as it is known, at least 20 days before the day appointed for the meeting.

(4) Subject to

section 27, no other business shall be transacted at any special general meeting unless all the shareholders of the company are present in person or by proxy and unanimously consent thereto.

(5) Before the business of any special general meeting is proceeded with there shall be produced and read a statutory declaration of the manager, acting manager or secretary of the company that the requirements of this

section as to notice have been fully complied with.

(6) A copy of the notice so delivered or sent, and of the declaration in relation thereto, shall be entered in the minute book of the company as part of the proceedings of the meeting. 19. Any director or officer wilfully neglecting or omit ting (

a) to give effect to the requisition mentioned in

section 18, or (

b) to give. the noti,ce of any general meeting required by

sectIon 17 or 18, is guilty of an offence. 2~. The transactions of all annual and special general meetIngs of the company and of all meetings of the board of directors shall be entered in the minute books of the com pany. 11

18. Special general meetings.

Section 17. 19. Offence.

Section 19. 20. Minute book. 11

21. At all meetings 'Of shareholders of the company a shareholder is entitled vnly to one vote for each fully paid share held by him. Proxies and Proxy Solicitation 22. In this

section and in sections 23 to 29, (a) "form of proxy" means a written or printed form that, upon completion and execution by or on be half 'Of a shareholder, becomes a proxy; (b) "information circular" means the circular referred to in subsection (1) of

section 25; (c) "proxy" means a completed and executed form of proxy by means of which a shareholder has ap pointed a person as his nominee to attend and act for him and on his behalf at a meeting of share holders; (d) ~'solicit" and "solicitation;' inelude (

i) any request for a proxy whether or not ac companied by or included in a form of proxy, (ii) any request to execute or not to execute a form of proxy or t'O revoke a proxy, (iii) the sending or delivery of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocati'On of a proxy, and (iv) the sending or delivery of a form of proxy to a shareholder pursuant to

section 24, but do not in,elude (

v) the sending or delivery of a form of proxy to a shareholder in response to an unsolicited re quest made by him or on his behalf, or (vi) the performance by any person of ministerial acts or professional services on behalf of a person soliciting a proxy. 23.

(1) Every common shareholder, including a common shareholder that is a corporation, may by means of a proxy appoint a common shareholder of the company whose shares are fully paid, as his nominee to attend and act at the meet ing in the manner, to the extent and with the power con ferred by the proxy.

(2) A proxy shall be executed by the shareholder or his attorney authorized in writing or, if the shareholder is a corporation, under its corporate seal or by an authorized officer or attorney thereof, and ceases to be valid one year from its date.

(3) In addition to the requirements, where applicable, of

section 27, a proxy shall contain the date thereof 'and the appointment and name of the nominee and may contain 12

21. One vote per fully paid share. The present

section 19 per mits voting of shares not fully paid if they are "not six months in arrears". 22. The sections under the heading "Proxies and Proxy Solicita tion" are new and follow closely the equivalent provisions in

Part 10 of the Bill for The Securies Act, 1967. 23. Proxies. Subsections (1) and (2) are the equivalent of the present

section 20. 12

(

a) a revocation of a former proxy, (

b) restricti'Ons, limitations or instructions as to the manner in which the shares in respect of which the proxy is given are to be voted or that may be necessary to comply with the laws of any jurisdic tion in which the shares of the company are listed on a stock ,exchange, and (

c) a restriction or limitation as to the number of shares in respect of which the pr'Oxy is given.

(4) In addition to revocation in any othe'r: manner pe! mitted by law, a proxy may be revoked by Instrument In writing executed by the shareholder or by his attorney authorized in writing or, if the shareholder is a corporation, under its corporate seal 'Or by an authorized officer or at torney thereof, and deposited either at the head office of the company at any time up to and including the last busi ness day preceding the day of the meeting, or any adjourn ment thereof, at which the proxy is to be used or with the chairman of the meeting on the day of the meeting, or ad journment thereof, and upon either of such deposits the proxy is revoked.

(5) In the absence of a by-law made pursuant to clause (

d) of

section 13 pertaining thereto, the directors may by resolution fix a time not exceeding 48 hours, excluding Sat urdays and holidays, preceding any meeting 'Or adjourned meeting of shareholders before which time proxies to be used at that meeting must be deposited with the company 'Or an agent thereof, and any period of time so fixed shall be specified in the notice calling the meeting or in the informa tion circular relating thereto. 24.

(1) Subject to

section 26, the management of a company shall, concurrently with or pri'Or to giving notice of a meeting of shareholders of the company, send by mail to each common shareholder or, on request, to his attorney authorized in writing, at his last address as shown on the books of the company, a form of proxy for use at the meet ing that complies with

section 27.

(2) If the management of a company fails to comply with subsection (1), the ,company is guilty of an offence and is liable on

summary conviction to a fine of not more than $1,000, and every director or officer 'Of the company who authorized, permitted or acquiesced in the failure is also guilty of an offence and is liable on

summary conviction to a like fine. 25.

(1) Subject to SUbsection (2) and

section 26 no person shall solicit proxies unless, ' (

a) in the case 'Of a solicitation by or on behalf of the management of a company, an information circular, either as an appendix to or as a separate document 13

24. Mandatory solicitation of proxies. New. 25. Information circular. New. 13

accompanying the notice of the meeting, is sent by prepaid mail to each shareholder of the company whose proxy is solicited at his last address as shown on the books of the company, or (

b) in the case of any other solicitation, the person making the solicitation, concurrently with or prior thereto, delivers or sends an information circular to each shareholder of the oompany whose proxy is soli,cited. (2) Subsection (1) does not apply to (

a) any solicitation, otherwise than by or on behalf of the management of a company, where the total number of shareholders whose proxies are solicited is not more than 15, two or more persons who are the j oint registered owners of one or more shares being counted as one shareholder, (

b) any solicitation by a person made pursuant to sec tion 79 of The Securities Act, 1967, and (

c) any solicitation by a person in respect of shares of which he is the beneficial owner.

(3) A person who fails to comply with subsection (1) is guilty of an offence and is liable on

summary conviction to a fine of not more than $1,000, and, where that person is a company, every director or officer of the company who authorized, permitted or acquiesced in the failure is also guilty of an offence and is liable on

summary conviction to a like fine.

(4) A person who effects a solicitation that is subject to this

section by means of a form of proxy, information circular or other con1munication that (

a) contains an untrue statement of a material fact, or (

b) omits to state a material fact necessary in order to make any statement contained therein not mis leading in the light of the circumstances in which it was made is guilty of an offence and is liable on

summary conviction to a fine of not more than $1,000, and, where that person is a company, every director or officer of the company who authorized, permitted or acquiesced in the offence is also guilty of an offence and is liable on

summary conviction to a like fine.

(5) No person is guilty of an offence under subsection (4) in respect of any untrue statement of a material fact or omission to state a material fact in a form of proxy or information circular, if the untruth of the statement or the fact of such omission was not known to the person who effected the solicitation and in the exercise of reasonable diligence could not have been known to the person. 26.

(1) Upon the application of any interested person, a judge of the Supreme Court designated by the Chief Justice of the Trial Division may, if satisfied that in the circurn- 14

26. Exemption orders. New. 14

stances of the particular case there is adequate justification for so doing, make an order, on such terms and conditions as seem to the judge just and expedient, exempting, in whole or in part, any person from the requirements of

section 24 or from the requirements of subsection (1) of

section 25.

(2) The applicant shall give the Alberta Securities Com mission notice of an application under subsection (1) and the Commission has the right to appear and be heard there on.

