Skip to main content
The Cooperatives and Consequential Amendments Act

This is an unofficial version.
If you need an official copy, contact Statutory Publications.

S.M. 1998, c. 52

THE COOPERATIVES AND CONSEQUENTIAL AMENDMENTS ACT


Table of Contents

(Assented to June 29, 1998)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

INTERPRETATION AND APPLICATION

Definitions

1         In this Act,

"affairs" means the relationship between

(a) a cooperative and its affiliates,

(b) a cooperative and its members, shareholders, directors and officers, and

(c) an affiliate of a cooperative and the members, shareholders, directors and officers of the cooperative,

but does not include a relationship that arises out of the ordinary course of a business carried on by the cooperative or an affiliate of the cooperative; (« affaires »)

"arrangement" means a reconstruction under which a cooperative transfers or sells, or proposes to transfer or sell, to another body corporate all or a substantial part of its undertaking for consideration consisting in whole or in part of securities of, or memberships in, that other body corporate, and under which the cooperative proposes to distribute a part or all of that consideration among its members or to cease carrying on its undertaking or that part of its undertaking so transferred or sold, or proposed to be transferred or sold; (« arrangement »)

"articles" means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of reorganization, articles of dissolution and articles of revival of a body corporate and any amendments thereto, and includes any Act, statute or ordinance by or under which a body corporate has been incorporated, and any letters patent, supplementary letters patent, certificate of incorporation, memorandum of association, and any other document evidencing corporate existence; (« statuts »)

"auditor" of a cooperative means the individual or firm of accountants appointed under this Act as auditor of the cooperative; (« vérificateur »)

"bearer", in respect of a security, means the person who is in possession of a security that is payable to bearer or endorsed in blank; (« porteur »)

"beneficial ownership" includes ownership through a trustee, legal representative, agent or other intermediary; (« propriété véritable »)

"body corporate" means any body that is incorporated wherever or however incorporated; (« personne morale »)

"broker" means a person who is engaged in whole or in part in the business of acting for others in the buying and selling shares in the capital stock of bodies corporate, interests in partnerships and syndicates, government and corporate bonds or similar issues, or options, warrants and similar rights in respect of such shares, bonds or interests, but not including such a person while the person is acting in the buying or selling of such shares, interests, bonds, issues, options, warrants or rights for the person's own account; (« courtier »)

"business" of a body corporate includes any undertaking carried on by the body corporate in the ordinary course of its activities; (« activité commerciale »)

"cooperative" means any body corporate to which this Act applies; (« coopérative »)

"cooperative entity" means a body corporate that, by the law under which it is organized and operated, is required to be organized and operated, and is organized and operated, on cooperative principles; (« entité coopérative »)

"corporation" means a body corporate incorporated by or under an Act of the Legislature; (« corporation »)

"court" means the Court of Queen's Bench; (« tribunal »)

"Crown" means Her Majesty in right of Manitoba; (« Couronne »)

"debt obligation" means a bond, debenture, note or other evidence of indebtedness or guarantee, whether secured or unsecured; (« titre de créance »)

"delegate" means an individual elected to represent a division of the members of a cooperative at meetings of the cooperative; (« délégué »)

"director" means an individual occupying the position of director, by whatever name called, of a cooperative, and "directors" and "board of directors" refers to the directors as a body; (« administrateur »)

"distributing cooperative" means a cooperative any of whose issued securities, other than membership shares, member loans and patronage loans, are or were part of a distribution to the public and remain outstanding and are held by more than one person; (« coopérative ayant fait appel au public »)

"entity" means a body corporate, a trust, a partnership, a fund or an unincorporated organization; (« entité »)

"federation" means a cooperative whose membership is composed substantially of other cooperative entities or leagues of cooperative entities; (« fédération »)

"firm of accountants" means a partnership that is engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and that is engaged in the practice of accounting; (« cabinet de comptables »)

"former Act cooperative" means a body corporate that was in existence immediately before this Act comes into force and that is

(a) a cooperative that was incorporated under The Cooperative Associations Act, being chapter 8 of the Statutes of Manitoba, 1925, now repealed,

(b) a corporation that was incorporated under The Companies Act, being chapter C160 of the Revised Statutes of Manitoba, 1970, now repealed, or under any previous Act of the Legislature for which that Act was substituted, as a corporation to be operated on a cooperative basis, or

(c) a cooperative that was incorporated under The Cooperatives Act being chapter C223 of the Re-enacted Statutes of Manitoba, 1987, or under any previous Act of the Legislature for which that Act was substituted; (« coopérative régie par l'ancienne loi »)

"holder" means

(a) in respect of a certificate evidencing a security of a cooperative, the person in possession of the certificate issued or endorsed to the person or to bearer or in blank,

(b) in respect of a membership share of a cooperative, the member of the cooperative who, according to the cooperative's register of members or like record, is the owner of the share or the person who is entitled to be entered in that register or record as the owner of the share, and

(c) in respect of an investment share of a cooperative, the shareholder of the cooperative who according to the cooperative's register of shareholders or like record, is the owner of the share, or the person who is entitled to be entered in that register or record as the owner of the share; (« détenteur »)

"housing cooperative" means a cooperative that is authorized by its articles to carry on a business of providing residential housing to its members; (« coopérative d'habitation »)

"incorporated", when used with reference to a body corporate that is incorporated by or under an Act of Parliament or of the legislature of a province, includes a body corporate that is continued by or under any such Act; (« constituée »)

"incorporator" of a cooperative means a person who signs the articles of incorporation of the cooperative; (« fondateur »)

"individual" means a natural person; (« particulier »)

"issuer", in respect of a security, means the entity that issues the security; (« émetteur »)

"investment share" of a cooperative means a share in the capital of the cooperative that is not a membership share; (« part de placement »)

"meeting of a cooperative" means

(a) a meeting of members of a cooperative, or

(b) a meeting of the holders of investment shares of a cooperative, or of a class or series of investment shares; (« assemblée d'une coopérative »)

"member" means a person having rights through a membership interest in a cooperative in accordance with the provisions of this Act and the articles or by-laws of the cooperative; (« membre »)

"member loan" means a loan required by a cooperative from its members as a condition of membership or to continue membership in the cooperative; (« prêt de membre »)

"membership share" of a cooperative means a share of the cooperative the ownership of one or more of which entitles the owner to become a member of the cooperative; (« part de membre »)

"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)

"ordinary resolution" means a resolution passed at a meeting of a cooperative or of its directors

(a) where its articles or a unanimous agreement of the cooperative fix a greater number or percentage of votes than a majority for the passing of an ordinary resolution at the meeting, by that number or percentage of the votes cast by or on behalf of the persons who are entitled to vote in respect of the resolution, and

(b) where its articles or a unanimous agreement of the cooperative do not fix a greater number or percentage than a majority for the passing of an ordinary resolution at the meeting, by a majority of the votes cast by or on behalf of the persons who are entitled to vote in respect of the resolution; (« résolution ordinaire »)

"patronage loan" means a loan by a member to a cooperative of all or part of a patronage return; (« prêt de ristourne »)

"patronage return" means an amount that under this Act is allocated among and credited or paid by a cooperative to its members, or to its members and non-member patrons, based upon the business done by each of them with or through the cooperative; (« ristourne »)

"person" means an individual or an entity, and includes a legal representative; (« personne »)

"prescribed" means prescribed by the regulations;

"proxy" means a completed and executed document by means of which a member or shareholder appoints a proxyholder to attend and act on the member's or shareholder's behalf at a meeting of the members or shareholders; (« procuration »)

"redeemable", in respect of an investment share issued by a cooperative, means that the share is one

(a) that the cooperative may acquire or redeem on the demand of the cooperative, or

(b) that the cooperative is required by its articles to acquire or redeem at a specified time or on the demand of the holder; (« rachetable »)

"Registrar" means the individual designated under section 7 as the Registrar; (« registraire »)

"security" of a cooperative means an investment share of the cooperative, a debt obligation of the cooperative and a certificate evidencing such a share or debt obligation; (« valeur mobilière »)

"security interest" in a cooperative means an interest in, or charge on, property of the cooperative to secure payment of a debt, or the performance of an obligation, of the cooperative; (« sûreté »)

"send" includes deliver; (« envoyer »)

"series", in respect of investment shares of a cooperative, means a division of a class of the investment shares; (« série »)

"share" of a cooperative means a membership share of the cooperative or an investment share of the cooperative; (« part »)

"shareholder" of a cooperative means a person who, according to the cooperative's register of its shareholders, or other like record, is the owner of an investment share of the cooperative, or who is entitled to be entered in the cooperative's register of shareholders or, other like record, as the owner of an investment share of the cooperative; (« détenteur de parts de placement »)

"special resolution" means a resolution passed at a meeting of a cooperative or of its directors

(a) where its articles or a unanimous agreement of the cooperative fix a greater number or percentage of votes than 2/3 for the passing of a special resolution at the meeting, by that number or percentage of the votes cast by or on behalf of the persons who are entitled to vote in respect of the resolution, and

(b) where its articles or a unanimous agreement of the cooperative do not fix a greater number or percentage of votes than 2/3 for the passing of a special resolution at the meeting, by 2/3 of the votes cast by or on behalf of the persons who are entitled to vote in respect of the resolution; (« résolution spéciale »)

"surplus", of a cooperative for any financial year of the cooperative, means the amount that remains after deducting from its operating revenue, charges to members and patrons, and other revenue in that financial year,

(a) its operating expenses and losses in that financial year, including proper allowances for depreciation, for expenses incurred but not paid and for other proper charges against its operations, and

(b) any refunds and interim and final payments to members and patrons made in that financial year or required to be made under contracts or under its articles or by-laws in that financial year or in respect of that financial year and not made in a previous financial year; (« surplus »)

"trust indenture" means any deed, indenture or other instrument, including any supplement or amendment thereto, made by a cooperative after its incorporation or continuance under this Act, under which the cooperative issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations issued thereunder; (« acte de fiducie »)

"unanimous agreement" of a cooperative means an agreement in writing into which all members and all shareholders, if any, of the cooperative have entered; (« convention unanime »)

"worker cooperative" means a cooperative that is authorized by its articles to carry on a business of providing employment to its members. (« coopérative de travailleurs »)

Control

2(1)      For the purposes of this Act,

(a) a body corporate is controlled by a person if securities of the body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the body corporate are beneficially owned by the person and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate; and

(b) a cooperative entity is controlled by a person if the person has the right to exercise more than 50% of the votes that may be cast at an annual meeting or to appoint or elect a majority of the directors.

Holding body corporate

2(2)      A particular body corporate is the holding body corporate of another body corporate if that other body corporate is the subsidiary of the particular body corporate.

Subsidiary

2(3)      A particular body corporate is a subsidiary of another body corporate if

(a) the particular body corporate is controlled by

(i) the other body corporate,

(ii) the other body corporate and one or more bodies corporate each of which is controlled by the other body corporate, or

(iii) two or more bodies corporate each of which is controlled by that other body corporate; or

(b) the particular body corporate is a subsidiary of a body corporate that is a subsidiary of the other body corporate.

Affiliates

2(4)      For the purposes of this Act, a body corporate is an affiliate of another body corporate

(a) if one of them is a subsidiary of the other;

(b) if each of them is a subsidiary of the same body corporate;

(c) if each of them is controlled by the same person; and

(d) if each of them is an affiliate of the same body corporate because of clause (a), (b) or (c) or this clause.

Associates

2(5)      For the purposes of this Act, a person is an associate of

(a) a body corporate of which the person beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or because of the occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase such shares or such convertible securities;

(b) a cooperative entity of which the person beneficially owns more than 10% of the voting rights that can be cast at a meeting of the cooperative entity;

(c) a partnership, other than a limited partnership, of which the person is a partner;

(d) a limited partnership of which the person is the operating partner or of which the person beneficially owns more than 10% of the partnership interests;

(e) an unincorporated entity, other than a partnership, of which the person beneficially owns more than 10% of the ownership interests or of which the person is the chief operating officer or chief administrative officer;

(f) a partner of a partnership of which the person is also a partner;

(g) a trust or an estate or succession in which the person has a substantial beneficial interest or serves as a trustee, administrator, executor or liquidator of the trust or of the estate or succession or in a similar capacity;

(h) a spouse of the person if the spouse and the person are not living separate and apart because of marital breakdown;

(i) a child, grandchild, parent, grandparent, brother or sister of the person;

(j) a child, grandchild, parent or grandparent of the spouse of the person if the person and the spouse are not living separate and apart because of marital breakdown; and

(k) a relative of the person or of the spouse of the person if the relative and the person have the same residence.

Deemed distribution to the public

3(1)      For the purposes of this Act, securities of a body corporate

(a) issued upon a conversion of other securities; or

(b) issued in exchange for other securities;

are deemed to be securities that are part of a distribution to the public if those other securities were part of a distribution to the public.

Distribution to the public

3(2)      For the purposes of this Act but subject to subsection (3), a security of a body corporate

(a) is part of a distribution to the public if, in respect of the security, there has been a filing of an offering statement, a prospectus, a statement of material facts, a registration statement, a securities exchange take-over bid circular or a similar document under the laws of Manitoba, or any jurisdiction outside Manitoba;

(b) is deemed to be part of a distribution to the public if the security has been issued and a filing referred to in clause (a) would be required if the security were being issued currently; or

(c) is deemed to be part of a distribution to the public if it is listed on a stock exchange.

Exemption

3(3)      Upon the application of a cooperative, the Registrar may determine that a security of the cooperative is not part of a distribution to the public if the Registrar is satisfied that to so determine would not prejudice any security holder, and where the Registrar makes that determination in respect of the security, the security is deemed, for the purposes of this Act not to be part of a distribution to the public.

Cooperative basis

4(1)       For the purposes of this Act, a cooperative is organized and operated, and carries on business, on a cooperative basis if,

(a) subject to subsection (2), membership in the cooperative is open, in a non-discriminatory manner, to persons who can use the services of the cooperative and who are willing and able to accept the responsibilities of membership;

(b) subject to subsection (3), each of its members or each delegate representing a division of its members has only one vote;

(c) interest on its member loans is limited to a maximum rate fixed in its articles, which maximum rate shall not exceed the prescribed maximum rate of interest on member loans;

(d) interest on its patronage loans is limited to a maximum rate fixed in its articles, which maximum rate shall not exceed the prescribed maximum rate of interest on patronage loans;

(e) dividends on its membership shares are limited to the maximum percentage, fixed in its articles, of the par value of its membership shares, which maximum percentage shall not exceed the prescribed maximum percentage for dividends on membership shares of cooperatives;

(f) to the extent feasible, its members provide the capital required by the cooperative;

(g) surplus funds arising from the cooperative's operations are used

(i) to develop its business,

(ii) to provide or improve common services to its members,

(iii) to provide for reserves or the payment of interest on its member loans or dividends on its membership shares and investment shares,

(iv) for community welfare or the propagation of cooperative enterprises, or

(v) as a distribution among its members as a patronage return based on the business the members have done with the cooperative; and

(h) it educates its members, officers, employees and the public on the principles and techniques of cooperative enterprise.

Restrictions on membership

4(2)      The articles of a cooperative may restrict the classes of persons to which membership in the cooperative is available if the restrictions

(a) reasonably relate to any business restriction set out in its articles and to the reasonable commercial ability of the cooperative to provide services to prospective members; and

(b) are consistent with applicable laws in respect of human rights.

Exception re voting

4(3)      The articles of a federation may provide that its members or delegates representing divisions of its members have unequal number of votes determined in accordance with rules set out in the articles.

Application of Act

5(1)      This Act, except where it is otherwise expressly provided, applies to

(a) every cooperative incorporated under this Act;

(b) every former Act cooperative that has not been continued under an Act of Parliament or of the legislature of a province, dissolved or wound-up; and

(c) every body corporate that is continued under this Act.

No application to credit unions

5(2)      This Act does not apply to a body corporate that is a credit union within the meaning of The Credit Unions and Caisses Populaires Act.

Powers of existing cooperatives

6         Where, immediately before the coming into force of this Act, the articles of a former Act cooperative excluded any of the powers authorized by any former Act by or under which the cooperative was incorporated, the articles are deemed to restrict the cooperative from exercising any similar power authorized by this Act until the exclusion is removed by subsequent articles of the cooperative.

Designation of Registrar

7(1)      The minister may designate an individual employed by the government under The Civil Service Act as the Registrar to carry out the duties and exercise the powers of the Registrar under this Act and may designate one or more Deputy Registrars.

Duties

7(2)      The Registrar shall assist persons desirous of applying for incorporation under this Act, shall prepare and have available model forms of articles and by-laws for the use of cooperatives, shall generally be an adviser to cooperatives, and shall perform such other duties as this Act requires or as may be prescribed.

Delegation by Registrar

7(3)      Where this Act authorizes the Registrar to do any act or thing, the Registrar may in writing delegate that authority to a Deputy Registrar designated under subsection (1).

PART 2

INCORPORATION

Application by individuals

8(1)      Any three or more individuals, none of whom

(a) is less than 18 years of age; or

(b) has the status of a bankrupt;

may apply for incorporation of a cooperative by sending to the Registrar, in duplicate, articles of incorporation.

Application by corporations

8(2)      Any two or more bodies corporate may apply for incorporation of a cooperative by sending to the Registrar, in duplicate, articles of incorporation.

Application by cooperatives

8(3)      Any one or more cooperative entities may apply for incorporation of a cooperative by sending to the Registrar, in duplicate, articles of incorporation.

Articles of incorporation

9(1)      Articles of incorporation of a cooperative shall be in a form approved by the Registrar and shall set out

(a) the name of the cooperative;

(b) the place in Manitoba where the registered office of the cooperative is to be situated;

(c) whether the cooperative is to be incorporated with or without membership share capital, and if without, a statement that the interest of each member of the cooperative is the same as that of every other member;

(d) where there is membership share capital in the cooperative

(i) the par value of the membership shares,

(ii) whether the number of membership shares to be issued is unlimited or limited, and where limited, the maximum number of membership shares that may be issued, and

(iii) the maximum percentage, or the maximum number, of the issued and outstanding membership shares of the cooperative that any one member may own;

(e) whether or not there is to be investment share capital in the cooperative and, if so, the particulars of the investment share capital as required by subsection 42(1);

(f) if the issue, transfer or ownership of shares of the cooperative is to be restricted, a statement to that effect, and a statement as to the nature of the restrictions;

(g) the number, or the minimum and maximum number, of directors of the cooperative, and the names and residence address, giving the street and number if any, of each individual who is to be a first director of the cooperative;

(h) a statement of the type of cooperative that the cooperative will be;

(i) any restrictions on the business or businesses that the cooperative may carry on;

(j) any restrictions on or qualifications for membership in the cooperative;

(k) a statement that the cooperative will be organized and operated and will carry on business on a cooperative basis;

(l) the maximum rate of return that may be paid on its membership shares, which maximum rate shall not exceed the prescribed maximum rate of return payable on membership shares of cooperatives;

(m) the maximum rate of interest that may be paid on its member loans or patronage loans, which maximum rate shall not exceed the prescribed maximum rate of interest payable on member loans or patronage loans of cooperatives; and

(n) provisions for the distribution of the property of the cooperative on its dissolution.

Additional provisions

9(2)      The articles of a cooperative may

(a) restrict, in whole or in part, the powers of its directors to manage the business of the cooperative; or

(b) set out any provisions that could be set out in the by-laws of the cooperative, and if the articles do, any reference in this Act to such provisions in the by-laws of a cooperative is also a reference to those provisions in the articles of the cooperative.

Special majorities

9(3)      Subject to subsection (4), the articles of a cooperative, or a unanimous agreement of the cooperative, may require a greater number of votes of directors, members or shareholders of the cooperative than is required by this Act to effect an action.

Voting number

9(4)      Neither the articles of a cooperative nor a unanimous agreement of the cooperative may require, in order to remove a director of the cooperative or a delegate representing a division of its members, that more than a majority of the votes cast by or on behalf of the persons who are entitled to vote be cast in favour of the removal.

Signatures

10(1)     The articles of incorporation of a cooperative must be signed by its incorporators.

Consent of first directors

10(2)     The articles of incorporation of a cooperative shall have attached to them, in a form approved by the Registrar, the consent of each of its first directors who is not an incorporator of the cooperative.

Address

10(3)     As soon as possible after a site is acquired for the first registered office of a cooperative, whether before or after the cooperative is incorporated, the incorporators, or the cooperative if it has been incorporated, shall send to the Registrar a notice indicating the address of the site giving the street and number, if any, at which the site is located.

Copy of by-laws to Registrar

11(1)     A cooperative shall send a copy of its by-laws adopted at the first meeting of its members to the Registrar within 30 days after they are adopted and shall send a copy of any by-laws passed subsequently and any amendments to its by-laws, and notice of any repeal of a by-law of the cooperative, to the Registrar within 30 days of the passing of the by-law or amendment or the repeal of the by-law, as the case may be.

Registrar's order re by-laws

11(2)     The Registrar may order a cooperative to enact a by-law consistent with, or to amend or repeal a by-law that is inconsistent with, any provision of this Act, the regulations or the cooperative's articles or any other provisions of its by-laws, and the cooperative shall enact, amend or repeal the by-law as ordered.

By-laws: mandatory provisions

12(1)     The by-laws of a cooperative shall provide for

(a) the qualifications, and the procedures for acceptance, of members of the cooperative;

(b) the rights of persons, if any, who hold memberships in the cooperative jointly;

(c) the membership obligations of members of the cooperative, including any obligation to use the services of the cooperative and any fees to be paid by the members;

(d) whether the interest of a member of the cooperative may, subject to section 102, be transferred or assigned, and any conditions or restrictions that apply to such a transfer or assignment;

(e) subject to sections 244, 245 and 246 and Parts 12 and 13, the conditions on which membership in the cooperative is terminated, whether by withdrawal or by involuntary termination;

(f) the mode of holding meetings of its members, the quorum for the meetings, the rights of voting of its members, the procedures for making, repealing, and amending its by-laws or regulations, the right of its members to vote by ballot or mail or both, and the manner, form and effect of votes at the meetings;

(g) the election, qualifications, term of office, removal and replacing of its directors, committee members and officers, and their powers, duties and remuneration, and the procedure and quorum at meetings of its board of directors;

(h) the terms of any contract between the cooperative and its members that all its members may be required to sign, and of any renewals of such contracts;

(i) the appointment of auditors of the cooperative;

(j) the refunds and the interim and final payments to be made to its members; and

(k) the distribution of the surplus earnings arising from the operations of the cooperative.

By-laws:  other provisions

12(2)     The by-laws of a cooperative may provide for

(a) the division of the territory in which members of the cooperative are located into districts and the alteration thereof, the election of delegates to represent the members located in each district and the defining of the powers, duties, election and voting rights of district delegates;

(b) the separation of members of the cooperative into divisions and if so,

(i) the qualifications for membership in each division,

(ii) the conditions precedent to membership in each division,

(iii) the method, time and manner of withdrawing from a division or transferring membership from one division to another and any applicable conditions on a transfer, and

(iv) the conditions on which membership in a division ends;

(c) the representation of divisions of members of the cooperative by delegates and, if so,

(i) the designation of the divisions of members, to be represented by delegates,

(ii) the procedures for altering divisions of members, if applicable, and

(iii) the powers, duties, selection, voting rights and procedures for appointment or election, and for removal, of delegates;

(d) the referral of disputes between the cooperative and a member of the cooperative to a process of dispute resolution;

(e) the holding of a referendum on any matter of general concern to its members; and

(f) any other matter that the members of the cooperative consider necessary or desirable.

Cooperative basis

13        Every cooperative shall be organized and operated, and shall carry on business, on a cooperative basis.

Issuance of certificate of incorporation

14(1)     The Registrar shall issue a certificate of incorporation for a cooperative if the Registrar is satisfied that

(a) the articles are in accordance with section 9 and, if applicable, section 276 and subsection 290(1);

(b) the cooperative will be organized and operated, and will carry on business, on a cooperative basis; and

(c) the cooperative will comply with Part 12 or 13, if applicable.

Additional information

14(2)     The Registrar may request additional information that the Registrar considers necessary to be satisfied that the requirements set out in subsection (1) have been met, but for the purposes of clauses (1)(b) and (c), the Registrar may rely on the articles.

If membership too low

15         If the membership of a cooperative is reduced to a number less than the number of members required for incorporation and, after 30 days notice remains at less than that number, the Registrar may require the cooperative

(a) to apply for a certificate of continuance under The Corporations Act if it was incorporated with membership capital; or

(b) to be liquidated or dissolved under Part 17.

Effect of certificate

16        A cooperative comes into existence on the day indicated in its certificate of incorporation.

Name of cooperative

17(1)     The corporate name of every cooperative shall include the word "Cooperative", "Co-operative" or "Coopérative", or the abbreviation "Co-op", or the word "Pool", as part thereof; and the word "Limited" or "limitée" or the abbreviation "Ltd." or "ltée" shall be the last word of the corporate name of every cooperative with share capital, and the word "Incorporated" or "Incorporée", or the abbreviation "Inc." shall be the last word of the corporate name of every cooperative without share capital but a cooperative may use and may be legally designated by either the full or the abbreviated form.

Name to reflect type

17(2)     A cooperative shall have as part of its name one or more words that suggest what type of cooperative it is.

Existing names

17(3)     A former Act cooperative is not required to change its name to conform with subsection (2), but if such a cooperative makes any change to its name after the coming into force of this Act, the new name shall conform with subsection (2).

Alternative name

17(4)     Subject to section 20, a cooperative may set out its name in its articles in an English form or a French form or a combined English and French form, and may be legally designated by that form.

Name in any language form

17(5)     Subject to section 20, a cooperative may set out its name in its articles in any language form and it may be legally designated by that form, but, if that language form is in characters other than the Roman alphabet, the articles shall set out an alternative name for the cooperative that is the English or French equivalent, in the Roman alphabet, of its name in that language form.

Use of symbols

17(6)     A cooperative may have as part of its name a symbol prescribed for use as part of names of cooperatives.

Publication of name

17(7)     A cooperative shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the cooperative.

Other name

17(8)     Subject to section 20 and the provisions of The Business Names Registration Act, a cooperative may carry on business under or identify itself by a name other than its corporate name.

Prohibited use of cooperative designations

18(1)     Subject to subsection (3), no person other than a cooperative entity shall use any of the words "cooperative", "co-operative", "coopérative" and "pool" or any derivative thereof, or the abbreviation "co-op" or any other abbreviation of those words, as part of its name.

Prohibition against holding out

18(2)     Subject to subsection (3), no person other than a cooperative entity shall hold itself out as, or use as part of its name or otherwise any word or abbreviation suggesting, indicating or implying that it is, carrying on business on a cooperative basis.

Exception

18(3)     Subsections (1) and (2) do not apply to a body corporate incorporated by or under the authority of an Act of the Parliament of Canada or of the legislature of a province or of an ordinance of a territory that expressly authorizes the use of any of the words "cooperative", "co-operative", "coopérative" and "pool", or the abbreviation "co-op", or to any corporation heretofore incorporated in respect of which the Registrar consents in writing to the continued use of any of those words or that abbreviation.

Reservation of name

19(1)     The Registrar may, on the request in writing of any person and upon payment of the prescribed fee, reserve a corporate name for use by, and the benefit of, the person or the person's nominee for a period of 90 days, if, at the time at the time of the request, a cooperative is not prohibited by section 20 from having that name.

Assignment of number

19(2)     If requested to do so by the incorporators of a cooperative, the Registrar shall assign to the cooperative, as its name, a number determined by the Registrar plus one or more words that suggest what type of cooperative the cooperative is.

"Business" or "association" defined

20(1)     In this section, "business" or "association" means an individual or an entity carrying on business.

Prohibited names

20(2)     A cooperative shall not have a name

(a) that is known to the Registrar to be the same as the name of an existing body corporate or of a dissolved body corporate;

(b) that, subject to subsection (4), is known to the Registrar to be the same as the name of a business or association;

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

(d) that includes the word "Loan" or "Trust"; or

(e) that the Registrar for any good and valid reason disapproves.

Names similar to other bodies corporate

20(3)     A cooperative shall not have a name that is the same as similar to the name of any other body corporate if the use of that name by the cooperative would be likely to confuse or mislead, unless the body corporate consents in writing to its name being given in whole or in part to the cooperative and, if required by the Registrar, the body corporate undertakes to dissolve or to change its name within six months after the incorporation of the cooperative.

Names similar to other businesses or associations

20(4)     A cooperative shall not have a name that is the same as or similar to the name of a business or association, if the use of that name by the cooperative would be likely to confuse or mislead, unless the business or association consents in writing to its name being given in whole or in part to the cooperative and, if required by the Registrar, the business or association undertakes to cease carrying on its business or activities or to change its name within six months after the incorporation of the cooperative.

Reserved name

20(5)     A cooperative shall not have a name that is reserved for another body corporate under this Act or The Corporations Act, unless the consent in writing is obtained from the person for whose use and benefit the name is reserved.

Undertaking not carried out

20(6)     Where a cooperative is granted a name subject to an undertaking given under subsection (3) or (4) and the undertaking is not carried out within the specified time, the Registrar may direct the cooperative to which the name is granted to change its name to a name that complies with this Act; and if the cooperative fails to comply with the directive within 60 days of the service thereof, the Registrar may revoke the name of the cooperative and assign to it a number plus one or more words that suggest what type of cooperative it is, and until changed in accordance with section 297 the name of the corporation is thereafter the number and words so assigned.

Directing change of name

20(7)     Where, through inadvertence or otherwise, a cooperative

(a) comes into existence or is continued with; or

(b) upon an application to change its name, is granted;

a name that contravenes this section, the Registrar may direct the cooperative to change its name in accordance with section 297.

Directing change of where number assigned

20(8)     Where a cooperative has an assigned number as its name, the Registrar may direct the cooperative to change its name, in accordance with section 297, to a name that complies with this Act.

Revoking name

20(9)     Where a cooperative is directed under subsection (7) to change its name and fails within 60 days from the service of the directive to change its name to a name that complies with this Act, the Registrar may revoke the name of the cooperative and assign to it a number plus one or more words that suggest what type of cooperative it is, and until changed in accordance with section 297 the name of the cooperative is thereafter the number and words so assigned.

Certificate of amendment

21(1)     Where a cooperative has had its name revoked and a number assigned to it under subsection 20(6) or (9), the Registrar shall issue a certificate of amendment in respect of the cooperative showing the new name of the cooperative and shall forthwith give notice of the change of name in the gazette.

Effect of certificate

21(2)     The articles of the cooperative are amended accordingly on the date shown in the certificate of amendment in respect of the cooperative.

Personal liability under pre-incorporation contracts

22(1)     Except as provided in this section, a person who enters into a written contract in the name of or on behalf of a cooperative before it comes into existence is personally bound by the contract and is entitled to the benefits of the contract.

Adoption of pre-incorporation contracts

22(2)     A cooperative may, within a reasonable time after it comes into existence, by any action or conduct signifying its intention to be bound by the contract, adopt a written contract made before it came into existence in its name or on its behalf, and upon the adoption

(a) the cooperative is bound by the contract and is entitled to the benefits thereof as if the cooperative had been in existence on the day when the contract was made and had been a party thereto; and

(b) the person who originally entered into the contract ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.

Application to court

22(3)     Except as provided in subsection (4), whether or not a written contract made before the coming into existence of a cooperative is adopted by the cooperative, a party to the contract may apply to the court for an order fixing obligations under the contract as joint and several or apportioning liability between or among the cooperative and any person who originally entered into the contract, and upon the application the court may make any order it thinks fit.

Exemption from personal liability

22(4)     If expressly so provided in the written contract, a person who entered into a contract in the name of or on behalf of a cooperative before it came into existence is not in any event bound by the contract or entitled to the benefits of the contract.

PART 3

CAPACITY AND POWERS

Capacity of a cooperative

23(1)     A cooperative has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

Extra-territorial capacity

23(2)     A cooperative has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Manitoba to the extent that the laws of that jurisdiction permit.

Powers of a cooperative

24(1)     It is not necessary for a by-law to be passed in order to confer any particular power on the cooperative or its directors.

Restricted business or powers

24(2)     No cooperative and no subsidiary of a cooperative may carry on any business or exercise any power contrary to a restriction set out in the articles of the cooperative.

Rights preserved

24(3)     No act of a cooperative, including any transfer of property to or by a cooperative, is invalid solely because the act or transfer is contrary to its articles or this Act.

No constructive notice

25(1)     Subject to subsection (2), no person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a cooperative solely because the document has been filed with the Registrar or is available for inspection at an office of the cooperative.

Constructive notice of articles and by-laws

25(2)     Each member of a cooperative is deemed to have notice and knowledge of the contents of the articles and by-laws of the cooperative.

Restrictions on defences by cooperatives and guarantors

26        A cooperative or a guarantor of an obligation of the cooperative may not assert against a person dealing with the cooperative or with any person who has acquired rights from the cooperative that

(a) its articles or by-laws have not been complied with;

(b) the individuals named in the most recent notice sent to the Registrar under this Act are not the directors of the cooperative;

(c) the place named in the most recent notice sent to the Registrar under this Act is not the registered office of the cooperative;

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

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

(f) any financial assistance to a member, director, officer, shareholder or employee of the cooperative was not authorized; or

(g) any sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized;

unless the person has or ought to have, because of a position with or relationship to the cooperative, knowledge to the contrary.

PART 4

REGISTERED OFFICE, RECORDS AND RETURNS

Registered office

27(1)     A cooperative shall at all times have a registered office in the place in Manitoba specified in its articles or in a special resolution under subsection (2).

Change of location

27(2)     A cooperative may by special resolution of its members change the location of its registered office to another place in Manitoba.

Change of address

27(3)     The directors of a cooperative may change the address of the registered office within the place specified in the articles or a special resolution.

Notice of change

27(4)     A cooperative shall send to the Registrar

(a) a copy of a resolution changing the location of its registered office to another place in Manitoba within 15 days after the resolution is passed; and

(b) a notice, in form approved by the Registrar, of any change of address of its registered office within 15 days after the address is changed.

Annexation or amalgamation of municipalities

27(5)     Where the location of the registered office of a cooperative is changed solely because of the annexation or amalgamation of the municipality or place in which the registered office is situated to or with another municipality or place, that change does not constitute and is deemed not to constitute a change in the location of the registered office of the cooperative.

Records

28(1)     A cooperative shall prepare and maintain, at its registered office or, subject to subsection (5), at any other place in Manitoba designated by its directors, records containing

(a) its articles and by-laws, and all amendments thereto, and a copy of any unanimous agreement of the cooperative;

(b) the minutes of meetings and resolutions of its members and shareholders;

(c) a register of its directors setting out the names, addresses and occupations of all individuals who are or have been directors of the cooperative, with the several dates when each became a director and, where they have ceased to be directors, the several dates when they ceased to be directors;

(d) a members' register setting out the names, alphabetically arranged, and the latest known addresses of all its members, and the number of membership shares and other securities, if any, of the cooperative owned by each;

(e) if the cooperative issues investment shares, a list of all its shareholders, setting out their names and their latest known addresses and the number of those investment shares owned by each; and

(f) if the cooperative issues securities in registered form, a securities register that complies with section 110.

Accounting and directors' records

28(2)     In addition to the records described in subsection (1), a cooperative shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of its directors and any committee of its directors.

Place for keeping records

28(3)     The records of a cooperative described in subsection (2) shall be kept at its registered office or at such other place in Manitoba as its directors think fit and shall at all reasonable times be open to inspection by its directors.

Accounting records in Manitoba

28(4)     Where accounting records of a cooperative are kept at a place outside Manitoba, there shall be kept at its registered office or other office in Manitoba accounting records adequate to enable its directors to ascertain the financial position of the cooperative with reasonable accuracy.

Exception

28(5)     Where a cooperative

(a) shows, to the satisfaction of the Registrar, the necessity of keeping any of the documents or records mentioned in subsections (1) and (2) at a place other than its registered office; and

(b) gives assurance, to the satisfaction of the Registrar, that those documents or records will at all reasonable times be open for inspection, at its registered office or some other place in Manitoba approved by the Registrar, by any person who is entitled to inspect them and who applies to the cooperative for an inspection thereof;

the Registrar may, by order and upon such terms as are set out in the order, permit the cooperative to keep such of them at such place or places, other than its registered office, as the Registrar thinks fit.

Rescind order

28(6)     The Registrar for any good and valid reason may, by order and upon such terms as the Registrar thinks fit, vary or rescind any order made under subsection (5).

Trustee's register of securities

28(7)     The trustee for the owners of securities of a cooperative may maintain at the trustee's office a duplicate register of those securities.

Notice of order

28(8)     The Registrar shall cause notice of every order made by the Registrar under this section to be given forthwith in the gazette.

Examination of records

29(1)     Members, shareholders and creditors of the cooperative, their agents and legal representatives, and the Registrar may examine the records of a cooperative referred to in clauses 28(1)(a) to (d) during the usual business hours of the cooperative, and may make copies of the records or parts of them free of charge and, where the cooperative has made a distribution to the public, any other person may do so upon payment to the cooperative of a reasonable fee.

Copies of records

29(2)     Every member and shareholder of a cooperative is entitled on request and without charge to one copy of the articles and by-laws of the cooperative, including any amendments thereto, and one copy of any unanimous agreement of the cooperative, including any amendments thereto.

Copies of by-laws and articles to creditors

29(3)     A cooperative shall, upon payment to it of a reasonable fee, provide a copy of its articles and by-laws and any unanimous agreement of the cooperative

(a) upon the written request of a creditor of the cooperative, to the creditor; and

(b) where the cooperative is a distributing cooperative, upon the written request of any other person, to the other person.

Form of records

30(1)     Every register or record required by this Act to be prepared or maintained shall be prepared and maintained in a form, whether

(a) a bound or loose-leaf form;

(b) a photographic form;

(c) a system of mechanical or electronic data processing; or

(d) any other form of or device for storing information;

that allows any information recorded or stored in it to be reproduced within a reasonable time in an intelligible, written English form or written French form.

Precautions

30(2)     A cooperative and its agents shall take reasonable precautions

(a) to prevent loss or destruction of the records and registers of the cooperative required by this Act to be prepared or maintained;

(b) to prevent falsification of entries in those records and registers; and

(c) to facilitate detection and correction of inaccuracies in those records and registers.

Corporate seal

31(1)     The directors of a cooperative may, but need not, adopt a corporate seal for the cooperative and may change a corporate seal that is adopted.

Seal not necessary for validity

31(2)     No instrument or agreement executed on behalf of a cooperative by a director, an officer or an agent of the cooperative is invalid merely because a corporate seal of the cooperative is not affixed thereto.

Annual return

32        Every cooperative shall send the Registrar an annual return in a form approved by the Registrar and before a day fixed by the Registrar.

Copies of financial statements to Registrar

33(1)     If any of the securities of a distributing cooperative that were part of a distribution to the public are outstanding and are held by more than one person, the cooperative shall, not less than 21 days before each annual meeting of members, and in any event not later than 15 months after the last preceding annual meeting of members, send to the Registrar a copy of the documents relating to the cooperative that are described in section 257.

Subsidiary cooperative

33(2)     A cooperative that is a subsidiary of a holding cooperative entity is not required to comply with this section if its financial statements are consolidated or combined with those of its holding cooperative entity and the statements of its holding cooperative entity are sent to the Registrar in compliance with this section.

Special return

34(1)     The minister may, at any time, by notice sent to a cooperative or a director or an officer thereof, require the cooperative or the director or officer, as the case may be, to make a special return within the time specified in the notice about any subject connected with the business and affairs of the cooperative.

Contents of special return

34(2)     The special return required under subsection (1) may be in respect of any matter that is certified by the minister to be in the public interest.

Offence

35(1)     A person who fails, within the time specified in the notice sent by the minister, to file the special return required under subsection 34(1) is guilty of an offence and liable on summary conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding one year or both.

Relief by court

35(2)     Where it appears to the court that a person is or may be liable in respect of an offence under subsection (1) but the person has acted honestly and reasonably and that, having regard to all the circumstances of the case, the person ought fairly to be excused for the offence, the court may relieve the person, either wholly or partly, from liability on such terms as the court thinks fit.

PART 5

CORPORATE FINANCE

Loan capital

36        The capital of a cooperative without membership shares may be in the form of member loans and those loans may be in such amounts, payable at such times, and with or without interest, as the articles of the cooperative provide.

Certificate of membership and right to vote

37        Where a cooperative does not have share capital, it shall issue a certificate of membership in the cooperative to each member of the cooperative who has paid the full membership fee; but a member of a cooperative has a right to vote immediately upon being accepted as a member in accordance with the by-laws of the cooperative, whether or not a certificate of membership has been issued to the member.

Par value

38        Membership shares of a cooperative with share capital shall have a par value.

Membership shares

39(1)     A cooperative with membership shares shall have one class of membership shares, designated as such in the articles.

Equal rights

39(2)     Subject to section 221 and Parts 12 and 13, each member of a cooperative has equal rights.

Membership shares

39(3)     The articles of a cooperative may not include any preference, right, condition, restriction, limitation or prohibition on its membership shares or member loans, except as provided by this Act.

Right to vote

40(1)     Subject to section 221, a member of a cooperative has one vote on all matters to be decided by the members of the cooperative.

No right to vote

40(2)     The right to vote at meetings of members of a cooperative attaches to membership in the cooperative in accordance with subsection (1) and not to the membership share of the cooperative.

Issuance of membership shares

41(1)     Membership shares of a cooperative may be issued only to, and member loans of a cooperative may be accepted only from, persons whose applications for membership in the cooperative have been approved in accordance with subsection 219(3).

Membership shares at par value

41(2)     A cooperative shall sell its membership shares at the par value thereof, and this subsection applies to the resale of any shares purchased or redeemed by the cooperative.

Investment shares

42(1)     The articles of a cooperative may provide that the cooperative may issue investment shares, and if they do, the articles shall set out

(a) whether the investment shares may be issued to non-members;

(b) the maximum number of investment shares that may be issued;

(c) the number of classes of investment shares;

(d) the preferences, rights, conditions, restrictions, limitations, and prohibitions attaching to the investment shares and, if there is to be more than one class, the designation of each class and the special preferences, rights, conditions, restrictions, limitations and prohibitions attaching to each class;

(e) the amounts payable to owners of the investment shares, or of shares of any class of the investment shares, on redemption of the shares or on the dissolution of the cooperative; and

(f) the mode of holding meetings of its shareholders, the quorum for the meetings, the rights of voting of its shareholders, the right of its shareholders to vote by ballot or mail or both and the manner, form and effect of votes at the meetings.

No voting rights

42(2)     Subject to the articles of a cooperative and to this Act, no right to vote at a meeting of the members of the cooperative attaches to an investment share of the cooperative.

Exception

42(3)     The articles of a cooperative may

(a) constrain

(i) the issue or transfer of its investment shares, or of any class or series thereof, to persons who are not resident in Canada,

(ii) the issue or transfer of its investment shares, or of any class or series thereof, to enable the cooperative or any of its affiliates or associates to qualify under any prescribed law of Canada or a province

(A) to obtain a licence to carry on any business,

(B) to become a publisher of a Canadian newspaper or periodical, or

(C) to acquire investment shares of a financial intermediary as defined in the regulations, or

(iii) the issue, transfer or ownership of its investment shares, or of any class or series thereof, to assist the cooperative or any of its affiliates or associates to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits because of attaining or maintaining a specified level of Canadian ownership or control; or

(b) provide that

(i) an investment share of the cooperative confers on its holder the right to vote at an election of directors of the cooperative because of an event that has occurred and is continuing or because of a condition that has been fulfilled, or

(ii) the shareholders, any class of shareholders or the holders of a series of investment shares of the cooperative, may elect a fixed number or a percentage of the directors of the cooperative.

Limit on shareholders' directors

42(4)     Notwithstanding subsections (2) and (3), neither the articles of a cooperative nor a unanimous agreement of the cooperative may provide that the shareholders of the cooperative have the right to elect more than 20% of the directors of the cooperative.

Election of director by shareholders

42(5)     A director of a cooperative who is to be elected by the shareholders of a class or series of its investment shares shall be elected at a meeting of those shareholders.

One share, one vote

42(6)     If shareholders of a cooperative are entitled to vote in accordance with subsection (3) or otherwise in accordance with this Act, each investment share of the cooperative entitles the holder to one vote.

Members may exercise rights of an investment shareholder

42(7)     Notwithstanding section 40, a member of a cooperative who holds an investment share of the cooperative may exercise any voting right that holders of investment shares of the cooperative have.

Special investment shares

42(8)     The articles of a cooperative may provide

(a) that the cooperative may issue a special class of investment shares that may be issued only to members of the cooperative;

(b) that each member of the cooperative who owns shares of the special class is entitled or obliged to conduct a specific amount or percentage of business with the cooperative that is dependent on the number or percentage of such shares owned by the member; and

(c) that, notwithstanding clause (1)(e) and subsections 338(1) and 341(7), each member of the cooperative who owns shares of the special class is entitled, on the liquidation and dissolution of the cooperative, to a pro rata share, dependent on the number or percentage of such shares owned by the member, of all remaining property of the cooperative after payment of all debts and liabilities of the cooperative including unpaid dividends, the amounts to be paid to the owners of its investment shares of other classes and any amounts to be paid on the redemption of its membership shares and the repayment of its member loans and patronage loans.

Non par value shares

43(1)     Investment shares of a cooperative shall be in registered form and shall be without nominal or par value.

Continued cooperative

43(2)     Where a body corporate is continued under this Act, an issued share with par value of the body corporate, other than a share that on the continuance is converted into a membership share, shall be deemed to be a share without nominal or par value.

Shares in series

44(1)     The articles of a cooperative may, subject to the limitations set out in them and subject to subsection (2), authorize the issue of any class of investment shares of the cooperative in one or more series and may

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

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

Series participation

44(2)     If any cumulative dividends or amounts payable on return of capital in respect of a series of investment shares of a cooperative are not paid in full, the investment shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

Restrictions on series

44(3)     No rights, privileges, restrictions or conditions attached to a series of investment shares of a cooperative authorized under this section confer a priority in respect of dividends or return of capital on a series over any other series of the same class of investment shares of the cooperative that are then outstanding.

Copy of resolution to Registrar

44(4)     If the directors of a cooperative exercise their authority granted by the articles under clause (1)(b) in respect of a series of shares, they shall, before the issue of the shares of the series, send to the Registrar a certified copy of the resolution of the directors by which they exercised the authority.

Pre-emptive right

45(1)     If the articles of a cooperative so provide, no shares of a class of investment shares of the cooperative shall be issued unless the shares are first offered to the shareholders of that class, and the shareholders of that class have a pre-emptive right to acquire the offered investment shares in proportion to their holdings of the investment shares of that class, at the price at which and on the terms on which those shares are to be offered to others.

Limitation

45(2)     Even if the articles of a cooperative provide the pre-emptive right referred to in subsection (1), shareholders of investment shares of the cooperative have no pre-emptive right to acquire investment shares that are to be issued

(a) in exchange for a thing or service other than money;

(b) as an investment share dividend; or

(c) on the exercise of conversion privileges, options or rights previously granted by the cooperative.

Commissions

46        The directors of a cooperative may authorize the cooperative to pay a reasonable commission to any person in consideration of the person

(a) purchasing or agreeing to purchase, as a broker, investment shares of the cooperative from the cooperative or from some other person; or

(b) procuring or agreeing to procure purchasers for investment shares of the cooperative.

Charge on investment shares

47(1)     Subject to subsection 98(2), the articles of a cooperative may provide that the cooperative has a charge on an investment share of the cooperative registered in the name of a shareholder or the legal representative of a shareholder for a debt of the shareholder to the cooperative, including an amount unpaid as of the date the cooperative was continued under this Act, in respect of an investment share issued by it.

Enforcement

47(2)     A cooperative may enforce a charge referred to in subsection (1) in accordance with its by-laws.

Constraints on shares

48(1)     A cooperative that has issued investment shares that are or were part of a distribution to the public, that remain outstanding and that are held by more than one person may, by a special resolution of its members and by a separate special resolution of the shareholders of each class of its investment shares, amend its articles to constrain

(a) the issue or transfer of its investment shares, or of any class or series thereof, to persons who are not resident in Canada;

(b) the issue or transfer of its investment shares, or of any class or series thereof, to enable the cooperative or any of its affiliates or associates to qualify under any prescribed law of Canada or a province

(i) to obtain a licence to carry on any business,

(ii) to become a publisher of a Canadian newspaper or periodical, or

(iii) to acquire investment shares of a financial intermediary as defined in the regulations; or

(c) the issue, transfer or ownership of its investment shares, or of any class or series thereof, to assist the cooperative or any of its affiliates or associates to qualify under any prescribed law of Canada or a province or territory to receive licences, permits, grants, payments or other benefits because of attaining or maintaining a specified level of Canadian ownership or control.

Limitation of prohibition of investment shares

48(2)     If the ownership by a person or class of persons of investment shares of a cooperative, or of any class or series thereof, would adversely affect the ability of the cooperative or any of its affiliates or associates to attain or maintain a level of Canadian ownership or control specified in its articles that equals or exceeds a specified level referred to in clause (1)(c), the cooperative may, under that clause, limit the number of its investment shares, or of any class or series thereof, that may be owned, or prohibit the ownership of its investment shares, or any class or series thereof, by that person or that class of persons.

Change or removal of constraint

48(3)     A cooperative referred to in subsection (1) may, by a special resolution of its members and by a separate special resolution of the shareholders of each class of its investment shares, amend its articles to change or remove any constraint on the issue, transfer or ownership of its investment shares.

Revocation

48(4)     The directors of a cooperative may, without further approval, revoke special resolutions referred to in subsection (1) or (3) before they are acted on if the special resolutions authorize the directors to do so.

Regulations

49        The Lieutenant Governor in Council may make regulations

(a) in respect of cooperatives or a class of cooperatives that constrains the issue, transfer or ownership of their investment shares, prescribing

(i) the disclosure required of the constraints in documents issued or published by the cooperatives,

(ii) the duties and powers of the directors of the cooperatives to refuse to issue or register transfers of investment shares of the cooperative in accordance with its articles,

(iii) the limitations on voting rights of any investment shares of the cooperatives held contrary to its articles,

(iv) the powers of the directors of the cooperatives to require disclosure of beneficial ownership of its investment shares and the right of the cooperatives and their directors, employees and agents to rely on that disclosure and the effects of that reliance, and

(v) the rights of any persons owning investment shares of the cooperatives at the time of an amendment to its articles constraining investment share issues or transfers; and

(b) defining "financial intermediary" for the purposes of subclause 48(1)(b)(iii).

Validity of acts

50        An issue or a transfer of an investment share of a cooperative or an act of a cooperative is valid notwithstanding any failure to comply with section 48 or regulations made under section 49.

Power to issue shares

51(1)     Subject to this Act, and to the articles, the by-laws and any unanimous agreement of a cooperative, its investment shares may be issued to any person, at any time and for money or in exchange for any thing or service that its directors may decide to accept.

Liability of members and shareholders

51(2)     Shares issued by a cooperative are non-assessable and its members and shareholders are not liable to the cooperative or to its creditors beyond the sum remaining unpaid on their subscriptions for shares or their undertakings to make member loans.

Consideration

51(3)     A share of a cooperative shall not be issued until it is fully paid, and a certificate for a member loan of a cooperative shall not be issued until the minimum amount for a member loan of the cooperative is fully paid,

(a) in money; or

(b) in property or past services that is the fair equivalent of the money that the cooperative would have received if the share had been issued for, or the member loan had been paid in, money.

Consideration other than money

51(4)     In determining whether property or past services is the fair equivalent of a money consideration, the directors of a cooperative may take into account reasonable charges and expenses of organization and reorganization of the cooperative and payments for property and past services reasonably expected to benefit it.

Property

51(5)     For the purposes of this section, "property" does not include a promissory note or a promise to pay.

Requirements respecting distribution of surplus

52        Every cooperative

(a) shall, by its by-laws, provide that, before any distribution of its surplus for a financial year is made, such part thereof as may be necessary for those purposes shall be appropriated for, and transferred to, reserve funds duly established by by-laws or by resolution passed by the members at a general meeting, and shall be used to retire all or a part of any accumulated deficits;

(b) may provide, in the manner set out in its by-laws, for payment out of the surplus of dividends or interest on its investment shares; and

(c) may, by its by-laws, provide for payment, out of surplus, of interest or dividends on its member loans, its membership shares or its patronage loans at rates not exceeding the prescribed maximum rates nor exceeding the maximum rates specified in its articles.

Allocation of surplus

53        Except as in this Act otherwise expressly provided, each cooperative shall allocate among, and credit to its members its surplus for each financial year of the cooperative, and each of its member shall be entitled to a share thereof proportionate to the business done by that member with or through the cooperative in that financial year as computed by its directors at a rate approved by a resolution of its directors.

Computation of business done

54        The directors of a cooperative shall compute the amount of the business done by each of its members with and through the cooperative in each financial year of the cooperative in relation to

(a) the quantity, quality, kind and value of the goods bought, sold, handled, marketed or dealt in by the cooperative; and

(b) the services rendered

(i) by the cooperative on behalf of or to the member, whether as principal or agent of the member or otherwise, or

(ii) by the member on behalf of or to the cooperative;

with appropriate differences for the different classes, grades or qualities of the goods and services.

Allocation of surplus to non-members

55        The by-laws of a cooperative may provide that it may in each of its financial years allocate among, and credit to, patrons of the cooperative who are not members thereof a share of the surplus at a rate that is equal to, or less than, the rate at which it is distributable to its members; and the business done by its non-member patrons shall be computed in the manner in which business done by its members is computed.

Use of return to non-members for memberships

56        Where its by-laws so provide, a cooperative may in each of its financial years credit to the account of a non-member patron the share of the surplus allocated to the patron, until such time as the amount to the patron's credit is equal to or greater than the par value of a membership share of the cooperative, where the cooperative has membership share capital, or the membership fee for a member of the cooperative in other cases; and thereupon an amount equal to that par value or the membership fee, as the case may be, shall be charged to the account of the non-member patron and transferred to the credit of the cooperative; and, subject to compliance with the other provisions of this Act,

(a) where there is a membership fee for membership in the cooperative, the patron thereupon becomes a member of the cooperative entitled to receive a certificate of membership; or

(b) where it has membership share capital, when the number of membership shares purchased for the non-member patron equals the minimum number of shares required for membership the patron thereupon becomes a member of the cooperative entitled to receive a certificate for the fully paid-up membership shares.

Non-payment of small returns

57        A cooperative may by by-law provide that, where the patronage return that would otherwise be payable to any person from its surplus for a financial year does not exceed $2, or such smaller amount as may be specified in the by-law, no patronage return be paid to that person from that surplus, and that the amount that would otherwise be payable to the person as a patronage return shall be the property of the cooperative to be used as its board of directors may decide.

Use of patronage return for shares

58(1)     A cooperative that has share capital may by by-law provide that, in each financial year of the cooperative, the whole of any patronage return credited to a person or such part thereof as may be prescribed in the by-laws shall be applied to purchase on behalf of the person membership shares of the cooperative, up to such number, if any, as may be specified in the by-laws.

Contents of by-law

58(2)     The by-laws of a cooperative shall provide for the giving of notice to each of its members or non-member patrons of the number of shares purchased or to be purchased for them, the manner of issuance or transfer to them of its shares, the payment for the shares out of their patronage returns and, if applicable, the issuance and forwarding of certificates to them in respect of the shares so issued or transferred to them.

Repurchase of shares

59        Where the by-laws of a cooperative contain provisions referred to in section 58, its by-laws shall also provide for the repurchase of the shares by the cooperative in accordance with this Act, within such period and subject to such conditions as may be prescribed in its by-laws.

Compulsory loan of patronage returns

60        A cooperative may by by-law require its members to lend to it the whole, or such part as may be specified in its by-laws, of the patronage return to which the members may become entitled in respect of any financial year, upon such terms and at such rate of interest, or without interest, as the by-laws may provide; and where its by-laws require such loans, they shall also provide for the repayment of any loan so made.

Effect of marketing plans

61        Where members of a cooperative are required by a marketing plan established under an Act of the Legislature or of the Parliament of Canada to sell or deliver goods or render services to or through a producer board, marketing commission or agency, then for the purposes of allocating, crediting and paying patronage returns among or to its members and for the purposes of making payments to its members as part of the price or proceeds of their goods or services, its members shall be deemed to have sold, delivered or rendered those goods or services to the cooperative, but the by-laws of the cooperative may provide that this section does not apply to a member unless conditions set out in the by-laws as to the delivery or rendering of the goods and services are fulfilled.

Community service cooperatives

62        Where a cooperative is, in the opinion of the Registrar, operating entirely for purposes of community service, the articles of the cooperative shall provide that no patronage returns shall be paid, and that its surplus for any financial year shall be used for the purposes of the cooperative or donated for community welfare.

Purchase of membership shares by cooperative

63        Subject to section 66, a cooperative may purchase or redeem any of its membership shares that are offered for sale or redemption or are available for compulsory purchase under section 243 or 246, and it shall, within one year of the date of purchase, pay in cash for shares so purchased.

Redemption of investment shares

64(1)     Subject to its articles and subsection (2), a cooperative may at any time redeem or otherwise acquire any investment share issued by it.

Limitation

64(2)     A cooperative shall not make a payment to redeem or otherwise acquire its investment shares if there are reasonable grounds for believing that

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

(b) the realizable value of its assets after the payment would be less than the total of the stated capital of all its issued shares and its liabilities.

Purchase or redemption of investment shares

64(3)     Subject to section 66 and its articles, a cooperative may, at any time, redeem any investment share that is redeemable, in accordance with such price or formula as may be set out in its articles or, if the articles do not so provide, at fair market value.

Alternative investment share acquisition

65        Notwithstanding subsection 64(2), but subject to section 66 and its articles, a cooperative may purchase, redeem or otherwise acquire its investment shares

(a) to satisfy the claim of its members or shareholders who dissent under section 320;

(b) to comply with an order under section 365;

(c) to settle or compromise a debt or claim by or against the cooperative;

(d) to eliminate fractional shares of the cooperative;

(e) to fulfil the terms of a non-assignable option or obligation to purchase its shares owned by a director, officer or employee of the cooperative.

Limitation on purchase or redemption

66(1)     A cooperative shall not make any payment to acquire or redeem a share under section 63 or 65 or subsection 64(3), or to repay a member loan or a patronage loan, if there are reasonable grounds to believe that

(a) it is or would, after the payment, be unable to pay its liabilities as they became due; or

(b) the realizable value of its assets after the payment would be less than the total of:

(i) its liabilities, and

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

Further limitations

66(2)     No cooperative shall exercise its powers to purchase its membership shares under section 63 if the result of so doing would be to reduce the number of holders of membership shares

(a) to fewer than three non-incorporated members, in a case where it has fewer than two members that are bodies corporate or one member that is a cooperative;

(b) to fewer than two members that are bodies corporate in a case where it has fewer than three non-incorporated members or one member that is a cooperative; or

(c) to fewer than one member that is a cooperative in a case where it has fewer than three non-incorporated members or two members that are bodies corporate.

Cancellation or resurrection of shares

67        Shares of a cooperative that are redeemed or otherwise acquired by it are cancelled or, if the articles limit the number of authorized shares, restored to the status of unissued shares.

Enforcement of contract to buy shares

68(1)     A cooperative shall fulfil its obligations under a contract to buy shares or to repay member loans of the cooperative, except if the cooperative can prove that enforcement of the contract would put it in breach of subsection 64(2) or 66(1).

Right of claimant

68(2)     Until the cooperative has fulfilled all its obligations under a contract referred to in subsection (1), the other party to the contract retains the status of claimant entitled to be paid as soon as the cooperative is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors and to the rights of any class of shareholders whose rights were in priority to the rights given to the class of investment shares to be purchased under the contract, but in priority to the rights of members and any other class of shareholders.

Money owing a debt

69        All moneys payable by any member to a cooperative under its articles or by-laws are a debt due from the member to the cooperative.

Prohibited loans and guarantees

70(1)     A cooperative shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise to any member, director, officer, shareholder or employee of the cooperative or of any affiliate of it for any purpose, or to any person for the purpose of or in connection with the purchase of a share of the cooperative, where there are reasonable grounds for believing that

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

(b) the realizable value of its assets, excluding the amount of the financial assistance, would after giving the financial assistance be less than the total of the stated capital of all its issued shares and its liabilities.

Permitted loans and guarantees

70(2)     Notwithstanding clause (1)(b), but subject to clause (1)(a), a cooperative may give financial assistance by means of a loan, guarantee or otherwise

(a) to any person in the ordinary course of business, if the lending of money or the extending of credit is part of the ordinary business of the cooperative;

(b) to any person on account of expenditures incurred or to be incurred on behalf of the cooperative;

(c) to a subsidiary of the cooperative; and

(d) to employees of the cooperative or of any of its affiliates

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

(ii) in accordance with a plan for the purchase of shares of the cooperative or any of its affiliates to be held by a trustee.

Enforceability

70(3)     A contract made by a cooperative in contravention of this section may be enforced by the cooperative or by a lender for value in good faith without notice of the contravention.

No personal liability

71        The members and shareholders of a cooperative are not liable, solely because of being members or shareholders, for any liability, act or default of a cooperative, except as provided in this Act.

Lien on member's interest

72(1)     A cooperative has a lien on any membership share of the cooperative registered in the name of a member of the cooperative or the member's legal representative, and on any other interest of the member in the property of the cooperative and on any sum payable by the cooperative to the member, for a debt owing by that member to the cooperative.

Charge on investment shares

72(2)     Subject to subsection 98(2), the articles of a cooperative may provide that it has a charge on an investment share registered in the name of a shareholder of the cooperative or the shareholder's legal representative for a debt owing by the shareholder to the cooperative in respect of a share issued by it, including such a debt unpaid as of the date the cooperative was continued under this Act.

Enforcement of liens and charges

73        A cooperative may enforce liens and charges referred to in section 72 in accordance with its by-laws.

Borrowing powers

74        Subject to the articles and by-laws of a cooperative, its directors may without authorization of the members

(a) borrow money upon the credit of the cooperative;

(b) issue, reissue, sell or pledge debt obligations of the cooperative; and

(c) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the cooperative, owned or subsequently acquired, to secure any debt obligation of the cooperative.

Stated capital account

75(1)      A cooperative that is authorized to issue shares must maintain a stated capital account for each class and series of shares that it issues.

Consideration for shares

75(2)     A cooperative must add to the appropriate stated capital account the full amount of any money, or the value of any thing or service, that it receives for shares it issues.

Exception for non arm's length transactions

75(3)     Notwithstanding subsection (2), where a cooperative issues shares

(a) in exchange for

(i) property of a person who immediately before the exchange did not deal with the cooperative at arm's length within the meaning assigned to that expression in the Income Tax Act (Canada), or

(ii) shares of, or another interest in, an entity that immediately before the exchange, or that because of the exchange, did not deal with the cooperative at arm's length within the meaning assigned to that expression in the Income Tax Act (Canada); or

(b) under an amalgamation agreement or arrangement, to members or shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated cooperative;

the cooperative may, subject to subjection (4), add to the stated capital accounts maintained for shares of the classes or series of the shares issued the whole or any part of the amounts of the money, or the value of the things or services, it receives in the exchange.

Limit on additions to a stated capital account

75(4)     On issuing a share, a cooperative shall not add to a stated capital account in respect of the share an amount greater than the amount of money, or the value of the thing or service, it received for the share.

Constraint on additions to a stated capital account

75(5)     The proposed addition of an amount to a stated capital account maintained by a cooperative in respect of a class or series of its shares must be approved in advance by special resolution of its members and, if the cooperative has issued investment shares, by a separate special resolution of its shareholders or its shareholders of each class or series of its investment shares, if

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

(b) the cooperative has issued shares of more than one class or series that are outstanding.

Membership share inclusion

75(6)     For greater certainty, if a cooperative issues membership shares, it is deemed for the purposes of subsection 64(2), section 80 and clauses 70(1)(b), 86(b) and 308(2)(d), to have a stated capital account for its membership shares that includes each amount that it has received for the membership shares.

Other additions to stated capital account

76(1)     When a body corporate is continued under this Act, it may add to a stated capital account any money, or the value of any thing or service, received by it for a share it issued.

Transitional

76(2)     When a body corporate is continued under this Act, subsection 75(2) does not apply to the money, or the value of things or services, received by it before it was so continued unless the share in respect of which the money, thing or service received is issued after the body corporate is continued.

Transitional

76(3)     When a body corporate is continued under this Act, any amount unpaid in respect of a share of any class or series issued by it before it was so continued and paid after it was so continued is added to the stated capital account maintained for shares of that class or series.

Continued cooperative

76(4)     For the purposes of subsection 64(2), section 80 and clauses 70(1)(b), 86(b) and 308(2)(d), when a cooperative is continued under this Act, its stated capital accounts are deemed to include the amounts that would have been included in those accounts if the cooperative had been incorporated under this Act.

Membership shares with a par value

76(5)     When a cooperative with membership shares is continued under this Act, subsection 75(6) applies to the cooperative.

Restriction

77        A cooperative shall not reduce its stated capital or any stated capital account except as provided in this Act.

Retained earnings accounts

78        Subject to subsection 75(5), a cooperative continued under this Act may at any time add to a stated capital account any amount it has at the time of the continuance to the credit of a retained earnings or other similar account.

Reduction of capital

79(1)     Subject to subsection (2), a cooperative may reduce its stated capital for any purpose by special resolution of its members and, if an investment share of the cooperative, or a share of any class or series thereof is proposed to be affected by the resolution, by separate special resolution of the holders of the investment shares or that class or series thereof.

Limitation on reductions

79(2)     A cooperative shall not reduce its stated capital if there are reasonable grounds to believe that

(a) it is or would, after the reduction, be unable to pay its liabilities as they became due; or

(b) the realizable value of its assets after the reduction would be less than the total of its liabilities.

Exception

79(3)     Where the stated capital of a cooperative is not wholly represented by realizable assets, subsection (2) does not apply to a reduction of its stated capital to an amount that is represented by realizable assets.

If several stated capital accounts

79(4)     If a cooperative maintains more than one stated capital account, the special resolution to reduce stated capital required by subsection (1) shall specify the stated capital account or accounts from which the reduction will be deducted and the amount to be deducted from each.

Court order

79(5)     A creditor of a cooperative may apply to a court for an order compelling a person

(a) to pay to the cooperative an amount equal to any liability of the person that was extinguished or reduced contrary to this section; or

(b) to pay or deliver to the cooperative any money or property that was paid or distributed to the person as a consequence of a reduction of stated capital made contrary to this section.

Limitation period

79(6)     No application may be made under subsection (5) more than two years after the day

(a) the liability of the person to whom the application relates was extinguished or reduced; or

(b) the money or property was paid or distributed to the person to whom the application relates;

as the case may be.

Adjustment of stated capital account

80(1)     On the redemption or acquisition by a cooperative of shares of a class or series of its shares, the cooperative shall deduct from the stated capital account for that class or series an amount calculated in accordance with the following formula:

A = B x C/D

In this formula,

A   is the amount to be deleted;

B   is the amount of the stated capital account for the class or series of shares immediately before the redemption or acquisition;

C   is the number of shares of the class or series that were redeemed or acquired on the redemption or acquisition;

D   is the number of shares of that class or series that had been issued and that were, immediately before the redemption or acquisition, outstanding.

If special resolution

80(2)     A cooperative shall adjust its stated capital accounts in accordance with any special resolution made under subsection 79(1).

Class or series

80(3)     On a conversion of investment shares of a class or series of investment shares of a cooperative into investment shares of another class or series of the investment shares of the cooperative or a change under section 297, a reorganization under section 321 or the redemption or exchange of investment shares under an order made under section 365, the cooperative shall

(a) deduct from the stated capital account for the class or series of shares converted or changed, or subject to the reorganization, redemption or exchange, an amount calculated in accordance with the following formula:

A = B x C/D

In this formula,

A   is the amount to be deducted,

B   is the amount of the stated capital account for the class or series of shares immediately before the conversion, change, reorganization, redemption or exchange,

C   is the number of shares of the class or series that were converted, changed, redeemed or exchanged on the conversion, change, reorganization, redemption or exchange,

D   is the number of shares of that class or series that had been issued and that were, immediately before the conversion, change, reorganization, redemption or exchange, outstanding; and

(b) add the result obtained under paragraph (a) and any additional amount received pursuant to the conversion, change, reorganization, redemption or exchange to the stated capital account for the other class or series of shares.

Stated capital of interconvertible shares

80(4)     For the purposes of subsection (3) and subject to its articles, if a cooperative issues two classes of investment shares and there is attached to the shares of each of the classes a right to convert an investment share of that class into an investment share of the other class, and an investment share of one of the classes is converted into a share of the other class, the amount of stated capital attributable to a share in either class is the total of the stated capital accounts for both classes divided by the number of investment shares of both classes that had been issued and were, immediately before the conversion, outstanding.

Exception

80(5)     For the purposes of this section, a cooperative holding shares in itself as permitted by section 84 is deemed not to have redeemed or acquired them.

Conversion or change of investment shares

80(6)     Investment shares issued by a cooperative and converted into shares of another class or series or changed under section 297, or subject to a reorganization under section 321 or the redemption or exchange of investment shares under an order made under section 365, become shares of the other class or series of shares.

Effect on number of unissued shares

80(7)      If the articles of a cooperative limit the number of authorized shares of a class of its investment shares and issued shares of that class or of shares of that class have become, under subsection (6), issued investment shares of another class or of a series of another class, the number of unissued shares of the first-mentioned class is, unless the articles provide otherwise, increased by the number of investment shares that, under subsection (6), became investment shares of another class or series.

Options and rights

81(1)     A cooperative may issue certificates, warrants or other evidence of conversion privileges, options or rights to acquire its shares or securities.

Conversion for members only

81(2)     A conversion privilege, option or right to acquire membership shares of a cooperative may be granted only to members of the cooperative, and is non-transferable.

Conditions

81(3)     The conditions of a conversion privilege, option or right to acquire shares or securities of a cooperative must be set out in

(a) the certificate, warrant or other evidence of the privilege, option or right; or

(b) the certificate evidencing the security to which the privilege, option or right is attached.

Transferability

81(4)     Subject to subsection (2), a conversion privilege, option or right to acquire securities of a cooperative may be made transferable or non-transferable, and options and rights to acquire securities of a cooperative may be made separable or inseparable from the securities to which they are attached.

Reserves

82        If the articles of a cooperative limit the number of shares of any class or series that it may issue, it must reserve sufficient shares of that class or series to meet the exercise of any conversion privileges, options or rights issued or granted by the cooperative to acquire shares of that class or series.

Holding own shares

83(1)     Subject to sections 63 to 65 and 84, a cooperative shall not

(a) hold any shares in itself;

(b) hold any shares in its holding body corporate, other than, where the holding body corporate is a cooperative entity, the minimum number of membership shares required by the articles or by-laws of the holding body corporate to qualify for membership in the holding body corporate; or

(c) permit any of its subsidiaries to hold shares in the cooperative, other than the minimum number of membership shares required by the articles or by-laws of the cooperative to qualify for membership in it.

Disposal of shares

83(2)     A cooperative shall cause any of its subsidiaries that holds shares in the cooperative contrary to subsection (1) to dispose of those shares no later than five years after the later of

(a) the day the subsidiary became a subsidiary of the cooperative; and

(b) the day the cooperative was continued under this Act.

Exception for holding own shares

84(1)     A cooperative may, and may permit its subsidiaries to, hold in the capacity of a legal representative, shares in itself or in its holding body corporate, but only if the cooperative, holding body corporate or subsidiary does not have a beneficial interest in the shares.

Holding own shares by way of security

84(2)     A cooperative may hold shares in itself or its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money or the extending of credit.

Form of dividend

85(1)     A cooperative may pay a dividend by issuing fully paid shares of the cooperative and, subject to section 86, a cooperative may pay a dividend in money or property, except that membership shares of a cooperative issued in payment of a dividend may only be issued to members of the cooperative.

Stated capital account

85(2)     If shares of a cooperative or of a class or series of its shares are issued in payment of a dividend, the declared amount of the dividend so paid stated as an amount of money shall be added to the stated capital account for the shares or that class or series of shares, as the case may be.

Stated capital account

85(3)     If shares of a cooperative or of a class or series of its shares are issued in payment of a patronage return, the amount of the patronage return so paid stated as an amount of money shall be added to the stated capital account for the shares or that class or series of shares, as the case may be.

Limitation on paying dividends

86        A cooperative shall not declare or pay a dividend if there are reasonable grounds to believe that

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

(b) the realizable value of its assets after payment of the dividend would be less than the total of its liabilities and the stated capital of all its issued shares.

Debt obligations

87(1)     Debt obligations issued by a cooperative are not redeemed solely because the indebtedness evidenced by the debt obligation is repaid.

Cancellation, etc.

87(2)     Debt obligations issued by a cooperative and purchased, redeemed or otherwise acquired by the cooperative may be cancelled or may be reissued to secure any obligation of the cooperative then existing or later incurred.

Application of The Securities Act

88(1)     The Securities Act

(a) applies to the sale or issue by a cooperative of securities of the cooperative where the securities may be issued or sold to the public; and

(b) does not apply to the sale or issue by a cooperative of

(i) membership shares of the cooperative, or

(ii) securities of the cooperative where the sale or issue of the securities is restricted to members of the cooperative and where only members of the cooperative are eligible to own the securities.

Application of sections 89 to 91

88(2)     Sections 89 to 91

(a) apply to the sale or issue by a cooperative of

(i) membership shares of the cooperative, or

(ii) securities of the cooperative where The Securities Act does not apply to the issue or sale; and

(b) do not apply to the sale or issue of securities by a cooperative where The Securities Act applies to the issue or sale.

Offering statement

89(1)     Before a cooperative issues any shares or other securities, it shall send to the Registrar, and receive a receipt from the Registrar for, an offering statement in a form approved by the Registrar

(a) that provides a full, true and plain disclosure of all the material facts relating to the shares or securities and the purposes for which the funds to be raised by their issue are to be used;

(b) that complies as to content with, and otherwise is in accordance with, this Act and the regulations; and

(c) that is accompanied by such documents, reports and other materials as are required by this Act and the regulations.

Material changes

89(2)     Where there is a material change in the facts set out in an offering statement sent to the Registrar by a cooperative, whether before or after the cooperative receives a receipt therefor from the Registrar, the cooperative shall, within 30 days after the change, or after the cooperative becomes aware of the change, send to the Registrar an amending statement giving full, true and plain particulars of the change.

Further offering statements

89(3)     A cooperative may, and shall if so required by the Registrar, send to the Registrar, in the place of an amending statement required under subsection (2), a further offering statement in respect of an issue of shares or other securities by the cooperative, revised to give effect to all previous material changes to an earlier offering statement in respect of the shares or securities that was sent to the Registrar.

Restraint on issue after material change

89(4)     Where there is a material change in the facts set out in an offering statement in respect of the issue of shares or other securities by a cooperative that was sent to the Registrar by the cooperative, the cooperative shall not issue any more of the shares or securities until it has sent to the Registrar, and received from the Registrar a receipt for, an amending statement under subsection (2) or a further offering statement under subsection (3) in respect of the shares or securities.