(3) An appeal lies to the Appellate Division from an order made under subsection (1). 27. Where

section 24 or 25 is applicable to a solicitation of proxies, (a) (b) (c) (

d) the form of proxy sent to a shareholder by a per son soliciting proxies (

i) shall indicate in bold face type whether or not the proxy is solicited by or on hehalf of the management of the company, and (ii) shall provide a specifically designated blank space for dating the form of proxy, the form of proxy shall provide means whereby the person whose proxy is solicited is afforded an op portunity to specify that the shares registered in his name shall be voted by the nominee in favour of or against, in accordance with such person's choice, each matter or group of related matters identified therein or in the information circular as intended to be acted upon, other than the election of directors and the appointment of auditors, but a proxy may confer discretionary authority with respect to mat ters as to which a choice is not so specified by such means if the form of proxy or the information circular states in bold face type how it is intended to vote the shares represented by the proxy in each such case, a proxy may confer discretionary authority with respect to amendments or variations to matterrs identified in the notice of meeting, or other matters which may properly come before the meeting, if (

i) the person by whom or on whose behalf the solicitation is made is not aware a reasonable time prior to the time the solicitation is made that anysuch amendments, variations or other matters are to be presented for action at the meeting, and (ii) a specific statement is made in the information ~ircular o~ in the for~ of proxy that the proxy IS confernng such dIscretIOnary authority, no proxy shall confer authority 15

27. Speci'al form of proxy. New. 15

(e) (I) (g) (

i) to vote for the election of any person as a direction of the company unless a bona fide proposed nominee for the election is named in the information circular, or (ii) to vote at any meeting other than the meeting specified in the noti,ce of meeting or any ad journment thereof, the information circular 'or form of proxy shall state that the shares represented by the proxy will be voted and that, where the person whose proxy is solicited specifies a choice with respect to any matter to be acted upon pursuant to clause (b), the shares shall, subject to

section 28, be voted in ac cordance with the specifications so made, the information circular or form of proxy shall in dicate in bold fa,ce type that the shareholder has the right to appoint a person to attend and act for him and on his behalf at the meeting other than the person, if any, designated in the form of proxy, and shall contain instructions as to the manner in which the shareholder may exercise such right, and if the form of proxy contains a designation of a named person as nominee, means shall be provided whereby the shareholder may designate in a form of proxy some other person as his nominee for the purpose of subsection (1) of

section 23. 28. If the aggregate number of shares represented at a meeting by proxies required to be voted for or against a particular matter or group of matters are, to the know ledge of the chairman of the meeting, less than 5 per cent of the shares entitled to vote and represented at the meet ing, the chairman of the meeting has the right not to con duct a vote by way of ballot on any such matter or group of matters unless a poll is dema.nded at the meeting. 29. The Lieutenant Governor in Council may make such regula.tions respecting the form and content of an informa tion circular as he considers necessary or appropriate in the public inte1rest. Directors 30.

(1) A provincial company shall be under the man agement of a board of directors elected or appointed in accordance with this Act.

(2) A person is not eligible to be a director unless he holds common shares of the company as the absolute and sole owner thereof in his individual right and not as trustee or in the right of another, on which not less than 16 (a) $3,000, or such greater amount as the by-laws re quire, have been paid in, when the paid in capital stock of the company is $1,000,000 or less, or

28. Where vote by ballot not required. New.. 29. Regulations re contents of information circular. New. 30. Qualifications of directors.

Section 30. The shareholding requirements in subsection (2) are increased from the present $1,000. Subsection (4) is new. 16

(b) $4,000, or such greater amount as the by-laws re quire, have been paid in, when the paid in capital stock of the company is over $1,000,000 and does not exceed $3,000,000, or (c) $5,000, or such greater amount as the by-laws re quire, have been paid in, when the paid in capital stock of the company is over $3,000,000.

(3) A person is not eligible to be elected or appointed a director if (

a) he is under 21 years of age or 75 years of age or over, or (

b) he is in arrears in respe,ct of any calls on shares held by him.

(4) A person is not eligible to be elected or appointed a director of the company if (

a) he is a director of a chartered bank, another trust company or a corporation incorporated under the laws of Canada or a province that carries on the business of a loan company and that accepts de posits from the public, or (

b) he is a director of a corporation that owns shares of the capital stock of a chartered bank, trust company or loan company described in clause (

a) in any number that would, under the voting rights attached to the shares owned by the corporation of which he is a director, permit the corporation of which he is a director to vote more than 10 per cent of the total votes that could, under the voting rights attached to all the issued and outstanding shares of the chartered bank, trust company or loan company described in clause (a), be voted by the holders thereof, but this subsection does not come into operation until May 1, 1968.

(5) Three-quarters of the directors shall at all times be Canadian citizens ordinarily resident in Canada.

(6) The election or appointment of any person as a director is void if the composition of the board would as a result thereof fail to comply with subsection (5). 31.

(1) At the election of directors of a company in 1968, (

a) one-half of the number of directors shall be elected for a term expiring at the annual general meeting in 1969, and (

b) one-half of the number of directors shall he elected for a term expiring at the annual general meeting in 1970.

(2) At the election of directors in 1969 and in subsequent years, one-half of the number of directors shall be elected 11

3 I. Election of dire·ctors.

Section 29. The present term of office is one or two years. The terms will now be two years in all cases, but with one-half elected each year. 17

for a term expiring at the annual general meeting held in the second year after the year in which they are elected. ( 3 ) The terms of office of the directors of a company holding office immediately before the company's annual general meeting in 1968 expire upon the commencement of that meeting, notwithstanding that they were elected or appointed for a longer term.

(4) Where an election of directors is not made at the annual general meeting, the election may take pla,ce on any other day fixed in accordance with the by-laws, and, subject to this Act, the directors in office immediately prior to the annual general meeting remain in office until new directors are elected or appointed. 32..

(1) Where a vacancy occurs in the board of directors, the board of directors may appoint a shareholder as a di rector to hold office for the remainder of the term of the director whom he replaces, if that shareholder is eligible to be appointed as a director.

(2) Where by reason of a vacancy in the board of di rectors the composition of the board fails to comply with subsection (5) of

section 30, the directors shall, if the vacancy has not wi thin 60 days of the occurrence thereof been filled under subsection (1), forthwith fill the vacancy.

(3) A vacancy in the board of directors does not impair the right of the remaining directors to act. 33.

(1) The shareholders may, at any special general meeting of the shareholders called for the purpose, remove any director.

(2) A director ceases to be a director if (

a) he ceases to fulfill the requirements of subsection (2) of

section 30 with respect to holdings of shares, or (

b) he ceases to be a Canadian citizen ordinarily resi ident in Canada and as a result thereof the com posi tion of the board of directors ceases to comply with subsection (5) of

section 30. 34.

(1) The shareholders, or, if authorized by the by laws, the directors (

a) shall elect by ballot from among the directors a president and at least one vice-president, and (

b) may elect by ballot from among the directors a chairman and vice-chairman of the board of di rectors and one or more vice-presidents in addi tion to the vice-president elected under clause (a).

(2) A person elected to an office under this

section ceases to hold that office if he ceases to be a director. 18

32. Appointment of director in c,ase of vacancy.' Sections 31 and 32. 33.

(1) Removal of director by shareholders. New.

(2) When director ceases to hold office. New. 34. 'Election of senior officers.

Section 34 (1). 18

(1) When a vacancy occurs in the office of the presi dent, the directors shall from their number elect a presi dent.

(2) When a vacancy occurs in the office of a vice-presi dent who is a director, the directors may from their number elect a vice-president and shall do so if without such an election there would be no vice-president who is a director. 36.

(1) The chairman of the board, or in his absence the vice-chairman of the board or the president, or in their absence a vice-president who is a director, shall preside at all meetings of the directors. .

(2) Where at any meeting of the directors the chairman of the board, the vice-chairman of the board, the president and all vice-presidents who are directors are absent, the di rectors present shall choose one of their number to preside at that meeting. 37.

(1) At a meeting of the board of directors (

a) a majority constitutes a quorum except that where the number of directors exceeds 13, seven directors constitute a quorum, and (

b) subject to subsection (2), the concurrence of a ma jority of the directors present is necessary to any act of the board.

(2) Each director, including the person presiding, has one vote on any question before the board, but if there is an equal division on any question, the person presiding also has a casting vote. 38.

(1) The shareholders of a company having more than six directors may, at a general meeting called for the pur pose, by resolution passed by a vote of the shareholders representing two-thirds of the subscribed and issued capital stock of the company, authorize the directors to elect from their number an executive committee consisting of not less than three members.

(2) The executive committee may fix its quorum at not less than a majority of its members and may, subject to subsection (3) and to any restriction in the resolution con stituting it or in the by-laws of the directors, exercise any of the powers of the directors delegated to it by the di rectors.

(3) The directors shall not delegate to the executive com mittee any of their po.wers under clauses (a), (b), (c), (

e) and (

f) of subsectlOn (1) of

section 14 or

section 48 49, 50 or 89 or their powers in respect of the borrowing of money by the company.

(4) Any act done by the executive committee, whether in conformity with its powers or not, binds all of the directors. 19

35. Election of president and vice-president in case of vacancy. New. 36. Who presides at: directors' meetings. New. 37. Procedure at directors' meetings.

Section 34 (2). 38. Executive committee.