Issue of receipts

89(5)     The Registrar may, in the Registrar's discretion, file and issue a receipt for any offering statement, amending statement or further offering statement sent by a cooperative to the Registrar under subsection (1), (2) or (3) unless it appears to the Registrar that

(a) the statement or any document required to be sent with the statement

(i) does not comply in any substantial respect with any of the requirements of this Act or the regulations,

(ii) contains a statement, promise, estimate or forecast that is misleading, false or deceptive, or

(iii) conceals or omits to state a material fact necessary in order to make information or statement contained therein not misleading in the light of the circumstances in which it is provided or made;

(b) the proceeds from the issue or sale of the shares or securities to which the statement relates that are to be paid into the treasury of the cooperative, together with other resources of the cooperative, are insufficient to accomplish the purpose of the issue indicated in the offering statement;

(c) an unconscionable consideration has been, or is intended to be, paid or given for promotional purposes or for the acquisition of property;

(d) an escrow or pooling agreement that the Registrar considers necessary or advisable has not been entered into; or

(e) any agreement that the Registrar considers necessary or advisable to accomplish the purpose indicated in the offering statement for the holding in trust of the proceeds payable to the cooperative from the issue or sale of the shares or securities pending the distribution of the shares or securities has not been entered into.

Ruling

89(6)     The Registrar shall not refuse to file, and to issue a receipt for, an offering statement, amending statement or further offering statement sent by a cooperative under subsection (5) without making a ruling or order and without giving the cooperative an opportunity to be heard before making the ruling or order.

Exception

89(7)     Subsections (1) to (6) do not apply to an issue of shares or other securities of a cooperative that is an issue that is exempted from the application of those subsections by the regulations or by order of the Registrar.

Cease trading orders

90(1)     The Registrar may order that trading in the shares or other securities of a cooperative in respect of which an offering statement is required to be sent under subsection 89(1) to the Registrar if the Registrar thinks that any of the circumstances described in clauses 89(5)(a) to (e) exist in respect of the shares or securities or their issue and sale, and shall, forthwith after making the order, give notice of the making of the order to the cooperative, and any agent of the cooperative of whom the Registrar has been notified and who is acting in connection with the issue or sale of the shares or securities.

Opportunity to be heard

90(2)     The Registrar shall not make an order under subsection (1) in respect of the trading of shares or securities of a cooperative without giving the cooperative an opportunity to be heard before the order is made unless the Registrar thinks that the time required for a hearing would be prejudicial to the public interest, in which case the Registrar may make a temporary order under subsection (1) the effect of which expires 15 days after the order is made.

Obligation to provide offering statement

91        Where an offering statement in respect of the issue of shares or other securities by a cooperative has been sent to the Registrar under subsection 89(1) and a receipt therefor received from the Registrar,

(a) no share or security of the issue shall be sold to a person unless, before the agreement for the sale and purchase of the share or security is entered into, the cooperative or its agent provides the person with

(i) a copy of the latest offering statement in respect of the issue for which a receipt has been received from the Registrar; and

(ii) any amending statements in respect of the issue for which a receipt has been received from the Registrar; and

(b) an agreement for the sale and purchase of the share or security is not binding on the purchaser under the agreement if, not later than midnight of the second day, not including Saturdays and holidays, after the day the purchaser received the copy of the offering statement and amending statements, if any, referred to in clause (a), the cooperative or its agent through whom the purchaser entered into the agreement receives written or telegraphic notice of the intention of the purchaser not to be bound by the agreement.

PART 6

SHARE CERTIFICATES, MEMBERSHIPS AND TRANSFERS

Definitions

92(1)     In this Part,

"adverse claim", in respect of a security, includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security; (« opposition »)

"delivery" means voluntary transfer of possession; (« livraison » ou « remise »)

"fiduciary" means a trustee, guardian, committee, curator, tutor, executor, administrator, representative of a deceased person, and any other person acting in a fiduciary capacity; (« représentant »)

"fungible", in relation to securities, means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit; (« fongibles »)

"genuine" means free of forgery or counterfeiting; (« authentique »)

"good faith", in respect of a transaction, means honesty in fact in the conduct of the transaction; (« bonne foi »)

"good faith purchaser", in respect of a security in bearer form or order form or a security in registered form issued to the purchaser or endorsed to the purchaser or endorsed in blank, means a purchaser of the security for value in good faith and without notice of any adverse claim in respect of the security who takes delivery of the security; (« acquéreur de bonne foi »)

"overissue" means the issue of securities

(a) the total number of which is in excess of any maximum number of such securities that the issuer is authorized by its articles or a trust indenture to issue, or

(b) the total value of which is in excess of the total value of such securities that the issuer is authorized by its articles or a trust indenture to issue; (« émission excédentaire »)

"purchaser" means a person who takes an interest in a security by sale, mortgage, hypothec, pledge, issue, reissue, gift or any other voluntary transaction; (« acquéreur »)

"security" or "security certificate" means a document issued by a cooperative that is

(a) in bearer, order or registered form,

(b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment,

(c) one of a class or series or by its terms divisible into a class or series of documents, and

(d) evidence of an investment share of, participation or other interest in, or obligation of, the cooperative,

but does not include

(e) a membership share or a document evidencing a membership share,

(f) a member loan or a document evidencing a member loan, or

(g) a patronage loan or a document evidencing a patronage loan; (« valeur mobilière » ou « certificat de valeurs mobilières »)

"transfer" includes transmission by operation of law; (« transfert »)

"valid", in respect of a security, means issued in accordance with the applicable law and the articles of the issuer, or validated under section 114. (« valide »)

Negotiable instruments

92(2)     For the purposes of this Part, a security is a negotiable instrument except where its transfer is restricted and the restriction or a reference to it is noted on the security in accordance with subsection 98(2),.

Registered form

92(3)     For the purposes of this Part, a security is in registered form if it

(a) specifies that the name of the person entitled to the security or to the rights it evidences, and its transfer is capable of being recorded in a securities register; or

(b) bears a statement that it is registered or in registered form.

Order form

92(4)     For the purposes of this Part, a debt obligation is in order form if, by its terms, it is payable to the order of a person specified with reasonable certainty in it or, if that person assigns it, to the person to whom it is so assigned.

Bearer form

92(5)     For the purposes of this Part, a security is in bearer form if it is payable to bearer according to its terms and not because of an endorsement.

Guarantor for issuer

92(6)     For the purposes of this Part, a guarantor who guarantees a security issued by a cooperative is deemed to be the cooperative to the extent of the guarantee whether the guarantee or a reference to it is noted on the security.

Application

93        This Part governs the transfer or transmission of securities of cooperatives.

Transferability

94(1)     Shares in the capital stock of a cooperative and memberships in a cooperative are transferable in such manner and subject to such conditions and restrictions as are contained in this Act and the regulations and in the articles and by-laws of the cooperative.

Fee

94(2)     Where a security of a cooperative is transferred, the cooperative may charge a reasonable fee for a new security certificate issued in respect of the security and may require any security certificate previously issued in respect of the security to be deposited with the cooperative.

Allotment of shares

95(1)     Subject to this Act and in the absence of any provision to the contrary in the articles or by-laws of a cooperative, shares in the capital stock of the cooperative may be allotted at such times, in such manner and to such persons or classes of persons as its directors may from time to time determine by resolution that is consistent with applicable laws in respect of human rights.

Security certificate

95(2)     Every owner of a security of a cooperative may, on written request, require the cooperative to issue to the owner

(a) a security certificate that complies with this Act; or

(b) a non-transferable written acknowledgment of the owner's right to obtain a security certificate.

Joint owners

95(3)     If a security of a cooperative is held jointly by more than one person

(a) the cooperative is not required to issue more than one security certificate in respect of the security; and

(b) delivery of a security certificate in respect of the security to one of the joint owners is deemed to be delivery to all of them.

Signatures

96(1)     A security certificate issued by a cooperative shall be signed by

(a) at least one director or officer of the cooperative;

(b) an individual on behalf of a director, transfer agent or branch transfer agent of the cooperative; or

(c) a trustee who certifies the certificate in accordance with a trust indenture.

Form of signature

96(2)     A signature required under subsection (1) shall be either a signature manually written or a facsimile signature mechanically or otherwise reproduced.

Former director

96(3)     A cooperative may issue security certificates that contain the signature of a person who is no longer a director or officer and the validity of the certificate is not adversely affected.

Certificates as evidence of title

96(4)     A share certificate for shares in a cooperative is evidence of the title of the person named in the certificate to the shares mentioned in it.

Membership share and member loan certificates

97        The face of each certificate issued by a cooperative in respect of membership shares or a member loan after the coming into force of this section shall contain

(a) the name of the cooperative;

(b) a statement that the cooperative is subject to this Act;

(c) the name of the person to whom it is issued;

(d) a statement that the certificate represents membership shares in or a member loan to the cooperative, and the number of the membership shares or the amount of the member loan;

(e) a statement that the certificate is not transferable without the approval of the directors; and

(f) a statement that there is a charge on the membership shares or member loan represented by the certificate in favour of the cooperative for any indebtedness of the member named in the certificate to the cooperative.

Certificates for securities

98(1)     The face of each certificate that a cooperative issues in respect of a security of the cooperative, other than a certificate for a membership share or a member loan, shall contain

(a) the name of the cooperative;

(b) a statement that the cooperative is subject to this Act and the words "Incorporated under the Laws of Manitoba" or words of like effect;

(c) the name of the person to whom it is issued;

(d) the number of investment shares that the certificate represents; and

(e) if the investment shares that the certificate represents are shares of a particular class or series, the designation of that class or series.

Notation of restrictions

98(2)     A restriction, charge or endorsement described in subsection (3) in respect of a security issued by a cooperative or a body corporate before it is continued under this Act is not effective against a transferee of the security who has no actual knowledge of the restriction, charge or endorsement unless the restriction, charge or endorsement or a reference to it is noted conspicuously on the certificate for the security.

Restrictions, etc.

98(3)     The restrictions, charges and endorsements referred to in subsection (2) in respect of a security of a cooperative or a body corporate are

(a) a restriction, other than a constraint under section 48, on transfer of investment shares of the cooperative or body corporate;

(b) a charge in favour of the cooperative or body corporate;

(c) an endorsement required by a unanimous agreement of the cooperative or body corporate; and

(d) an endorsement required under subsection 320(10) in respect of the security.

Restrictions

98(4)     If the issued investment shares of a cooperative are or were part of a distribution to the public, remain outstanding and are held by more than one person, the cooperative shall not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 48.

Conspicuous notation

98(5)      A reference to a constraint on the issue, transfer or ownership of any class or series of investment shares shall be noted conspicuously on every security certificate evidencing such a share that is issued after the share becomes subject to the constraint under this Act, if the constraint is for the purpose of

(a) attaining or maintaining a level of Canadian ownership or control specified in its articles or required by law to carry on business or qualify for a benefit; or

(b) complying with any Act of Parliament or the legislature

(i) that requires any body corporate that carries on a particular business or activity to have a specified portion of its shares, or any class of its shares, owned, or to be controlled, by a specified class of persons, or

(ii) that disqualifies from carrying on a particular business or activity certain bodies corporate because a specified portion of their shares, or a class of their shares, are owned, or because they are controlled, by a specified class of persons.

Effect of failure to note constraint

98(6)     A failure to note a constraint described in subsection (5) in respect of an investment share of a cooperative on the certificate issued for the share does not invalidate the share or the certificate and does not render the constraint ineffective.

Contents of certificate

99(1)     Every share certificate for an investment share of a cooperative that is authorized to issue shares of more than one class or series shall clearly state

(a) the rights, privileges, restrictions, and conditions that attach to the shares of the class and series to which the certificate relates and that exist when the share certificate is issued; or

(b) that the class or series of shares to which the certificate relates has rights, privileges, restrictions or conditions attached to it and that the cooperative will provide a shareholder, on demand and without charge, a copy of any provisions of the articles and by-laws of the cooperative and any resolution

(i) that authorizes the issue of the classes or series or that fixes, changes or removes any rights, privileges, restrictions, and conditions attached to each class authorized to be issued, and to each series, that have been fixed or determined by the directors, or

(ii) that grants authority to the directors to fix or determine the rights, privileges, restrictions, and conditions of subsequent series.

Copy of information

99(2)     If a share certificate for an investment share of a cooperative contains the statement referred to in clause (1)(b), the cooperative shall provide the shareholder, on demand and without charge, with a copy of the provisions and resolutions described in that clause.

Fractional shares

100(1)    A cooperative may issue a certificate for a fraction of an investment share in the cooperative or may instead issue a scrip certificate for the fraction of the share in bearer form that entitles the holder to receive a certificate for a full investment share in the cooperative in exchange for scrip certificates for fractions of a share the total of which equals a full investment share.

Conditions

100(2)    The directors of a cooperative may attach conditions to scrip certificates issued by the cooperative, including conditions that

(a) the scrip certificates become null or void if not used in an exchange for a full investment share before a specified date; and

(b) any investment shares for which the scrip certificates are exchangeable may, notwithstanding any pre-emptive right, be issued by the cooperative to any single person and the cooperative is not responsible for any rateable or other distribution among the former holders of the scrip certificates of any dividends or other proceeds arising out of the ownership of the scrips or the shares.

Voting rights

100(3)    A holder of a fraction of an investment share of a cooperative is not entitled to exercise voting rights or to receive a dividend in respect of the fraction of the share unless

(a) the fraction of the share results from a consolidation of investment shares; or

(b) the articles of the cooperative provide otherwise.

Exercise of voting rights

100(4)    A holder of a scrip certificate issued by a cooperative is not entitled to exercise voting rights in the cooperative or to receive a dividend in respect of the scrip certificate.

Membership certificates

101(1)    The by-laws of a cooperative may provide that it is not required to issue membership share certificates or certificates in respect of member loans, and in that case

(a) the members register kept by the cooperative under section 28 is prima facie proof of the number of membership shares held by each member; and

(b) the cooperative shall, if requested in writing by a member, provide a statement to the member showing the interest of the member in the cooperative, including the number of membership shares held by, and the amounts of any member loan and patronage loan owed to, the member.

Membership certificates

101(2)    Where a cooperative has no share capital, every person who is a member of the cooperative is, upon request and without payment, entitled to a certificate signed by the proper officer or officers of the cooperative stating that the person is a member of the cooperative, but such a certificate is not a security certificate.

Transfers of memberships etc.

102       A transfer of a membership, a member loan, a patronage loan or a membership share in a cooperative is not valid for any purpose, except as evidence of, or exhibiting, the rights of the parties to the transfer as between those parties,

(a) unless a written application for membership by the transferee has been approved and the transfer has been authorized by a resolution of the directors of the cooperative or by a person authorized by a resolution of the directors to approve applications and transfers of that kind;

(b) the transferee has otherwise complied with the articles and by-laws of the cooperative and, if applicable, become a party to any unanimous agreement; and

(c) until notification of any approval given under clause (a) has been sent to the transferee and the transferee's name has been entered on the members register.

Dealings with registered owner

103       Subject to section 225, subsection 226(3) and section 231, where a person is named in the members register or securities register of a cooperative as a member of the cooperative or as the owner of a security of the cooperative, the cooperative or a trustee (as defined in section 164) may treat the person as a member of the cooperative or as the owner of the security, as the case may be, for all purposes.

Constructive registered owner

104       Notwithstanding section 103, a cooperative shall treat a person as the owner of a security of, membership share of or membership in the cooperative entitled to exercise all the rights of the registered owner of the security, share or membership, if the person furnishes evidence satisfactory to the cooperative that the person is

(a) where the registered owner is deceased, the executor, administrator, heir or legal representative of the heirs of the estate of the registered owner;

(b) where the registered owner is a minor, an incompetent person or a missing person, the guardian, committee, trustee, curator or tutor representing the minor, incompetent person or missing person; or

(c) where the registered owner is in liquidation or is a bankrupt, the liquidator of, or a trustee in bankruptcy for, the registered owner.

Permissible registered owner

105       If a person, other than a person described in section 104, upon whom the ownership of a security of a cooperative that is not registered in the person's name devolves by operation of law, furnishes proof of the person's authority to exercise rights or privileges in respect of the security, the cooperative shall treat the person as entitled to exercise those rights or privileges.

Limitation on duties of cooperative

106       A cooperative is not required to inquire into the existence of, or see to the performance or observance of any duty owed to a third person by, a member of the cooperative or the registered owner of any of its securities or by anyone whom it is permitted or required by section 103, 104 or 105 to treat as a member of the cooperative or as the owner or registered owner of the securities.

Minors

107       If a minor exercises any rights of a member of a cooperative or of ownership in the securities of a cooperative, no subsequent repudiation or avoidance by the minor is effective against the cooperative.

Joint owners

108       If a cooperative receives proof satisfactory to it of the death of any of the joint owners of a membership in the cooperative or of a security of the cooperative, it may treat the survivors of the joint owners as the owners of the membership or security, as the case may be.

Transmission of securities

109(1)    Subject to any applicable law relating to the collection of taxes, a person who is the executor, administrator, heir or legal representative of the heirs of the estate of a deceased registered owner of a membership share, member loan, patronage loan or security of a cooperative is entitled to become the registered owner or to designate a registered owner of the share, loan or security, if the person deposits with the cooperative or its transfer agent

(a) the original grant of probate or of letters of administration, in respect of the estate of the deceased or a copy thereof certified to be a true copy by

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

(ii) a trust company incorporated under the laws of Canada or a province, or

(iii) a lawyer or notary acting on behalf of the person; or

(b) in the case of transmission by notarial will in the Province of Quebec, a copy of the will of the deceased authenticated pursuant to the laws of that Province;

together with

(c) an affidavit or declaration in respect of the transmission made by the person, stating particulars of the transmission; and

(d) the certificate for the share, loan or security that was owned by the deceased owner, endorsed by the person and accompanied by any assurance the cooperative may require that the endorsement is genuine and effective.

Excepted transmissions

109(2)    Notwithstanding subsection (1), if the laws of the jurisdiction governing the transmission of the personal estate of a deceased owner of a membership share, member loan, patronage loan or security of a cooperative do not require a grant of probate or of letters of administration in respect of the transmission, the legal representative of the deceased owner is entitled, subject to any applicable law relating to the collection of taxes, to become the registered owner or to designate a registered owner of the share, loan or security, as the case may be, if the legal representative deposits with the cooperative or its transfer agent

(a) the certificate for the share, loan or security that was owned by the deceased owner; and

(b) reasonable proof of the governing laws, of the interest of the deceased owner in share, loan or the security and of the right of the legal representative or the person the representative designates to become the registered owner.

Right of cooperative

109(3)    Where the documents referred to in subsection (1) or (2) have been deposited with a cooperative for the purpose of the transmission of a membership share, member loan, patronage loan or security of the cooperative, the cooperative or its transfer agent shall record in the members or other securities register of the cooperative the transmission of the share, loan or security from the deceased owner to the person entitled under subsection (1) or (2) to become the registered owner of the security or to such other person as that person may designate and, thereafter, to treat the person who thus becomes a registered owner as the owner of that share, loan or security, as the case may be.

Securities register

110(1)    A cooperative that issues securities shall maintain a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series of securities

(a) the names, in alphabetical order, and the last known address of each person who owns or previously owned the security;

(b) the number of securities owned by each security owner; and

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

Location of register

110(2)    The securities register of a cooperative shall be maintained at the cooperative's registered office or at any other place in Manitoba designated by its directors.

Branch registers

110(3)    A cooperative may maintain additional branch securities registers in other places designated by its directors.

Contents of branch register

110(4)    A branch securities register of a cooperative shall only contain particulars of securities issued or transferred at the branch, and the same information shall also be recorded in the central securities register of the cooperative.

Destruction of certificates

111       A cooperative or its agent or a trustee, as defined in section 164, is not required to produce

(a) a security certificate in registered form that is cancelled, an instrument referred to in any of subsections 81(1), (2) or (3) in registered form that is cancelled or a like instrument in registered form that is cancelled, after six years after its cancellation;

(b) a security certificate in bearer form that is cancelled, an instrument referred to in any of subsections 81(1), (2) or (3) in bearer form that is cancelled or a like instrument in bearer form that is cancelled, after its cancellation; or

(c) an instrument referred to in any of subsections 81(1), (2) or (3) that has expired or a like instrument after it has expired, irrespective of its form, after the its expiration.

Agent

112       A cooperative may appoint an agent to maintain securities registers on its behalf.

Registration

113       The registration in a securities register maintained by a cooperative of the issue or transfer of an investment share of the cooperative is complete and valid registration for all purposes.

Overissue

114(1)    Subject to this section, the provisions of this Part that validate a security or compel its issue or reissue do not apply if the validation, issue or reissue of a security would result in overissue.

Rights of recipient of overissued security

114(2)    A person who is entitled to the validation or issue of a security of a cooperative may, where the validation or issue has resulted or would result in overissue

(a) if a valid security of the cooperative that is similar in all respects to the security involved in the validation or issue is reasonably available for purchase, compel the cooperative to purchase and deliver that valid security against the surrender of the entitlement of the person or the overissued security, if it has been issued to the person; and

(b) if a valid security of the cooperative that is similar in all respects to the security involved in the validation or issue is not reasonably available for purchase, recover from the cooperative an amount equal to the price that the last purchaser for value of the invalid security paid for it.

Increase in capital

114(3)    Overissued securities of a cooperative are valid from the date they were issued only if the cooperative increases the number of its authorized securities to a number equal to or greater than the number of securities previously authorized plus the number of the securities overissued.

Exemptions

115       Subsection 64(2) and sections 66, 67 and 80 do not apply to a payment or purchase by a cooperative under section 114.

Rules of action

116       In any action on or in respect of a security of a cooperative in which the validity of a security is in issue

(a) each signature on the certificate for the security or in a necessary endorsement is admitted unless specifically denied in the pleadings;

(b) a signature on the certificate for the security is presumed to be genuine and authorized but, if the effectiveness of the signature is in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature;

(c) if a signature on the certificate for the security is admitted or established, production of the certificate entitles the holder or a person claiming under the holder to recover on the security unless the other party establishes a defence or defect going to the validity of the security; and

(d) if the other party establishes a defence or defect going to the validity of the security, the holder or other person claiming under the holder has the burden of establishing that the defect is ineffective against the holder or the other person, as the case may be.

Delivery of securities

117(1)    A person who is required to deliver securities of a cooperative may, in performance of the requirement deliver any security of the cooperative of the specified class or series

(a) in bearer form;

(b) in registered form in the name of the transferee; or

(c) endorsed to the person or endorsed in blank.

Limitation

117(2)    Subsection (1) is subject to any agreement to the contrary, to any applicable Act of Parliament or the Legislature or to any applicable regulation or stock exchange rule.

Incorporation by reference

118(1)    The terms of a security of a cooperative include those stated on the certificate for the security and those incorporated by reference in the certificate to another document, an Act of Parliament or the Legislature, a regulation, a rule, or an order, to the extent that the incorporated terms do not conflict with those stated on the security.

Purchaser without notice

118(2)    Subsection (1) applies to a good faith purchaser of a security of a cooperative, but the incorporation by reference in the certificate for the security to another document , an Act, a regulation , a rule or an order is itself not notice of a defect to the purchaser even if the certificate expressly states that a person accepting it admits that notice.

Validity of security

119       A security of a cooperative is valid in the hands of a good faith purchaser.

Defence

120       Subject to section 123, the fact that something purporting to be a security of a cooperative is not genuine is a complete defence for the cooperative even against a good faith purchaser of the thing.

Other defences fail

121       All other defences of a cooperative to a claim under a security of the cooperative, including non-delivery and conditional delivery of the security or of a certificate for the security, are ineffective against a good faith purchaser.

Deemed notice

122(1)    Where a person purchases a security of a cooperative, if the security becomes stale, the purchaser is deemed to have notice of

(a) any defect in the issue of a security or the certificate for the security; and

(b) any defence of the cooperative.

Stale security

122(2)    For the purpose of subsection (1), a security of a cooperative becomes stale if

(a) the purchaser acquires the security more than two years after

(i) the day on which performance of the principal obligation evidenced by the security was due, or

(ii) the day on or after which the security is to be presented or surrendered for redemption or exchange; or

(b) the payment of money or the delivery of securities is required in order to present or surrender the security, the money or securities are available on the day for the payment or delivery and the purchaser acquires the security more than one year after that day.

Unauthorized signature

123(1)    Subject to subsection (2), an unauthorized signature on the certificate for a security of a cooperative is ineffective.

Limited effectiveness

123(2)    An unauthorized signature on the certificate for a security of a cooperative is effective in favour of a good faith purchaser of the security if the signature was made by

(a) an authenticating trustee, transfer agent or other person entrusted by the cooperative with the duty to sign the certificate for the security, or similar certificates, or to prepare them for signing; or

(b) an employee of the cooperative, or a person referred to in clause (a), whose regular duties include the handling of securities of the cooperative.

Completion of form

124       If a certificate for a security of a cooperative contains the signatures necessary for its issue or transfer but is incomplete in any other respect, any person may complete it in accordance with their authority.

Enforceability

125       A security of a cooperative that was completed incorrectly is enforceable by a good faith purchaser of the security.

Fraud

126       A completed security of a cooperative that was improperly altered, even if fraudulently altered, remains enforceable but only according to its original terms.

Guarantees

127(1)    A person who has signed a security of a cooperative as an authenticating trustee, transfer agent or other person entrusted by the cooperative with the duty to sign the security guarantees to a good faith purchaser of the security that

(a) the security is genuine;

(b) the person's acts in connection with the security are within the person's authority; and

(c) the person has reasonable grounds for believing that the security is in the form and within the amount the cooperative is authorized to issue.

Liability

127(2)    Unless agreed otherwise, a person referred to in subsection (1) does not assume any further liability for the validity of the security of a cooperative.

Acquisition of rights

128(1)    On delivery of a certificate for a security of a cooperative to a purchaser of the security, the purchaser acquires the rights in the security that the assignor or transferor had or had authority to convey.

Claim free

128(2)    A good faith purchaser of a security of a cooperative acquires it free from any adverse claim.

No better position

128(3)    A purchaser of a security of a cooperative who was a party to a fraud or illegality affecting the security or who, as a prior holder, had notice of an adverse claim does not acquire a better position by purchasing or acquiring the security from a later good faith purchaser.

Limited interests

129       A purchaser of a limited interest in a security of a cooperative acquires rights only to the extent of the interest purchased.

Deemed notice

130(1)    A purchaser of a security of a cooperative, or a broker for a seller or purchaser of the security, is deemed to have notice of an adverse claim if

(a) the security has been endorsed "for collection" or "for surrender" or for some other purpose other than transfer; or

(b) the security is in bearer form and has a statement on it that it belongs to a person other than the transferor.

Name

130(2)    For the purposes of clause (1)(b), the mere writing of a person's name on a security of a cooperative is not a statement that it belongs to the person named.

No duty to inquire

131(1)    A purchaser of a security of a cooperative, or a broker for the seller of the security or the purchaser, has no duty to inquire into the rightfulness of the sale or transfer and, subject to sections 130 and 132, has no notice of an adverse claim.

Third party holding

131(2)    Subsection (1) applies to the purchaser of a security of a cooperative or a broker for the seller of the security or the purchaser even if the purchaser or broker has notice that the security is held by a third person or is registered in the name of or endorsed by a fiduciary.

Deemed notice

132       A purchaser of a security of a cooperative or a broker for the seller of the security or the purchaser, who knows that the sale or transfer is for the personal benefit of a fiduciary and not for the benefit of the person lawfully entitled to the benefit through the fiduciary or that the sale or transfer is otherwise in breach of the fiduciary's duty, is deemed to have notice of an adverse claim.

Events not constituting adverse claim

133(1)    The following events do not constitute notice of an adverse claim in respect of a security of a cooperative, except if the security becomes stale:

(a) an event that creates a right to performance of the principal obligation evidenced by the security;

(b) an event that sets the day on or after which the security is to be presented or surrendered for redemption or exchange.

Staleness

133(2)    For the purposes of subsection (1), a security of a cooperative becomes stale if

(a) the purchaser acquires the security more than one year after

(i) the day on which performance of the principal obligation evidenced by the security was due, or

(ii) the day on or after which the security was to be presented or surrendered for redemption or exchange; or

(b) the payment of money or the delivery of securities is required in order to present or surrender the security, the money or securities are available on the day for the payment or delivery and the purchaser takes the security more than six months after that day.

Guarantee

134(1)    A person who presents a security of a cooperative for registration of transfer or for payment or exchange guarantees to the cooperative that the person is entitled to do so.

Limitation on guarantee

134(2)    A good faith purchaser of a security of a cooperative who receives a new, reissued or re-registered security and who registers a transfer guarantees only that the purchaser has no knowledge of any unauthorized signature in a necessary endorsement.

Content of guarantee

135       A person who transfers a security of a cooperative to a purchaser of the security for value guarantees to the purchaser by that transfer only that

(a) the transfer is effective and rightful;

(b) the security is genuine and has not been materially altered; and

(c) the person knows of nothing that might impair the validity of the security.

Guarantee of intermediary

136       An intermediary delivering a security of a cooperative to a purchaser who knows that the intermediary is an intermediary guarantees only the good faith of the intermediary.

Guarantee of broker

137       A broker for the seller or purchaser of a security of a cooperative gives to a customer, to the cooperative and to a purchaser the guarantees provided in sections 134, 135 and 136 and has the rights and privileges of a purchaser under those sections, and those guarantees of and in favour of the broker acting as an agent are in addition to guarantees given by the customer and guarantees given in favour of the customer.

Right to compel endorsement

138        If a registered security of a cooperative is delivered to a purchaser of the security without a necessary endorsement, the purchaser has the right to demand the endorsement and the purchaser becomes a good faith purchaser after the endorsement.

Definition of "appropriate person"

139(1)    In this section, section 140, subsections 147(1) and 155(1) and section 159, "appropriate person", in respect of the endorsement on, or the endorsing of, a security of a cooperative, means

(a) the person who is specified by the security or by special endorsement on the certificate for the security to be entitled to the security;

(b) if a person described in clause (a) is described as a fiduciary but is no longer serving as one, either that person or that person's successor;

(c) if the security or a special endorsement on the certificate for the security specifies more than one person as fiduciaries and one or more of those persons is no longer a fiduciary, the remaining fiduciary or fiduciaries, whether a successor for the departed fiduciary has been appointed or qualified;

(d) if a person described in clause (a) is an individual and is without capacity to act because of death, incompetence, minority or other incapacity, the person's fiduciary;

(e) if the security or a special endorsement on the certificate for the security specifies more than one person with right of survivorship and because of the death of one or more of them, not all of the persons can sign, the survivor or survivors;

(f) any person who has the legal power to endorse the security or to sign the endorsement on the security; or

(g) to the extent that a person described in any of clauses (a) to (f) may act through an agent, the person's authorized agent.

Time for determination

139(2)    The authority of a person signing an endorsement on a security of a cooperative is determined as of the time of signing.

Endorsement

140(1)    An endorsement of a security of a cooperative in registered form made for the purposes of an assignment or transfer of the security is made when an appropriate person signs either the certificate for the security or a separate document assigning or transferring the security, or when the signature of an appropriate person is written without more on the back of the certificate for the security.

Blank or special

140(2)    An endorsement referred to in subsection (1) may be

(a) in blank; or

(b) special.

Blank endorsement

140(3)    For the purposes of this Act an endorsement of a security of a cooperative in blank includes an endorsement of the security to bearer.

Special endorsement

140(4)    An endorsement referred to in subsection (1) is a special endorsement if it specifies the person to whom the security is to be assigned or transferred, or who has power to assign or transfer it.

Right of holder

140(5)    A holder of a security of a cooperative may convert an endorsement of the security in blank into a special endorsement.

Immunity of endorser

141       Unless otherwise agreed, the endorser of a security of a cooperative does not by the endorsement, guarantee or warrant that the security will be honoured by the cooperative.

Partial endorsement

142       An endorsement on a certificate for a security of a cooperative that purports to be an endorsement for the purpose of assigning or transferring only a part of the security representing units intended by the cooperative to be separately transferable is effective to the extent of the part of the security referred to in the endorsement.

Effect of failure by fiduciary to comply

143        Where a fiduciary endorses a security of a cooperative for the purpose of assigning or transferring the security and, in so doing, fails to comply with the document that is the source of the fiduciary's power or with the law of the jurisdiction governing the fiduciary relationship, the failure does not render the fiduciary's endorsement unauthorized for the purposes of this Part.

Effect of endorsement without delivery

144        An endorsement of a security of a cooperative does not constitute a transfer of the security until delivery of the certificate for the security on which the endorsement appears or, if the endorsement is on a separate document, until delivery of both the certificate and that document.

Endorsement in bearer form

145        An endorsement of a security of a cooperative in bearer form may give notice of an adverse claim in respect of the security under section 130 but does not otherwise affect any of the holder's rights.

Effect of unauthorized endorsement

146(1)    The owner of a security of a cooperative may assert the ineffectiveness of an endorsement of the security against the cooperative or against a purchaser of the security, other than a good faith purchaser who has in good faith received a new, reissued or re-registered security on registration of transfer, unless the owner

(a) has ratified the endorsement that the owner asserts is ineffective; or

(b) is otherwise prevented from calling into question the effectiveness of an unauthorized endorsement.

Liability of issuer

146(2)    A cooperative that registers an assignment or transfer of a security of the cooperative based on an unauthorized endorsement is liable for improper registration.

Guarantee of guarantor of signature

147(1)    A person who guarantees the signature of an endorser of a security of a cooperative guarantees that, at the time of signing, the signer was an appropriate person to endorse and the signature was genuine, but does not otherwise guarantee the rightfulness of the assignment or transfer to which the endorsement relates.

Guarantee of guarantor of endorsement

147(2)    A person who guarantees the endorsement of a security of a cooperative guarantees both the signature of the endorser and the rightfulness, in all respects, of the assignment or transfer to which the endorsement relates, but a cooperative may not require a guarantee of endorsement as a condition to registration of assignment or transfer.

Extent of liability

147(3)    A guarantee referred to in subsections (1) or (2) is made to any person who, relying on the guarantee, acquires or deals with the security to which the guarantee relates, and the guarantor is liable to the person for any loss resulting from breach of the guarantee.

Presumption of delivery

148       Delivery of a security of a cooperative to a purchaser occurs when

(a) the purchaser or a person designated by the purchaser acquires possession of the security or the certificate for the security;

(b) the purchaser's broker acquires possession of the security or a certificate for it specially endorsed to or issued in the name of the purchaser;

(c) the purchaser's broker sends the purchaser confirmation of the purchase of the security and the broker in the broker's records identifies the security, or another specific security that is identical to it, as belonging to the purchaser; or

(d) where the security is an identified security to be delivered while still in the possession of a third person, that third person acknowledges that it is held for the purchaser.

Presumption of ownership

149(1)    A purchaser is the owner of a security of a cooperative held for the purchaser by a broker, but the purchaser is not a holder of the security held by the broker unless delivery of it has occurred in accordance with clause 148(b) or (c).

Ownership of part of fungible bulk

149(2)    If a security of a cooperative is part of a fungible bulk, a purchaser of the security is the owner of the purchaser's proportionate interest in the fungible bulk.

Notice to securities broker of adverse claim

149(3)    Where a broker for a purchaser takes delivery as a holder for value of a security of a cooperative, notice of an adverse claim in respect of the security received by the broker or the purchaser after the delivery is not effective against the broker or the purchaser, except that, as between the broker and the purchaser, the purchaser may demand delivery of an equivalent security in respect of which no notice of an adverse claim has been received.

Delivery of security

150(1)    Unless agreed otherwise, if a sale of a security of a cooperative is made on a stock exchange or otherwise through brokers,

(a) the duty of the seller to deliver the security is fulfilled when the seller delivers the security to the seller's broker or to a person designated by the seller's broker or when the seller causes an acknowledgement to be made to the seller's broker that the security is held for the purchaser; and

(b) the broker, including a correspondence broker, acting for the seller fulfils that broker's duty to deliver by delivering the security or a like security to the purchaser's broker or to a person designated by the purchaser's broker or by affecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place.

Duty to deliver

150(2)    Except as provided otherwise in this section and unless agreed otherwise, a seller's duty to deliver a security of a cooperative under a contract of purchase of the security is not fulfilled until the seller delivers the security in negotiable form to the purchaser or to a person designated by the purchaser, or causes an acknowledgement to be made to the purchaser that the security is held for the purchaser.

Delivery to securities broker

150(3)    Subsection (1) does not apply to a sale of a security of a cooperative to a broker purchasing for the broker's own account, unless the sale is made on a stock exchange.

Right to reclaim possession

151(1)    A person against whom an assignment or transfer of a security of a cooperative is wrongful may, against anyone except a good faith purchaser,

(a) reclaim possession of the security or obtain possession of any new security evidencing all or part of the same rights; or

(b) claim damages.

Recovery when unauthorized endorsement

151(2)    If the assignment or transfer of a security of a cooperative is wrongful because of an unauthorized endorsement, the rightful owner of the security may reclaim possession of it or a new security even from a good faith purchaser if the ineffectiveness of the purported endorsement for the assignment or transfer is asserted against the purchaser under section 146.

Right to requisites for registration

152(1)    Unless agreed otherwise, a transferor of a security of a cooperative shall, on demand, supply a purchaser of the security with proof of the transferor's authority to transfer the security or with any other requisite that is necessary to obtain registration of the transfer of the security, but if the transfer is not for value, it is not necessary for the transferor to provide proof of authority to transfer the security unless the purchaser pays the reasonable and necessary costs of the proof and transfer.

Rescission of transfer

152(2)    If a transferor of a security of a cooperative fails to comply, within a reasonable time, with a demand under subsection (1) by the purchaser, the purchaser may reject or rescind the transfer.

Seizure of security

153       No seizure of a security of a cooperative or other interest evidenced by the security is effective until the person making the seizure obtains possession of the security or the certificate for the security.

Not liable if good faith delivery

154       An agent, bailee or depository, who in good faith has received a security of a cooperative and sold, pledged or delivered it in accordance with the instructions of the principal, bailor or depositor is not in breach of a fiduciary duty or otherwise liable even though the principal, bailor or depositor had no right to dispose of the security.

Duty to register transfer

155(1)    If a security of a cooperative in registered form or a transfer thereof is presented for registration, the cooperative shall register the security or transfer if

(a) the security is endorsed or the transfer is signed by an appropriate person;

(b) the cooperative is given reasonable assurance that the endorsement or signature is genuine and effective;

(c) the cooperative has no duty to inquire into adverse claims or has discharged that duty;

(d) all applicable laws relating to the collection of taxes have been complied with;

(e) the transfer is rightful or is to a good faith purchaser; and

(f) any fee in respect of the transfer authorized under section 94 has been paid.

Liability for delay

155(2)    A cooperative that has a duty to register a transfer of a security is liable to the person presenting it for registration for any loss resulting from any unreasonable delay in registration or from failure or refusal to register the transfer.

Assurance of endorsement

156(1)    Where a security of a cooperative or a transfer thereof is presented to the cooperative for registration, the cooperative may require an assurance that each necessary endorsement on the security or the transfer is genuine and effective by requiring a guarantee of the signature of the person endorsing the security or signing the transfer and by requiring

(a) if the endorsement or transfer is signed by an agent, reasonable assurance of authority to sign;

(b) if the endorsement or transfer is made by a fiduciary, evidence of the appointment or incumbency of the fiduciary;

(c) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and

(d) in any other case, assurance that corresponds as closely as is feasible to cases set out in clauses (a) to (c).

Sufficiency of guarantee

156(2)    For the purposes of subsection (1), a guarantee of the signature of a person given to a cooperative is sufficient if it is signed by or on behalf of a person whom the directors of the cooperative believe, or the officer of the cooperative designated by the directors for the purpose believes, on reasonable grounds, to be a responsible person.

Standards

156(3)    A cooperative may adopt reasonable standards to determine responsible persons for the purposes of subsection (2).

Evidence of appointment or incumbency

156(4)    For the purpose of satisfying a requirement of a cooperative under clause (1)(b) in respect of an endorsement on or a transfer of a security of the cooperative, the following constitutes sufficient evidence of appointment or incumbency of a fiduciary

(a) in the case of a fiduciary of a deceased security holder's estate or succession, a certified copy of the document referred to in clause 109(1)(a) or (b) and a certified copy of the document referred to in 109(1)(c) dated not earlier than 60 days before the day the security or transfer is presented for registration; and

(b) in the case of any other fiduciary, a certified copy of the document that evidences the appointment or other appropriate evidence satisfactory to the cooperative.

Standards

156(5)    A cooperative may adopt reasonable standards with respect to evidence referred to in clause (4)(b).

No notice to issuer

156(6)    Subject to section 157, a cooperative is deemed not to have notice of the content of a document referred to in subsection (4) that is obtained by the cooperative except to the extent that the contents relate directly to appointment or incumbency of a fiduciary.

Notice from additional documentation

157       If a cooperative, in relation to a transfer of its securities, demands assurance other than an assurance specified in subsection 156(1) and obtains a copy of a will, trust or partnership agreement or a by-law or similar document, the cooperative is deemed to have notice of all matters contained in the document that affect the transfer.

Limited duty of inquiry

158(1)    Where a security of a cooperative is presented to the cooperative for registration, it has a duty to inquire into adverse claims in respect of the security if the cooperative

(a) receives written notice of an adverse claim in respect of the security at a time and in a manner that provides the cooperative with a reasonable opportunity to act on the notice before the issue of a new, reissued or re-registered security and the notice discloses the name and address of the claimant, the registered owner and the issue of which the security is a part; or

(b) is deemed to have notice of an adverse claim in respect of the security from a document referred to in section 157 that it obtained and that discloses, either directly or by inference, an adverse claim in respect of the security.

Discharge of duty

158(2)    A cooperative may discharge a duty of inquiry into an adverse claim in respect of a security of the cooperative by any reasonable means, including notifying the adverse claimant by registered mail sent to the address provided by the adverse claimant or, if no such address has been provided, to the adverse claimant's residence or regular place of business, that the security or a transfer thereof has been presented for registration by a named person and that the security or transfer will be registered unless, not later than 30 days after the day the notice is sent, the cooperative

(a) is served with a restraining order or other order of the court; or

(b) is provided with an indemnity bond sufficient in the judgment of directors of the cooperative to protect the cooperative and its transfer agent and other agents from any loss that may be incurred by any of them as a result of complying with the adverse claim.

Duration of notice of adverse claim

158(3)    A written notice received by a cooperative of an adverse claim is ineffective after a day that is 12 months after the day the notice was received unless the notice is renewed in writing, in which case the notice is effective for an additional 12 months after the day the renewal is received.

Inquiry into adverse claim

159       Unless a cooperative is deemed to have notice of an adverse claim in respect of a security of the cooperative from a document referred to in section 157 that it obtained or has received notice of an adverse claim in respect of the security under subsection 158(1), if the security is presented to it for registration and is endorsed by the appropriate person, the cooperative has no duty to inquire into adverse claims and, in particular,

(a) if the security or a transfer thereof is presented to the cooperative for registration in the name of a person who is a fiduciary or who is described as a fiduciary, the cooperative is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and it may then assume, without inquiry, that the newly registered owner continues to be the fiduciary until the cooperative receives written notice that the fiduciary is no longer acting as such in respect of the security;

(b) if the security or a transfer thereof is presented to the cooperative for registration on an endorsement or transfer signed by a fiduciary, the cooperative has no duty to inquire into whether the transfer is made in compliance with the document, or with the law of the jurisdiction, governing the fiduciary relationship; and

(c) the cooperative is deemed not to have notice of the contents of a court record or any registered document even if the record or document is in its possession and the transfer is made, on an endorsement or transfer signed by a fiduciary, to the fiduciary or to the fiduciary's nominee.

Limitation on issuer's liability

160(1)    Except as provided otherwise in any applicable law relating to the collection of taxes, a cooperative is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a security of the cooperative if

(a) the necessary endorsements were on or with the security when it, or a transfer of the security, were presented to the cooperative or its transfer agent for registration; and

(b) the cooperative had no duty to inquire into adverse claims in respect of the security or had discharged that duty.

Duty of issuer on default

160(2)    If a cooperative has registered a transfer of a security of the cooperative to a person who is not entitled to it, the cooperative shall on demand deliver a like security to the owner of the security unless

(a) the cooperative is not liable because of subsection (1);

(b) the owner is not entitled, because of subsection 161(1), to assert a claim to a new security; or

(c) the delivery would result in an overissue.

Lost or stolen security

161(1)    The owner of a security of a cooperative who fails to notify the cooperative of an adverse claim in respect of the security, in writing, within a reasonable time after the owner knows of a loss, apparent destruction or wrongful acquisition, of the security is not entitled to assert against the cooperative a claim to a new security if the cooperative has registered a transfer of the security.

Duty to issue new security

161(2)    If the owner of a security of a cooperative claims that the security has been lost, destroyed or wrongfully acquired, the cooperative shall issue a new security in place of the original security if the owner

(a) so requests before the cooperative has notice that the security has been acquired by a good faith purchaser;

(b) provides the cooperative with an indemnity bond in an amount sufficient to protect the cooperative from loss arising from claims of any other person who may claim a right to or interest in the security; and

(c) satisfies any other reasonable requirements imposed by the cooperative.

Duty to register transfer

161(3)    If, after the issue under subsection (2) of a new security of a cooperative, a good faith purchaser of the original security presents the original security for registration of transfer, the cooperative shall register the transfer unless registration would result in an overissue.

Right of issuer to recover

161(4)    Where a cooperative has issued a new security of the cooperative under subsection (2), and is required, under subsection (3), to register a transfer of the security, in addition to the rights that the cooperative has under an indemnity bond, it may recover the new security issued under subsection (2) from the person to whom it was issued or any person taking under that person other than a good faith purchaser of that new security.

Duty

162       An authenticating trustee, transfer agent or other agent of a cooperative has, in respect of the issue, registration of transfer and cancellation of a security of the cooperative,

(a) a duty to the cooperative to exercise good faith and reasonable diligence;

(b) the same obligations to the holder or owner of the security as the cooperative; and

(c) the same rights, privileges and immunities, as the cooperative.

Notice to agent

163       Notice to an authenticating trustee, transfer agent or other agent of a cooperative is notice to the cooperative in respect of the functions performed by the trustee or agent, as the case may be.

PART 7

TRUST INDENTURES

Definitions

164       In this Part,

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

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

(b) the principal, interest and other moneys payable under the trust indenture become or may be declared to be payable before maturity,

but the event is not an event of default until all conditions prescribed by the trust indenture in connection with the event for the giving of notice or the lapse of time or otherwise have been satisfied; (« cas de défaut »)

"trustee" means any person appointed as trustee under the terms of a trust indenture to which a cooperative is a party and includes any successor trustee. (« fiduciaire »)

Application

165(1)    This Part applies to trust indentures if the debt obligations issued or to be issued under the trust indenture are part of a distribution to the public.

Exemptions

165(2)    The Registrar may exempt a trust indenture from the application of this Part if the trust indenture, the debt obligations issued thereunder and the security interest effected thereby are subject to the law of a province other than Manitoba, or of Canada, or a country other than Canada that is substantially equivalent to this Part.

Conflict of interest

166(1)    No person shall be appointed as trustee if there is a material conflict of interest between the person's role as trustee and the person's role in any other capacity.

Eliminating conflict of interest

166(2)    A trustee shall, within 90 days after the trustee becomes aware that a material conflict of interest exists,

(a) eliminate the conflict of interest; or

(b) resign from office.

Validity despite conflict

166(3)    A trust indenture, any debt obligations issued thereunder and a security interest effected thereby are valid notwithstanding any material conflict of interest of the trustee.

Removal of trustee

166(4)    If a trustee contravenes subsection (1) or (2), any interested person may apply to the court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit.

Qualification of trustee

167       A trustee under a trust indenture or, if more than one trustee is appointed under the indenture, at least one of them shall be a body corporate incorporated under the laws of Canada or a province of Canada and authorized to carry on the business of a trust company.

List of security holders

168(1)    The holder of a debt obligation issued by a cooperative under a trust indenture may, upon payment of a reasonable fee to the trustee under the indenture, require the trustee to furnish, within 15 days after delivering to the trustee the statutory declaration referred to in subsection (4), a list setting out

(a) the names and addresses of the registered owners of outstanding debt obligations of the cooperative;

(b) the principal amount of the outstanding debt obligations owned by each of the owners described in clause (a); and

(c) the total of the principal amounts of all the outstanding debt obligations of the cooperative;

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

Duty of issuer

168(2)    Upon the demand of a trustee under a trust indenture made by a cooperative, the cooperative shall furnish the trustee with the information required to enable the trustee to comply with subsection (1).

Corporate applicant

168(3)    If the person requiring a trustee to furnish a list under subsection (1) is a body corporate, the statutory declaration required under that subsection shall be made by a director or officer of the body corporate.

Contents of statutory declaration

168(4)    The statutory declaration required under subsection (1) shall state

(a) the name and address of the person requiring the trustee to furnish the list and, if the person is a body corporate, the address for service thereof; and

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

Use of list

168(5)    A list obtained under this section by the holder of a debt obligation issued by a cooperative under a trust indenture shall not be used by any person except in connection with

(a) an effort to influence the voting of the holders of debt obligations issued under the indenture;

(b) an offer to acquire debt obligations issued under the indenture; or

(c) any other matter relating to the debt obligations or the affairs of the cooperative or a guarantor thereof.

Evidence of compliance

169(1)    A cooperative or a guarantor of its debt obligations issued or to be issued under a trust indenture made by the cooperative shall, before doing any act referred to in clause (a), (b), or (c), furnish the trustee with evidence of compliance with the conditions in the indenture relating to

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

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

(c) the satisfaction and discharge of the indenture.

Duty of issuer or guarantor

169(2)    Upon the demand of a trustee under a trust indenture made by a cooperative, the cooperative or the guarantor of its debt obligations issued or to be issued under the indenture shall furnish the trustee with evidence of compliance with conditions in the indenture by the cooperative or guarantor in respect of any act to be done by the trustee at the request of the cooperative or guarantor.

Contents of declaration, etc.

170       Evidence required under section 169 of compliance by a cooperative or the guarantor of its debt obligations with conditions in a trust indenture made by the cooperative shall consist of

(a) a statutory declaration or certificate made by a director or an officer of the cooperative or guarantor stating that the conditions referred to in that section have been complied with; and

(b) where the trust indenture requires compliance with conditions that are subject to review

(i) by legal counsel, an opinion of legal counsel that those conditions have been complied with, and

(ii) by an auditor or accountant, an opinion or report of the auditor of the cooperative or guarantor, or such other accountant as the trustee may select, that those conditions have been complied with.

Further evidence of compliance

171       The evidence of compliance referred to in section 170 shall include a statement by the person giving the evidence

(a) declaring that the person has read and understands the conditions of the trust indenture described in section 169;

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

(c) declaring that the person has made such examination or investigation as the person believes necessary to enable the statements, or the opinions contained or expressed therein, to be made or given, as the case may be.

Trustee may require evidence of compliance

172(1)    Upon the demand of a trustee under a trust indenture made by a cooperative, the cooperative or the guarantor of its debt obligations issued under the indenture shall furnish the trustee with evidence, in such form as the trustee may require, as to compliance with any condition thereof relating to any action required or permitted to be taken by the cooperative or guarantor under the indenture.

Certificate of compliance

172(2)    Upon the demand of a trustee under a trust indenture made by a cooperative, the cooperative or the guarantor of its debt obligations issued under the indenture shall, at least once in each 12 month period beginning on the date of the indenture and at any other time, furnish the trustee with a certificate that the cooperative or the guarantor, as the case may be, has complied with all the requirements contained in the indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars of the failure.

Notice of default

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

Duty of care

174       A trustee under a trust indenture, in exercising powers and discharging duties under the indenture, shall

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

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

Reliance on statements

175       Notwithstanding section 174, a trustee under a trust indenture is not liable for any act or omission that the trustee performs or makes if the act or omission was performed or made on the basis of the trustee's reliance, in good faith, upon statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the indenture.

No exculpation

176       No term of a trust indenture made by a cooperative or of any agreement between the trustee under the indenture and the holders of debt obligations issued under the indenture or between the trustee and the cooperative or the guarantor of its debt obligations issued under the indenture shall operate to relieve the trustee from the duties imposed upon trustees under section 174.

PART 8

DIRECTORS AND BY-LAWS

Functions of directors

177       Subject to this Act and to the articles of a cooperative and any unanimous agreement of the cooperative, the directors of the cooperative shall

(a) exercise the powers of the cooperative directly or indirectly through the employees and agents of the cooperative; and

(b) direct the management of the business and affairs of the cooperative.

Number of directors

178       A cooperative shall have at least three directors or any greater minimum number that is set out in the articles.

Power to enact by-laws

179(1)    The members of a cooperative may, subject to this Act and its articles, by resolution passed at any annual meeting of the members, or any special general meeting of the members called for the purpose, enact by-laws of the cooperative not contrary to law and amend, repeal or replace any of the by-laws.

Making or amendment of by-law by directors

179(2)     Unless the by-laws of a cooperative provide otherwise, its directors may, by ordinary resolution, enact a by-law or amend a by-law of the cooperative, but only if the by-law or amendment is not contrary to a by-law enacted by the members of the cooperative.

Member approval

179(3)    The directors of a cooperative shall submit any by-law of the cooperative enacted under subsection (2), and any amendment, repeal or replacement thereof, to the members of the cooperative at their next meeting, and the members may at the meeting confirm, reject or amend the by-law, amendment, repeal or replacement.

By-law not confirmed

179(4)    If a by-law of a cooperative, or an amendment thereto, made by the directors of the cooperative is not confirmed, with or without amendments, at a meeting of its members in accordance with subsection (3), the by-law or amendment is repealed as of the day of the meeting of members of the cooperative at which it was not confirmed.

Notice required

179(5)    Where a proposal to enact, amend, repeal, replace or confirm a by-law of a cooperative is to be considered at a meeting of its members, written notice of the proposal shall be sent to each of its members with the notice of the meeting at which the proposal is to be considered.

Effect of by-law passed by members

180(1)    A by-law of a cooperative, or an amendment thereto or the repeal thereof, enacted by its members is effective from the later of the day the resolution under subsection 179(1) in respect of the by-law, amendment, or repeal is passed and the day specified in the by-law or amendment or in the resolution repealing the by-law.

Effect of by-law passed by directors

180(2)    A by-law of a cooperative, or an amendment thereto, enacted by its directors is effective from the later of the day the resolution under subsection 179(2) in respect of the by-law or amendment is passed by the directors and the day specified in the by-law or amendment, until it is confirmed, with or without amendments, under subsection 179(3) or repealed under subsection 179(4) and, if the by-law is confirmed, or confirmed as amended, it is in effect in the form in which it was so confirmed.

Where by-law not approved

180(3)    If a by-law of a cooperative, or an amendment thereto, enacted by its directors under subsection 179(2) is not submitted by the directors to the next meeting of the members of the cooperative, as required under subsection 179(3), the by-law or amendment ceases to be effective from the day that meeting is held.

New resolution of directors

180(4)    If a by-law of a cooperative, or an amendment thereto, enacted by its directors under subsection 179(2), is repealed under subsection 179(4) or ceases to be effective under subsection (3), no subsequent resolution of its directors to enact or amend a by-law that has substantially the same purpose or effect is effective until it is confirmed, or confirmed as amended, by the members of the cooperative.

Proposal of by-law

181       A member of a cooperative may, in accordance with section 230, make a proposal to enact, amend, repeal or replace a by-law of the cooperative.

Organizational meeting

182(1)    After the issue of the certificate of incorporation of a cooperative, a meeting of its directors shall be held at which the directors may

(a) adopt forms of security certificates and corporate records for the cooperative;

(b) authorize the issue of securities of the cooperative;

(c) admit persons to membership in the cooperative and issue or authorize the issue of membership shares and member loan certificates, as the case requires, to those persons;

(d) appoint officers of the cooperative;

(e) appoint an individual or firm of accountants as auditor of the cooperative to hold office until the first meeting of the members;

(f) make banking or other like financial arrangements for the cooperative; and

(g) transact any other business necessary to organize the cooperative.

Calling meeting

182(2)    An incorporator or a director of a cooperative may call the meeting of its directors referred to in subsection (1) by giving not less than five days notice thereof by mail to each of its directors, and the notice shall state the time and place of the meeting.

Directors to be members

183(1)    All directors of a cooperative, other than its directors elected by its shareholders, shall be members of the cooperative or representatives of its members that are entities.

Where shareholders elect directors

183(2)    Where the shareholders of a cooperative have the right to elect one or more of its directors, not less than 80% of the directors of the cooperative, or any greater percentage that is provided for by its articles, shall be members of the cooperative or representatives of its members that are entities.

Qualifications of directors

184(1)    A person is not qualified to be a director of a cooperative if the person

(a) is not an individual;

(b) is less than 18 years of age;

(c) is of unsound mind and has been so found by a court in Canada or elsewhere; or

(d) is bankrupt.

Additional qualifications

184(2)     A cooperative may provide in its by-laws for qualifications or disqualifications of its directors that are in addition to those set out in subsection (1) and that are consistent with applicable laws in respect of human rights.

Status of directors

184(3)    Unless a cooperative is a worker cooperative, a majority of its directors shall be individuals who are not full-time officers or employees of the cooperative.

Resident in Canada

184(4)    A majority of the directors of a cooperative shall be resident in Canada.

Terms of office

185       Each director of a cooperative named in its articles holds office from the issue of the certificate of its incorporation until the first meeting of its members.

Election of directors

186(1)    The members of a cooperative shall, by ordinary resolution at the first meeting of its members and at each succeeding annual meeting of its members at which an election of directors of the cooperative is required, elect directors to hold office for a term expiring not later than the close of the third annual meeting of its members following the election.

Staggered terms

186(2)    It is not necessary that all directors of a cooperative elected at a meeting of its members hold office for the same term.

No stated term

186(3)    A director of a cooperative not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of its members following the meeting at which the director is elected.

Incumbent directors

186(4)    Notwithstanding section 185 and subsections (1) and (3), if directors of a cooperative are not elected at a meeting of its members, its incumbent directors continue in office until their successors are elected.

Consent to nomination

186(5)    An election or appointment of an individual as a director of a cooperative is not valid unless

(a) not later than ten days after the election or appointment, the individual consents in writing to the election or appointment; or

(b) if the individual is elected or appointed at a meeting which the individual attended, the individual did not refuse at the meeting to act as a director of the cooperative.

Consent in writing

186(6)    A written consent given under clause (5)(a) by an individual to the individual's election or appointment as a director of a cooperative is effective during the term of office for which the individual was elected or appointed, unless the consent states that it is valid until

(a) a day specified in the consent; or

(b) the individual delivers a written revocation of the consent to the cooperative;

in which case, the individual's term of office ends on the day so specified or the day the revocation is delivered to the cooperative.

Secret ballot

187(1)    Directors of a cooperative shall be elected by secret ballot if the number of nominees in an election for directors exceeds the number of directors to be elected at the election.

Casting ballot

187(2)    In an election for directors of a cooperative, a ballot that is cast for the election of more than the number of directors to be elected is null and void.

Determining election of directors

187(3)    In an election for directors of a cooperative, the individual who receives the greatest number of votes in the election is elected a director and the other individuals who receive, in descending order, the next greatest number of votes are also elected director, until the number of directors to be elected has been elected.

Run-off elections

187(4)    If in an election for directors of a cooperative held at a meeting of the cooperative, two or more individuals receive an equal number of votes for the last vacancy in the directors, the chairperson of the meeting shall, if it is practical to do so, arrange for a run-off election to be held at the meeting in accordance with subsection (1) to decide which of those individuals is to be elected as a director to fill that vacancy.

Where run-off election not practical

187(5)    If in an election for directors of a cooperative held at a meeting of the cooperative, two or more individuals receive an equal number of votes for the last vacancy in the directors and it is not practical to hold under subsection (4) a run-off election at the meeting, the directors of the cooperative who have already been elected in the election and any directors of the cooperative whose terms of office do not end at or before the end of the meeting at which the election is held shall determine which of the two individuals is to be elected.

Determining election with staggard terms

187(6)    If in an election for directors of a cooperative, individuals are to be elected for different terms of office, the individual who receives the greatest number of votes in the election is elected for the longest term, and the other individuals who receive, in descending order, the next greatest number of votes are elected to the longest remaining terms to be filled, until the number of directors to be elected have been elected.

Run-off elections

187(7)    If in an election for directors of a cooperative in which individuals are to be elected for different terms of office held at a meeting of the cooperative, two or more individuals receive an equal number of votes for the last position of a particular term, the chairperson of the meeting shall, if it is practical to do so, arrange for a run-off election to be held at the meeting in accordance with subsection (1) to decide which of those individuals is to be elected as a director for the particular term.

Where run-off election not practical

187(8)    If in an election for directors of a cooperative in which individuals are to be elected for different terms of office held at a meeting of the cooperative, two or more individuals receive an equal number of votes for the last position of a particular term and it is not practical to hold under subsection (7) a run-off election at the meeting, the directors of the cooperative, other than those individuals, who have already been elected as directors of the cooperative at the election or whose terms of office do not end at or before the end of the meeting at which the election is held shall determine which of the two individuals is to be elected for the longer term.

Separate election

188       If shareholders of a cooperative have a right to elect one or more directors, they shall vote at an election that is separate from the election for directors of the cooperative to be elected by the members of the cooperative.

Election of directors

189(1)    If the holders of a class or series of investment shares of a cooperative have, under its articles, a right to elect or appoint one or more directors, or have a right to elect or appoint one or more directors because of an event that has occurred and is continuing or because of a condition that has been fulfilled, the directors shall, for the purpose of electing or appointing the director or directors, call

(a) a special meeting of the holders of the class or series of investment shares, to be held on a day that is not more than six months, or such shorter period as may be specified in the articles, after the day on which investment shares of the class or series are first issued or after the event has occurred or the condition has been fulfilled, as the case may be; and

(b) an annual meeting of those holders for every subsequent year.

Cumulative voting

189(2)    If the articles of a cooperative so provide, its directors who are to be elected by holders of its investment shares may be elected by cumulative voting, and if they do

(a) the articles shall require a fixed number of its directors to be elected by the holders of its investment shares, and not a minimum or maximum number of directors;

(b) each shareholder of the cooperative who is entitled to vote at an election of its directors by holders of investment shares has the right to cast a number of votes calculated by the following formula:

A = B x C

In this formula

A   is the number of votes that may be cast,

B   is the number of investment shares that the shareholder holds and that entitle the shareholder to a vote in the election,

C   is the number of directors to be elected in the election;

(c) a shareholder of the cooperative who is entitled to cast more than one vote at an election of the directors may cast all the votes in favour of one candidate or distribute them among the candidates in any manner;

(d) a separate vote of shareholders of the cooperative shall be taken with respect to each candidate nominated for director in the election unless a resolution is passed unanimously permitting two or more persons to be elected by a single vote;

(e) if a shareholder of the cooperative has voted for more than one candidate in the election without specifying the distribution of votes among the candidates, the shareholder is deemed to have distributed the shareholder's votes equally among the candidates for whom the shareholder voted;

(f) if the number of candidates nominated for election as director in the election exceeds the number of positions to be filled, the candidates who receive the least number of votes are eliminated until the number of candidates remaining equals the number of positions to be filled;

(g) each director of the cooperative elected by its shareholders ceases to hold office at the close of the first annual meeting of the shareholders entitled to elect that director held after their election;

(h) a director of the cooperative who was elected by its shareholders may not be removed from office if the votes cast against the removal of the director would be sufficient to elect the director in an election by cumulative voting in which

(i) the same total number of votes were cast, and

(ii) the number of directors required by the articles to be elected by the shareholders were then being elected; and

(i) the number of directors of the cooperative required by the articles to be elected by its shareholders may not be decreased if the votes cast by shareholders against the resolution to decrease that number would be sufficient to elect a director of the cooperative to be elected by the shareholders in an election by cumulative voting in which

(i) the same number of votes were cast, and

(ii) the number of directors required by the articles to be elected, before the decrease, were then being elected.

Ceasing to hold office

190(1)    A director of a cooperative ceases to hold office when the director

(a) dies;

(b) resigns;

(c) is removed from office in accordance with section 191; or

(d) becomes disqualified under subsection 184(1) or under the by-laws of the cooperative.

Effective date of resignation

190(2)    The resignation of a director of a cooperative shall be in writing signed by the director and becomes effective at the time the written resignation is received by the cooperative, or at the time specified in the resignation, whichever is later.

Removal of directors

191(1)    Subject to clause 189(2)(h), a director of a cooperative may be removed from office by ordinary resolution at a special meeting of the persons who are entitled to vote in an election or appointment of that director.

Vacancy

191(2)    The vacancy created by the removal of a director of a cooperative may be filled at the meeting at which the director was removed or, if not so filled, may be filled under section 194.

Right to attend meetings

192       A director of a cooperative is entitled to receive notice of, to attend and to be heard at every meeting of the cooperative.

Resignation statement

193(1)    A director of a cooperative who resigns is entitled to submit to the cooperative a written statement giving the reasons for the resignation.

Opposition statement

193(2)    A director of a cooperative who learns of

(a) a meeting of the cooperative called for the purpose of removing the director, or

(b) a meeting of the cooperative, or of its directors, at which another person is to be appointed or elected to succeed or replace the director,

is entitled to attend and address the meeting, or to submit a written statement to the cooperative, giving reasons why the director opposes any action or resolution proposed at the meeting for a purpose described in clause (a) or (b).

Circulation of statement

193(3)    When a cooperative receives a statement under subsection (1) or (2) it shall ensure that a copy of it is sent without delay to the Registrar and to every person who is entitled to receive notice

(a) in the case of a statement received under subsection (1) from a resigning director, of the meeting of the cooperative that would be required to replace the director; and

(b) in the case of a statement received under subsection (2) from a director, of the meeting of the cooperative referred to in that subsection.

Immunity for statement

193(4)    A cooperative or person acting on its behalf does not incur any liability solely because of circulating a director's statement in compliance with subsection (3).

Vacancy on board

194(1)    Subject to subsections (3) and (8), if there is a vacancy on the board of directors of a cooperative, except a vacancy caused by an increase in the number or minimum number of its directors or by a failure to elect or appoint the number of directors required by its articles, and there is still a quorum on the board, the remaining directors may

(a) continue to fulfil their functions without filing the vacancy; or

(b) subject to subsection (8), appoint a director to fill the vacancy.

Vacancy among candidates

194(2)    If a meeting of a cooperative at which directors are to be elected or appointed fails to elect or appoint the number or minimum number of directors required by its articles because of the disqualification, incapacity or death of any candidate, the directors elected or appointed at that meeting plus the incumbent directors, if any, may exercise all the powers of directors if the number of directors so elected or appointed plus the number of incumbent directors, if any, whose term did not expire at the close of the meeting constitutes a quorum.

Special meeting

194(3)    The articles of a cooperative may provide that if there is a vacancy on its board of directors, the remaining directors shall call a special meeting of the persons who are entitled to vote for the purpose of electing or appointing directors to fill the vacancy.

Calling meeting

194(4)    If there is not a quorum of the directors of a cooperative, or if there is a failure to elect the number or minimum number of directors required by its articles, its directors then in office shall forthwith call a special meeting of the persons who are entitled to vote at an election of a director to fill the vacancy for the purpose of filling the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any person who is entitled to vote at an election of a director to fill the vacancy.

Vacant board

194(5)    If there are no directors on the board of directors of a cooperative, any person who is entitled to vote at an election of a director to fill any of the vacancies may call a special meeting of the cooperative to elect directors to fill the vacancies.

Special directors

194(6)    Subject to subsection (3), if there is a vacancy in the office of a director of a cooperative and the vacancy is required to be filled by an individual elected by a vote of either a division of the members or a class of the holders of the investment shares or a class of investment shares,

(a) any remaining directors elected or appointed by that division or class may fill the vacancy under subsection (1); or

(b) if there are no such remaining directors, any member of the division or class may call a meeting under subsection (5).

Unexpired term

194(7)    Unless the by-laws of a cooperative provide otherwise, a director of the cooperative who is elected or appointed to fill a vacancy holds office for the unexpired term of the predecessor in the office.

Effect of decrease

195       If the articles of a cooperative are amended to decrease the number of its directors, the terms of any of its incumbent directors are not affected.

Notice of change of directors

196(1)    Within 15 days after a change is made among its directors, a cooperative shall send to the Registrar a notice in a form approved by the Registrar setting out the change, and the Registrar shall file the notice.

Effect of notice

196(2)    A director named in the articles or in a notice sent by the cooperative to the Registrar under subsection(1) and filed by the Registrar is deemed for the purposes of this Act to be a director of the cooperative referred to in the notice.

Meeting of directors

197       Unless the articles or by-laws of a cooperative otherwise provide, its directors may meet at such place and upon such notice as the directors may determine.

Quorum

198(1)    Unless the articles, the by-laws or a unanimous agreement of a cooperative provides for a greater proportion, a majority of the number or minimum number of its directors, subject to section 199, constitutes a quorum at any meeting of directors and a majority of the members of a committee of its directors constitutes a quorum at any meeting of the committee.

Quorum may act

198(2)    Notwithstanding any vacancy among the directors of a cooperative, a quorum of its directors may exercise all the powers of the directors.

Qualifications of majority

199(1)    To constitute a quorum at a meeting of the directors of a cooperative, a majority of the directors at the meeting must be

(a) resident in Canada; and

(b) members of the cooperative or representatives of members that are entities.

Exception

199(2)    Notwithstanding subsection (1), a meeting of the directors of a cooperative may be held without the required majority of directors who are resident in Canada if

(a) a director who is resident in Canada and who is not present approves, in writing or by telephonic, electronic or other communication facilities, the business transacted at the meeting; and

(b) the required majority would have been present had that director been present at the meeting.

Notice of meeting

200(1)    A notice of a meeting of directors of a cooperative shall specify any matter referred to in subsection 202(3) that is to be dealt with at the meeting but, unless the by-laws of the cooperative otherwise provide, the notice need not specify any other matter that is to be dealt with at the meeting.

Waiver of notice

200(2)    A director of a cooperative may in any manner waive notice of a meeting of the directors of the cooperative, and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except where the director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called.

Where notice not required

200(3)    There is no need to give notice for a meeting of the directors of a cooperative that

(a) is the continuation of a meeting of directors that is adjourned;

(b) immediately follows an annual meeting of the cooperative; or

(c) immediately follows a special meeting of the cooperative that was called for the purpose of electing directors.

Electronic meeting

201(1)    Subject to the by-laws of the cooperative, a director of the cooperative may attend a meeting of the directors of the cooperative by means of a telephonic, electronic or other communication facility if the facility permits all persons participating in the meeting to communicate adequately with each other during the meeting.

Presence

201(2)    A director of a cooperative participating in a meeting of its directors by a means referred to in subsection (1) is deemed to be present at the meeting.

Delegation

202(1)    The directors of a cooperative may appoint from their number a managing director of the cooperative or a committee of directors.

Residency

202(2)    The managing director of a cooperative shall be resident in Canada.

Delegation

202(3)    The directors of a cooperative may delegate to its managing director, or to a committee composed of at least three of its directors, any powers of the directors, except the power to

(a) submit to the members or shareholders of the cooperative any question or matter requiring the approval of the members or shareholders;

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

(c) issue securities of the cooperative, except in the manner and on the terms authorized by the directors;

(d) declare dividends on shares, interest on member loans or patronage returns;

(e) purchase, redeem or otherwise acquire shares issued by the cooperative;

(f) approve any financial statement of the cooperative of a kind referred to in section 245;

(g) enact, amend or repeal by-laws of the cooperative;

(h) make decisions that by this Act, its articles or a unanimous agreement of the cooperative are required to be made by a vote of greater than a majority of the directors;

(i) authorize the payment of commissions referred to in section 46; or

(j) approve a management proxy circular referred to in Part 10.

Powers

202(4)    A managing director of a cooperative or a committee of its directors referred to in subsection (1) may exercise the powers that have been delegated to the managing director or the committee, as the case may be, subject to any restrictions imposed by the directors.

Membership on committee

202(5)    A director of a cooperative who is appointed to a committee of its directors may remain on the committee until the appointment is revoked or that individual ceases to be a director.

Duties

202(6)    A committee of the directors of a cooperative appointed under this section shall

(a) fix its quorum at not less than a majority of its members;

(b) keep minutes of its proceedings; and

(c) report, at each meeting of the directors of the cooperative, on the proceedings of the committee since the last meeting of the directors.

Validity of acts of directors and officers

203       An act of a director or officer of a cooperative is valid notwithstanding any irregularity in the election or appointment, or any defect in the qualifications, of the director or officer.

Resolution in lieu of meeting

204(1)    A resolution in writing, signed by all the directors of a cooperative entitled to vote on that resolution at a meeting of its directors or a committee of its directors, is as valid as if it had been passed at a meeting of its directors or a committee of its directors and is effective from the day specified in the resolution, but that day shall not be before the day on which the first director to sign the resolution signed it.

Keeping resolution

204(2)    A copy of every resolution of the directors of a cooperative, or of a committee of its directors, referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or the committee of directors, as the case may be.

Liability of directors

205(1)    Directors of a cooperative who vote for or consent to a resolution authorizing the issue of a share of the cooperative for a consideration other than money are jointly and severally liable to the cooperative to make good any amount by which the value of the consideration received is less than the fair equivalent of the money that the cooperative would have received if the share had been issued for money on the day the resolution is passed.

Further liability

205(2)    Directors of a cooperative who vote for or consent to resolutions authorizing any of the following matters are jointly and severally liable to restore to the cooperative any amounts so distributed or paid and not otherwise recovered by the cooperative:

(a) the redemption or other acquisition of shares of the cooperative or the repayment of its member loans or patronage loans contrary to this Act;

(b) the payment of a commission contrary to this Act;

(c) the payment of a dividend, patronage return or interest contrary to this Act or its articles;

(d) the granting of financial assistance contrary to this Act;

(e) the payment of an indemnity contrary to this Act;

(f) any other payment contrary to this Act.

Contribution

205(3)    A director of a cooperative who satisfies a judgment rendered in respect of the director's liability under this section is entitled to contribution from the other directors of the cooperative who voted for or consented to the unlawful act upon which the judgment was founded.

Recovery

205(4)    A director of a cooperative who is liable under subsection (2) is entitled to apply to the court for an order compelling a member or shareholder of the cooperative, or other recipient, to pay or deliver to the director any money or property referred to in clauses (2)(a) to (f).

Order of court

205(5)    Upon an application under subsection (4) by a director of a cooperative, the court may, if it is satisfied that it is equitable to do so,

(a) order any person to pay or deliver to the director any money or property referred to in clauses (2)(a) to (f) that was paid or distributed to that person;

(b) order the cooperative to return or issue shares to a person from whom the cooperative has purchased, redeemed or otherwise acquired shares;

(c) order any person to repay to the cooperative the amount of a member loan or patronage loan that was repaid; or

(d) make any further order that it thinks fit.

No liability

205(6)    A director of a cooperative is not liable under subsection (1) in respect of the issue of a share if it is proven that the director did not know and could not reasonably have known that the share was issued for a consideration the value of which was less than the fair equivalent of the money that the cooperative would have received if the share had been issued for money.