Section 3'5. 19

-39. The directors may lawfully exercise ail the of the company except as to any matters that are r~;~::d by law or by the by-laws of the company to be transacted only at a general meeting of the shareholders. 40: Subject to this Act and to the by-laws of the company the dIrectors may , (

a) use or cause to be used and affixed the seal of the company, and may affix or cause it to be affixed to any document, (

b) make and enforce calls upon shares, (

c) declare the forfeiture of all shares on which such calls are not paid, (

d) make any payments and advances of money that they consider expedient and that are authorized to be made by or on behalf of the company, (

e) enter into all contracts for the execution of the pur poses of the company, and for all other matters necessary to the transaction of its affairs, and (/) generally deal with, sell, exchange, lease and dis pose of the company's own property in such manner as they consider expedient and conducive to the benefit of the company. 41.

(1) Where the directors entertain reasonable doubts as to the legality of any claim to or upon any share or obli gation of a company, or to or upon any dividend, coupon or the proceeds thereof, the company, on the authorization of a resolution of the directors, may apply to the Supreme Court by way of originating notice of motion for an order or judgment adjudicating upon such claim and awarding such share, obligation, dividend, coupon or proceeds to the person legally entitled to it, and the Court may restrain any action or proceeding against the company, or the directors or officers thereof, for the same subject matter, pending the determination of the motion.

(2) If the order or judgment of the Court is obeyed, the company and the directors and officers are fully protected and indemnified against all actions, claims and demands in respect of the matters in question in the application and the proceedings thereupon. 42.

(1) A company shall acquire and at all times main tain a bond with a bonding company or insurance company acceptable to the directors for the indemnification of the company in the event of loss to it by reason of the fraudulent or criminal act of any of its officers or employees.

(2) Coverage under the bond referred to in SUbsection (1) is a condition of employment .of every .employ~e of the company and a condition upon whIch any dIrector IS elected to or holds office as an officer of the company. 20

39. Exercise of company's powers by directors.

Section 33. 40. Particular powers of directors.

Section 36. 41. Reference to Supreme Court to decide on claims re shares, etc.

Section 37. 42. Mandatory bonding of all officers and employees.

Section 39. 20

(3) Subsections (1) and (2) do not apply in respect of persons who are officers and employees of a company at the commencement of this Act until July 1, 1967. 43.

(1) Not less than two officers of the company acting together shall (

a) sign or endorse on behalf of the company any cheque, voucher, other negotiable instrument or other document authorizing payment of any money by the company or subj ecting the company to any liability, or (

b) be permitted by the company to have access to any vault, safe or other place where the company stores property for safekeeping, or (

c) deliver or authorize the delivery to any person of any of the company's own property or any property held by the company in a trust or representative capaci ty, or (

d) sign on behalf of the company any document trans ferring, assigning or in any way alienating, or any agreement to transfer, assign or in any way alien ate, the company's own property or any property held by the company in a trust or representative capacity.

(2) The directors shall by resolution specify the em ployees of the company who are officers for the purposes of doing any of the acts mentioned in subsection (1) but may restrict the authority of any employee so specified to any of those acts. 44.

(1) The directors shall not pass any by-law to declare or pay any dividend or bonus when the company is insolvent, or that renders the company insolvent or impairs or di minishes its capital.

(2) The persons who were directors of the company when a by-law was passed in contravention of subsection (1) are jointly and severally liable to the company for all moneys paid pursuant to that by-law unless, (

a) being present at the meeting of the directors when the by-law was passed, he (

i) protested the by-law at that meeting orally or in writing, and (ii) n~tif~ed !he Director, in writing, of his protest WIthIn eIght days after the date of that meet ing, or (

b) not being present at the meeting of the directors when the by-law was passed, he (

i) filed his written protest against the by-law with the company, and 21

43. Dual control and custody as to property, vaults, cheques, etc. New. 44. Illegal dividend and liability of directors therefor.

Section 40. 21

(ii) notified the Director, in writing, of that pro test, within 30 days after the day on which the by-law was passed . . 45.

(1) The directors of a company are jointly and sever ally liable to its employees for all debts of the company not exceeding one year's wages due for services performed for the company while they were directors.

(2) A director is not liable under subsection (1) unless (

a) the company has been sued for the debt within one year after it has become due and execution has been returned unsatisfied in whole or in part, or (

b) the company has, within that period, gone into liquidation or has been ordered to be wound up and the claim for such debt has been filed and proved, and unless he is sued for the debt while a director or within one year after he has ceased to be a director.

(3) If execution has so issued, the amount recoverable against the director is the amount remaining unsatisfied on the execution.

(4) If the claim for the debt has been proved in liquida tion or winding-up proceedings a director, upon payment of the debt, is entitled to any preference that the creditor paid would have been entitled to, and where a judgment has been recovered he is entitled to an assignment of the judgment. DIVISION 3 Capital Stock and Shares Capitalization 46. Subject to this Act, the authorized capital stock of a company shall be divided into shares each having a par value of $1, or any multiple thereof not exceeding $100. 47.

(1) A company shall not, after the commencement of this Act, create or issue more than one class of common shares.

(2) All common shares of a company have voting rights under all circumstances, notwithstanding that any class of them are issued without voting rights or with limited voting rights.

(3) All shares of a company, other than preferred shares shall be designated as common shares. ' .48.

(1) Subject to subsections (3), (4) and (5), the dIrectors of a company may make by-laws for creating and issuing any part of the capital stock of the company as preferred shares. 22

45. Liability of directors for wages.

Section 41. 46. Division of capital stock. The present

section 45 permits shares of $5 par value each, or any multiple not over $100. 47. Common shares. New. Cf. se·ction 45. 48. Preferred shares. New. Cf.

section 45. 22

(2) Subject to subsection (3), a by-law under this

section may specify that the shares may be preferred in any respect and deferred in any other respect and, without limiting the generality of the foregoing, may specify that the shares may be either preferred or deferred in matters of the division of profits, payment of dividends and bonuses or rank in winding-up proceedings.

(3) No by-law may be made under this

section for the creation and issue of preferred shares carrying any voting rights and any preferred shares of a company created or issued before the commencement of this Act do not have voting rights under any circumstances, notwithstanding that they purport to confer full or limited voting rights.

(4) A by-law under this

section is invalid unless (

a) it is approved by a vote of the shareholders at a special general meeting called for that purpose and the shares voted in favour of the approval repre sent at least two-thirds of the subscribed and issued capital stock of the company, and (

b) it is afterwards approved by the Lieutenant Gov ernor in Council.

(5) No by-law may be made under this

section to author ize the creation and issue of any preferred shares that are subject to (

a) redemption by the company of all or part of those shares, except for the purpose of exchanging the preferred shares for common shares of the com pany only, or (

b) the right of the company to purchase for cancella tion all or any part of the shares.

(6) Nothing in this

section shall be construed to prevent the Lieutenant Governor in Council from refusing to ap prove a by-law under this section. 49.

(1) The directors of a company may, at any time after all of the capital stock of the company has been sub scribed and at least 90 per cent thereof paid in, by by-law provide for the increase of the capital stock of the company.

(2) The by-law shall declare the number and par value of the shares of the stock so increased and provide for the manner in which they are to be allotted, or the rule or rules by which the allotment is to be made.

(3) The directors may pass a by-law providing upon ~erms therein stated for the conversion of partly paid shares Into fully paid shares or for subdividing shares or altering the par value of shares of its capital stock. .

(4) The liability of shareholders to persons who, at the tIme the stock or shares are so increased, converted or altered, are creditors of the company remains as though the stock or shares had not been increased, converted or altered. 23

49. Increase of capital stock and subdivision of shares.

Section 54. Provision for decrease in ,capital is omitted. 23

(5) Where it is proposed to pass a by-law under this sec tion that will have the effect of increasing the capital stock of the company or altering the liability of any holder of that stock, a copy of the proposed by-law shall be delivered to the Director and the by-law shall not be passed for at least six weeks thereafter.

(6) Before submission of any such by-law to a meeting of shareholders, as provided in subsection (7), such notice shall be given by publication and otherwise as the Director directs.

(7) A by-law under this

section is invalid unless (

a) it is approved by a vote of the shareholders at a special general meeting of the shareholders called for that purpose and the shares voted in favour of the approval represent at least two-thirds of the subscribed and issued capital stock of the company, and (

b) it is afterwards approved by the Lieutenant Gov ernor in Council.

(8) Nothing in this

section shall be construed to prevent the Lieutenant Governor in Council from refusing to approve a by-law under this section. Liabilities of Shareholders 50.

(1) The directors may make calls on the holders of shares of the company that are not fully paid, at such times and places and in such payments or instalments as this Act or the by-laws of the company require or allow, and interest shall accrue at the rate of 6 per cent per annum upon the amount of any unpaid call from the day appointed for pay ment thereof.

(2) The call shall state that in the event of non-payment the shares in respect of which the call was made will be liable to be forfeited.

(3) If a call is not paid in accordance with its terms, the directors, by resolution recorded in their minutes, may sum marily declare the shares concerned to be forfeited.

(4) Shares declared to be forfeited under subsection (3) thereupon become the property of the company and may be disposed of as, by by-law or otherwise, the company deter mines, but the forfeiture does not relieve the shareholder of any liability to the company or to any creditor. 51.

(1) Every shareholder is entitled to pay to the com pany on account of his shares any amount in advance of calls thereon.

(2) In respect of any amount so paid a shareholder is entitled to participate in any dividend declared but the amount shall not bear interest and does not constit~te a loan to or a debt of the company. 24

so. Liability for calls on shares.

Section 42. 51. Payments on shares in advance of calls.

Section 47. A share holder will no longer need the consent of the directors before paying in advance of calls. 24

(3) The shareholder is entitled to have any such advance payment credited to him pro tanto as against subsequent calls. 52.

(1) A shareholder is not, as such, liable or respon sible for any act, default, obligation or liability of the com pany, or for any engagement, claim, payment, loss, inju:y, transaction matter or thing related to or connected wIth the compa~y beyond the amount of the subscription price remaining unpaid on his shares.

(2) Until the whole amount of the subscription price has been paid on his shares, a shar~holder is liable to the credi tors of the company for the amount remaining unpaid on the subscription price thereof, but he is not liable to an action therefor by a creditor until an execution at the suit of the creditor against the company has been returned unsatisfield in whole or in part.

(3) The amount due on such an execution, not exceeding the amount unpaid on his shares, is the amount recoverable from any such shareholder and when so recovered shall be considered as paid on his shares.

(4) A shareholder may plead by way of defence, in whole or in part, to any such action by a creditor any set-off that he could set up against the company except a claim for un paid dividends or a salary or allowance as a director or officer of the company. 53.

(1) No person holding shares of the capital stock of the company as executor, administrator, trustee, guardian or committee (

a) of or for any estate, trust or person named in the books of the company as being represented by him, or (

b) under or by virtue of a will or other instrument that is named in the books of the company in con nection with such holding, is personally subject to any liability as a shareholder for the amount remaining unpaid on the SUbscription price on the shares, but the estate and funds in his hands are liable in like manner and to the same extent as the testator, in testate, ward or person interested in the estate and funds would be, if living and competent to hold the shares in his own name.

(2) Where the trust is for an individual or corporation the individual or corporation is also liable as a shareholde; to the extent of his or its interest in the shares.

(3) Where the estate, trust or person so represented or the will or other instrument, is not named in the book~ of the company, the executor, administrator, trustee, guardian or committee is personally liable in respect of the shares as if he held them in his own name as owner thereof. 25

52. Liability of shares for debts and obligations of the company. Sections 43 and 44. 53. Liability as to shares held in trust.

Section 46. 25

(1) In this

section "mortgagee" includes a trustee for holders of bonds, debentures, notes or other evidences of indebtedness.

(2) No mortgagee of a share of a company and no person holding such a share as collateral security who is (

a) recorded in the register of shareholders as the holder of the share, and (

b) described in that register as representing in either of those capacities a named mortgagor or person giving the collateral security is personally liable in respect of the share that he so repre sents, but the mortgagor or other person giving the col lateral security is liable as if he were registered on the books of the company as the holder of the share. Share Certificates 55.

(1) Every shareholder is entitled to a share certifi cate in respect of the fully paid shares held by him signed by the proper officers in accordance with the by-laws of the company in that regard.

(2) A company is not bound to issue more than one share certificate in respect of a share or shares held jointly by several persons, and delivery of a share certificate to one of several joint shareholders is sufficient delivery to all.

(3) A share certificate shall be admitted in evidence as prim.a facie proof of the title of the shareholder named therein to the shares represented thereby.

(4) A company may charge a fee of not more than $1 for every share certificate issued but in the case of the allot ment and issue of shares no fee shall be charged.

(5) A company shall not deliver a share certificate in respect of (

a) shares issued by the company after the commence ment of this Act, or (

b) shares transferred under a transfer recorded in the share transfer register of the company after the commencement of this Act, unless the shares are fully paid. 56. Where a share certificate is defaced, lost or destroyed, a new certificate may be issued in its place upon 26 (

a) payment of such fee, if any, not exceeding $1 as the directors prescribe, and (

b) the furnishing to the company of a bond of indem nity issued by a bonding company or insurance com pany that is acceptable to the directors.

54. Liability as to mortgaged share. New. 55. Share certificates. New. 56. Issue of new certificates.

Section 50. 26

Transfer and Transmission of Shares 57.

(1) The shares of a provincial company are personal property and, subject to this Act, are transferable.

(2) A fraction of a share is not transferable.

(3) Subject to

section 58, no by-law is valid that in any way restricts the right of a holder of fully paid shares to transfer them. 58.

(1) No registration of the transfer of a share that is not fully paid shall be made without the consent of the directors and of the transferee and, subject to subsection (4), where such a registration is made with the consent of the directors, the transferor is not liable to the company or to its creditors for the amount unpaid on such a share.

(2) Subject to subsection (3), where registration is made with the consent of the directors of the transfer of a share that is not fully paid to a person whom the directors have reason to believe is not of sufficient means to pay fully for the share, the directors in office when the resolution giving the consent was passed are jointly and severally liable to the company and to its creditors in the same manner and to the same extent as the transferor would have been liable if the registration had not been made.

(3) A director is not liable under subsection (2) if (

a) being present at the meeting of the board of di rectors or the executive committee at which the resolution giving the consent was passed, he (

i) did not vote in favour of the resolution and protested the resolution at that meeting, orally or in writing, and (ii) notified the Director, in writing, of his protest within eight days after the date of that meet ing, or (

b) not being present at the meeting of the board of directors or the executive committee at which the resolution giving consent was passed, he (

i) filed his written protest against the resolution, and (ii) notified the Director, in writing, of that pro test within 30 days after the date when the consent was given.

(4) Where a transfer of a share upon which a call is unpaid is registered with the consent of the directors and of the transferee, the transferee is liable for the call to the same extent and with the same liability to forfeiture of the share, if the call remains unpaid, as if he had been the holder when the call was made, and the transferor also remains liable for the call until it is paid. 27

51. Transferability of shares.

Section 48. 58. Transfer of shares not fully paid.

Section 49. 27

59. Unless made by sale under execution or under the order or judgment of a competent court, no transfer of shares is, until it is recorded in the share transfer register of the company, valid for any purpose whatever, except only (

a) as exhibiting the rights of the parties thereto to wards each other, and (

b) if absolute, as rendering the transferee and the transferor jointly and severally liable to the com pany and its creditors until it is recorded in the share transfer register of the company. 60.

(1) The by-laws of a company may provide that transfers of shares of the capital stock of the company may be deposited with any branch office or any specified branch office of the company, for recording in the share transfer register of the company, subject to compliance with the pro cedure and conditions prescribed in the by-laws.

(2) Where a transfer of shares is deposited with a branch office pursuant to subsection (1), the person in charge of that office shall forthwith send the transfer to the head office of the company for recording in the share transfer register. 61.

(1) Where upon the death of a holder of any shares of a company a transmission thereof takes place to or title to or control thereof vests or is claimed to vest in any per son (in this

section and

section 62 called the "successor") the company may permit the recording thereof in the name of the successor in the share transfer register and the register of shareholders of the company or may pay the principal amount or any dividend thereon to the successor (

a) if the successor claims by virtue of a grant of pro bate or letters of administration or other instrument issued or purporting to be issued by a court or other judicial authority in any jurisdiction, upon produc tion of the grant or instrument or (

i) an authenticated copy thereof or extract there- from, or (ii) a certificate of the grant or instrument, under the seal of the court or other authority or a notarial copy thereof without proof of the authenti city of the seal or other proof, and upon deposit of a copy thereof, or (

b) if the successor claims by virtue of the laws of any jurisdiction in which any such transmission or vest ing of title or control takes place without any grant of probate or letters of administration or other court or judicial action, upon production and deposit of proof thereof in accordance with the laws of that jurisdiction and reasonable evidence of those laws, together with, in any such event, production and deposit of an affidavit or statutory declaration by the successor, or 28

59. Effect of share transfer before registration.

Section 51. 60. Deposit of transfer in branch office for the purpose of regis tration. New. 61. Transmission of shares.

Section 53 .. 28

anyone of the persons where more than one person is the successor, showing the nature of the transmission or vesting of title or control, as the case may be.