Limitation period

205(7)    An action to enforce a liability imposed by this section may not be commenced after two years from the day the resolution authorizing the thing complained of was passed.

Liability of directors for wages

206(1)    Where a cooperative has failed to pay to an employee of the cooperative wages or salary for services performed by the employee for the cooperative in any period not exceeding six months, each individual who was a director of the cooperative in that period is jointly and severally liable, together with the cooperative and the other directors of the cooperative in that period, for payment of the wages or salary payable to the employee for the period, or that portion of those wages or that salary that was earned by the employee while the individual was a director of the cooperative.

Conditions precedent to liability

206(2)    A director of a cooperative is not liable under subsection (1) unless

(a) the cooperative has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part;

(b) the cooperative has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proved within six months after the earlier of

(i) the day the liquidation and dissolution proceedings are commenced, and

(ii) the day the cooperative is dissolved; or

(c) the cooperative has made an assignment, or a receiving order has been made against it under the Bankruptcy and Insolvency Act (Canada), and a claim for the debt has been proved within six months after the date of the assignment or receiving order.

Limitation period

206(3)    An individual is not liable under this section because of being or having been a director of a cooperative unless the individual is sued for a debt referred to in subsection (1) while the individual is a director of the cooperative or within two years after ceasing to be a director.

Amount due after execution

206(4)    Where the execution referred to in clause (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after applying the proceeds of the execution to the debt.

Subrogation

206(5)    Where a director of a cooperative pays a debt referred to in subsection (1) that is proved in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to and, where the employee has obtained a judgment against the cooperative for the debt, is entitled to an assignment of the judgment.

Contribution

206(6)     A director of a cooperative who pays a debt referred to in subsection (1) is entitled to contribution from the other directors of the cooperative who were liable for the debt.

Disclosure of director's interest in contract

207(1)    A director or officer of a cooperative who

(a) is a party to a material contract or proposed material contract with the cooperative; or

(b) is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the cooperative;

shall disclose in writing to the cooperative or request to have entered in the minutes of meetings of its directors the nature and extent of the director's or officer's interest.

Exemption

207(2)    This section does not require the disclosure of an interest in any contract that is available to and customarily entered into between the cooperative and its members, if the contract is on the same terms as are generally available to its members.

Time of disclosure for director

207(3)    The disclosure required by subsection (1) shall be made, in the case of a director of a cooperative,

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

(b) if the director was not then interested in a proposed contract, at the first meeting after the director becomes so interested;

(c) if the director becomes interested after a contract is made, at the first meeting after the director becomes so interested;

(d) if an individual who is interested in a contract later becomes a director of the cooperative, at the first meeting after the individual becomes a director; or

(e) if there is a material change in the director's interest in the contract, transaction, proposed contract or proposed transaction, at the first meeting after the change.

Time of disclosure for officer

207(4)    The disclosure required by subsection (1) shall be made, in the case of an officer of a cooperative who is not a director of the cooperative,

(a) forthwith after the officer becomes aware that the contract or proposed contract is to be considered or has been considered at a meeting of the directors of the cooperative;

(b) if the officer becomes interested after a contract is made, forthwith after the officer becomes so interested; or

(c) if an individual who is interested in a contract later becomes an officer of the cooperative, forthwith after the individual becomes an officer.

Time of disclosure for director or officer

207(5)    If a material contract or proposed material contract with a cooperative is one that, in the ordinary course of the cooperative's business, would not require approval by its directors or members, a director or officer of the cooperative shall disclose in writing to the cooperative, or request to have entered in the minutes of meetings of its directors, the nature and extent of the director's or officer's interest forthwith after the director or officer becomes aware of the contract or proposed contract.

Access

207(6)    The members and shareholders of a cooperative may, during the usual business hours of the cooperative, examine the portions of minutes of meetings of its directors, or other documents of the cooperative, that contain disclosures under this section or a general notice referred to in section 209.

Exception

207(7)    The members and shareholders of a cooperative may, by unanimous agreement, modify the procedural requirements of this section in so far as they relate to the cooperative.

Limitation on voting

208(1)    A director of a cooperative who is a party to a material contract or proposed material contract with the cooperative, or is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the cooperative, shall not vote on any resolution to approve the contract, unless the contract is

(a) an arrangement by way of security for money lent to or obligations undertaken by the director for the benefit of the cooperative or its subsidiary;

(b) a contract relating primarily to the director's remuneration as a director, officer, employee or agent of the cooperative or its subsidiary; or

(c) a contract for indemnity or insurance under section 214.

Approval by members

208(2)    Where a director of a cooperative who is described in subsection 207(1) votes on a resolution to approve a contract that is not a contract described in clause (1)(a), (b) or (c), the resolution is not valid unless

(a) notice is given to all the members of the cooperative declaring and disclosing in reasonable detail the nature and extent of the director's interest in the contract or transaction; and

(b) the resolution is approved by not less than 2/3 of the votes of all the members of the cooperative.

Continuing disclosure

209       For the purposes of section 207, a general notice by an individual who is a director or officer of a cooperative to its directors, declaring that the individual is a director or officer of or has a material interest in a person and is to be regarded as interested in any contract made by the cooperative with that person, is a sufficient disclosure of interest in relation to any contract so made.

Avoidance standards

210(1)     A material contract between a cooperative and one or more individuals who are directors or officers of the cooperative, or between a cooperative and another person of which an individual who is a director or officer of the cooperative is a director or officer or in which the individual has a material interest, is neither void nor voidable solely because

(a) of that relationship; or

(b) the individual is present at or is counted to determine the presence of a quorum at a meeting of directors of the cooperative or committee of its directors at which the contract was authorized;

if the individual disclosed the individual's interest in accordance with section 207 or 209, and the contract was approved by the directors and it was reasonable and fair to the cooperative at the time it was approved.

Application to court

210(2)    Where a director or officer of a cooperative fails to disclose an interest of the director or officer in a material contract in accordance with section 207 or 209, the court may, upon the application of the cooperative or a member or shareholder of the cooperative, set aside the contract on such terms as it thinks fit.

Officers

211       Subject to its articles, its by-laws and any unanimous agreement of the cooperative, the directors of a cooperative may

(a) designate the offices of the cooperative;

(b) specify the powers and duties of the incumbent of each office;

(c) appoint an individual of full capacity, including a director, to be an officer of the cooperative;

(d) appoint an individual to hold more than one office; and

(e) delegate to its officers the power to manage the business and affairs of the cooperative, except a power referred to in subsection 202(3).

Duty of care of directors and officers

212(1)    Every director and officer of a cooperative, in exercising the powers and discharging the duties of office, shall

(a) act honestly and in good faith with a view to the best interests of the cooperative; and

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

Duty to comply

212(2)    Every director and officer of a cooperative shall comply with this Act and the regulations, its articles and by-laws and any unanimous agreement of the cooperative.

No exculpation

212(3)    A director or officer of a cooperative is not relieved from the duty to act in accordance with this Act and the regulations, or from liability for non-compliance with this Act or the regulations, by any provision in a contract, the articles or by-laws of the cooperative or a unanimous agreement or a resolution of the cooperative.

Interpretation

212(4)    This section is in addition to, and not in derogation of, any enactment or rule of law relating to the duty or liability of directors or officers of a cooperative.

Dissent

213(1)    A director of a cooperative who is present at a meeting of its directors or of a committee of its directors is deemed to have consented to any resolution passed or action taken at the meeting, unless

(a) the director's dissent from the resolution or action is entered in the minutes of the meeting or the director requests that the dissent be entered in the minutes;

(b) the director sends a written dissent from the resolution or action to the secretary of the meeting before the meeting is adjourned; or

(c) the director sends a written dissent from the resolution or action by registered mail or delivers it to the registered office of the cooperative immediately after the meeting is adjourned.

Loss of right to dissent

213(2)    A director of a cooperative who votes for or consents to a resolution or action is not entitled to dissent under subsection (1) from the resolution or action.

Dissent of absent director

213(3)    A director of a cooperative who was not present at a meeting at which a resolution was passed or action taken is deemed to have consented to the resolution or action unless within seven days after becoming aware of the resolution or action the director

(a) causes the director's dissent in writing from the resolution or action to be placed with the minutes of the meeting; or

(b) sends the director's dissent in writing from the resolution or action by registered mail or delivers it to the registered office of the cooperative.

Reliance on statements

213(4)    A director of a cooperative is not liable under section 205, 206 or 212 if the director relies in good faith on

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

(b) a report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to the report.

Indemnification

214(1)    A cooperative may indemnify an individual who is a director or officer of the cooperative or a former director or officer of the cooperative, or who acts or acted at the cooperative's request as a director or officer of a body corporate of which the cooperative is or was a member, shareholder or creditor, and the individual's heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal or administrative action or proceeding (except an action or proceeding brought by or on behalf of the cooperative or the body corporate to procure a judgment in its favour) to which the individual is made a party because of being or having been a director or officer of the cooperative or body corporate, if

(a) the individual acted honestly and in good faith with a view to the best interests of the cooperative or the body corporate of which the individual was a director or officer; and

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

Advance of costs

214(2)    A cooperative may advance moneys to an individual referred to in subsection (1) for the costs of a proceeding referred to in that subsection, and the individual shall repay the moneys if the court determines that the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

Indemnification in derivative actions

214(3)    A cooperative may with the approval of the court indemnify an individual referred to in subsection (1) or advance to the individual costs under subsection (2) in respect of an action by or on behalf of the cooperative, or a body corporate of which the cooperative is or was a member, shareholder or creditor, to procure a judgment in its favour, to which the individual is made a party because of being or having been a director or an officer of the cooperative or body corporate, against all costs, charges and expenses reasonably incurred by the individual in connection with the action if the individual fulfils the conditions set out in clauses (1)(a) and (b).

Right to indemnify

214(4)    Notwithstanding anything in this section, a cooperative shall indemnify an individual referred to in subsection (1) who has been substantially successful in the defence of any civil, criminal or administrative action or proceeding to which the individual is made a party because of being or having been a director or officer of the cooperative, or of a body corporate of which the cooperative is or was a member, shareholder or creditor, against all costs, charges and expenses reasonably incurred by the individual in respect of the action or proceeding.

Directors' and officers' insurance

214(5)    A cooperative may purchase and maintain insurance for the benefit of any individual referred to in subsection (1) against any liability incurred by the individual

(a) as a director or officer of the cooperative, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the cooperative; or

(b) as a director or officer of another entity where the individual acts or acted in that capacity at the request of the cooperative, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

Application to court

215(1)     A cooperative or an individual referred to in subsection 214(1) may apply to the court for an order approving an indemnity under section 214, and the court may so order and make any further order it thinks fit.

Notice to interested persons

215(2)    Upon an application under subsection (1), the court may order notice to be given to any interested person, and that person is entitled to appear and be heard in person or by counsel.

Remuneration

216       Unless its articles or by-laws, or a unanimous agreement of the cooperative, provide otherwise, the directors of a cooperative may fix the remuneration of its directors, officers and employees.

Restricting powers of directors

217(1)    A provision in the articles of a cooperative, or in a unanimous agreement of the cooperative, that restricts, in whole or in part, the discretion or powers of its directors to manage, or supervise the management of, the business and affairs of the cooperative, is valid, if

(a) the cooperative continues to comply with section 178; and

(b) the discretion and powers that the directors are prevented from exercising by the restriction are vested in members of the cooperative.

Deemed unanimous agreement

217(2)    For the purpose of subsection (1), an agreement that would be a unanimous agreement of a cooperative except that a person who is neither a member nor a shareholder of the cooperative is a party to the agreement is deemed to be a unanimous agreement of the cooperative.

Investment shareholders

217(3)    Notwithstanding subsection 98(2) but subject to this section, a purchaser or transferee of an investment share in a cooperative that is subject to a unanimous agreement is deemed to be party to that agreement.

Where no notice given

217(4)    If notice is not given to the purchaser or transferee of an investment share of a cooperative of the existence of a unanimous agreement of the cooperative, the purchaser or transferee may, not later than the day the purchaser or transferee becomes aware of the existence of the agreement, rescind the transaction by which the purchaser or transferee acquired the share.

Rights of members

217(5)    To the extent that a provision in the articles of a cooperative, or in a unanimous agreement of the cooperative, restricts the powers of its directors to manage, or supervise the management of, its business and affairs, members who are given that power to manage or supervise the management of its business and affairs have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and its directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 206, to the same extent.

Provisions re meetings

217(6)    A unanimous agreement of a cooperative may contain provisions respecting the rules and procedures governing meetings of its members, shareholders or directors under this Act and provisions that eliminate the need for annual meetings of shareholders and meetings of directors.

Documents

217(7)    If there is to be no annual meeting of the shareholders of a cooperative because of a provision in a unanimous agreement of the cooperative, the cooperative shall send a copy of the documents referred to in section 257 to any shareholder who requests it.

Notice of unanimous agreement

217(8)    Where a unanimous agreement of a cooperative is executed or terminated, the cooperative shall, not later than 15 days after it is so executed or terminated, send to the Registrar a notice, in a form approved by the Registrar, of the execution, with a copy of the agreement, or the termination, as the case may be.

PART 9

MEMBERS AND SHAREHOLDERS

By-laws govern

218       Subject to this Act and any provision in its articles, membership in a cooperative is governed by its by-laws.

Incorporators become members

219(1)    Each incorporator of a cooperative who has subscribed for one share in the cooperative or has paid a membership fee, if any, to the cooperative shall, on the effective date of the certificate of incorporation issued in respect of the cooperative, be entered on the members' register.

Minimum share requirement

219(2)    Where the by-laws of a cooperative approved at the first meeting of its members require an individual to own more that one membership share to become a member of the cooperative, incorporators who do not already own the required minimum number of membership shares must purchase additional membership shares to the required number to remain a member of the cooperative.

Application and approval

219(3)    Unless the by-laws of a cooperative otherwise provide, no person, other than an incorporator described in subsection (1) or a member of a body corporate mentioned in section 315, becomes a member of the cooperative, unless

(a) a written application for membership in the cooperative submitted by the person has been approved by resolution of its directors or by a person authorized by such a resolution to approve membership applications; and

(b) the person holds the minimum number of membership shares in the cooperative, or has paid the membership fee, specified in the by-laws for membership in the cooperative and has complied with all other requirements for membership specified in the by-laws of the cooperative.

When membership effective

219(4)     If all the conditions set out in subsection (3) have been met within 6 months after the day on which the cooperative receives the application of a person for membership in the cooperative, its directors, or the person authorized by its directors to approve the application, may determine that the person's membership is effective on any day not before the day the application was received or the deemed application under the by-laws was deemed to be received, or on any day after that day within the 6 months and, if no determination is so made, the membership is effective on the day the application is approved.

Age qualification

219(5)    Unless otherwise provided by its by-laws, a person of the full age of 16 years may become a member of a cooperative, but no person under the full age of 18 years is eligible to act as a director or officer of a cooperative.

Members bound by articles and by-laws

220       The articles and by-laws of a cooperative bind the cooperative and its members.

Delegates

221       Where the by-laws of a cooperative provide for the election of delegates to represent divisions of its members, the provisions of this Act relating to the rights of a member to attend, vote at or participate in meetings of the cooperative are, where applicable, deemed to refer to a delegate.

Place of members' meetings

222(1)    Subject to subsections (2) and (3), meetings of the members of a cooperative shall be held at the place within Manitoba provided in its by-laws or, in the absence of that provision, at the place within Manitoba that its directors determine.

Meetings outside Manitoba

222(2)    A meeting of the members of a cooperative may be held outside Manitoba if all its members entitled to vote at the meeting so agree, and a member of a cooperative who attends a meeting of its members held outside Manitoba is deemed to have so agreed except where the member attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

Meetings outside Manitoba

222(3)    The by-laws of a cooperative may provide that meetings of its members may be held at one or more places outside Manitoba.

Place of shareholders' meetings

222(4)    Subject to subsection (5) and (6), meetings of the shareholders of a cooperative shall be held at the place within Manitoba provided in its articles or, in the absence of that provision, at the place within Manitoba that its directors determine.

Meetings outside Manitoba

222(5)    A meeting of the shareholders of any class or series of the investment shares of a cooperative may be held outside Manitoba if all the shareholders of that class or series of shares entitled to vote at the meeting so agree, and a shareholder of a cooperative who attends a meeting of its members held outside Manitoba is deemed to have so agreed except where the shareholder attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

Meetings outside Manitoba

222(6)    The articles of a cooperative may provide that meetings of its shareholders of any class or series of its investment shares may be held at one or more places outside Manitoba.

Electronic meeting

222(7)    Subject to the by-laws of a cooperative, a member or a shareholder of the cooperative may attend a meeting of the cooperative by means of a telephonic, electronic or other communication facility if the facility permits all participants to communicate adequately with each other during the meeting.

Presence

222(8)    A person participating in a meeting referred to in subsection (7) is deemed to be present at the meeting.

Calling members' meetings

223(1)    The directors of a cooperative shall, after holding the organizational meeting required under subsection 182(1), call a meeting of the members of the cooperative without delay.

Business at first meeting

223(2)    The members of a cooperative, at their first meeting, shall

(a) adopt by-laws for the cooperative;

(b) elect directors of the cooperative in accordance with subsection 186(1); and

(c) in accordance with 263(1), appoint an individual or firm of accountants as auditor of the cooperative to hold office until the close of the first annual meeting of its members.

Calling meetings

224       The directors of a cooperative

(a) shall call an annual meeting of its members not later than 18 months after the cooperative comes into existence, and subsequently not later than 15 months after the holding of that, and each subsequent, annual meeting;

(b) may at any time call a special meeting of its members; and

(c) may, at any time, call a meeting of the holders of its investment shares of any class or series.

Fixing record day

225(1)    For the purpose of determining the members or shareholders of a cooperative

(a) entitled to receive payment of interest, a dividend or a patronage return;

(b) entitled to participate in a liquidation distribution; or

(c) for any other purpose, except the right to receive notice of or to vote at a meeting of the cooperative;

the directors of the cooperative may fix in advance a day as the record day for the determination of its members or shareholders, but that record day shall not be more than 50 days before the day on when the particular action is to be taken.

Notice of meetings

225(2)    For the purpose of determining the members or shareholders of a cooperative entitled to receive notice of or to vote at a meeting of its members or shareholders, its directors may fix in advance a day as the record day for the determination of its members or shareholders, but that record day shall not be more than 50 days or by less than 21 days before the day when the meeting is to be held.

No record day under subsec. (1)

225(3)    If the directors of a cooperative do not fix a record day under subsection (1) for the purposes set out in that subsection, the record day for those purposes shall be at the close of business on the day when the directors of the cooperative pass the resolution relating thereto.

No record day under subsec. (2)

225(4)    If the directors of a cooperative do not fix a record day under subsection (2) for the purpose set out in that subsection in respect of a meeting of the cooperative, the record day for that purpose shall be

(a) at the close of business on the day immediately preceding the day on which the notice of the meeting is given; or

(b) if no notice is given, the day on which the meeting is held.

Where record day fixed

225(5)    If the directors of a cooperative fix a record day under subsection (1) or (2), notice thereof shall, not less than 14 days before the day so fixed, be given in accordance with the provisions of the by-laws of the cooperative for giving notice of meetings of its members or shareholders or, in the absence of those provisions,

(a) by mailing to each member or shareholder of the cooperative a notice of the fixing of the record day at the latest address for the member or shareholder shown on the records of the cooperative or its transfer agent; or

(b) by

(i) advertisement in a newspaper published or distributed in the place where the cooperative has its registered office and in each place in Manitoba where it has a transfer agent or where a transfer of its shares, if any, may be recorded, and

(ii) by written notice to each stock exchange in Canada on which the investment shares of the cooperative are listed for trading.

Notice of meetings

226(1)    Notice of the time and place of a meeting of members or shareholders of a cooperative shall be given in accordance with the provisions of its by-laws or, in the absence of those provisions, shall be given not less than 21 days or more than 50 days before the meeting

(a) to each person entitled to vote at the meeting;

(b) to each director of the cooperative; and

(c) to the auditor of the cooperative, if any.

Notice of shareholder meetings - publicly traded shares

226(2)    Notice of the time and place of a meeting of the holders of the shares of any class or series of the investment shares of a cooperative that are publicly traded on a recognized stock exchange in Canada may be published once a week for at least four consecutive weeks before the day of the meeting in a newspaper in general circulation in the place where the registered office of the cooperative is situated and in each place in Canada where the cooperative has a transfer agent or where a transfer of the investment shares may be recorded.

Exception

226(3)    A notice of a meeting of a cooperative is not required to be given to its members or shareholders who were not registered as members or shareholders on the records of the cooperative or its transfer agent on the record day determined under subsection 225(2) or (4) in respect of the meeting, but failure to receive a notice of the meeting does not deprive a member or shareholder of the right to vote at the meeting.

Adjournment

227(1)    If a meeting of members or shareholders of a cooperative is adjourned for less than 30 days, it is not necessary, unless the by-laws of the cooperative otherwise provide, to give notice of the adjourned meeting, other than by announcement at the meeting that is adjourned.

Notice of adjournment - meeting of members

227(2)    If a meeting of members of a cooperative is adjourned by one or more adjournments for a total of 30 days or more, notice of the adjourned meeting shall be given in the same manner as notice for an annual meeting of members of the cooperative.

Notice of adjournment - meeting of shareholders

227(3)    If a meeting of shareholders of a cooperative is adjourned by one or more adjournments for a total of 30 days or more, notice of the adjourned meeting shall be given in the same manner as notice for an annual or special meeting of shareholders of the cooperative, but, unless the meeting is adjourned by one or more adjournments for a total of more than 90 days, subsection 251(1) does not apply.

Notice of business

228(1)    The notice of a meeting of members or shareholders of a cooperative at which special business is to be transacted shall state

(a) the nature of that business in sufficient detail to permit a person to form a reasoned judgment thereon; and

(b) the text of any special resolution to be submitted to the meeting or, if the full text is too lengthy for convenient inclusion in the notice, a summary thereof.

Special business

228(2)    For the purposes of subsection (1), all business transacted at a meeting of the members or shareholders of a cooperative is deemed to be special business except

(a) the consideration of

(i) the annual report of the directors of the cooperative,

(ii) the financial statements of the cooperative, and

(iii) the report of the auditor of the cooperative;

(b) the election of directors of the cooperative;

(c) the re-appointment of the incumbent auditor of the cooperative; and

(d) any other business authorized by the by-laws of the cooperative to be transacted at an annual meeting.

Waiver of notice

229       A member, shareholder or any other person entitled to attend a meeting of members or shareholders of a cooperative may in any manner waive notice of the meeting, and attendance of the member, shareholder or other person at the meeting is a waiver of notice of the meeting, except where the member, shareholder or other person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called.

Member proposal

230(1)    A member of a cooperative entitled to vote at an annual meeting of members of the cooperative may

(a) submit to the cooperative notice of any matter that the member proposes to raise at the meeting (in this section referred to as a "proposal"); and

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

Notice

230(2)    Where a proposal is submitted to a cooperative, the cooperative shall set out the proposal in the notice of the meeting to which the proposal is to be presented, and shall, if so requested by the member submitting the proposal, include in the notice or attach thereto a statement by the member of not more than 200 words in support of the proposal, and the name and address of the member.

Nomination for director

230(3)    A proposal submitted under subsection (1) to a cooperative may include nominations for the election of directors of the cooperative if the proposal is signed by not less than 5% of the members of the cooperative entitled to vote at the meeting to which the proposal is to be presented, but this subsection does not preclude nominations made at a meeting of members.

Exemptions

230(4)    A cooperative is not required to comply with subsection (2) in respect of a proposal submitted under subsection (1) by a member if

(a) the proposal is not submitted to the cooperative at least 90 days before the anniversary date of the latest annual meeting of its members;

(b) it clearly appears that the proposal is submitted by the member primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the cooperative or its directors, officers, members or other security holders, or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes;

(c) the cooperative, at the member's request, included a proposal in a notice of meeting of members held within two years before the receipt of the submission under subsection (1), and the member failed to present the proposal at the meeting;

(d) substantially the same proposal was submitted to members in the notice of a meeting of members held within two years before the receipt of the submission, and the proposal was defeated; or

(e) in the opinion of the directors of the cooperative, the rights conferred by this section are being abused to secure publicity.

Immunity

230(5)    No cooperative or person acting on its behalf incurs any liability solely because of circulating a proposal or statement in compliance with this section.

Notice of refusal

230(6)    If a cooperative refuses to include a proposal submitted by a member in accordance with this section in a notice of a meeting, the cooperative shall within 10 days after receiving the proposal notify the member of its intention to omit the proposal from the notice and send to the member a statement of the reasons for the refusal.

Member application to court

230(7)    Upon the application to the court of a member of a cooperative claiming to be aggrieved by a refusal under subsection (6) by the cooperative to include a proposal in a notice of a meeting, the court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

Cooperative's application to court

230(8)    Where a proposal is submitted under this subsection to a cooperative, the cooperative or any person claiming to be aggrieved by the proposal may apply to the court for an order permitting the cooperative to omit the proposal from the notice of meeting, and the court, if it is satisfied that subsection (4) applies, may make the order.

List of persons entitled to receive notice

231(1)    If a record day is fixed under subsection 225(2) in respect of a meeting of the members of a cooperative, the cooperative shall prepare, not later than 10 days after the record day, an alphabetical list of its members or, if its by-laws provide for delegates, of the delegates, who are, as of the record day, entitled to receive notice of and vote at the meeting.

List of persons entitled to receive notice

231(2)    If a record day is not fixed under subsection 225(2) in respect of a meeting of members of a cooperative, the cooperative shall prepare not later than the record day determined under subsection 225(4) in respect of the meeting an alphabetical list of its members or, if its by-laws provide for delegates, of the delegates, who are, as of the record day, entitled to receive notice of and vote at the meeting.

Effect of list

231(3)    A person named in a list prepared under subsection (1) or (2) is entitled to vote at the meeting to which the list relates.

List of shareholders entitled to vote

231(4)    If a record day is fixed under subsection 225(2) in respect of a meeting of shareholders of a cooperative, the cooperative shall prepare, not later than 10 days after the record day, an alphabetical list of its shareholders who are, as of the record day, entitled to receive notice of and vote at the meeting that shows the number of investment shares of the cooperative held by each them.

Entitlement to vote

231(5)    Each shareholder named in a list referred to in subsection (4) is entitled, at the meeting to which the list relates, to vote the number of investment shares shown in the list to be held by the shareholder.

List of shareholders entitled to receive notice

231(6)    If a record day is not fixed under subsection 225(2) in respect of a meeting of shareholders of a cooperative, the cooperative shall prepare not later than the record day determined under subsection 225(4) in respect of the meeting an alphabetical list of its shareholders who are, as of the record day, entitled to receive notice of and vote at the meeting that shows the number of investment shares of the cooperative held by each of them.

Entitlement to vote

231(7)    A shareholder of a cooperative whose name appears on a list referred to in subsection (6) is entitled, at the meeting to which the list relates, to vote the investment shares shown in the list to be held by the shareholder, except to the extent that

(a) the shareholder has transferred the ownership of any of those investment shares after the record day; and

(b) the transferee of those investments shares demands, not later than 10 days before the meeting, or any shorter period that the by-laws of the cooperative provide, that the transferee's name be included in the list before the meeting and produces properly endorsed investment share certificates or otherwise establishes that the transferee owns the investment shares;

in which case the transferee may vote the transferred shares at the meeting.

Examination of list

231(8)    A person who is entitled to vote at a meeting of members or shareholders of a cooperative may examine a list prepared under this section that relates to that meeting

(a) during usual business hours at the registered office of the cooperative or at the place where the records of its members and shareholders are maintained; and

(b) at the meeting for which the list was prepared.

Lists

232(1)    Members, shareholders and creditors of a cooperative and their legal representatives, and where the cooperative is a distributing cooperative, any other person, may request that the cooperative provide them with a list of its members or shareholders, not later than 10 days after the cooperative receives the affidavit referred to in subsection (2) and after payment of a reasonable fee.

Affidavit

232(2)    A request under subsection (1) must be accompanied by an affidavit containing

(a) the name and address of the applicant; and

(b) an undertaking that the list of members or shareholders will not be used except as is permitted by subsection (5).

Request by Registrar

232(3)    The Registrar may request a cooperative to provide the Registrar with a list of its members or shareholders, not later than 10 days after the cooperative receives the request and after payment of a reasonable fee.

Contents of list

232(4)    The list of members or shareholders of a cooperative provided under subsection (1) or (3) shall set out in alphabetical order the names and addresses of its members or shareholders as of a day not more than 10 days before the receipt of the affidavit referred to in subsection (2) or the request referred to in subsection (3).

Permitted uses of list

232(5)    A list obtained under subsection (1) from a cooperative shall not be used by any person except in connection with

(a) an effort to influence voting at a meeting of the cooperative; and

(b) any other matter relating to the affairs of the cooperative.

Non-inclusion of name on request

232(6)    A member or shareholder of a cooperative may advise the cooperative in writing that their name is not to be included in a list prepared by the cooperative to satisfy a request under subsection (1), in which case the cooperative shall not include that name in the list but shall set out on the list a declaration that the list is incomplete.

Quorum: members' meetings

233(1)    Unless the by-laws of a cooperative otherwise provide, at each meeting of its members 50% of its members entitled to vote at the meeting, present in person or by proxy, constitutes a quorum.

Quorum: shareholders' meetings

233(2)    Unless the articles of a cooperative otherwise provide, at each meeting of its shareholders 50% of its shareholders entitled to vote at the meeting, present in person or by proxy, constitutes a quorum.

Opening quorum sufficient

233(3)    If a quorum is present at the opening of a meeting of a cooperative, the persons who are present and entitled to vote may, unless the by-laws of the cooperative provide otherwise, proceed with the business of the meeting even though a quorum is not present throughout the meeting.

Adjournment

233(4)    If a quorum is not present at the opening of a meeting of a cooperative, the persons who are present and entitled to vote may adjourn the meeting to a fixed time and place but may not transact any other business.

Limited proxy voting

234(1)    At any meeting of the members of a cooperative, unless its by-laws provide for members to vote by proxy, no member of the cooperative shall vote by proxy.

Rules for proxies

234(2)    Where the by-laws of a cooperative provide for voting by its members by proxy,

(a) a member of the cooperative may by means of a proxy executed by the member, or by the member's attorney authorized in writing, appoint a proxyholder and one or more alternative proxyholders to act for the member at a meeting of the members of the cooperative;

(b) each proxy is valid only at the meeting of the members of the cooperative for which it was given and at any adjournment of that meeting;

(c) a proxyholder may attend the meeting for which the proxy was given and, with the authority conferred by the proxy, act at the meeting in the manner and to the extent authorized by the proxy;

(d) only a member of the cooperative shall act as the proxyholder for another member of the cooperative; and

(e) no member of the cooperative shall act at a meeting of the members of the cooperative as the proxyholder for more than one other member of the cooperative.

Revocation of proxy

234(3)    A member of a cooperative who has given a proxy for a meeting of the members of the cooperative may revoke the proxy

(a) by depositing an instrument, executed by the member or by the member's attorney authorized in writing, revoking the proxy

(i) at the registered office of the cooperative at any time up to and including the last business day preceding the day the meeting is to be held; or

(iii) with the chairperson of the meeting on the day of the meeting or any adjournment of it; or

(b) in any other manner permitted by law.

Deposit of proxies

234(4)    Where the by-laws of a cooperative provide for voting by its members by proxy, a notice calling a meeting of its members may specify a period, not exceeding 48 hours, excluding Saturdays and holidays, preceding the meeting or any adjournment thereof, before which proxies to be used at the meeting must be deposited with the cooperative or its agent.

Representative

235(1)    If an entity is entitled to vote at a meeting of a cooperative, the cooperative shall recognize at the meeting any individual authorized by a resolution of the directors or governing body or similar authority of the entity to represent it at the meeting.

Powers of representative

235(2)    An individual who is authorized under subsection (1) to represent an entity at a meeting of a cooperative may, at the meeting, exercise on behalf of the entity all the powers the entity could exercise if it were an individual.

Joint voting - members

235(3)    Unless the articles of a cooperative otherwise provide, where two or more persons hold a membership in the cooperative jointly, any one of those persons present at a meeting of members of the cooperative may, in the absence of the others, vote but if two or more of those persons are present and vote, they shall vote as one.

Joint voting - shareholders

235(4)    Unless the articles of a cooperative otherwise provide, where two or more persons hold investment shares of the cooperative jointly, any one of those holders present at a meeting of shareholders of the cooperative may, in the absence of the others, vote the investment shares, but if two or more of those persons are present and vote, in person or by proxy, they shall vote as one on the investment shares jointly held by them.

Voting by show of hands

236(1)    Subject to subsection 187(1), unless the by-laws of a cooperative otherwise provide, voting at a meeting of the cooperative shall take place by show of hands except where a ballot is demanded by a person entitled to vote at the meeting.

Ballot

236(2)    A person entitled to vote at a meeting of a cooperative may, at the meeting and either before or after any vote by show of hands is taken at the meeting on any matter, demand that a vote by ballot be taken on the matter.

Mail ballot

236(3)    A cooperative may, by by-law, establish procedures to permit its members to vote by mail ballot on any matter or any type of matter.

Signed resolution not passed at meeting

237(1)    Where a written resolution is signed by all the members or shareholders of a cooperative who would be entitled to vote on the resolution if it were voted on at a meeting of the cooperative held on the day the last signor signs the resolution, whether the resolution deals with a matter required by this Act or its articles or by-laws to be dealt with at a meeting of the cooperative, except where a written statement that relates to the subject matter of the resolution is submitted by a director under subsection 193(1) or (2) or by an auditor under subsection 269(4), the resolution

(a) is as valid as if it had been passed at a meeting of the cooperative; and

(b) is effective from the day specified in the resolution, which day shall not be before the day on which the first member or shareholder signed the resolution.

Keeping resolution

237(2)    A copy of every resolution signed by the members or shareholders of a cooperative that is valid because of subsection (1) shall be kept with the minutes of meetings of the cooperative as though the resolution had been passed at a meeting of the cooperative.

Proof

238       An entry in the minutes of a cooperative of a vote taken under section 236 or of a resolution that is valid because of section 237 is, in the absence of evidence of the contrary, proof of the outcome of the vote or resolution.

One shareholder meeting

239       If a cooperative has only one shareholder, or only one holder of any class or series of its investment shares, the shareholder present in person or represented by proxy constitutes a meeting of its shareholders or a meeting of its shareholders of that class or series, as the case may be.

Requisition of meeting of members

240(1)    If a written requisition to hold a meeting of the members of a cooperative signed by 5% of its members who would be entitled to vote at the meeting sought to be held, or such other percentage or number, not exceeding 20%, of its members as its by-laws may provide is submitted to the cooperative, the directors of the cooperative shall call a meeting of its members for the purposes stated in the requisition.

Existing cooperatives

240(2)    Where, before the coming into force of this section, the by-laws of a cooperative provided a percentage in excess of 20% of its members for the purpose of requiring a meeting of its members as provided in subsection (1), that provision of its by-laws may remain in force until amended by the cooperative.

Requisition of meeting of shareholders

240(3)    If a written requisition to hold a meeting of the shareholders of a cooperative signed by two or more persons who together hold not less than 5% of the voting rights that could be exercised at the meeting sought to be held is submitted to the cooperative, the directors of the cooperative shall call a meeting of its shareholders for the purposes stated in the requisition.

Form of requisition

240(4)    A requisition for a meeting of a cooperative referred to in subsection (1) or (3), which may consist of several documents of like form each signed by one or more persons entitled to vote at the meeting, shall state the business to be transacted at the meeting and shall be sent to the registered office of the cooperative.

Directors calling meeting

240(5)    On receipt of a requisition referred to in subsection (1) or (3), the directors of a cooperative shall call a meeting to transact the business stated in the requisition, unless

(a) if the requisition were a proposal submitted under section 230 to the cooperative by a member of the cooperative, the cooperative would not be required to comply with subsections 230(2) and (3) because of any of clauses 230(4)(b) to (e); or

(b) in the case of a requisition by a shareholder, the business of the meeting as stated in the requisition consists of matters outside the powers of the shareholders.

Member or shareholder calling meeting

240(6)    If the directors of a cooperative do not call a meeting within 21 days after receiving a requisition referred to in subsection (1) and clause (5)(a) or (b) do not apply, any person who signed the requisition may call the meeting.

Procedure

240(7)    A meeting of a cooperative called under this section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to its by-laws, any unanimous agreement of the cooperative and this Act.

Reimbursement

240(8)    Unless the persons present and entitled to vote at a meeting of a cooperative called under subsection (6) otherwise resolve, the cooperative shall reimburse its members or shareholders who signed the requisition for the meeting for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

Meeting called by the Registrar

241(1)    If for any reason it is impracticable to call a meeting of members or shareholders of a cooperative in the manner in which meetings may be called, or to conduct the meeting in the manner prescribed by this Act, its by-laws or any unanimous agreement of the cooperative, or if for any other reason the Registrar thinks fit, the Registrar, upon the application of a director or a person entitled to vote at the meeting or upon the Registrar's own initiative, may order a meeting to be called held and conducted in such manner as the Registrar directs.

Varying quorum

241(2)    Without restricting the generality of subsection (1), the Registrar may order that, at a meeting of a cooperative called, held and conducted under this section, the quorum required by the by-laws of the cooperative or by this Act be varied or dispensed with.

Valid meeting

241(3)    A meeting of a cooperative called, held and conducted under this section is for all purposes a meeting of its members or shareholders duly called, held and conducted.

Court review of election

242(1)    A cooperative, a director of a cooperative, or any persons entitled to vote in the election or appointment of a director of a cooperative or its auditor, may apply to the court to determine any controversy with respect to the election or appointment of a director or auditor of the cooperative.