(2) Every grant or instrument required by subsection (1) to perfect the transmission of a share in the company shall, if made elsewhere than in a country of the British Common wealth or any colony, dependency or protectorate of any such country, (

a) be further authenticated by the clerk of a court of record under the seal of the court, or by a consul, vice-consul or other accredited representative of any of Her Majesty's Governments in the country w here the grant or instrument was made, or (

b) be made directly before such consul, vice-consul or other accredited representative. 62. A company may, in its discretion, record a transfer of a share executed by the successor of the share without the necessity of recording the transmission of the share under

section 61 if the transfer is accompanied by the documents or proof that would be required by that

section if the successor had applied to record a transmission there under. 63.

(1) Where the transmission of a share of the capital stock of the company takes place by operation of law other wise than because of the death of a shareholder, the com pany shall record the transmission in the share transfer register and register of shareholders upon being furnished with an affidavit or declaration in a form satisfactory to it signed by or on behalf of a person claiming under the transmission stating the nature and effect of the transmis sion together with any corroborative evidence that the company may request.

(2) Until the transmission has been recorded in the share transfer register of the company, no person claiming a share by virtue thereof is entitled to receive notice of or vote at meetings of shareholders or to receive any payment in respect of such share whether by way of dividend or otherwise. 64.

(1) In this

section and sections 65 to 67, (a) "corporation" includes an association, partnership or other organization; (b) "non-resident" means (

i) an individual who is not ordinarily resident in Canada, or (ii) a corporation incorporated, formed or other wise organized, elsewhere than in Canada, or (iii) ~ ~orporation that !s controlled directly or IndIrectly by non-resIdents as defined in sub clause (

i) or (ii), or 29

62. Transfer by successor without the necessity of a prior trans mission. New. 63. Transmission by operation of law. New. 64.

Interpretation provisions re sections 65 to 67. Sections 64 to 67 are new and in general restrict the shareholdings of non residents of Canada to 25 per cent: of the issued and outstanding shares of the company and 10 percent of such shares in the case of anyone non-resident and his associates. 29

(iv) a trust established by a non-resident as defined in subclause (i), (ii) or (iii), or a trust in which non-residents as so defined have more than ,50 per cent of the beneficial interest, or (

v) a corporation that is controlled directly or in directly by a trust mentioned in subclause (iv) ; (c) "resident" means an individual, corporation or trust that is not a non-resident.

(2) For the purposes of sections 65 to 67, a shareholder is deemed to be associated with another shareholder if (

a) one shareholder is a corporation of which the other shareholder is an officer or director, or (

b) one shareholder is a partnership of which the other shareholder is a partner, or (

c) one shareholder is a corporation that is controlled directly or indirectly by the other shareholder, or (

d) both shareholders are corporations and one share holder is controlled directly or indirectly by the same individual or corporation that controls directly or indirectly the other shareholder, or (

e) both shareholders are members of a voting trust where the trust relates to shares of the company, or (

f) both shareholders are associated within the meaning of clauses (

a) to (

e) with the same shareholder.

(3) For the purposes of sections 65 to 67, where a share of the capital stock of the company is held jointly and one or more of the joint holders thereof is a non-resident, the share is deemed to be held by a non-resident. ( 4) For the purposes of this

section and secti'Ons 65 to 67, a ushareholder" is a person who according to the register of shareholders of the company is the holder of one or more shares of the capital stock 'Of the company and a reference in sections 65 to 67 to a share being held by or in the name of any person is a reference to his being the holder of the share according to the register of shareholders 'Of the com pany.

(5) Where after the commencement of this Act a corpor ation or trust that was at any time a resident becomes a non-resident, any shares of the capital stock of the com pany acquired by the corporation or the trust while it was a resident and held by it while it is a non-resident shall be deemed, for the purposes of sections 65 and 66, to be shares held by a resident for the use or benefit of a non-resident. 65.

(1) The directors of a company shall refuse to allow a transfe~ of a share of the capital stock of the company to a non-reSIdent to be recorded In the share transfer register of the company 30 (

a) if, when the total number of shares of the capital stock of the company held by non-residents exceeds

65. New. Limitations as to non-resident holdings. 30

25 pBr cent of the total number of the issued and outstanding shares of such stock, the transfer would increase the percentage of such shares held by non residents, or (

b) if, when the total number of shares of the capital stock of the company held by non-residents is 25 per cent or less of the total number of the issued and outstanding shares of such stock, the transfer would cause the total number of such shares held by non-residents to exceed 25 per cent of the total num ber of the issued and outstanding shares of such stock, or (

c) when the total number of shares of the capital stock of the company held by the non-resident and by other shareholders associated with him, if any, exceeds 10 per cent of the total number of issued and outstanding shares of such stock, or (

d) if, when the total number of shares of the capital stock of the company held by the non-resident and bv other shareholders associated with him, if any, is 10 per cent or less of the total numher of issued and outstanding shares of such stock, the recording of the transfer would cause the number of such shares of stock held by the non-resident and by other shareholders associated with him, if any, to exceed 10 per cent of the issued and outstanding shares of such stock.

(2) The directors of a company shall not allot or allow the allotment of any shares of the capital stock of the com pany in circumstances where, if the allotment were a trans fer of the shares, the directors would be required under sub section (1) to refuse to allow the transfer to be recorded.

(3) Default in complying with the provisions of this sec tion does not affect the validity of a transfer of a share of the capital stock of the company that has heen recorded in the share transfer register of the company or the validity of the allotment of shares of the capital stock of the com pany. 66. (1 ) Notwithstanding

section 21 and subsection (2) of

section 47, where a resident holds shares of the capital stock of the company in the right of, or for the use or benefit of, a non-resident, the resident shall not, in person or by proxy, exercise the voting rights pertaining to those shares.

(2) Where any shares of the capital stock of a company are held in the name or right of or for the use or benefit of a non~resident, no person shall, either as proxy or in person exerCIse the. voting r:igh~s p~rtaining to such shares held by the non-resIdent or In hIS nght or for his use or benefit, if the t?tal of such shares so held, together with such shares held In the name or right of or for the use or benefit of 31

66. New. No voting of shares held bya nominee for a non resident. 31

(

a) any shareholders associated with the non-resident, or (

b) any persons who would, under subsection (2) of

section 64, be deemed to be shareholders associated with the non-resident were such persons and the non-resident themselves shareholders exceed in number 10 per cent of the issued and outstanding shares of such stock.

(3) If any provision of this

section is contravened at a general meeting of the shareholders of the company, no proceeding, matter or thing at that meeting is void by reason only of such contravention, but any such proceeding, matter or thing is, at any time wi thin one year from the day of commencement of the general meeting at which the contravention occurred, voidable at the option of the share holders by a resolution passed at a special general meeting of the shareholders. 67.

(1) The directors may make such by-laws as they consider necessary to carry out the intent of sections 64 to 66 and subsections (2) to (6) of this

section and in particular, and without restricting the generality of the foregoing, the directors may make by-laws (

a) requiring any shareholders of the company to sub mit a declaration (

i) with respect to the ownership of such share, (ii) with respect to the place in which the share holder and any person in whose right or for whose use or benefit the share is held are ordi narily resident, (iii) whether the shareholder is associated with any other shareholder, and (iv) with respect to such other matters as the di rectors consider relevant for the purposes of sections 64 to 66 and this section, (

b) requiring any person desiring to have a transfer of a share to him recorded in the share transfer register of the company or desiring to subscribe for a share of the capital stock of the company to sub mit such a declaration as may be required pursuant to this

section in the case of a shareholder, and (

c) prescribing the times at which and the manner in which any declaration required under clause (

a) or (

b) is to be submitted.

(2) Where pursuant to any by-law made under subsec tion (1) any declaration is required to be submitted by any shareholder or person in respect of the transfer of or sub scription for any share, the directors may refuse to allow a transfer to be recorded in the share transfer register of the company or to accept a subscription without the submission of the required declaration. 32

67. By-laws and ruleS re non-resident shareholders. New. 32

(3) In determining for the purposes of sections 64 to 66 (

a) whether a person is a resident or non-resident, (

b) by whom a corporation is controlled, or (

c) any other circumstances relevant to the perform- ance of their duties under those sections, the directors of the ,company may rely upon any statements made in any declarations submitted under this

section or rely upon their own knowledge of the circumstances, and the directors are not liable in any action for any thing done or omitted by them in good faith as a result of any conclu sions made by them on the basis of any such statements or knowledge. 68.

(1) A company shall at all times have recorded in its register of shareholders at least 25 shareholders.

(2) The directors shall refuse to allow a transfer of the share of the capital stock of the company to be recorded in the share transfer register of the company if as a result thereof the number of shareholders would be fewer than 25.

(3) In determining the number of shareholders of the company for the purposes of this section, either before or after the recording of any transfer, only shares of the following kinds shall be counted: (

a) shares recorded in the name of one person only, except where that person (

i) to the knowledge of the company, holds the shares as trustee for or in the right of another shareholder or shareholders, or (ii) is recorded as holding the shares in a trust capacity for the benefit of two or more persons, or (iii) is recorded as holding the shares as mortgagee or as holding the shares as collateral security, if he is also described as only representing two or more mortgagors or two or more persons giving the collateral security, as the case may be; and (

b) shares held by two or more persons upon the record ing of a transmission under this Division if, prior to the recording of the transmission, the shares could have been counted under clause (a).

(4) Where at the commencement of this Act a company does not have at least 25 shareholders, this

section does not apply to the company until April 1, 1968. 69 •.

(1) Every ~irector of a company who knowingly aut~onzes or pe~mIts. a contravention of any provision of

sectIOn 65 or 68 IS gUIlty of an offence and liable on sum mary conviction to a fine of not more than $5,000 or to im- 33

68. New. No transfer to reduce number of shareholders to less than 25.. The present Act requires a minimum of 25 subscribers when the company applies for registration but there has been no requirement to maintain that minimum after registration. 69 . .offences re prohibited share transfers and minimum re quirement of 25 shareholders. New. 33

prisonment for a term of not more than one year or to both such fine and imprisonment.

(2) Every person who knowingly contravenes

section 66 is guilty of an offence and liable on

summary conviction to a fine of not more than $5,000 or to imprisonment for a term of not more than one year or to both such fine and imprisonment.

(3) Where the register of shareholders does not, on April 1, 1968, comply with subsection (1) of

section 68, the company is liable to a penalty of $100 for each day, commencing on April 1, 1968, that the default continues. 34 Insider Trading 70.

(1) In this

section and in sections 71 to 76, (a) "affiliate" means a corporation that is an affiliated company within the meaning of

section 2 of The Securities Act, 1967; (b) "associate", where used to indicate a relationship wi th any person, means (

i) any corporation of which that person benefici ally owns, directly or indirectly, equity shares carrying more than 10 per cent of the voting rights attached to all equity shares of the cor poration for the time being outstanding, (ii) any trust or estate in which that person has a substantial beneficial interest or as to which that person serves as trustee or in a similar capacity, or (iii) any relative or spouse of that person or any relative of that spouse who, in any such case, has the same home as that person; (c) "capital share" means any share of any class of shares of a corporation; (d) "Commission" means the Alberta Securities Com mission; (

e) Uequity share" (

i) with reference to a provincial company, means a common share of the capital stock of the company, and (ii) with reference to any corporation other than a provincial company, means any share of any class of shares of the corporation carrying vot ing rights under all circumstances and any share of any class of shares carrying voting r.ights by reason of the occurrence of any con tIngency that has occurred and is continuing; (I) "insider" or "insider of a provincial company" means

70. Sections 70 to 76 under "Insider Trading" follow similar legislation in Ontario pertaining to Ontario trust companies. "In siders" of a provincial trust -company will have to report their holdings to the Alberta Securities Commission. An insider with confidential information who buys shares knowing that the value of the shares will likely increase when the information becomes gen erally known, is liable to any shareholder who sold him the shares for any loss suffered by him. The insider is also liable to account to the company for the profit. There are also similar provisions in

Part 11 of the Bill for The Securities Act, 1967. 34

(

i) any director or senior officer of a provincial company, or (ii) a.ny person who beneficially owns, directly or indirectly, equity shares of a provincial com pany carrying more than 10 per cent of the voting rights attached to all equity shares of the company for the time being outstanding, except that in computing the percentage of voting rights attached to equity shares owned by an underwriter there shall be excluded any equity shares that have been acquired by him as underwriter in the course of distribution to the public of such shares, but such exclusion ceases to have effect on completion or cessa tion of the distribution to the public by him; (g) "senior officer" means (

i) the chairma.n or any vice-chairman of the board of directors, the president, any vice-president, the secretary, the treasurer or the general manager of a corporation or any other individ ual who performs functions for the corpora tion similar to those normally performed by an individual occupying any such office, and (ii) each of the five highest paid employees of a corporation, including any individual referred to in subclause (i) ; (h) "underwriter" has the same meaning as in The Securities Act, 1967.

(2) For the purposes of this

section and sections 71 to 76, (

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

b) an individual shall be deemed to own beneficially capital shares beneficially owned by a corporation controlled by him or by an affiliate of such cor poration, (

c) a corporation shall be deemed to own beneficially capital shares heneficially owned by its affiliates, and (

d) the acquisition or disposition by an insider of a put, call or other transferable option with respect to a capital share shall be deemed a change in the beneficial ownership of the capital share to which such transferable option relates. 71.

(1) A person who is an insider of a provincial company at the commencement of this Act shall, on or be fore July 10, 1967, file with the Commission a report as of the date of the commencement of this Act, of his di~ect or indirect beneficial ownership of capital shares of the company. 35

71. Insiders to report holdings t·o Alberta Securities Commission. New. 35

(2) A person who, after the commencement of this Act, becomes an insider of a provincial company shall, within 10 days after the end of the month in which he becomes an insider, file with the Commission a report, as of the day on which he became an insider, of his direct or indirect beneficial ownership of capital shares of the company.

(3) If a person who is an insider of a provincial company, but has no direct or indirect beneficial ownership of capital shares of the company, acquires direct or indirect beneficial ownership of any such shares, he shall, within 10 days after the end of the month in which he acquired such direct or indirect beneficial ownership, file with the Commission a report, as of the date of such acquisition, of his direct or indirect beneficial ownership of capital shares of the company.

(4) A person who has filed or is required to file a re port under subsection (1), (2) or (3) and whose direct or indirect beneficial ownership of capital shares of the company changes from that shown or required to be shown in such report or in the last report filed by him under this subsection shall, within 10 days following the end of the month in which such change takes place, if he was an insider of the company at any time during such month, file with the Commission a report of his direct or indirect beneficial ownership of capital shares of the company at the end of such month and the change or changes therein that occurred during the month and giving such details of each transaction as may be required by the regulations made under

section 76. 72. All reports filed with the Commission under

section 71 shall be open to public inspection at the offices of the Commission during normal business hours of the Commis sion, and any person may make extracts from such reports. 73.

(1) Every person who is required to file a report under

section 71 and who fails to do so is guilty of an of fence and is liable on

summary conviction to a fine of not more than $1,000, and, where that person is a company, every director or officer of the company who authorized, permitted or acquiesced in the failure is also guilty of an offence and is liable on

summary conviction to a like fine.

(2) Every person who files a report under

section 71 that is false or misleading by reason of the misstatement or omission of a material fact is guilty of an offence and is liable on

summary conviction to a fine of not mOre than $1,000, and, where that person is a company, every director or officer of the company who authorized, permitted or acquiesced in the filing of the false or misleading report is also guilty of an offence and is liable on

summary conviction to a like fine. 36

72 . . Reports may be inspected. New. 73. Offences and penalties. New. 36

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

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

(5) Whenever it appears to the Commission that any person has failed to comply with

section 71, it may in its discretion apply to a judge of the Supreme Court designated by the Chief Justice of the Trial Division for an order re quiring that person to comply therewith.

(6) An appeal lies to the Appellate Division from an order made under subsection (5). 74.

(1) Every insider of a provincial company or as sociate or affiliate of such insider, who, in connection with a transaction relating to the capital shares of the company, makes use of any specific confidential information for his own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of such shares, (

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

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

(2) An action to enforce any right created by subsection (1) may be commenced only wi thin two years after the date of completion of the transaction that gave rise to the cause of action. 75.

(1) Upon application by any person who was at the time of a transaction referred to in subsection (1) of sec tion 74 or is at the time of the application an owner of capital shares of the company, a judge of the Supreme Court designated by the Chief Justice of the Trial Division may, if satisfied that (

a) such person has reasonable grounds for believing that the company has a cause of action under sec tion 74, and (

b) either (

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

section 74 within 60 days after receipt of a written request from such person to do so, or 37

74. Liability of insiders. New. 75. Order to commence 'action. New. 37

(ii) the company has failed to prosecute diligently an action commenced by it under

section 74, make an order, upon such terms as to security for costs and otherwise as to the judge seems fit, requiring the Commis sion to commence or continue an action in the name of and on behalf of the company to enforce the liability created by

section 74.