Powers of court

242(2)    Upon an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing, one or more of the following:

(a) an order restraining a director or auditor of a cooperative, whose election or appointment is challenged, from acting in that capacity pending determination of the dispute;

(b) an order declaring the result of the disputed election or appointment;

(c) an order requiring a new election or appointment of a director or auditor of a cooperative, and including in the order directions for the management of the business and affairs of the cooperative until the new election is held or appointment made;

(d) an order determining the voting rights of members of a cooperative and of persons claiming entitlement to vote at an election of a director or auditor of a cooperative.

Compulsory sale of membership shares

243       Where

(a) winding-up proceedings have commenced in respect of a body corporate that is a member of a cooperative; or

(b) a member of a cooperative has, during a period of two years, failed to transact any business with the cooperative;

the cooperative may, by written notice to the member, require the member to sell the member's membership shares to the cooperative in accordance with section 63, and the member shall sell the shares as so required.

Termination of membership

244(1)    The directors of a cooperative may by special resolution of the directors terminate the membership of a member of the cooperative.

Notice to member

244(2)    Where the directors of a cooperative propose to terminate the membership of a member of the cooperative by resolution under subsection (1), the directors shall give to the member at least seven days notice of the meeting at which the resolution is to be considered, together with a statement of the grounds upon which the membership is proposed to be terminated, and the member is entitled to appear, either personally or by or with an agent or counsel, to make submissions at the meeting.

Notice of termination

244(3)    Within seven days after the day on which a resolution referred to in subsection (1) is passed by the requisite majority of the directors of a cooperative, the cooperative shall, in the same manner as that provided for the giving of notice of a meeting of members, notify the person whose membership was terminated of the resolution.

Appeal to meeting of members

244(4)    A person whose membership in a cooperative is terminated by special resolution under subsection (1) may appeal the decision of the directors of the cooperative to the next meeting of the members of the cooperative by sending a notice of appeal to the cooperative within 14 days after the day when notice was given to the person under subsection (3).

Decision of meeting

244(5)    The meeting of members of a cooperative to which an appeal under subsection (4) is brought shall, by a majority vote, either confirm or set aside the resolution of the directors of the cooperative terminating the membership of the person who brought the appeal, and there is no further appeal in the matter.

Termination by meeting of members

244(6)    A meeting of members of a cooperative may, by special resolution, terminate the membership of a member of the cooperative.

Termination not to have certain effects

244(7)    Unless the directors of a cooperative determine otherwise, the termination of the membership of a member of the cooperative does not release the member from any debt or obligation to, or contract with, the cooperative.

Membership continues

244(8)    A person who in accordance with subsection (4) appeals the termination of the person's membership in a cooperative shall, notwithstanding the resolution terminating the membership, continue to be a member of the cooperative until the termination of the membership is confirmed by the meeting of the members of the cooperative under subsection (5).

Re-admittance

244(9)    A person whose membership in a cooperative is terminated upon an appeal to, or by special resolution of, a meeting of the members of the cooperative in accordance with this section shall not again be admitted to membership in the cooperative except by special resolution of a general meeting of the cooperative.

Withdrawal

245       A member of a cooperative may withdraw from the cooperative on such conditions as its by-laws may provide.

Shares and loans upon termination of membership

246(1)    Where the membership of a member of a cooperative is terminated, or a member of a cooperative withdraws from the cooperative, or a membership in a cooperative otherwise ceases, the cooperative shall not later than one year after the day of the termination, withdrawal or cessation, redeem all membership shares held by the member, other than shares purchased on behalf of the member by the application of patronage dividends credited to the member, and repay all member loans to the member, other than patronage loans, unless the cooperative would not be permitted to purchase the shares or repay the member loans because of subsection 66(1).

Price for shares

246(2)    The price of a share purchased under subsection (1) by a cooperative shall be its par value, unless the capital of the cooperative has been impaired, in which case the price may be fixed by the directors of the cooperative at such amount below par value as the board in its entire discretion considers consistent with the impairment of capital.

Effect of termination of membership

246(3)    Where the membership of a member of a cooperative is terminated, or a member of a cooperative withdraws from the cooperative, or a membership in a cooperative otherwise ceases, shares of a cooperative which were purchased on behalf of the member by the application of patronage dividends credited to the member, and patronage loans owing to the member, shall, on termination, withdrawal or cessation, be purchased from or repaid to the member or the member's personal representatives in accordance with the priorities set out in the by-laws applicable to continuing members and their estates.

Withdrawal not to have certain effects

246(4)    Unless the directors of a cooperative determine otherwise,

(a) the withdrawal of a member from the cooperative does not release the member from any debt or obligation to the cooperative or contract with the cooperative; and

(b) the cooperative need not, notwithstanding subsection (1) repay to the member amounts outstanding on loans made by the member to the cooperative that have a fixed maturity day until that day arrives.

If address of member unknown

246(5)    Where the address of a member of a cooperative whose membership in the cooperative has been terminated by its directors is unknown to the cooperative after all reasonable efforts have been made to ascertain it, and two years have elapsed since the day referred to in subsection 244(3), the cooperative shall transfer all amounts owing to the member under subsection (1) to a reserve fund, and those amounts need not include any interest that would have accrued after the end of the two years.

Amounts paid to entitled persons

246(6)    Where under subsection (5) a cooperative transfers an amount to a reserve fund, it shall pay those amounts to any person who, not later than 10 years after the day the transfer is made, shows evidence of entitlement to the amount satisfactory to the cooperative and if no person appears to show that evidence within the 10 years, the amounts become the property of the cooperative.

Contracts

247(1)    A cooperative may, subject to its articles, enter into any contract or arrangement with its members or patrons for or incidental to dealing in commodities of the kinds the cooperative may lawfully deal in, and may advance money to its members or patrons as part payment for commodities delivered or agreed to be delivered to it.

Performance

247(2)    In the event of a breach of any material provision of a contract described in subsection (1) by a member of a cooperative, particularly as to the delivery or marketing of any products other than through the cooperative, the cooperative, in a proper action, is entitled

(a) to an injunction to prevent any further breach of the provision;

(b)  to the remedy of specific performance of the provision; and

(c) to other equitable relief according to the terms of the contract.

PART 10

PROXIES

Definitions

248       In this Part,

"commission" means The Manitoba Securities Commission; (« commission »)

"form of proxy" means a written or printed form that, upon completion and execution by or on behalf of a shareholder, becomes a proxy; (« formulaire de procuration »)

"proxy" means a completed and executed form of proxy by means of which a shareholder appoints a proxyholder to attend and act on the shareholder's behalf at a meeting of shareholders; (« procuration )

"registrant" means a broker or dealer required to be registered under the laws of any jurisdiction to trade or deal in shares in the capital stock of bodies corporate, interests in partnerships and syndicates, government and corporate bonds or similar issues, or options, warrants and similar rights in respect of such shares, bonds, or interests; (« courtier inscrit »)

"solicit" or "solicitation" includes

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

(b) a request to execute or not to execute a form of proxy or to revoke a proxy,

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

(d) the sending of a form of proxy to a shareholder under section 251,

but does not include

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

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

(g) the sending of the documents referred to in section 255 by a registrant, or

(h) a solicitation by a person in respect of shares of a cooperative of which the person is the beneficial owner. (« sollicitation »)

Application of Part

249       This Part does not apply to a member or membership shares of a cooperative, but a member who is a shareholder of a cooperative may exercise the rights given to the shareholder by this Part for all investment shares held by the member.

Appointment of proxyholder

250(1)    A shareholder of a cooperative entitled to vote at a meeting of shareholders of the cooperative may by means of a proxy appoint a proxyholder or one or more alternate proxyholders, who are not required to be shareholders of the cooperative, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.

Execution of proxy

250(2)    A proxy of a shareholder shall be executed by the shareholder or by the shareholder's attorney authorized in writing.

Validity of proxy

250(3)    A proxy of a shareholder is valid only at the meeting in respect of which it is given or any adjournment thereof.

Revocation of proxy

250(4)    A shareholder of a cooperative may revoke a proxy

(a) by depositing a written instrument revoking the proxy executed by the shareholder or by the shareholder's attorney authorized in writing

(i) at the registered office of the cooperative at any time up to and including the last business day preceding the day of the meeting, or an adjournment thereof, at which the proxy is to be used, or

(ii) with the chairperson of the meeting on the day of the meeting or an adjournment thereof; or

(b) in any other manner permitted by law.

Deposit of proxies

250(5)    The directors of a cooperative may specify in a notice calling a meeting of its shareholders a time not exceeding 48 hours, excluding Saturdays and holidays, before the meeting or an adjournment thereof before which time proxies to be used at the meeting must be deposited with the cooperative or its agent.

Mandatory distribution of forms of proxy

251(1)    Subject to subsection (2), the management of a cooperative which has made a distribution to the public shall, concurrently with giving notice of a meeting of its shareholders, send a form of proxy in a form approved by the Registrar to each of its shareholders who is entitled to receive notice of the meeting.

Exception

251(2)    Where a cooperative has fewer than 15 shareholders entitled to vote at a meeting of its shareholders, two or more joint holders being counted as one shareholder, the management of the cooperative is not required to send a form of proxy under subsection (1).

Soliciting proxies

252(1)    A person shall not solicit proxies for use at a meeting of a cooperative unless

(a) in the case of solicitation by any person pursuant to a resolution or instructions of, or with the acquiescence of, the directors of the cooperative or a committee of its directors, a management proxy circular in a form approved by the Registrar, either as an appendix to or as a separate document accompanying the notice of the meeting; or

(b) in the case of any other solicitation, a dissident's proxy circular in a form approved by the Registrar stating the purposes of the solicitation;

is sent to the auditor of the cooperative, to each shareholder of the cooperative whose proxy is solicited and, if clause (b) applies, to the cooperative.

Copy to commission

252(2)    A person required under subsection (1) to send a management proxy circular or dissident's proxy circular shall send concurrently a copy thereof to the commission together with a copy of the notice of the meeting in respect of which the proxy is solicited, of the form of proxy and of any other documents for use in connection with the meeting.

When all shareholders are members

252(3)    A management proxy circular in respect of a meeting of a cooperative need not be sent

(a) if all of its shareholders are members of the cooperative; and

(b) if the management of the cooperative has sent to its shareholders substantially the same information as that required to be sent in the circular, not less than 21 days or more than 60 days before the meeting at which the vote to which the circular relates is to be held.

Exemption order

253       On the application of an interested person, the commission may make an order on such terms as it thinks fit exempting the person from any of the requirements of section 251 or subsection 252(1) in respect of a meeting of a cooperative specified in the order, and the order may have retrospective effect.

Attendance at meeting

254(1)    A person who solicits a proxy and is appointed proxyholder in respect of a meeting of a cooperative shall attend in person, or cause an alternate proxyholder to attend, the meeting in respect of which the proxy is given and shall comply with the directions of the shareholder of the cooperative who appointed the proxyholder.

Rights of a proxyholder

254(2)    A person who is appointed a proxyholder or an alternate proxyholder by a shareholder of a cooperative in respect of a meeting of the cooperative has the same rights as the shareholder to speak at the meeting in respect of any matter, to vote by way of ballot at the meeting and, except where the proxyholder or alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of any show of hands.

Voting by proxyholders

254(3)    Notwithstanding subsections (1) and (2), where the chairperson of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what the chairperson believes will be the decision of the meeting in relation to any matter or group of matters is less than 5% of all the votes that might be cast at the meeting on such ballot, unless a shareholder or proxyholder demands a ballot,

(a) subject to subsection 187(1), the chairperson may conduct the vote in respect of that matter or group of matters by a show of hands; and

(b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by a show of hands.

Duty of registrant

255(1)    Shares of a cooperative that are registered in the name of a registrant or a registrant's nominee and not beneficially owned by the registrant shall not be voted unless the registrant, forthwith after the registrant or the nominee receives the notice of the meeting, financial statements, management proxy circular, dissident's proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy thereof to the beneficial owner and, except where the registrant has received written voting instructions from the beneficial owner in respect of the meeting, a written request for such instructions.

Beneficial owner unknown

255(2)    A registrant shall not vote or appoint a proxyholder to vote at a meeting of a cooperative shares of the cooperative registered in the registrant's name or in the name of the registrant's nominee that the registrant does not beneficially own unless the registrant receives voting instructions in respect of the meeting from the beneficial owner of the shares.

Copies

255(3)    A person by or on behalf of whom a solicitation of a proxy is made for use at a meeting of a cooperative shall, at the request of a registrant, forthwith furnish the registrant at that person's expense with the number of copies of the documents referred to in subsection (1), other than copies of the document requesting voting instructions, that will be necessary for the registrant to meet the registrant's obligations under subsection (2).

Instructions to registrant

255(4)    A registrant shall vote or appoint a proxyholder to vote any shares of a cooperative referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner of the shares.

Beneficial owner as proxyholder

255(5)    If requested by a beneficial owner of shares of a cooperative, a registrant who is the registered holder of the shares shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder in respect of the shares for use at a meeting of the cooperative.

Validity

255(6)    The failure of a registrant to comply with this section does not render void any meeting of a cooperative or any action taken at the meeting.

Limitation

255(7)    Nothing in this section gives a registrant the right to vote shares of a cooperative at a meeting of the cooperative that the registrant is otherwise prohibited from voting.

Restraining order

256(1)    If a form of proxy, management proxy circular or dissident's proxy circular in respect of a meeting of a cooperative contains an untrue statement of a material fact or omits to state a material fact required to be included therein, or necessary to make a statement contained therein not misleading in the light of the circumstances in which the statement was made, an interested person or the commission may apply to the court and the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order restraining

(i) the solicitation,

(ii) the holding of the meeting, or

(iii) any person from implementing or acting upon any resolution passed at the meeting to which the form of proxy, management proxy circular or dissident's proxy circular relates;

(b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; and

(c) an order adjourning the meeting.

Notice to commission

256(2)    An interested person making an application under subsection (1) shall give to the commission notice of the application and the commission is entitled to be heard on the application by counsel or otherwise.

PART 11

FINANCIAL DISCLOSURE

Annual financial statements

257(1)    The directors of a cooperative shall place before the members at every annual meeting

(a) comparative financial statements, as prescribed, relating separately to

(i) the period that began on the day the cooperative came into existence and ended not more than six months before the annual meeting or, if the cooperative has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and

(ii) subject to subsection (2), the immediately preceding financial year;

(b) the report of the auditor of the cooperative, if any; and

(c) any further information respecting the financial position of the cooperative and the results of its operations required by its articles, its by-laws or a unanimous agreement of the cooperative.

Annual financial statements to shareholders

257(2)    If shareholders of a cooperative have a right to have an annual meeting under subsection 189(1), the directors of the cooperative shall place the documents described in subsection (1) before the shareholders at every annual meeting of shareholders.

Exception

257(3)    The directors of a cooperative may omit to place the cooperative's financial statements referred to in sub-clause (1)(a)(ii) before a meeting of the cooperative if the reason for the omission is set out in the financial statements referred to in sub-clause (1)(a)(i) that are placed before the meeting.

Exemption

258       A cooperative may apply to the Registrar for an order authorizing the cooperative to omit from its financial statements any item prescribed or to dispense with the publication of any particular financial statement prescribed, and the Registrar, if the Registrar reasonably believes that disclosure of the information therein contained would be detrimental to the cooperative, may make the order on such conditions as the Registrar thinks fit and reasonable.

Consolidated statements

259(1)    A cooperative holding a subsidiary may prepare the financial statements referred to in section 257 in consolidated or combined form, as prescribed, and in any case the cooperative shall keep at its registered office copies of the latest financial statements of each subsidiary.

Examination

259(2)    Members and shareholders of a cooperative and their agents and legal representatives may, upon request therefor and without charge, examine the statements referred to in subsection (1) during the usual business hours of the cooperative, and may make copies of them or parts of them.

Barring examination

259(3)    A cooperative may, within 15 days of receiving a request under subsection (2) to examine the statements referred to in subsection (1), apply to the court for an order barring the right of any person to examine the statements, and the court may, if satisfied that the examination would be detrimental to the cooperative or to a subsidiary of the cooperative, make the order and any further order it thinks fit.

Notice to Registrar

259(4)    A cooperative that makes an application under subsection (3) shall give the Registrar, and the person who requested under subsection (2) the examination of the statements, notice of the application, and the Registrar and that person may appear on the application and be heard in person or by counsel.

Condition precedent to issue

260       A cooperative shall not issue, publish or circulate copies of its financial statements referred to in section 257, unless the financial statements are

(a) approved by its directors, and the approval is evidenced by the signatures of one or more of the directors on the statements; and

(b) accompanied by the report of the auditor of the cooperative, if any.

Copies to shareholders

261(1)    A cooperative shall send a copy of the documents referred to in section 257 to each shareholder of the cooperative, except a shareholder who has informed the cooperative in writing that the shareholder does not want a copy of those documents,

(a) not less than 21 days before each annual meeting of its shareholders, if subsection 257(2) applies; or

(b) not later than the day on which a unanimous agreement that eliminates the need for an annual meeting of its shareholders, as authorized under subsection 217(6), is signed by all persons required to sign it.

Copies to members

261(2)     Every member of a cooperative is entitled, on request and without charge, to one copy of the annual financial statements of the cooperative.

Qualification of auditor

262(1)    Subject to subsection (5), an individual or firm of accountants is disqualified from being an auditor of a cooperative if the individual or firm, as the case may be, is not independent of the cooperative or any of its subsidiaries, or the directors or officers of the cooperative or subsidiary.

Independence

262(2)    For the purposes of this section,

(a) independence is a question of fact; and

(b) an individual or firm of accountants is deemed not to be independent of a cooperative if the individual or firm or a business partner of the individual or firm

(i) is a business partner, director, officer or employee of the cooperative or any of its subsidiaries, or of any director, officer or employee of the cooperative or subsidiary, or

(ii) beneficially owns or controls, directly or indirectly, a material interest in the securities of the cooperative or any of its subsidiaries, or

(iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the cooperative or any of its subsidiaries within two years before the proposed appointment of the individual or firm as auditor of the cooperative.

Duty to resign

262(3)    An auditor of a cooperative who becomes disqualified under this section shall, subject to subsection (5), resign forthwith after becoming aware of the disqualification.

Disqualification order

262(4)    Any interested person may apply to the court for an order declaring an auditor of a cooperative to be disqualified under this section and the office of auditor of the cooperative to be vacant.

Exemption order

262(5)    Any interested person may apply to the Registrar for an order exempting an auditor of a cooperative from disqualification under this section, and the Registrar may, if satisfied that an exemption would not unfairly prejudice the members of the cooperative, make an exemption order on such terms as the Registrar thinks fit, and may make the order with retrospective effect.

Exception

262(6)    The members and shareholders of a cooperative may resolve to appoint as auditor of the cooperative an individual or firm of accountants otherwise disqualified under subsection (1) or (2), if the resolution is consented to by all the members and all the shareholders, including those who do not otherwise have the right to vote.

Validity of resolution

262(7)     A resolution under subsection (6) in respect of an auditor of a cooperative is valid only until the next succeeding annual meeting of members of the cooperative.

Auditor's relationship to be disclosed in report

262(8)    An auditor of a cooperative appointed under subsection (6) shall indicate in the auditor's report to the members of the cooperative particulars of the relationship that would ordinarily disqualify the auditor under subsection (1) or (2).

Appointment of auditor

263(1)    Subject to section 264, the members of a cooperative shall, by ordinary resolution at the first meeting of the members and at each succeeding annual meeting of the members, appoint an individual or a firm of accountants as auditor of the cooperative to hold office until the close of the next following annual meeting of the members.

Eligibility

263(2)    An auditor of a cooperative appointed under subsection 182(1) is eligible for appointment under subsection (1) as auditor of the cooperative.

Incumbent auditor

263(3)    Notwithstanding subsection (1), where at a meeting of members of a cooperative an auditor of the cooperative is not appointed, its incumbent auditor continues in office until a successor is appointed.

Remuneration

263(4)    The remuneration of an auditor of a cooperative may be fixed by an ordinary resolution of its members or, if not so fixed, by its directors.

Dispensing with auditor

264(1)    A cooperative that is not a distributing cooperative may resolve not to appoint an auditor by

(a) special resolution of its members; and

(b) special resolution of all its shareholders, including those who do not otherwise have the right to vote.

Limitation

264(2)    A resolution passed under subsection (1) at a meeting of a cooperative is valid only until the next annual meeting of the cooperative.

Ceasing to hold office

265(1)    An auditor of a cooperative ceases to hold office when the auditor

(a) dies or ceases to exist;

(b) resigns; or

(c) is removed from office under section 266.

Effective time of resignation

265(2)     The resignation of an auditor of a cooperative shall be in writing and becomes effective at the time the written resignation is received by the cooperative, or at the time specified in the resignation, whichever is later.

Removal of auditor

266(1)    The members of a cooperative may by ordinary resolution at a special meeting of the members remove from office an auditor of the cooperative, other than an auditor appointed by the Registrar.

Vacancy

266(2)    A vacancy created by the removal of an auditor of a cooperative under subsection (1) may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 267.

Filling vacancy

267(1)    Subject to subsection (3), the directors of a cooperative shall forthwith fill any vacancy in the office of its auditor.

Calling meeting

267(2)    Where there is not a quorum of directors of a cooperative in office, its directors then in office shall, within 21 days after a vacancy in the office of its auditor occurs, call a special meeting of members of the cooperative to fill the vacancy and, if they fail to call the meeting or if there are no directors then in office, the meeting may be called by any member of the cooperative.

Members filling vacancy

267(3)    The by-laws of a cooperative may provide that a vacancy in the office of its auditor shall be filled only by vote of its members.

Unexpired term

267(4)    An auditor of a cooperative appointed to fill a vacancy holds office for the unexpired term of the predecessor in the office.

Auditor appointed by Registrar

268(1)    Where a cooperative does not have an auditor, the Registrar may appoint an individual or firm of accountants as its auditor and fix the remuneration of the auditor, and the auditor so appointed holds office until an auditor is appointed by the members of the cooperative.

Exception

268(2)    Subsection (1) does not apply to the appointment of an auditor of a cooperative if a resolution made under section 264 not to appoint an auditor of the cooperative is in effect.

Right to attend meeting

269(1)    The auditor of a cooperative is entitled to receive notice of every meeting of the members or shareholders of the cooperative and, at the expense of the cooperative, to attend and be heard at the meetings on matters relating to the duties of the auditor.

Duty to attend

269(2)    If a director or member of a cooperative, whether or not the member is entitled to vote at the meeting, or a shareholder that is entitled to vote at the meeting of shareholders, gives written notice not less than 10 days before a meeting of the cooperative to the auditor or a former auditor of the cooperative, the auditor or former auditor shall attend the meeting at the expense of the cooperative and answer questions relating to the duties of and the audits performed by the auditor.

Notice to cooperative

269(3)    A director, member or shareholder of a cooperative who gives a notice under subsection (2) shall concurrently give a copy of the notice to the cooperative.

Statement of auditor

269(4)    An auditor of a cooperative who

(a) resigns;

(b) receives a notice or otherwise learns of a meeting of members of the cooperative called for the purpose of removing the auditor from office;

(c) receives a notice or otherwise learns of a meeting of directors or members of the cooperative at which another person is to be appointed to fill the office of auditor in the place of the auditor, whether because of the auditor's resignation or removal from office or because the term of office has expired or is about to expire; or

(d) receives a notice or otherwise learns of a meeting of members at which a resolution as described in section 264 is to be proposed;

is entitled to submit to the cooperative a written statement giving the reasons for the resignation or the reasons why the auditor opposes the proposed action or resolution, as the case may be.

Other statements

269(5)    In the case of a proposed replacement of an auditor of a cooperative, whether through removal or at the end of the auditor's term,

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

(b) the proposed replacement auditor may make a statement containing comments on the reasons referred to in clause (a).

Circulating statement

269(6)    A cooperative shall send a copy of any statements referred to in subsections (4) and (5) that it receives without delay to every person who is entitled to receive notice of a meeting of the cooperative referred to in subsection (1) and to the Registrar.

Replacing auditor

269(7)    No individual or firm of accountants shall accept an appointment or consent to be appointed as auditor of a cooperative if the individual or firm, as the case may be, is replacing a former auditor who has resigned, has been removed from office or whose term of office has expired or is about to expire, unless and until the individual or firm has requested and received from that former auditor a written statement of the circumstances and the reasons why, in the opinion of that former auditor, that former auditor is being replaced.

Exception

269(8)    Notwithstanding subsection (7), an individual or firm of accountants otherwise qualified may accept an appointment or consent to be appointed as auditor of a cooperative if, within 15 days after making the request referred to in that subsection, the individual or firm does not receive a reply from the former auditor.

Effect of non-compliance

269(9)    Unless subsection (8) applies, an appointment as auditor of a cooperative of an individual or firm of accountants that has not complied with subsection (7) is null and void.

Offence

269(10)   An auditor or former auditor of a cooperative who fails without reasonable excuse to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000., or to imprisonment for a term not exceeding six months, or to both.

Examination and report

270(1)    An auditor of a cooperative shall make any examination that is, in the auditor's opinion, necessary to enable the auditor to report in the manner that may be prescribed, and shall report in that manner, on the financial statements required by this Act to be placed before the members or shareholders of the cooperative, except any financial statements or parts of statements that relate to the period referred to in subclause 257(1)(a)(ii).

Reliance on other auditor

270(2)    Notwithstanding section 271, an auditor of a cooperative may reasonably rely upon the report of the auditor of a body corporate that is a subsidiary of the cooperative if the fact of that reliance is disclosed in the report of the auditor of the cooperative.

Reasonableness

270(3)    For the purposes of subsection (2), reasonableness is a question of fact.

Application

270(4)    Subsection (2) applies whether or not the financial statements of the cooperative reported on by the auditor are in consolidated form.

Right to information

271(1)    Upon the demand of an auditor of a cooperative, the present or former directors, officers, employees or agents of the cooperative shall furnish such

(a) information and explanations; and

(b) access to records, documents, books, accounts and vouchers of the cooperative or any of its subsidiaries;

as are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 270 and as the directors, officers, employees or agents are reasonably able to furnish.

Information from subsidiaries

271(2)    Upon the demand of an auditor of a cooperative, the directors of the cooperative shall obtain and furnish to the auditor such information and explanations from the present or former directors, officers, employees or agents of any subsidiary of the cooperative as are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 270 and as the directors, officers, employees or agents are reasonably able to furnish.

No civil liability

271(3)    A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil action arising from having made the communication.

Audit committee

272(1)    Subject to subsection (2), a distributing cooperative shall, and any other cooperative may, have an audit committee composed of not fewer than three of its directors, a majority of whom are not officers or employees of the cooperative or any of its affiliates.

Exemption

272(2)    The Registrar may, on the application of a cooperative and if satisfied that its members and shareholders will not be prejudiced by the lack of an audit committee, authorize the cooperative to dispense with an audit committee on any conditions that the Registrar thinks fit and reasonable.

Duty of committee

272(3)    An audit committee of a cooperative shall perform such duties and functions as may be prescribed.

Auditor's attendance

272(4)    The auditor of a cooperative is entitled to receive notice of every meeting of its audit committee and, at the expense of the cooperative, to attend and be heard at the meeting, and if so requested by a member of the audit committee, the auditor shall attend every meeting of the committee held during the auditor's term of office.

Calling meeting

272(5)    The auditor of a cooperative or a member of its audit committee may call a meeting of the committee.

Notice of errors

273(1)     Forthwith after becoming aware of any error or misstatement in a financial statement of a cooperative that its auditor or a former auditor has reported upon, a director or officer of the cooperative shall notify the auditor and audit committee of the cooperative of the error or misstatement.

Error in financial statements

273(2)    Where the auditor or former auditor of a cooperative is notified or becomes aware of an error or misstatement in a financial statement upon which the auditor or former auditor has reported, and, in the opinion of the auditor or former auditor, the error or misstatement is material, the auditor or former auditor shall inform each director of the cooperative accordingly.

Duty of directors

273(3)    When under subsection (2) the auditor or former auditor of a cooperative informs its directors of an error or misstatement in a financial statement of the cooperative, the directors shall

(a) prepare and issue revised financial statements; or

(b) otherwise inform the members and shareholders of the cooperative and, if it is required to comply with subsection 33(1), inform the Registrar of the error or misstatement in the same manner as they inform its members.

Offence

273(4)    Every director or officer of a cooperative who knowingly fails to comply with subsection (1) or (3) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000., or to imprisonment for a term not exceeding six months, or to both.

Qualified privilege

274       Any oral or written statement or report made under this Act by the auditor or former auditor of a cooperative has qualified privilege.

PART 12

HOUSING COOPERATIVES

Application

275(1)    This Part applies to all housing cooperatives.

Not for profit housing cooperative

275(2)    For the purposes of this Part, a housing cooperative is a not for profit housing cooperative if

(a) its articles specify that it is a not for profit housing cooperative;

(b) it is a former Act cooperative and its articles, letters patent or charter by-laws specified, as of March 1, 1998, that it was a not for profit housing cooperative;

(c) it has received from the Government of Canada or the Government of Manitoba, or an agency of either of them, a subsidy or assistance of a type prescribed in the regulations that assisted with or reduced housing costs; or

(d) it files income tax returns as a not for profit corporation.

Requirement of articles

276(1)    The articles of a housing cooperative shall provide that the business of the cooperative is restricted to that of primarily providing housing to its members.

Requirement of articles

276(2)    The articles of a not for profit housing cooperative shall provide that the name of the cooperative include the words "non-profit", "not for profit", "not-for-profit", "sans but lucratif" or "à but non lucratif".

Existing names

276(3)    A former Act cooperative that is a not for profit housing cooperative is not required to change its name to comply with subsection (2), but, if it makes any change in its name after the coming into force of this Act, its new name shall comply with subsection (2).

Special limitations

277       The following restrictions apply to a not for profit housing cooperative:

(a) it may not issue investment shares;

(b) it must in each year conduct at least 90% of its business with its members;

(c) subject to subsections 286(2) and (3), its business shall be carried on without the purpose of gain for its members;

(d) it may not be continued under any other Act of the legislature or of any other jurisdiction;

(e) it may not amend its articles to change from a not for profit housing cooperative to any other type of cooperative;

(f) on its dissolution, and after the payment of its liabilities, its remaining property is to be transferred to or distributed among one or more not for profit housing cooperatives, cooperatives incorporated in the province that have similar objectives and limitations, or charitable organizations with similar purposes.

By-laws

278(1)    The by-laws of a housing cooperative shall include

(a) any obligation of a member of the cooperative to provide capital to the cooperative and the manner in which the capital is to be contributed;

(b) any obligation of a member of the cooperative to contribute to charges of the cooperative and the manner in which the charges are to be determined and paid;

(c) the procedure for determining disputes

(i) between its members, and

(ii) between its members and the cooperative;

(d) the manner by which the equity of a member of the cooperative in the cooperative is to be determined on the member's withdrawal from the cooperative, on the termination of the member's membership in the cooperative or on a dissolution of the cooperative, and the manner in which that equity is to be repaid and any right of setoff that the cooperative has against that equity for amounts owed to the cooperative by the member;

(e) a provision for the establishment of adequate reserves and the maintenance of adequate insurance to protect the cooperative from loss; and

(f) a provision for the establishment of the rules governing charges by the cooperative for the occupation, leasing, subletting and subleasing of housing units of the cooperative.

Other provisions in by-laws

278(2)    The by-laws of a not for profit housing cooperative may provide

(a) the rules by which its directors may establish a system of providing subsidies to its members for housing charges; and

(b) any rules in addition to those specified in clause (1)(f) relating to the occupancy of a housing unit of the cooperative;

and in administering those rules the directors of the cooperative shall treat all members of the cooperative in a fair and equal manner, particularly as between one member and another.

Member occupancy rights

279(1)    An individual who is a member of a housing cooperative is entitled to occupy the housing unit allocated to the individual by the cooperative while the individual is a member, although the directors of the cooperative may, subject to its by-laws, by notice, require the individual to occupy an alternate housing unit.

Appeal

279(2)    A member of a housing cooperative to whom a notice has been given by the cooperative to occupy an alternate housing unit may appeal the decision in the same manner as that provided for appeals of decisions to terminate the membership of a member of the cooperative.

Unsuccessful appeal

279(3)    If an appeal under subsection (2) by the member of a housing cooperative is not successful and the member does not relocate to the alternate housing unit within the time provided by the directors of the cooperative, the member's membership in the cooperative is deemed to have been terminated and notwithstanding sections 244 and 280, the member has no further appeal.

Application of 244(4) to (6) & (8) & (9)

280(1)    Subsections 244(4) to (6) and (8) and (9) do not apply to housing cooperatives or to memberships in housing cooperatives.

Appeal of termination of membership

280(2)    Where a special resolution of the directors of a housing cooperative terminating the membership of a person in the cooperative is passed under 244(1), the person may appeal the termination by filing with the Registrar, within seven days after receiving notice under subsection 244(3) of the resolution, a written notice of appeal in a form approved by the Registrar setting out the reasons why the resolution effecting the termination should be set aside.

Registrar's functions

280(3)    Where the Registrar receives a notice of appeal under subsection (2) respecting the termination of a person's membership in a housing cooperative, the Registrar shall

(a) select three or five individuals whose names are on the current list maintained under subsection (9) who are able to act to constitute an appeal tribunal to hear the appeal and name one of them as the presiding member of the tribunal;

(b) make arrangements for, and convene, a meeting of the appeal tribunal to be held within 14 days after the day the Registrar received the notice of appeal for the purpose of determining the appeal;

(c) provide the members of the appeal tribunal with copies of the notice of appeal and any other documents that are in the possession of the Registrar that may be pertinent to the appeal; and

(d) notify the members of the tribunal, the person whose membership is the subject of the appeal and the cooperative of the time and place of the meeting of the appeal tribunal.

Appeal tribunal hearing

280(4)    An appeal tribunal convened under subsection (3) to hear an appeal respecting the termination of a person's membership in a housing cooperative

(a) shall proceed to hear the appeal at the time and place determined by the Registrar;

(b) shall, as far as practicable, follow the prescribed procedures for appeals under this section;

(c) shall permit the person and the cooperative to be heard and to be represented by counsel or agents;

(d) may confirm or set aside the special resolution of the directors of the cooperative terminating the person's membership in the cooperative; and

(e) shall, within seven days after the completion of the hearing of the appeal, render a decision in the appeal and notify the Registrar, the person and the cooperative of the decision.

No further appeal

280(5)    A decision of an appeal tribunal in respect of an appeal respecting the termination of a person's membership in a housing cooperative is not subject to any further appeal.

Membership continues

280(6)    A person who in accordance with this section appeals the termination of the person's membership in a housing cooperative shall, notwithstanding the resolution terminating the membership, continue to be a member of the cooperative until the termination of the membership is confirmed by an appeal tribunal under subsection (4).

Re-admittance

280(7)    A person whose termination of membership in a housing cooperative is confirmed on an appeal under this section shall not again be admitted to membership in the cooperative except by special resolution of a general meeting of the cooperative.

Occupancy during appeal

280(8)    If the directors of a housing cooperative terminate a member's membership in the cooperative and the member appeals the termination under this section, the member has the right to occupy the housing unit allocated to the member until the termination has been confirmed by an appeal tribunal under subsection (4).

Tribunal members list

280(9)    Each housing cooperative shall in December of each year submit to the Registrar the names and addresses of not less than two individuals, who are members of the cooperative and at least one of whom is not a director of the cooperative, and who are willing to act as members of appeal tribunals under this section for the next following year, and the Registrar shall create and maintain a list of those individuals for participation on appeal tribunals during the next following year.

Remuneration of tribunal members

280(10)   The presiding member and each other member of an appeal tribunal convened under this section is entitled to be paid honoraria in prescribed amounts.

Responsibility for costs of tribunals

280(11)   Where an appeal tribunal is convened to hear an appeal respecting the termination of a person's membership in a housing cooperative, the honoraria for the members of the tribunal and the costs of obtaining accommodation for the hearing shall be paid by the cooperative.

Right to possession terminated

281       Any right of a member of a housing cooperative to possession or occupancy of residential premises of the cooperative acquired because of membership in the cooperative is terminated upon the termination or other cessation of the membership of the member in the cooperative.

Order for possession

282       Where

(a) the right of a member of a housing cooperative to possession and occupancy of residential premises of the cooperative has been terminated because of section 279 or 281; and

(b) the member does not go out of possession of the premises;

the provisions of The Residential Tenancies Act, that provide for an order of possession against a tenant of residential premises who does not go out of possession of the premises after the tenant's tenancy has expired or has been terminated, apply, with such modifications as the circumstances require, to the member and to the cooperative.

Compensation for over holding past termination

283       A housing cooperative is entitled to compensation for the occupancy of a housing unit of the cooperative that is occupied by a terminated member until it is vacated.

Restriction on taking property

284(1)    A housing cooperative may not take the property of a member of the cooperative to satisfy amounts due to the cooperative except by consent or by legal proceedings.

Abandoned property

284(2)    Notwithstanding subsection (1) but subject to the regulations, a housing cooperative may include in its by-laws provisions allowing it to remove and store or dispose of personal property of a member or former member of the cooperative that was left by the member or former member in a housing unit of the cooperative after ceasing to occupy the unit without making arrangements satisfactory to the cooperative for the prompt removal of the property.

Inclusion in by-laws

285       For the purpose of section 220, the provisions of sections 279 to 283 and subsection 284(1) are deemed to be included in the by-laws of every housing cooperative.

Not for profit requirements

286(1)    Subject to subsections (2) and (3), but notwithstanding any other provision of this Act, a not for profit housing cooperative may not distribute or pay any of its assets to a member of the cooperative.

Use of patronage return to adjust rent

286(2)    A not for profit housing cooperative may in its by-laws provide that the whole or any part of any patronage return payable to a member of the cooperative shall be applied in reduction of the rent or price of the housing.

Permitted payments

286(3)    Subject to section 86, a not for profit housing cooperative may pay a member of the cooperative

(a) dividends on the member's membership shares in the cooperative and interest on member loans in accordance with its articles;

(b) if a member of the cooperative withdraws from the cooperative or the member's membership in the cooperative is terminated, or on the dissolution of the cooperative, a sum equal to the member's investment in its membership shares or member loans;

(c) a reasonable amount for property or services provided by the member to the cooperative; and

(d) a reasonable amount needed to resolve a dispute with a member.

No other payments permitted

287(1)    No person may pay or accept compensation for the withdrawal from membership of a member of a not for profit housing cooperative or for any person giving up possession of a housing unit of the cooperative, except as provided in subsection 286(3).

Limit on compensation

287(2)    No person may give or accept, in connection with the allocation or use of a housing unit of a not for profit housing cooperative, compensation that exceeds the housing charges for the housing unit determined in accordance with the by-laws.

Limit on compensation

287(3)    No person may give or accept, in connection with the allocation or use of a part of a housing unit of a not for profit housing cooperative, compensation that exceeds the amount that, having regard to the portion of the housing unit, would be a reasonable share of the housing charges for the housing unit determined in accordance with the by-laws.

Contravention of subsection (1), (2) or (3)

287(4)    A person who accepts compensation in respect of a housing unit of a not for profit housing cooperative in contravention of subsection (1), (2) or (3) shall pay the amount of the compensation to the cooperative.

Resolution for proposed fundamental change

288       A not for profit housing cooperative shall not be a party to a fundamental change to which Part 14 applies unless the change is authorized by a vote of not less than 90% of its members.

PART 13

WORKER COOPERATIVES

Application

289        This Part applies to cooperatives the articles of which set out that its business is restricted to primarily providing employment to its members.

Requirements of articles

290(1)    The articles of a worker cooperative shall provide that

(a) the business of the cooperative is restricted to that of primarily providing employment to its members;

(b) not more than 20% of its members may be persons who are not employees of the cooperative; and

(c) the maximum membership investment payable by a person to be a member of the cooperative may not be more than 50% of the member's expected annual salary during the first year of the member's membership, unless any amount in excess of that amount is also paid equally by all persons who are members.

Non-member employees

290(2)    A worker cooperative may provide employment to non-members if, not later than five years after the incorporation of the cooperative or the acquisition of a business by the cooperative, not less than 75% of its permanent employees or those of any entity controlled by it are members.

Permanent employees

290(3)    For the purpose of subsection (2), the following individuals are not permanent employees:

(a) an individual who is employed on a probationary period of less than three years;

(b) an individual who is under contract for a period of less than two years.

By-laws

291       The by-laws of a worker cooperative shall provide

(a) for any obligation of a member of the cooperative to provide capital to the cooperative, which capital, if required, shall be applied fairly to all members;

(b) the procedure for allocating, crediting or distributing any surplus earnings of the cooperative to its members, including that not less than 50% of those surplus earnings shall be paid on the basis of the remuneration earned by its members from the cooperative or the labour contributed by its members to the cooperative;

(c) the period of probation of an applicant for membership in the cooperative, which may not be longer than three years;

(d) how work is to be allocated;

(e) a provision for the laying off or suspending of its members when there is a lack of work; and

(f) a provision for the recall of its members to work.

Termination of membership

292(1)    Notwithstanding subsection 244(4), the by-laws of a worker cooperative may require that an appeal from the decision of its directors terminating the membership of a member of the cooperative may only be launched within seven days after the day the member receives notice of the termination of membership.

Laid-off member

292(2)    A temporary lay-off of a member of a worker cooperative by the cooperative does not result in termination of the member's membership in the cooperative.

Lay-off exceeding 2 years

292(3)    Where a member of a worker cooperative has been laid off for two years without the member having resumed employment with the cooperative, the directors or members of the cooperative may, in accordance with the by-laws, terminate the membership of the member.

Confirmation on appeal

292(4)    A decision of the directors of a worker cooperative to terminate the membership of a member of the cooperative is confirmed if the members of the cooperative, at a duly called meeting of the members, do not reverse the directors' decision.

Deemed confirmation

292(5)    If a meeting of the members of a worker cooperative is duly called to consider the appeal of a terminated member of the cooperative and a quorum of members is not available for the meeting, the directors shall call a second meeting to be held, notwithstanding section 226, not later than seven days after the first meeting and if, at the second meeting, there is no quorum of members, the decision of the directors is deemed to be confirmed.

Directors

293       Notwithstanding anything in this Act,

(a) not less than 80% of the directors of a worker cooperative shall be members of the cooperative who are employees of the cooperative;

(b) the general manager of a worker cooperative may be a director; and

(c) members of an audit committee of a worker cooperative may be employees of the cooperative.

Reorganization

294       A worker cooperative shall not be a party to a fundamental change to which Part 14 applies unless the change is authorized by a vote of not less than 90% of its members.

Dissolution

295       Unless otherwise provided in its articles, on dissolution of a worker cooperative, not less than 20% of the surplus of the cooperative, after the payment of its liabilities, shall be distributed to another cooperative, a non-profit entity or a charitable entity before any distribution is made to its members or shareholders.

PART 14

FUNDAMENTAL CHANGES

Interpretation

296       In this Part, "common share" means a share in a body corporate, other than a cooperative,

(a) that is, except where the body corporate is a cooperative entity or a credit union or caisse populaire, non-redeemable; and

(b) the rights of the holder of which are equal in all respects to the rights of the holders of other shares of the same class in the body corporate, including the right

(i) to vote at all meetings of the holders of shares of the body corporate except where only the holders of another specified class of shares are entitled to vote,

(ii) to receive dividends declared by the body corporate on the shares of that class, and

(iii) to receive the remaining property of the body corporate on dissolution.

Amendment of articles

297(1)    Subject to subsection (3) and sections 298, 299 and 300, the articles of a cooperative may be amended by special resolution of its members to

(a) change its name;

(b) change its statement of the type of cooperative that it will be;

(c) add, change or remove a restriction on the business or businesses that it may carry on;

(d) change the par value of its membership shares, and establish, remove or change the limit, if any, on the maximum number of its membership shares that may be issued;

(e) convert it from a cooperative that is incorporated without membership shares to one with membership shares and establish the par value of its membership shares and the maximum number, if any, of membership shares that may be issued;

(f) convert it from a cooperative that is incorporated with member shares into one without membership shares and provide for the conversion of membership shares into member loans;

(g) change the maximum number of investment shares that the cooperative is authorized to issue;

(h) reduce or increase its stated capital which, for the purposes of the amendment, is deemed to be set out in its articles;

(i) create and authorize the issue of investment shares or new classes of investment shares in the cooperative;

(j) change the designation of all or any of its investment shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any class or series of its investment shares, whether issued or unissued;

(k) change its investment shares of any class or series, whether issued or unissued, into a different number of investment shares of the same class or series or into the same or a different number of investment shares of other classes or series;

(l) divide a class of its investment shares, whether issued or unissued, into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of them;

(m) authorize its directors to divide any class of its unissued investment shares into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of each series;

(n) authorize its directors to change the rights, privileges, restrictions and conditions attached to its unissued investment shares of any series;

(o) revoke, diminish or enlarge any authority conferred under clause (m) or (n);

(p) add, change or remove restrictions on the issue, transfer or ownership of its investment shares;

(q) subject to subsection 42(4) and section 178, increase or decrease the number of its directors or the minimum or maximum number of its directors; or

(r) add, change or remove any other provision that is permitted by this Act to be set out in its articles.

Clerical errors

297(2)    The articles of a cooperative containing a clerical error may be amended by resolution of its directors or by ordinary resolution of its members to correct the error.

Filing articles of amendment

297(3)    Where the articles of a cooperative are amended under this section, its articles of amendment shall within six months after the day of the passing of the resolution of its members authorizing the amendment be delivered to the Registrar for filing, and the Registrar shall refuse to file the articles if not so delivered.

Revocation

297(4)    The directors of a cooperative may, if authorized by the special resolution of its members effecting an amendment under this section, revoke the resolution before it is acted on without further approval of the members or shareholders of the cooperative.

Restriction on amendment

297(5)    If the name of a cooperative is indicative of a restriction on the business that may be carried on by it, its articles may not be amended to remove that restriction unless its name is also amended.

Type of cooperative

297(6)    If the articles of a cooperative are amended to change the statement of the type of cooperative that it will be, its name shall also be changed to one that complies with subsection 17(2).

Cooperative basis

297(7)    An amendment to the articles of a cooperative may not be made if it would result in the cooperative not being organized or operated or not carrying on business on a cooperative basis or, if the cooperative is a housing cooperative or a worker cooperative, result in the cooperative not being in compliance with Part 12 or 13, as the case may be.

Proposal to amend

298(1)    Subject to subsection (2),

(a) a member of a cooperative;

(b) a director or a shareholder of a cooperative; and

(c) a person who has a beneficial ownership of investment shares in a cooperative, if the person claiming to have the beneficial ownership provides, not less than 14 days before the earliest day on which notice of the meeting at which the proposal is to be considered may be sent, satisfactory evidence of that beneficial ownership, if the cooperative so requests;

may make a proposal to amend the articles of the cooperative and section 230 applies, with any modifications that the circumstances require, to any meeting of the cooperative at which the proposal is to be considered.

Notice of amendment

298(2)    Notice of the meeting of members or shareholders of a cooperative at which a proposal to amend its articles is to be considered shall set out the proposed amendment and, if applicable, state that a dissenting member or a dissenting shareholder is entitled to the benefit of section 320, but failure to make that statement does not invalidate an amendment.

Amendment of articles: separate votes

299(1)    The holders of shares of a class or, subject to subsection (4), of a series of the investment shares of a cooperative are, unless its articles otherwise provide in the case of an amendment referred to in clause (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the articles of the cooperative

(a) to increase or decrease any maximum number of its authorized shares of the class, or increase any maximum number of its authorized investment shares of a class having rights or privileges equal or superior to the investment shares of the class;

(b) to effect an exchange, reclassification or cancellation of all or part of its investment shares of the class;

(c) to add, change or remove the rights, privileges, restrictions or conditions attached to its investment shares of the class, including

(i) rights to accrued dividends or rights to cumulative dividends,

(ii) redemption rights,

(iii) dividend preferences or liquidation preferences, or

(iv) conversion privileges, options, voting, transfer or preemptive rights, or rights to acquire securities of the cooperative, or sinking fund provisions;

(d) to increase the rights or privileges of any class of its shares having rights or privileges equal or superior to the investment shares of the class;

(e) to create a new class of its investment shares equal or superior to the investment shares of the class;

(f) to make any class of its investment shares having rights or privileges inferior to the investments shares of the class equal or superior to the investment shares of the class;

(g) to effect an exchange or create a right or exchange of all or part of its investment shares of another class into the investment shares of the class; or

(h) to constrain the issue, transfer or ownership of the investment shares of the class or change or remove a constraint on the shares.

Exception

299(2)    Subsection (1) does not apply in respect of a proposal to amend the articles of a cooperative to add a right or privilege for a shareholder to convert shares of a class or series of its investment shares into shares of another class or series of its investment shares that is subject to a constraint permitted under clause 48(1)(c) but otherwise equal to the class or series first mentioned.

Deeming provision

299(3)    For the purposes of clause (1)(e), a new class of investment shares of a cooperative, the issue, transfer or ownership of which is to be constrained by an amendment to its articles under clause 48(1)(c), that is otherwise equal to an existing class of its investment shares is deemed not to be equal or superior to the existing class of shares.

Limitation

299(4)    The shareholders of a particular series of a class of investment shares of a cooperative are entitled to vote under subsection (1) on an amendment to its articles separately from the shareholders of another series of that class only if the particular series is affected by the amendment in a manner different from other investment shares of the same class.

Right to vote

299(5)    Subsection (1) applies to amendments to the articles of a cooperative whether shares of a class or series of investment shares of the cooperative otherwise carry a right to vote.

Separate resolutions

299(6)    A proposed amendment under subsection (1) to the articles of a cooperative is adopted when its members and its shareholders of each class or series of its investment shares entitled to vote separately thereon as a class or series have approved the amendment by a special resolution.

Delivery of articles

300(1)    Subject to any revocation under subsection 48(5) or 297(4), after an amendment to the articles of a cooperative has been adopted, its articles of amendment shall be sent to the Registrar in a form approved by the Registrar, together with any information that the Registrar may require.

Reduction of stated capital

300(2)    If an amendment to the articles of a cooperative effects or requires a reduction of its stated capital, subsections 79(2) and (6) apply.

Certificate of amendment

301       On receipt of articles of amendment of a cooperative, the Registrar shall issue a certificate of amendment to the cooperative, if the Registrar is satisfied that the articles are in accordance with section 9 and, if the cooperative is a housing cooperative or a worker cooperative, with section 276 or subsection 290(1), as the case may be.

Effect of certificate

302(1)    An amendment to the articles of a cooperative becomes effective on the day indicated in its certificate of amendment, and the articles are amended accordingly.

Existing rights preserved

302(2)    No amendment to the articles of a cooperative affects any existing cause of action, claim or liability to prosecution, in favour of or against the cooperative or any of its directors or officers, or any civil, criminal or administrative action or proceeding to which the cooperative or any of its directors or officers is a party.

Restated articles

303(1)    The directors of a cooperative may at any time, and shall when reasonably so directed by the Registrar, restate the articles of incorporation of the cooperative as amended.

Delivery of articles

303(2)    Restated articles of incorporation of a cooperative, in a form approved by the Registrar, shall be sent to the Registrar.

Restated certificate

303(3)    Upon receipt of restated articles of incorporation of a cooperative, the Registrar shall issue a restated certificate of incorporation to the cooperative.

Effect of certificate

303(4)    Restated articles of incorporation of a cooperative are effective on, from and after the day indicated in its restated certificate of incorporation and supersede its original articles of incorporation and all amendments thereto made before that day.

Amalgamation

304(1)    Two or more cooperatives, including a holding cooperative and its subsidiary cooperatives, may amalgamate and continue as one cooperative, if the resulting amalgamated cooperative would meet the requirements for a cooperative to be incorporated under this Act.

Amalgamation with a body corporate

304(2)    A cooperative may enter into an amalgamation agreement with a body corporate for the purpose of amalgamating with that body corporate and

(a) continuing as one cooperative under this Act, if the resulting amalgamated cooperative would meet the requirements for a cooperative to be incorporated under this Act;

(b) continuing as a body corporate under another Act of the Legislature of Manitoba; or

(c) continuing as a body corporate under the laws of another jurisdiction;

if the body corporate is authorized to enter into the agreement by the laws of the jurisdiction in which the body corporate is incorporated.

Amalgamation agreement

305(1)    Each cooperative proposing to amalgamate under subsection 304(1) shall enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out:

(a) the provisions that are required under section 9 to be included in articles of incorporation;

(b) the name and address of each proposed director of the amalgamated cooperative;

(c) the manner in which the memberships, member loans, membership shares and patronage loans of each of the amalgamating cooperatives are to be converted into memberships, member loans, membership shares or patronage loans of the amalgamated cooperative and, if applicable, the manner in which the investment shares or other securities of the amalgamating cooperatives are to be converted into investment shares or securities of the amalgamated cooperative;

(d) if any share of an amalgamating cooperative is not to be converted into a share, membersip or security of the amalgamated cooperative, the amount of money or securities of any body corporate that the holders of those shares are to receive in addition to or instead of shares or securities of the amalgamated cooperative;

(e) the manner of payment of money instead of the issue of fractional shares, or the creating of fractional member loans, of the amalgamated cooperative or of any other body corporate the securities of which are to be received in the amalgamation;

(f) whether the by-laws of the amalgamated cooperative are to be those of one of the amalgamating cooperatives and, if not, a copy of the proposed by-laws of the amalgamated cooperative; and

(g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated cooperative.

Cancellation of certain shares

305(2)    Where, in an amalgamation of two or more cooperatives under subsection 304(1), shares or member loans of one of the amalgamating cooperatives are held by or on behalf of another of the amalgamating cooperatives, the amalgamation agreement shall provide for the cancellation of those shares or member loans when the amalgamation becomes effective, without any repayment of capital in respect of the cancelled shares or member loans, and no provision shall be made in the agreement for the conversion of those shares or member loans into shares or member loans of the amalgamated cooperative.

Approval

306(1)    The directors of each amalgamating cooperative shall submit the amalgamation agreement for approval to a meeting of the members of that cooperative and to a meeting of the shareholders, if any, of that cooperative and, subject to subsection (4), to the shareholders of each class or series of its investment shares.

Notice of meeting

306(2)    Notices of meetings of the members and shareholders, if any, of each amalgamating cooperative shall be sent in accordance with section 226 to each of its members and shareholders and the notice shall

(a) include or be accompanied by a copy or summary of the amalgamation agreement; and

(b) state that a dissenting member or shareholder is entitled to the benefit of section 320;

but failure to make the statement required under clause (b) does not invalidate the amalgamation.

Right to vote

306(3)    Each investment share of an amalgamating cooperative carries the right to vote with respect to the amalgamation agreement, whether the share otherwise carries the right to vote.

Class vote

306(4)    The shareholders of shares of a class or series of investment shares of an amalgamating cooperative are entitled to vote separately as a class or series in respect of the amalgamation agreement if it contains a provision that, if contained in a proposed amendment to the articles, would entitle them to vote as a class or series under subsection 299(1).

Approval

306(5)    Subject to subsection (4), an amalgamation agreement for the amalgamation of two or more cooperatives is adopted when the members of each of the amalgamating cooperatives and, if any of the amalgamating cooperatives has issued investment shares, their shareholders, have approved the amalgamation agreement by separate special resolutions.

Termination

306(6)    An amalgamation agreement for the amalgamation of two or more cooperatives may provide that at any time before the issue of a certificate of amalgamation the agreement may be terminated by the directors of an amalgamating cooperative, even if the agreement has been approved by the members and the shareholders, if any, of all or any of the amalgamating cooperatives.

Amalgamations under clause 304(2)(a)

306(7)    Section 305 and subsections (1) to (6) of this section apply, with necessary modifications, to the amalgamation of a cooperative and a body corporate for the purpose of continuing as one cooperative under this Act, as provided for in clause 304(2)(a), and, in this regard, a reference to "cooperative" in section 305 includes the body corporate.

Further requirements

306(8)    An amalgamation agreement referred to in clause 304(2)(a) shall contain any information required by the laws of the jurisdiction in which the amalgamating body corporate is incorporated and shall be approved by the members of the amalgamating body corporate in accordance with the requirements of those laws.

Amalgamations under clause 304(2)(b) or (c)

306(9)    Subject to subsection (10), clauses 305(1)(b) to (g), subsection 305(2) and subsections (1) to (6) of this section apply, with necessary modifications, to the amalgamation of a cooperative and a body corporate for the purpose of continuing as a body corporate under another Act of the Legislature of Manitoba, as provided for in clause 304(2)(b), or under the laws of another jurisdiction, as provided for in clause 304(2)(c), and, in this regard, a reference to "cooperative" in section 305 includes the body corporate.

Further requirements

306(10)   An amalgamation agreement referred to in clause 304(2)(b) or (c)

(a) shall contain any information required by the laws of the jurisdiction in which the amalgamating body corporate is incorporated and shall be approved by the members of the amalgamating body corporate in accordance with the requirements of those laws; and

(b) shall contain any information required by the Act under which the amalgamating cooperative and body corporate propose to continue.

Vertical short-form amalgamation

307(1)    A cooperative that is a holding cooperative may amalgamate with one or more of its wholly-owned subsidiary cooperatives, and in that case the cooperative and its subsidiaries continue as a single amalgamated cooperative without complying with sections 305 and 306 if

(a) the amalgamation is approved by a resolution of the directors of each of the amalgamating cooperatives; and

(b) the resolutions provide that

(i) the shares of each subsidiary be cancelled without any repayment of capital in respect of them,

(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the holding cooperative, and

(iii) no shares or securities may be issued by the amalgamated cooperative in connection with the amalgamation.

Horizontal short-form amalgamation

307(2)    Two or more wholly-owned subsidiary cooperatives of a holding entity may amalgamate and continue as a single amalgamated cooperative without complying with sections 305 and 306 if

(a) the amalgamation is approved by a resolution of the directors of each of the amalgamating cooperatives; and

(b) the resolutions provide that

(i) the shares of all but one of the amalgamating subsidiaries be cancelled without any repayment of capital in respect of them,

(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the amalgamating subsidiary whose shares are not cancelled, and

(iii) the stated capital of the amalgamating subsidiaries whose shares are cancelled are added to the stated capital of the amalgamating subsidiary whose shares are not cancelled.

Articles of amalgamation

308(1)    Subject to subsection 306(6), after an amalgamation of cooperatives has been adopted under section 306 or 307, articles of amalgamation of the cooperatives in a form approved by the Registrar shall be sent to the Registrar.

Attached declarations

308(2)    A statutory declaration of a director or officer of each amalgamating cooperative shall be attached to the articles of amalgamation of the cooperatives and shall establish

(a) that the amalgamated cooperative will be organized and operated and will carry on business on a cooperative basis;

(b) if the cooperative is a housing cooperative, that the amalgamated cooperative will comply with Part 12;

(c) if the cooperative is a worker cooperative, that the cooperative will comply with Part 13;

(d) that there are reasonable grounds to believe that

(i) each amalgamating cooperative is, and the amalgamated cooperative will be, able to pay its liabilities as they become due, and

(ii) the realizable value of the amalgamated cooperative's assets will not be less than the total of its liabilities and stated capital of all classes; and

(e) that there are reasonable grounds to believe that

(i) no creditor of the amalgamating cooperatives will be prejudiced by the amalgamation, or

(ii) adequate notice has been given to all known creditors of the amalgamating cooperatives and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

Adequate notice

308(3)    For the purpose of clause (2)(e), adequate notice is given if

(a) a notice in writing is sent to each known creditor who has a claim against any of the amalgamating cooperatives that exceeds $1,000;

(b) a notice in writing is published once in a newspaper published or distributed in the place where each amalgamating cooperative has its registered office and reasonable notice is given in each province in Canada where the cooperative carries on business; and

(c) each notice states that the cooperative intends to amalgamate with one or more specified cooperatives in accordance with this Act and that a creditor of the cooperative may object to the amalgamation not later than 30 days after the day of the notice.

Certificate of amalgamation

308(4)    On receipt of articles of amalgamation of two or more cooperatives and the declarations required by subsection (2), the Registrar shall issue a certificate of amalgamation to the amalgamated cooperative if the Registrar is satisfied that

(a) the articles are in accordance with section 9 and, if the cooperative is a housing cooperative or a worker cooperative, with section 276 or subsection 290(1),as the case may be;

(b) the cooperative will be organized and operated and will carry on business on a cooperative basis;

(c) the things described in clauses (2)(d) and (e) are true; and

(d) if the cooperative is a housing cooperative or a worker cooperative, Part 12 or 13, as the case may be, has been complied with.

Additional information

308(5)    The Registrar may request any additional information that the Registrar considers necessary to be satisfied that the requirements set out in subsection (4) have been met.

Effect of certificate of amalgamation

309       On the day indicated in a certificate of amalgamation of two or more cooperatives,

(a) the amalgamation of the amalgamating cooperatives and their continuance as one cooperative are effective;

(b) the property of each of the amalgamating cooperatives continues to be the property of the amalgamated cooperative;

(c) the amalgamated cooperative continues to be liable for the obligations of each of the amalgamating cooperatives;

(d) any existing cause of action, claim or liability to prosecute remains unaffected;

(e) any civil, criminal or administrative action or proceeding pending by or against any of the amalgamating cooperatives may be continued by or against the amalgamated cooperative;

(f) any conviction against, or any ruling, order or judgment in favour of or against, any of the amalgamating cooperatives may be enforced by or against the amalgamated cooperative; and

(g) the articles of amalgamation are deemed to be the articles of incorporation of the amalgamated cooperative, and the certificate of amalgamation is deemed to be the certificate of incorporation of the amalgamated cooperative.

Arrangement

310(1)    A cooperative may make an arrangement

(a) that affects the rights of all its members; or

(b) that affects only the rights of the shareholders of a part or all of a particular class of its investment shares.

Joint arrangement

310(2)    Where a cooperative proposing an arrangement has one or more subsidiaries, it may join in the arrangement with the subsidiary or subsidiaries.

Scheme of arrangement

310(3)    A cooperative proposing an arrangement shall prepare a scheme for the purpose, specifying in detail what is to be done under the arrangement and the manner in which it is to be effected.

Approval

311(1)    The directors of a cooperative proposing to make an arrangement shall submit the scheme of the arrangement for approval to a meeting of its members and to a meeting of its shareholders, if any, and, subject to subsection (4), to the shareholders of each class or series of its investment shares.

Notice of meeting

311(2)    A notice of a meeting of members or shareholders of a cooperative to which a scheme of arrangement is to be submitted shall be sent in accordance with section 226 to each of the members and shareholders of the cooperative, and shall

(a) include or be accompanied by a copy or summary of the scheme of arrangement; and

(b) state that a member or shareholder is entitled to dissent in accordance with section 320;

but failure to make the statement required under clause (b) does not invalidate the arrangement.

Right to vote

311(3)    Each investment share of a cooperative carries the right to vote with respect to a scheme of arrangement to be made by the cooperative, whether it otherwise carries the right to vote.

Class vote

311(4)    The holders of shares of a class or series of investment shares of a cooperative are entitled to vote separately as a class or series in respect of a scheme of arrangement to be made by the cooperative if it contains a provision that, if contained in a proposed amendment to the articles, would entitle them to vote as a class or series under subsection 299(1).

Adoption of arrangement

311(5)    Subject to subsection (4), a scheme of arrangement by a cooperative is adopted when its members and, if the cooperative has issued investment shares, its shareholders have approved of the scheme by separate special resolutions.

Termination of proposed arrangement

311(6)    A scheme of arrangement by a cooperative may provide that, at any time before the issue of a certificate of arrangement, the scheme of arrangement may be terminated by the directors of the cooperative, even if the scheme of arrangement has been approved by the members and shareholders of the cooperative.

Articles of arrangement

312(1)    After a scheme of arrangement has been adopted under section 311 by a cooperative, but subject to subsection 311(6), articles of arrangement in a form approved by the Registrar shall be sent to the Registrar.

Attached declarations

312(2)    The articles of arrangement of a cooperative sent to the Registrar under subsection (1) shall have attached thereto a statutory declaration of a director or officer of the cooperative that establishes to the satisfaction of the Registrar that

(a) there are reasonable grounds to believe that

(i) the body corporate to which the whole or part of the undertaking of the cooperative is to be sold or transferred will, if required to do so under the scheme of arrangement, be able to pay the liabilities of the cooperative as they become due, and

(ii) the realizable value of the assets of the body corporate, upon completion of the arrangement, will not be less than the total of its liabilities and stated capital of all classes; and

(b) there are reasonable grounds to believe that

(i) no creditor of the cooperative will be prejudiced by the arrangement, or

(ii) adequate notice has been given to all known creditors of the cooperative and no creditor objects to the arrangement otherwise than on grounds that are frivolous or vexatious.

Adequate notice to creditors

312(3)    For the purposes of clause (2)(b), adequate notice is given if

(a) a notice in writing is sent to each known creditor who has a claim against the cooperative that exceeds $1,000;

(b) a notice in writing is published once in a newspaper published or distributed in the place where the cooperative has its registered office, and reasonable notice is given in each province in Canada where the cooperative carries on business; and

(c) each notice states that the cooperative proposes to complete an arrangement in accordance with this Act and that a creditor of the cooperative may object to the arrangement not later than 30 days after the day the notice is given.

Certificate of arrangement

312(4)    On receiving articles of arrangement of a cooperative and the declaration required by subsection (3), the Registrar shall file the articles and issue a certificate of arrangement to the cooperative if the Registrar is satisfied that, if the cooperative is not to be dissolved under subsection 313(3),

(a) the articles are in accordance with section 9 and, if the cooperative is a housing cooperative or a worker cooperative, with section 276 or subsection 290(1), as the case may be;

(b) the cooperative will be organized and operated and will carry on business on a cooperative basis;

(c) the things described in clauses (2)(a) and (b) are true; and

(d) if the cooperative is a housing cooperative or a worker cooperative, Parts 12 and 13, as the case may be, has been complied with.

Time of effect

313(1)    An arrangement of a cooperative becomes effective on the day indicated in the certificate of arrangement issued to the cooperative.

Effect of certificate

313(2)    Where the scheme of arrangement of a cooperative provides for the transfer or sale of the whole of the undertaking of the cooperative to another body corporate, then, on the effective day of the arrangement,

(a) the whole of the undertaking of the cooperative is vested in the body corporate;

(b) the body corporate becomes liable for the obligations of the cooperative;

(c) an existing cause of action, claim or liability to prosecution against the cooperative continues against the body corporate;

(d) a civil, criminal or administrative action or proceeding pending by or against the cooperative may be continued by or against the body corporate; and

(e) a conviction against, or ruling, order or judgment in favour of or against, the cooperative may be enforced by or against the body corporate.

Dissolution

313(3)    If a scheme of arrangement of a cooperative so provides, the cooperative may send to the Registrar articles of dissolution in a form approved by the Registrar, and if the Registrar is satisfied that the cooperative has no property and no liabilities the Registrar may file the articles and issue a certificate of dissolution of the cooperative.

Continuance

314(1)    A body corporate incorporated or continued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Registrar for a certificate of continuance under this Act if the body corporate

(a) satisfies, or by its articles of continuance would satisfy, the requirements for incorporation under this Act;

(b) is organized and operated and carries on its business on a cooperative basis or, by its articles of continuance, causes the body corporate to be organized and operated and to carry on its business on a cooperative basis; and

(c) has a capital and corporate structure that, if set out in its articles and by-laws, would meet the requirements of this Act.

Continuance for the purpose of amalgamation

314(2)     A body corporate incorporated or continued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Registrar for a certificate of continuance and a certificate of amalgamation under this Act if the body corporate

(a) proposes to be continued under this section for the purpose of amalgamating with another body corporate in compliance with this Act and does, or will after the amalgamation, satisfy the requirements for incorporation as a cooperative under this Act;

(b) is organized and operated and carries on its business on a cooperative basis or, after the amalgamation, will be organized and operated and will carry on its business on a cooperative basis; and

(c) has a capital and corporate structure, or after the amalgamation will have a capital and corporate structure, that, if set out in its articles and by-laws, would meet the requirements of this Act.

Amendments in articles of continuance

314(3)    A body corporate that applies for continuance under subsection (1) or (2) may, without so stating in its articles of continuance, effect by those articles any amendment to the documents by which it was originally incorporated if the amendment is one that a cooperative incorporated under this Act may make to its articles.

Articles of continuance

314(4)    If a body corporate wishes to apply for continuance under subsection (1), articles of continuance in a form approved by the Registrar shall be sent to the Registrar, together with any information that the Registrar may require and a statutory declaration of a director or officer of the body corporate

(a) that after continuance the cooperative will be organized and operated and will carry on business on a cooperative basis;

(b) in the case of a housing cooperative, that after continuance, the cooperative will be in compliance with Part 12; and

(c) in the case of a worker cooperative, that after continuance the cooperative will be in compliance with Part 13.

Continuance and amalgamation

314(5)    If a body corporate wishes to apply for continuance under subsection (2), articles of continuance and articles of amalgamation in a form approved by the Registrar shall be sent to the Registrar together with an amalgamation agreement containing the particulars required by section 305 to be set out therein, any information that the Registrar may require and a statutory declaration of a director or officer of the body corporate

(a) that after amalgamation the cooperative will be organized and operated and will carry on business on a cooperative basis;

(b) in the case of a housing cooperative, that after amalgamation the cooperative will be in compliance with Part 12; and

(c) in the case of a worker cooperative, that after amalgamation the cooperative will be in compliance with Part 13.

Certificate of continuance

315(1)    On receipt of the articles of continuance of a body corporate, and the declaration required by subsection 314(4), the Registrar, if satisfied that the requirements for incorporation under this Act have been met, shall issue a certificate of continuance to the continued cooperative.

Certificate of continuance with amalgamation

315(2)    On receipt of the articles of continuance of a body corporate, the articles of amalgamation, the amalgamation agreement and the declaration required by subsection 314(5), the Registrar, if satisfied that the requirements for incorporation and the requirements for amalgamation have been met, shall issue a certificate of continuance and a certificate of amalgamation to the continued and amalgamated cooperative.

Reliance

315(3)    For the purposes of subsections (1) and (2), the Registrar may rely on the articles and the declarations sent to the Registrar.

Effect of certificate

315(4)    On the day shown in the certificate of continuance issued under subsection (1) or (2) by the Registrar to a continued cooperative

(a) the body corporate becomes a cooperative to which this Act applies as if it had been incorporated under this Act;

(b) the articles of continuance are deemed to be the articles of incorporation of the continued cooperative; and

(c) the certificate of continuance is deemed to be the certificate of incorporation of the continued cooperative.

Copy of certificate

315(5)    Where under this section the Registrar issues a certificate of continuance to a continued cooperative, the Registrar shall forthwith send a copy thereof to the appropriate official or public body in the jurisdiction in which the body corporate that was continued was incorporated before the continuance.

Rights preserved

315(6)    When a body corporate is continued as a cooperative under this Act,

(a) the property of the body corporate continues to be the property of the cooperative;

(b) the cooperative continues to be liable for the obligations of the body corporate;

(c) an existing cause of action, claim or liability to prosecution is unaffected;

(d) any civil, criminal or administrative action or proceeding pending by or against the body corporate may be continued by or against the cooperative; and

(e) any conviction against, or ruling, order or judgment in favour of or against the body corporate may be enforced by or against cooperative.

Membership shares

315(7)    When a body corporate is continued as a cooperative under this Act,

(a) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions of membership shares set out in this Act and its articles, including the par value thereof as set out in its articles;

(b) the holders of the common shares of the body corporate are deemed to be the members of the cooperative; and

(c) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect.

Issued shares

315(8)    Subject to section 96,

(a) a share of a body corporate issued before it was continued under this Act is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance, irrespective of whether the share is fully paid and irrespective of any designation, right, privilege, restriction or condition set out on or referred to in the certificate representing the share;

(b) continuance under this Act does not deprive a holder of any right or privilege that the holder claims under, or relieve the holder of any liability in respect of, an issued share; and

(c) shares carry voting rights only to the extent permitted by this Act.

Conversion privilege

315(9)    If a cooperative continued under this Act had, before it was so continued, issued a certificate for shares in registered form that is convertible to bearer form, the cooperative may, if the holder of the certificate exercises the conversion privilege attached to the certificate, issue a certificate in bearer form for the same number of shares to the holder.

Definition of "share"

315(10)   For the purpose of subsections (8) and (9), "share" includes a document referred to in any of subsections 81(1) to (3), a share warrant (within the meaning assigned by subsection 38(1) of the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, and a like instrument.

Continuance: other provincial Acts

316(1)    A cooperative, other than a not for profit housing cooperative, with membership share capital may, on special resolution of the members and, if the cooperative has issued investment shares, on a separate special resolution of the shareholders of each class, apply for continuance under The Corporations Act or The Condominium Act and on the day specified in the document evidencing the continuance, that Act applies and this Act ceases to apply to the body corporate continued under that Act.

Notice of meeting

316(2)    A notice of a meeting of a cooperative to authorize its continuance under this section shall be sent in accordance with section 226 to each of its members and each of its shareholders, if any, and shall

(a) include or be accompanied by a copy or summary of the proposal for the continuance and any proposed changes to its articles; and

(b) state that a member or shareholder is entitled to dissent in accordance with section 320;

but failure to make the statement required under clause (b) does not invalidate a discontinuance under this section.

Result of continuance

316(3)    On a continuance under subsection (1), the membership shares of a cooperative are deemed to be

(a) common shares without a par value in the case of a continuance under The Corporations Act; and

(b) owners' interests in the case of a continuance under The Condominium Act.

Revocation

316(4)    If authorized by the special resolutions referred to in subsection (1) of a cooperative authorizing the application for continuance of the cooperative, its directors may, without further approval of its members or shareholders, revoke the resolution before it is acted on.

Certificate of discontinuance

316(5)    On receipt of a notice satisfactory to the Registrar that a cooperative has been continued under this section, the Registrar shall file the notice and issue a certificate of discontinuance of the cooperative in a form approved by the Registrar.

Time of discontinuance

316(6)    This Act ceases to apply to a cooperative on the day shown in the certificate of its discontinuance.

Continuance: other jurisdictions

317(1)    Subject to subsection (6) a cooperative, other than a not for profit housing cooperative, on a special resolution of the members and, if the cooperative has issued investment shares, on a separate special resolution of the shareholders of each class, may, if it establishes to the satisfaction of the Registrar by a statutory declaration of a director or officer of the cooperative that its proposed continuance in another jurisdiction would not have an effect set out in any of clauses (a) to (c), apply to the appropriate official or public body of another jurisdiction requesting that the cooperative be continued as if it had been originally incorporated under the laws of that other jurisdiction, namely, that the continuance would not

(a) adversely affect its members, creditors or shareholders; or

(b) result in a worker cooperative carrying on its business or affairs in a manner not consistent with Part 13.

Continuance and amalgamation

317(2)    If authorized by the members and shareholders of a cooperative in accordance with this section, and if made pursuant to an amalgamation agreement referred to in clause 304(2)(b) or (c) that is approved in accordance with section 306, an application for continuance under subsection (1) may include an application to the official or public body referred to in that subsection for a certificate of amalgamation.