(2) The company and the Commission shall be given notice of any application under subsection (1) and may appear and be heard thereon.

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

(4) An appeal lies to the Appellate Division from an order made under subsection (1). 76. The Lieutenant Governor in Council may make regulations (

a) prescribing the form and content of the reports re quired to be filed under

section 71, and (

b) respecting any other matter necessary or advisable to carry out effectively the intent and purpose of sections 70 to 75. DIVISION 4 Records and Financial Disclosure Accounts and Records 77. Every company shall cause the following documents and registers to be kept: 38 (

a) a copy of its special Act or memorandum of as sociation and the by-laws of the company; (

b) a register of shareholders setting out (

i) the names, alphabetically arranged or alpha betically indexed in appropriate categories, and addresses of all persons who are shareholders of the company, (ii) the names, alphabetically arranged or alpha betically indexed, of all persons who have been shareholders of the company, and the date any person ceased to be a shareholder, (iii) the names, alphabetically arranged or alpha betically indexed of every person described in the register as a mortgagee as holding the share as collateral se·curity or as representing a

76. Regulations. New. 77. Documents and registers.

Section 55 (1). 38

named person or an estate, with the name of the mortgagor or holder of the collateral security or a description of the capacity in which he represents the other person or estate and the name of the mortgagor, person or estate so represented, (iv) the date each person's name was entered in the register as a shareholder, (

v) the number and class of shares held by each shareholder and the amounts paid up and re maining unpaid on the shares of each share holder, and (vi) particulars of the transfer by any shareholder of his shares; (

c) a register of directors setting out the names, ad dresses and other occupations, if any, of all persons who are or have been directors of the company with the several dates on which each became or ceased to be a director; (

d) a register called the ushare transfer register" in which transfers and transmissions of shares may be recorded in accordance with this Act and the by laws of the company. 78. Every company shall cause to be kept proper books of account and accounting records in respect of all financial and other transactions of the company and, without limiting the generality of the foregoing, records of (

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

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

c) all other transactions affecting the financial posi tion of the company. 79. The documents and registers mentioned in sections 77 and 78 shall be admitted in evidence before and after dissolution of the company as prima facie proof of all facts purporting to be stated therein. 80.

(1) Every company shall cause minutes of all pro ceedings at meetings of the shareholders and of the directors and of any executive committee to be entered in books kept for that purpose.

(2) Any such minute, if purporting to be signed by the chairman of the meeting at which the proceedings were had or by the chairman of the next succeeding meeting, shall be admitted in evidence as prima facie proof of the pro ceedings.

(3) Unless the contrary is proved, where minutes have been made, as required by this section, of the proceedings 39

78. Accounting records. New. 79. Evidence. New. 80. 'Minutes. New. 39

(

a) at a meeting of the shareholders, or (

b) at a meeting of the directors, or (

c) at a meeting of an executive committee, the meeting shall be deemed to have been duly held and convened and all proceedings had thereat to have been duly had and all appointments of directors, managers, officers or liquidators to have been duly made. 81.

(1) Every company shall cause the documents and registers mentioned in

section 77 and the books of account and accounting records mentioned in

section 78 (

a) to be open for inspection by any director during the normal business hours of the company, and (

b) except as provided in subsection (3), to be kept at the head office of the company.

(2) Every person who removes or assists in removing from Alberta any of the documents and registers mentioned in

section 77 is guilty of an offence and liable on

summary conviction to a fine of not more than $10,000.

(3) Any company may keep at any branch office such part of the accounting records as relate to the operations and assets and liabilities thereof or to such business of the company as may be carried on or supervised or accounted for at that branch office, but the company shall keep at the head office of the company such records as will enable the directors to ascertain quarterly with reasonable accuracy the financial position of the company. 82.

(1) Subject to

section 84, a company shall allow (

a) a shareholder of the company, or his agent or per sonal representative, to inspect the minutes of proceedings at meetings of shareholders mentioned in

section 80 and the documents and registers men tioned in

section 77, and (

b) a creditor of the company, or his agent or personal representative, to inspect the documents and regis ters mentioned in

section 77, and allow him to make extracts therefrom during the nor mal business hours of the company and at the place where the minutes, documents or registers are kept.

(2) A company shall not make any charge for an in spection of the minutes or of the register of directors, but may charge $1 or such other sum as the company may pre scribe, for each inspection of the documents or other regis ters.

(3) Every company shall, upon request, provide to any shareholder or creditor of the company or his agent or personal representative 40

81. Location of registers, records, etc.

Section 55 (2) (3). 82. Inspection of registers, documents, records, etc.

Section 55 (5). 40

(

a) a copy of the register of shareholders, or any part thereof, on payment of such sum as the company may prescribe, for every name copied, and (

b) a copy of the register of directors, or any part thereof, on payment of $1 or such other sum as the company may prescribe.

(4) Every company shall, within seven days after a re quest, provide to a shareholder a copy of all minutes men tioned in

section 80 on payment of such sum as the company may prescribe.

(5) Where a company is convicted of an offence against this section, the convicting magistrate may order that the inspection be allowed or a copy be furnished within such time as he thinks fit. 83.

(1) Every company shall send to a shareholder there of at his request a copy of its special Act, memorandum of association, by-laws, or any special or ordinary resolution of the company, on payment of such sum as the company may prescribe.

(2) Where a company is convicted of an offence against this section, the convicting magistrate may order that the copy be furnished within such time as he thinks fit. 84. A company may close the register of shareholders and the share transfer register for a period of time not ex ceeding 15 days, exclusive of Saturdays and holidays, im media tely preceding any meeting of the shareholders. 85.

(1) Where (

a) the name of any person is, without sufficient cause, entered in or omitted or deleted from the register of shareholders of a ,company, or (

b) default is made or unnecessary delay takes place in entering therein the fact of any person having ceased to be a shareholder of the company, the person aggrieved, or any shareholder of the company, or the company, may petition the Supreme Court for rectifica tion of the register.

(2) The Court may either refuse the petition or direct rectification of the register and payment by the company of any damages sustained by any party aggrieved.

(3) The Court may, in any proceedings under this section, decide any question relating to the entitlement of any party to the proceedings to have his name entered in or omitted or deleted from the register, whether the question arises (

a) between shareholders and alleged shareholders, or (

b) between any shareholder or alleged shareholder, on the one hand, and the company on the other and the Court generally may decide any question necessary or expedie~t to be decided for rectification of the register. 41

83. Furnishing copies _of by-Ia,ws, resolutions, etc. New. 84. Closure of shareholders' register before meeting. New. 85. Rectification of shareholders' register. New. 41

(4) The company shall file with the Director a copy of the order within 15 days after the making thereof. 86.

(1) A company is not bound to see to the execution of any trust, whether express, implied or constructive, in re spect of any share.

(2) The receipt of the shareholder in whose name the share is registered on the books of the company is a valid and binding discharge to the company for any payment made in respect of any share notwithstanding any trust to which the share may be subject and whether the company has or has not had notice of the trust.

(3) The company is not bound to see to the application of the money paid upon such a receipt. 87.

(1) The registers, books of account, accounting re cords, d'Ocuments, minutes, files and other records of a company, including any books of account or accounting or other records used by a company's auditors or the officers, employees and agents of a company, are the s'Ole property of the company and no other person is entitled to any solicitor's lien or other lien in respect thereof.

(2) Any person, without lawful justification, who re moves, withholds or detains any thing mentioned in subsec tion (1) from the possession or control of the directors of the company that owns it, or from the receiver and manager or liquidator of the company, is guilty of an offence. 88.

Where a person who has been but has ,ceased to be a director, manager, auditor, officer, employee or agent of a company, or any other person, unlawfully retains possession of any registers, books of account, accounting records, documents, minutes, files, records, moneys, securities or other things that are the property 'Of the company, a judge of the Supreme Court on the petition of the company or any depositor or shareholder of the company or of the Director, and upon notice to the person affected, may (

a) order that the things so retained be forthwith de livered to such person as the judge may direct and in default that the person so retaining possession shall be imprisoned for such period as the judge may direct or until he complies with the direction of the order, and (

b) authorize the sheriff of any judicial district in which they may be found forthwith to seize, take possession of and deliver them to the person to whom they have been directed to be delivered. Shareholders' Audit 89.

(1) The shareholders shall by resolution at each annual meeting of the company appoint as the auditors of 42

86. Shares subject to trusts.

Section 78. 87. Property rights in company's records.

Section 58. 88. Court order to deliver records unlawfully retained.

Section 59. Sl9. Appointment of auditors.

Section 61 (2) to (7). 42

the company a firm of chartered accountants acceptable to the Director.

(2) The auditors of the company hold office until the close of the next annual meeting unless previously removed by a resolution of the shareholders in general meeting or by the directors under subsection (6).

(3) No firm is eligible to be appointed or to hold office as a company's auditors, and no member, employee or agent of that firm is entitled to conduct or take

part in any audit of a company's accounts or perform any of the powers, duties or functions of auditors under this Act if that firm, member, employee or agent, as the case may be, (

a) is a shareholder of the company, or (

b) is interested in any transaction of the company, or (

c) is a director, officer or employee of the company.

(4) If an appointment of auditors is not made at an annual meeting or by the directors under subsection (6), the Director may, on the application of any shareholder of the company, appoint a firm of chartered aC,countants as the auditors of the company for the current year, and fix the remuneration, if any, to be paid to them by the company for their services.

(5) The directors may, by a two-thirds vote, remove the auditors for incapacity, misconduct or negligence.

(6) Where the company's auditors resign or are removed pursuant to subsection (5), the directors shall, by a ma jority vote, appoint as the company's auditors another firm of chartered accountants a,cceptable to the Director.

(7) The remuneration of the auditors shall be fixed by the company in general meeting, except that the remunera tion of any auditors appointed by the directors may be fixed by the directors. 90.

(1) The auditors of a company shall audit its ac counts at least once in every year and shall report thereon to the shareholders in accordance with this section.

(2) The auditors shall make such examination as will enable them to make their report under this section.

(3) The auditors have right of access at all times to the books and accounts, cash, securities, documents and vouch ers of the company, and are entitled to require from the directors and officers of the company such information and explanation as in their opinion may be necessary to enable the auditors to report to the shareholders under this section.

(4) The auditors shall, at least once during their term of office, check the cash and verify the investments and loans of the company at the head office of the company against the entries in regard thereto in the company's reco~ds and if they consider it necessary, shall check and verify i'n th~ 43

90. Annual audit and auditors' report ,to shareholders.

Section 61 (1), (8), (9) and (10). Subsections (6) and (7) above are new. 43

same manner the cash, investments and loans at any branch or agency.

(5) The auditors' report to the shareholders shall show (

a) that they have examined the books for the preced ing fiscal year, (

b) that they have verified the cash and securities of the company, (

c) whether or not their requirements as auditors have been complied with, (

d) that they have examined the financial statement of the company and that it agrees with the books of the company, (

e) that their examination includes a general review of the accounting procedures and such tests of account ing records and other supporting evidence as they consider necessary in the circumstances, (

f) that after due consideration they have formed an independent opinion as to the position of the com pany, (

g) that with their independent opinion so formed and according to the best of their information and the explanations given them, they certify that in their opinion the financial statement sets forth fairly the financial position of the company and the results of its operations in accordance with generally ac cepted accounting principles applied on a basis con sistent with that of the preceding fiscal year, and (

h) that all transactions of the company that have come within their notice have been within the powers of the company, except as otherwise specified pursuant to subsection (6).

(6) The auditors in their report shall make such state ments as they consider necessary in any case where (

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

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

c) they have not received all the information and ex planations that they have required, or (

d) proper accounting records have not been kept, so far as appears from their examination, or (

e) it has come to their attention that the company, at any time during the period under review, made, held or disposed of any investment or loan, that is, in their opinion, an unauthorized investment or loan.

(7) The auditors of a company are entitled to attend any meeting of shareholders of the company at which any accounts that have been examined or reported on by them are to be laid before the shareholders for the purpose of 44

nlaking any statement or explanation they desire with respect to the accounts. Financial Disclosure to Shareholders 91.

(1) Every company shall within 60 days after the end of its fiscal year cause to be prepared comparative fin ancial statements relating separately to (

a) the period that commenced on the date of incor poration and ended as of the close of its first fiscal year or, if the con1pany has completed a fiscal year, the latest completed fiscal year, as the case may be, and (

b) the period covered by the fiscal year next preceding such latest completed fiscal year, if any, and made up of (

c) a statement of profit and loss for each period, (

d) a statement of surplus for each period, (

e) a balance sheet as at the end of each period, and (

f) any additional statements as to its affairs that are required under the regulations.

(2) The financial statements mentioned in subsection (1) shall be prepared in accordance with the regulations.

(3) The financial statements shall be certified under a certificate signed by (

a) the chairman or the vice-chairman of the board of directors or the president or a vice-president who is a director, or by two other directors, and (

b) the general manager or a person authorized to sign in the place of the general manager, stating that to the best of their knowledge and belief, the financial statements are correct and show truly and clearly the financial condition of the company's affairs.

(4) A copy of the financial statements, the certificate made under subsection (3) and the auditors' report made under

section 90 shall be mailed or delivered without charge to every common or preferred shareholder of the company at least 20 days before the annual meeting of shareholders.

(5) A copy of the financial statements, the certificate made under subsection (3) and the auditors' report made under

section 90 shall be mailed or delivered without charge to any holder of an investment certificate or depositor of the company on request, at any time after copies are first mailed or delivered to the shareholders. 45

91. Annual financial statement to shareholders.

Section 62. The regulations contemplated by this

section will require financial disclosure along lines similar in extent to the requirements in

Part 12 of the Bill for The Securities Act, 1967. 45

DIVISION 5 Powers of Provincial Companies General Powers 92. A provincial company may 46 (

a) take, receive and hold all estates and real and per sonal property that may be granted, committed, transferred or conveyed to the company with its consent, upon any trust or trusts not contrary to law, at any time or times, by any person or by any court, (

b) take and receive as trustee or as bailee, upon such terms and for such remuneration as may be agreed upon, deeds, wills, policies of insurance, bonds, de bentures or other valuable papers or securities for money, jewelry, plate or other chattel property of any kind, and may guarantee the safekeeping of the same, (

c) l'eceive and store for safekeeping all kinds of secur ities and personal property and rent spaces or com partments for the storage of securities or personal property and enter into all legal contracts for regu lating the terms and conditions upon which such business will be carried on, (

d) act generally as attorney or agent for the trans action of business, the management of estates, the collection of loans, rents, interest, dividends, debts, mortgages, debentures, bonds, bills, notes, coupons and other securities for money, (

e) act as agent for the purpose of issuing or counter signing certificates of stock, bonds or other obliga tions of any association or municipal or other cor poration, and may receive, invest and manage any sinking fund therefor on such terms as may be agreed upon, (

I) accept and execute the offices of trustee, executor, administrator, receiver, liquidator, sequestrator, assignee, custodian, trustee in bankruptcy, tutor, curator, guardian of the estate of an infant, com mittee of the estate of a mentally incompetent per son or trustee for the benefit of creditors, and may accept the duty of and act generally in the winding up of estates, partnerships, companies and corpor ations, (

g) make investments or loans of moneys held by the company in a trust or representative capacity in or upon any securities or other property in which pri vate trustees may by law invest or lend trust funds, (

h) sell any real or personal property held by the com pany, and execute and deliver all necessary convey ances and assurances in respect thereof,

92. General powers of provincial companies.

Section 63. 46

(

i) make, enter into, deliver, accept and receive all deeds, conveyances, assurances, transfers, assign ments, grants and contracts necessary to carry out the purposes of the company, and promote its ob jects and business, and (

j) charge, collect and receive all proper remuneration, legal, usual and customary costs,charges and ex penses for all such services, duties and trusts. 93. A provincial company (

a) may exercise its powers in any jurisdiction outside Alberta where it is registered or licensed to carry on business as a trust company, in accordance with and subject to the laws in force in that jurisdiction, and (

b) shall not accept or exercise any additional powers that could otherwise be conferred on it by or under the laws in force in that jurisdiction. 94.

(1) A company may establish and maintain branch offices in Alberta or elsewhere where the company is regis tered or licensed to carryon business as a trust company.

(2) A company, if authorized by its by-laws, may have an official seal for use at each or any of its branch offices. ( 3 ) An official seal shall be a facsimile of the common seal of the company.

(4) Any document to which an official seal is duly affixed binds the company to the same extent as if it had been sealed with the common seal of the company. 95. A provincial company may, under its seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute on its behalf, instruments or deeds to which it is a party in any capacity within or au tside Alberta, and every instrument or deed signed by such attorney, on behalf of the company and under his own seal, binds the company and has the same effect as if it were under the

Document details

Collection	Alberta — Bills
Citation	L15 S5 1261
Type	bill
Volume / chapter	L15 S5 1261
Language	en
Format	json
Source	PROVINCIAL
Identifier	f7577ea4595df33669efcea4f055805396331455

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