Notice of meeting

317(3)    A notice of a meeting of a cooperative to authorize its continuance under this section shall be sent in accordance with section 226 to each of its members and its shareholders, if any, and shall

(a) include or be accompanied by a copy or summary of the proposal for the continuance and any proposed changes to its articles; and

(b) state that a member or shareholder is entitled to dissent in accordance with section 320;

but failure to make the statement required under clause (b) does not invalidate a discontinuance under this section.

Revocation

317(4)    If authorized by the special resolutions referred to in subsection (1) of a cooperative authorizing the application for continuance of the cooperative under this section, its directors may, without further approval of its members or shareholders, revoke the resolution before it is acted on.

Certificate of discontinuance

317(5)    On receipt of a notice satisfactory to the Registrar that a cooperative has been continued under the laws of another jurisdiction, the Registrar shall file the notice and issue a certificate of its discontinuance.

Time of discontinuance

317(6)    This Act ceases to apply to the cooperative on the day shown in the certificate of its discontinuance.

Requirements for continuance

317(7)    A cooperative shall not be continued as a body corporate under the laws of another jurisdiction, unless those laws provide in effect that

(a) the property of the cooperative becomes and continues to be the property of the body corporate;

(b) the body corporate becomes and continues to be liable for the obligations of the cooperative;

(c) any existing cause of action, claim or liability to prosecution is unaffected;

(d) any civil, criminal or administrative action or proceeding pending by or against the cooperative may be continued to be prosecuted by or against the body corporate; and

(e) any conviction against, or ruling, order or judgment in favour of or against the cooperative may be enforced by or against the body corporate.

Shareholders right to vote

318(1)    Each investment share of a cooperative carries the right to vote on a continuance of the cooperative under section 316 or 317, whether it otherwise carries the right to vote.

Class vote

318(2)    The shareholders of a class or series of the investment shares of a cooperative are entitled to vote separately as a class or series in respect of a continuance referred to in subsection (1) if the class or series is affected differently from another class or series of the investment shares by the proposed continuance.

Extraordinary disposition

319(1)    A sale, lease or exchange of all or substantially all of the property of a cooperative, other than in the ordinary course of business, requires the approval of its members and its shareholders, if any, in accordance with subsections (2) to (6).

Notice

319(2)    A notice of meeting of a cooperative to obtain the approval referred to in subsection (1) complying with section 226 shall be sent to its members and shareholders, if any, and shall

(a) include or be accompanied by a copy or summary of the agreement of sale, lease or exchange of its property; and

(b) state that a member or a shareholder is entitled to dissent in accordance with section 320;

but failure to make the statement required under clause (b) does not invalidate the sale, lease or exchange.

Right to vote

319(3)    Each investment share of a cooperative carries the right to vote in respect of an extraordinary disposition of the property of the cooperative referred to in subsection (1), whether it otherwise carries the right to vote.

Class vote

319(4)    The shareholders of a class or series of the investment shares of a cooperative are entitled to vote separately as a class or series in respect of an extraordinary disposition of its property referred to in subsection (1) if the class or series is affected differently from another class or series of the investment shares by the proposed disposition.

Approval

319(5)    Subject to subsection (4), an extraordinary disposition referred to in subsection (1) of the property of a cooperative is authorized when approved by a special resolution of its members and, if the cooperative has issued investment shares, by a separate special resolution of its shareholders of each class or series of its investment shares and, the special resolutions may authorize the directors to fix any terms or conditions of the disposition.

Abandonment

319(6)    If the special resolutions referred to in subsection (5) of a cooperative authorizing the extraordinary disposition of its property under this section so state, but subject to the rights of third parties, its directors may abandon the disposition without further approval.

Right to dissent

320(1)    Unless section 321 or 324 applies, a member or shareholder of a cooperative may dissent if the cooperative resolves to

(a) amend its articles in a manner that adversely affects a member's membership rights or that affects the rights of a shareholder in respect of an investment share;

(b) amend its articles to add, change or remove a restriction on the business the cooperative may carry on;

(c) amalgamate other than under clause 304(2)(c) or section 307;

(d) make an arrangement;

(e) apply for continuance under section 316 or subsection 317(1);

(f) sell, lease or exchange all or substantially all of its property under section 319; or

(g) amalgamate with a body corporate under clause 304(2)(c) and apply for continuance under subsection 317(2).

Further right

320(2)    A shareholder of any class or series of the investment shares of a cooperative entitled to vote under section 299 may dissent if the cooperative resolves to amend its articles in a manner described in that section.

Dissent

320(3)    A dissenting member or shareholder of a cooperative shall send to the cooperative, at or before any meeting of its members or shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the cooperative did not give notice to the member or shareholder of the purpose of the meeting or of the right to dissent.

Effect if dissent

320(4)    A dissenting member of a cooperative is deemed to have given notice of intent to withdraw from the cooperative under this section if the resolution to which the member objects is passed; and a dissenting shareholder of a cooperative is deemed to have claimed under this section on behalf of all investment shares in a class held by the shareholder if the resolution to which the shareholder objects is passed.

Notice of resolution

320(5)    The cooperative shall, not later than 10 days after its members and shareholders have adopted a resolution to which a member or shareholder has objected under subsection (3), send to each dissenting member and shareholder notice that the resolution has been adopted.

Notice

320(6)    A dissenting member or shareholder of a cooperative may, not later than 21 days after receiving the notice under subsection (5), or if no such notice is received, not later than 21 days after learning that the resolution to which the member or shareholder objected was adopted, send to the cooperative a written notice that contains

(a) the member's or shareholder's name and address;

(b) if the person is a shareholder, the number of investment shares and the class or classes of the shares held; and

(c) a demand

(i) in the case of a dissenting member, for withdrawal from the cooperative, for payment of all membership shares at their par value and for repayment of any other interest held by the member in the cooperative, the par value being determined on the day before the resolution was adopted, and

(ii) in the case of a dissenting shareholder, for payment of the fair market value of all investment shares of each class held by the shareholder, the fair market value being determined on the day before the resolution was adopted.

Rights of members

320(7)    Notwithstanding the articles and by-laws of the cooperative, a dissenting member of a cooperative who has sent it a notice under subsection (6) does not have the right to vote at a meeting of the cooperative after having sent the notice, and notwithstanding its articles and by-laws and subsection 64(3), the member is entitled to be paid the value of the member's membership shares in the cooperative, and of any other interest held by the member in the cooperative, in accordance with this section or a court order.

Share certificates

320(8)    A dissenting shareholder of a cooperative shall, not later than 30 days after sending the notice under subsection (6), send to the cooperative or to its transfer agent the certificates representing the investment shares in the cooperative held by the shareholder.

Forfeiture

320(9)    A dissenting shareholder of a cooperative who fails to comply with subsection (8) has no right to claim under this section.

Endorsing certificate

320(10)   Each certificate representing investment shares in a cooperative sent under subsection (8) shall be endorsed by the cooperative or its transfer agent with a notice that the holder is a dissenting shareholder and shall be returned to the shareholder.

Suspension of rights

320(11)   Where a dissenting member or shareholder of a cooperative sends a notice under subsection (6) to the cooperative, the member's rights as a member, or the shareholder's rights as a shareholder, as the case may be, other than the right to be paid in accordance with subsection (6), are suspended.

Reinstatement

320(12)   The rights of a dissenting member or shareholder of a cooperative are reinstated as of the day the notice referred to in subsection (6) was sent by the member or shareholder if

(a) the member or shareholder withdraws the demand made under clause (6)(c) before the cooperative makes an offer under subsection (13);

(b) the cooperative fails to make an offer in accordance with subsection (13) and the dissenting member or shareholder withdraws the notice; or

(c) the directors of the cooperative

(i) revoke under subsection 297(4) a resolution to amend its articles,

(ii) terminate under subsection 306(6) an amalgamation agreement,

(iii) terminate under subsection 311(6) an arrangement,

(iv) revoke under subsection 316(4) a resolution for an application for its continuance,

(v) revoke under subsection 317(4) a resolution for an application for its continuance, or

(vi) abandon under subsection 319(6) an extraordinary disposition of its property;

that was the subject of the member's or shareholder's dissent.

Offer to pay

320(13)   Where a member or shareholder of a cooperative dissents under subsection (1) or (2) in respect of a resolution, the cooperative shall, not later than 7 days after the later of the day on which the resolution becomes effective and the day the cooperative receives a notice under subsection (6) in respect of the resolution from one of its members or shareholders, send to each of the dissenting members and shareholders

(a) a written offer to make the payments described in subsection (6) and a statement showing how the payments were calculated; or

(b) a statement that subsection (23) or (24) applies.

Same terms

320(14)   Every offer for membership shares of a cooperative and offer for repayment of any other interests in the cooperative made under subsection (13) in respect of a particular resolution shall be on the same terms as every other offer for its membership shares or for repayment of other interests made under that subsection in respect of that resolution, and every offer for shares of a class or series of the investment shares of the cooperative made under subsection (13) in respect of that resolution shall be on the same terms as every other offer for shares of that class or series of its investment shares made under that subsection in respect of that resolution.

Payment

320(15)   Subject to subsection (23) or (24), a cooperative shall pay to each of its dissenting members and shareholders the amounts offered to them under subsection (13) not later than 10 days after their acceptance of the offer, but the offer lapses if it is not accepted within 30 days after it is made.

Application to court

320(16)   If a dissenting member or shareholder of a cooperative fails to accept an offer made by the cooperative, the cooperative may, not later than 50 days after the resolution is approved or any later time that the court may allow, apply to the court to fix the amount to be paid in satisfaction of a claim made by the member or shareholder under subsection (6).

If no application

320(17)   If a cooperative authorized to make an application to the court under subsection (16) fails to make the application, or fails to make an offer under subsection (13) within the time set out in subsection (16), a dissenting member or shareholder of the cooperative may, not later than 20 days after the end of that period, make an application to the court for the same purpose.

No security for costs

320(18)   On an application under subsection (16) or (17) by a cooperative or a dissenting member or shareholder of a cooperative, the dissenting member or shareholder of the cooperative is not required to give security for costs in the application.

Parties

320(19)   On an application under subsection (16) or (17) by a cooperative or a dissenting member or shareholder of a cooperative, all the dissenting members and shareholders of the cooperative whose shares or other interests have not been purchased are joined as parties and the cooperative shall notify them, advising each of them of their right to participate in, and the consequences of, the application.

Powers of court

320(20)   On an application under subsection (16) or (17) by a cooperative or a dissenting member or shareholder of a cooperative, the court shall determine who are dissenting members and shareholders of the cooperative and fix the amount to be paid to each in satisfaction of their claims under subsection (6) and may make any further order that the court thinks fit.

Notice if subsection (23) or (24) applies

320(21)   If subsection (23) or (24) applies in respect of the satisfaction of a claim under subsection (6) against a cooperative, the cooperative shall, not later than ten days after the determination under subsection (20) of the claim, give written notice to each dissenting member and shareholder affected by any satisfaction of the claim advising them that subsection (23) or (24) applies in respect of their claims.

Effect if subsection (23) or (24) applies

320(22)   If subsection (23) or (24) applies in respect of a claim under subsection (6) against a cooperative,

(a) a dissenting member or shareholder of the cooperative who is affected by the satisfaction of the claim may, not later than 30 days after receiving the notice under subsection (21) in respect of the claim, by notice to the cooperative withdraw the member's or shareholder's, as the case may be, notice of demand, in which case the member is reinstated as a member or the shareholder is reinstated as a shareholder; or

(b) if no notice is given to the cooperative under clause (a), the dissenting member or shareholder retains the status of a claimant to be paid as soon as the cooperative may lawfully do so or, in liquidation, to be paid in priority to its remaining members and shareholders.

Limitation

320(23)   A cooperative may not make a payment to a dissenting member or shareholder of the cooperative under this section if there are reasonable grounds to believe that the making of the payment by the cooperative would be a breach of subsection 66(1).

Instalments

320(24)   If the directors of a cooperative determine that a payment under this section to a dissenting member of the cooperative would adversely affect the financial well-being of the cooperative, the payment may be made to the dissenting member over a period that begins on the day the resolution in respect of which the member dissented was adopted and ends not later than

(a) five years after that day; or

(b) any other day that is not more than 10 years after that day and that is specified in the articles of the cooperative;

but the payment of the amount or any part of the amount shall not be made later than it would otherwise be made under the by-laws of the cooperative.

Interest on instalments

320(25)   Every payment made under subsection (24) shall bear interest at the prescribed rate or interest calculated in accordance with the regulations.

Former member who dissented

320(26)   Notwithstanding any other provision of this Act, where a person who was a dissenting member of a cooperative has received a payment under this section,

(a) the cooperative may refuse to readmit the person to membership until the amount, or such part of the amount as would not otherwise have been paid to the member under the by-laws of the cooperative, is repaid to the cooperative; and

(b) if the person becomes a non-member patron of the cooperative, the cooperative need not pay any non-member patronage return to the former member, even if such patronage returns are paid to other non-member patrons of the cooperative.

Reorganization

321(1)    This section applies to a reorganization of a cooperative made pursuant to an order of the court made under section 365, an order of the court approving a proposal under The Bankruptcy and Insolvency Act (Canada) or an order of the court that affects the rights among the cooperative, its members, shareholders and creditors made under any Act of the Legislature.

Limitation

321(2)    No order of the court for reorganization of a cooperative shall result in the cooperative

(a) no longer being organized or operating or carrying on business on a cooperative basis;

(b) if the cooperative is a housing cooperative, not complying with Part 12; or

(c) if the cooperative is a worker cooperative, not complying with Part 13.

Powers of court

321(3)    If a cooperative is subject to an order referred to in subsection (1), its articles may be amended by the order to effect any changes that might lawfully be made by an amendment under this Act.

Further powers

321(4)    If the court makes an order referred to in subsection (1) in respect of a cooperative, the court may also

(a) authorize the issue of debt obligations of the cooperative that if held by members may be converted to membership shares, member loans or investment shares and, if they may be converted to investment shares fix the terms of the investment shares; and

(b) appoint directors in place of or in addition to all or any of its directors then in office.

Articles of reorganization

321(5)     After an order of the court referred to in subsection (1) has been made in respect of a cooperative, articles of reorganization of the cooperative in a form approved by the Registrar, together with, if applicable, notice of the registered office and notice of change of directors of the cooperative, shall be sent to the Registrar.

Certificate of reorganization

321(6)    On receipt under subsection (5) of articles of reorganization of a cooperative, the Registrar shall issue a certificate of amendment to the cooperative.

Effect of certificate

321(7)    A reorganization of a cooperative pursuant to an order of the court becomes effective on the day indicated on the certificate of amendment issued to the cooperative under subsection (6) and its articles of incorporation are amended accordingly.

No dissent

321(8)    No member or shareholder of a cooperative is entitled to dissent under section 320 if an amendment to its articles of incorporation is effected under this section.

PART 15

INVESTIGATIONS

Special audit

322(1)    The Registrar may, on the Registrar's own motion, or upon the application of 10% of the members of a cooperative each of whom has been a member of the cooperative for not less than 12 months immediately preceding the day the application is made, appoint an individual or a firm of accountants as auditor to conduct a special audit of the books of the cooperative and to report thereon.

Expenses of audit

322(2)    The expenses incidental to the special audit of the books of a cooperative shall be defrayed, as the Registrar may direct, by the members of the cooperative applying therefor, or by the cooperative or its directors or officers or former directors, members or officers, or by all or any combination of the foregoing, in such proportion as the Registrar may direct.

Production of books

322(3)    An auditor appointed under this section to conduct a special audit of the books of a cooperative may require the production of all or any of the books, accounts, securities and documents of the cooperative, and may require its directors, officers, members, agents and servants to furnish such evidence as the Registrar deems requisite in relation to its business.

Investigations

323(1)    Any interested person may apply, without notice or on any notice that the court may require, to the court for an order directing an investigation to be made of a cooperative and any of its affiliates.

Grounds

323(2)     The court may order an investigation to be made of a cooperative and any of its affiliates if, on an application under subsection (1), it appears to the court that the application is neither frivolous nor vexatious and that

(a) the cooperative is not organized, operating or carrying on business on a cooperative basis;

(b) the business or the affairs of the cooperative are not being carried on or conducted in accordance with

(i) the restrictions contained in its articles,

(ii) its by-laws,

(iii) a unanimous agreement, or

(iv) this Act,

(c) the business of the cooperative or any of its affiliates is or has been carried on with intent to defraud any person;

(d) the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised, in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, any of its members, shareholders or security holders;

(e) the cooperative or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose; or

(f) persons concerned with the formation, business or affairs of the cooperative or any of its affiliates have, in connection with the formation, business or affairs of the cooperative, acted fraudulently or dishonestly.

No security for costs

323(3)    A person making an application under this section is not required to give security for costs.

Powers of court

324(1)    In connection with an investigation of a cooperative pursuant to an order of the court made under this Part, the court may make any order it thinks fit, including an order:

(a) to investigate the cooperative or any subsidiary of the cooperative or any holding body corporate of the cooperative;

(b) appointing an inspector, who may be the Registrar, to carry out the investigation, fixing the inspector's remuneration, or replacing an inspector;

(c) determining the notice to be given to any interested person, or dispensing with notice to any person;

(d) authorizing the inspector to enter any premises in which the court is satisfied there might be relevant information and to examine any thing and make copies of any document found on the premises;

(e) requiring any person to produce documents to the inspector;

(f) authorizing the inspector to conduct a hearing, administer oaths, and examine any person on oath, and setting out rules for the conduct of hearings;

(g) requiring any person to attend a hearing conducted by the inspector and to give evidence on oath;

(h) giving directions to the inspector or any other interested person on any matter arising in the investigation;

(i) requiring the inspector to make an interim or final report to the court;

(j) determining whether a report of the inspector should be published and, if so, ordering its publication in whole or in part or that copies of it be sent to any person the court designates;

(k) requiring the inspector to discontinue an investigation;

(l) if the cooperative is incorporated with membership capital, requiring the cooperative to be continued under The Corporations Act, or if it is incorporated without membership capital, requiring it to be dissolved;

(m) determining any matter that relates to the relationship between a member and the cooperative; and

(n) requiring the cooperative to pay the costs of the investigation.

Copy of report

324(2)    An inspector appointed to conduct an investigation of a cooperative under this Part shall send the Registrar a copy of every report made by the inspector under this Part.

Powers of inspector

325(1)    An inspector appointed to conduct an investigation of a cooperative under this Part has the powers set out in the order appointing the inspector.

Exchange of information

325(2)    In addition to the powers set out in the order appointing an inspector to conduct an investigation of a cooperative under this Part, the inspector may provide information to, or exchange information and otherwise cooperate with, any public official in Canada or elsewhere who

(a) is authorized to exercise investigatory powers; and

(b) is investigating, in respect of the cooperative or any subsidiary of the cooperative or its holding body corporate, any allegation of improper conduct that is the same as or similar to the conduct described in subsection 323(2).

Court order

325(3)     An inspector appointed to conduct an investigation of a cooperative under this Part shall, on the request of an interested person, produce a copy of any order made under subsection 324(1) under which the inspector was appointed or under which the inspector is acting.

Hearing in private

326(1)    Any interested person may apply to the court for an order that a hearing under this Part be heard in private and for directions on any matter arising in the investigation.

Right to counsel

326(2)    A person whose conduct is being investigated or who is being examined at a hearing conducted under this Part has the right to be represented by counsel.

Incriminating statements

327       No person is excused from attending and giving evidence and producing a document to an inspector appointed to conduct an investigation under this Part solely because the evidence or document tends to incriminate the person or subject the person to a proceeding or penalty, but no such evidence may be used or is receivable against the person in any later proceeding instituted under any Act, other than a prosecution for perjury in giving the evidence or a prosecution under section 132 or 136 of the Criminal Code (Canada) in respect of the evidence.

Absolute privilege: defamation

328       Any oral or written statement or report made in an investigation under this Part by any person including the inspector appointed to conduct the investigation has absolute privilege.

"Security" defined

329(1)    For the purposes of this section, "security" includes a membership share or an interest in a membership share.

Information respecting ownership and control

329(2)    If the Registrar is satisfied that, for the purposes of Part 10 or section 367 or for the purposes of enforcing any regulation made under subsection 48(6), there is reason to inquire into the ownership or control of a security of a cooperative or any of its affiliates, the Registrar may require any person that the Registrar reasonably believes has or has had an interest in the security or acts or has acted on behalf of a person with such an interest to report to the Registrar or to any designated person,

(a) information that the person has or can reasonably be expected to obtain as to present and past interests in the security; and

(b) the names and addresses of the persons so interested and of any person who acts or has acted in relation to the security on behalf of the persons so interested.

Deemed interest in securities

329(3)    For the purposes of subsection (2), a person is deemed to hold an interest in a security of a cooperative if

(a) in the case of a membership share of the cooperative, the person is or is entitled to be entered in the records of the cooperative as the owner of the membership share; and

(b) in the case of an investment share of the cooperative,

(i) the person has a right to vote or to acquire or dispose of the investment share or an interest in it,

(ii) the person's consent is necessary for the exercise of the rights or privileges of any other person interested in the investment share, or

(iii) any other person interested in the investment share can be required or is accustomed to exercise rights or privileges attached to it in accordance with the person's instructions.

Publication

329(4)    The Registrar shall publish, in a publication generally available to the public, the particulars of information obtained under this section if the particulars

(a) are required by this Act or the regulations to be disclosed; and

(b) have not previously been so disclosed.

Solicitor-client privilege

330       Nothing in this Part may be construed as affecting the privilege that exists in respect of lawyers and notaries and their clients.

Inquiries

331       The Registrar may make inquiries of any person relating to compliance with this Act.

PART 16

RECEIVERS AND RECEIVER MANAGERS

Functions of receiver

332(1)    Subject to the rights of secured creditors, a receiver of any property of a cooperative may

(a) receive the income from the property and pay the liabilities connected with it; and

(b) realize the security interest of those on whose behalf the receiver is appointed.

If receiver not manager

332(2)    Notwithstanding subsection (1) but subject to any order that the court may make under section 336, a receiver of property of a cooperative who is not appointed manager of the cooperative may not carry on the business of the cooperative.

Functions of receiver-manager

333       Notwithstanding section 332, if a receiver of a cooperative is also appointed manager of the cooperative, the receiver may carry on any business of the cooperative to protect the security interest of those on whose behalf the receiver was appointed.

Directors' powers cease

334       If a receiver or receiver-manager of a cooperative is appointed by the court or pursuant to an instrument, no director of the cooperative shall exercise directors' powers in respect of the cooperative that the receiver or receiver-manager is authorized to exercise until the receiver or receiver-manager is discharged.

If receiver appointed by court

335(1)    A receiver or receiver-manager of a cooperative appointed by the court shall act in accordance with any directions of the court.

If receiver appointed pursuant to instrument

335(2)    A receiver or receiver-manager of a cooperative appointed pursuant to an instrument shall act in accordance with the instrument and any direction that the court may make under section 336.

Duty

335(3)    A receiver or receiver-manager of a cooperative shall

(a) act honestly and in good faith; and

(b) deal in a commercially reasonable manner with any property of the cooperative in the possession or control of the receiver or receiver-manager, as the case may be.

Directions given by court

336       The court may, on the application of a receiver or receiver-manager of a cooperative appointed by the court or pursuant to an instrument, or any other interested person, make any order giving directions on any matter relating to the duties of the receiver or receiver-manager appointed by it or pursuant to an instrument that it considers appropriate, including an order

(a) appointing, replacing or discharging the receiver or receiver-manager and approving the accounts of the receiver or receiver-manager;

(b) determining the notice to be given to any person or dispensing with notice to any person;

(c) fixing the remuneration of the receiver or receiver-manager;

(d) requiring the receiver or receiver-manager, or a person by or on behalf of whom the receiver or receiver-manager was appointed, to make good any default in connection with the receiver's or receiver- manager's custody or management of the property and business of the cooperative, or relieving a receiver or receiver-manager, or a person by or on behalf of whom a receiver or receiver-manager was appointed, from any default on any terms that the court considers appropriate;

(e) confirming any act of the receiver or receiver-manager; and

(f) giving directions on any other matter relating to the duties of the receiver or receiver-manager.

Required action

337(1)    A receiver or receiver-manager of a cooperative shall

(a) take the property of the cooperative into custody and control in accordance with the court order or instrument pursuant to which the receiver or receiver-manager is appointed;

(b) open and maintain a bank account as receiver or receiver-manager of the cooperative for the money of the cooperative coming under the control of the receiver or receiver-manager;

(c) keep detailed accounts of all transactions carried out as receiver or receiver-manager;

(d) keep accounts of the administration of the receiver or receiver-manager and cause them to be made available during usual business hours for inspection by the directors;

(e) prepare, at least once in every six month period after the day of appointment, financial statements of the administration, as far as is feasible, in the form required by section 257;

(f) on completion of the duties under the court order or instrument pursuant to which the receiver or receiver-manager was appointed, render a final account of the administration in the form that the receiver or receiver-manager has adopted for preparation of interim accounts under clause (e); and

(g) if section 33 would otherwise apply, file with the Registrar a copy of any financial statement mentioned in clause (e) and any final account mentioned in clause (f) not later than 15 days after it is prepared or rendered.

Liability of receiver for wages

337(2)    Where, under the provisions of a security of a cooperative secured by a floating charge or by a charge that includes a floating charge on the property of the cooperative, a receiver or receiver-manager of the property is appointed or possession of any of the property is taken by or on behalf of a holder of the security, there shall be paid out of any assets secured by the floating charge but not subject to a fixed charge that comes into the hands of the receiver or receiver-manager or holder, in priority to any claim for payment under the security the unpaid wages for a period not exceeding three months of all clerks, labourers, servants, apprentices and other wage earners in the employ of the cooperative as at the day the receiver or receiver-manager is appointed or the holder takes possession, or so much of those wages as may be realized out of those assets.

Receiver subrogated

337(3)    A receiver or receiver-manager or holder making payment under subsection (2) is subrogated, to the extent of the amount of the payment, to the rights that the person receiving payment has under section 206 but subject to the person's prior right to enforce payment under that section of any balance of wages due to and not received by the person under subsection (2).

Rights of director who pays receiver

337(4)    Where a receiver or receiver-manager or holder receives payment from a director of the body corporate because of subsection (3), the director is entitled to any preference that the person to whose rights the receiver or receiver-manager or holder was subrogated would have, or, if a judgment has been recovered for the amount paid by the director, the director is entitled to an assignment of the judgment.

PART 17

LIQUIDATION, DISSOLUTION AND REVIVAL

Distribution on dissolution

338(1)    Subject to Parts 12 and 13, on the liquidation and dissolution of a cooperative and after the payment of all of its debts and liabilities, including any declared and unpaid dividends, the amount to be paid to the holders of any investment shares and the amount to be paid on the redemption of membership shares and the repayment of member loans and patronage loans, the remaining property of the cooperative shall be distributed or disposed of

(a) to another cooperative;

(b) to a Canadian organization or association that is a registered charity or a registered Canadian amateur athletic association, as defined in subsection 248(1) of the Income Tax Act (Canada);

(c) to The Cooperative Promotion Board continued under The Cooperative Promotion Trust Act;

(d) equally among the persons, who were members of the cooperative during the financial year in which it was resolved to liquidate and dissolve the cooperative, or who were members of the cooperative during the financial year in which the cooperative ceased to carry on active business;

(e) among the persons who were members of the cooperative during the financial year of the cooperative in which the cooperative ceased to carry on active business and the five financial years of the cooperative immediately preceding that financial year, on the basis of the patronage dividends allocated to those persons during those financial years;

(f) among the persons, who were members of the cooperative during the financial year in which it was resolved to liquidate and dissolve the cooperative, or who were members of the cooperative during the financial year in which the cooperative ceased to carry on active business, on the basis of patronage dividends allocated to those members during a period of not less than three years as shall be specified in the articles or by-laws of the cooperative;

(g) in accordance with any combination of clauses (a), (b), (c), (d), (e) and (f) or any of them; or

(h) to such persons as the regulations may prescribe.

Dissolution of community service cooperatives

338(2)    Notwithstanding subsection (1), a cooperative that in the opinion of the Registrar was operated entirely for purposes of community service shall, upon the liquidation and dissolution thereof and after payment of all of its debts and liabilities, distribute or dispose of its remaining property

(a) to another cooperative that in the opinion of the Registrar is operating entirely for purposes of community service;

(b) to a Canadian organization or association that is a registered charity or a registered Canadian amateur athletic association, as defined in subsection 248(1) of the Income Tax Act (Canada);

(c) to The Cooperative Promotion Board continued under The Cooperative Promotion Trust Act;

(d) in accordance with any combination of clauses (a), (b) and (c) or any two of them; or

(e) to such persons as the regulations may prescribe.

Revival

339(1)    When a cooperative is dissolved under this Part, or was dissolved under The Cooperatives Act, being chapter C223 of the Re-enacted Statutes of Manitoba, 1987, any interested person, or any person who would be an interested person if a certificate of its revival is issued under this section, may apply to the Registrar to have the cooperative revived under this Act.

Articles of revival

339(2)    Articles of revival of a cooperative in a form approved by the Registrar shall be sent to the Registrar.

Certificate of revival

339(3)    On receipt of articles of revival of a cooperative, the Registrar shall issue a certificate of revival to the cooperative, unless the Registrar is of the opinion that issuing the certificate

(a) would result in the cooperative

(i) no longer being organized or operating or carrying on business on a cooperative basis,

(ii) if the cooperative is a housing cooperative, not complying with Part 12, and

(iii) if the cooperative is a worker cooperative, not complying with Part 13; or

(b) would not be advisable for any other valid reason.

Date or revival

339(4)    A cooperative is revived under this Act on the day indicated on the certificate of its revival.

Rights preserved

339(5)    In the same manner and to the same extent as if it had not been dissolved, but subject to any reasonable terms that may be imposed by the Registrar and to the rights acquired by any person after its dissolution, the revived cooperative is

(a) subject to the regulations, restored to its previous position in law, including the restoration of all its property whether acquired before its dissolution or after its dissolution and before its revival and any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and

(b) liable for the obligations that it would have had if it had not been dissolved whether they arise before its dissolution or after its dissolution and before its revival.

Legal actions

339(6)    Any legal action respecting the affairs of a revived cooperative, other than those with its affiliates, taken between the time of its dissolution and its revival is valid and effective.

Dissolution if no property and no liability

340(1)    A cooperative that has no property and no liabilities may be dissolved by a special resolution of its members and, if the cooperative has issued investment shares, by a special resolution of its shareholders of each class, whether they are otherwise entitled to vote.

Dissolution if property disposed of

340(2)    A cooperative that has property or liabilities, or both, may be dissolved by a special resolution of its members and, if the cooperative has issued investment shares, by separate special resolution of its shareholders of each class, whether they are otherwise entitled to vote, if

(a) by the special resolution or resolutions its directors are authorized to cause the cooperative to distribute property and discharge liabilities; and

(b) the cooperative has distributed property and discharged liabilities before it sends articles of dissolution to the Registrar under subsection (3).

Articles of dissolution

340(3)    Articles of dissolution of a cooperative in a form approved by the Registrar shall be sent to the Registrar.

Certificate of dissolution

340(4)    On receipt of articles of dissolution of a cooperative, the Registrar shall issue a certificate of its dissolution.

Effect of certificate

340(5)    A cooperative ceases to exist on the day indicated in the certificate of its dissolution.

Proposing liquidation and dissolution

341(1)    The directors of a cooperative may propose, or a member of a cooperative may, in accordance with section 230, make a proposal for, the voluntary liquidation and dissolution of the cooperative.

Notice of meeting

341(2)    Notice of any meeting of a cooperative at which its voluntary liquidation and dissolution is to be proposed shall set out the terms of the proposal.

Approval

341(3)    A cooperative may liquidate and dissolve by a special resolution of its members and, if the cooperative has issued investment shares, by a special resolution of its shareholders of each class, whether they are otherwise entitled to vote.

Statement of intent to dissolve

341(4)    A statement of intent to dissolve a cooperative in a form approved by the Registrar shall be sent to the Registrar.

Certificate of intent to dissolve

341(5)    On receipt of a statement of intent to dissolve a cooperative, the Registrar shall issue to the cooperative a certificate of intent to dissolve it.

Effect of certificate

341(6)    On the issue of a certificate of intent to dissolve a cooperative, the cooperative shall cease to carry on business except to the extent necessary for the liquidation, but its corporate existence continues until the Registrar issues a certificate of its dissolution.

Liquidation

341(7)    After the issue of a certificate of intent to dissolve a cooperative, it shall, without delay,

(a) cause a notice to be sent to each known creditor of the cooperative;

(b) publish notice in the gazette and once in a newspaper published or distributed in the place where the cooperative has its registered office and take reasonable steps to give notice of the proposed dissolution of the cooperative in every jurisdiction where the cooperative carries on business;

(c) proceed to collect its property, dispose of its properties that are not to be distributed in kind to its members or shareholders, if any, discharge all its obligations and do all other acts required to liquidate its business; and

(d) after giving the notice required under clause (a) and adequately providing for the payment or discharge of all its obligations, but subject to its articles and Parts 12 and 13, if applicable, distribute its remaining property among its members according to their respective rights.

Supervision by court

342(1)    Any interested person may, at any time during the liquidation of a cooperative, apply to the court for an order that the liquidation be continued under the supervision of the court as provided in this Part, and on the application the court may so order and make any further order it thinks fit.

Notice to Registrar

342(2)    A person applying to the court under this section shall give the Registrar notice of the application.

Revocation

343(1)    At any time after issue of a certificate of intent to dissolve a cooperative and before issue of a certificate of its dissolution, a certificate of intent to dissolve the cooperative may be revoked by sending the Registrar a statement of the revocation of intent to dissolve the cooperative in a form approved by the Registrar, if the revocation is approved in the same manner as the resolution to dissolve the cooperative was approved under subsection 341(3).

Certificate of revocation of intent to dissolve

343(2)    On receipt of a statement of revocation of intent to dissolve a cooperative, the Registrar shall issue to the cooperative a certificate of the revocation of intent to dissolve it.

Effect of certificate

343(3)    On the day indicated in the certificate of revocation of intent to dissolve a cooperative, the revocation is effective and the cooperative may continue to carry on its business or businesses.

Articles of dissolution

344(1)    If a certificate of intent to dissolve a cooperative has not been revoked and the cooperative has complied with subsection 341(7), articles of its dissolution in a form approved by the Registrar shall be sent to the Registrar.

Certificate of dissolution

344(2)    On receipt of articles of dissolution of a cooperative, the Registrar shall issue to the cooperative a certificate of its dissolution.

Effect of certificate

344(3)    The cooperative ceases to exist on the day indicated in the certificate of its dissolution.

Dissolution by Registrar

345(1)    Subject to subsections (2) and (3), the Registrar may dissolve a cooperative by issuing a certificate of its dissolution under this section if the cooperative

(a) has not commenced business within three years after the day indicated in its certificate of incorporation;

(b) has not carried on its business for three consecutive years;

(c) is in default for a period of two years in sending the Registrar any fee, notice or document required by this Act; or

(d) if the cooperative is in the situation described in subsection 194(6).

Publication

345(2)    The Registrar shall not dissolve a cooperative under this section until

(a) 90 days has elapsed since a notice of intent to dissolve the cooperative has been given to the cooperative and to each of its directors; and

(b) a notice of intent to dissolve the cooperative has been published in a publication generally available to the public.

Certificate of dissolution

345(3)    Where notice of intent to dissolve a cooperative has been given under subsection (2), unless the cooperative remedies the default or cause to the contrary has been shown or an order has been made by the court under section 349, the Registrar shall, after the end of the 90 days referred to in subsection (2), issue to the cooperative a certificate of its dissolution.

Effect of certificate

345(4)    A cooperative ceases to exist on the day indicated in the certificate of its dissolution.

Grounds for dissolution

346(1)    An interested person may apply to the court for an order dissolving a cooperative if the cooperative has

(a) failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings, except an annual meeting of its shareholders if a unanimous agreement of the cooperative contains a provision that eliminates the need for meetings of its shareholders as authorized under subsection 217(6);

(b) contravened section 13, subsection 24(2) or section 28, 257 or 259; or

(c) procured any certificate under this Act by misrepresentation.

Notice to Registrar

346(2)    A person applying to the court under this section shall give the Registrar notice of the application.

Dissolution order

346(3)    On an application under this section in respect of a cooperative, the court may order that the cooperative be dissolved or that it be liquidated and dissolved under the supervision of the court, and the court may make any other order it thinks fit.

Certificate

346(4)    On receipt of an order under this section, or section 347, the Registrar shall

(a) if the order is to dissolve a cooperative, issue a certificate of dissolution of the cooperative in a form approved by the Registrar; or

(b) if the order is to liquidate and dissolve a cooperative under the supervision of the court, issue a certificate of intent to dissolve the cooperative in a form approved by the Registrar and publish notice of the order in a publication generally available to the public.

Effect of certificate

346(5)    A cooperative ceases to exist on the day indicated in the certificate of its dissolution.

Further grounds

347(1)    The court may order the liquidation and dissolution of a cooperative or any of its affiliates on the application of a member or shareholder of the cooperative if the court is satisfied

(a) that the cooperative no longer carries on business or is no longer organized or operating on a cooperative basis;

(b) that

(i) an act or omission of the cooperative or any of its affiliates effects a result,

(ii) the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted in a manner, or

(iii) the powers of the directors of the cooperative or any of its affiliates are or have been exercised in a manner,

that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member, shareholder, security holder, creditor, director or officer of the cooperative; or

(c) that events have occurred that entitle a member or shareholder of the cooperative, in accordance with a unanimous agreement of the cooperative, to demand that the cooperative be dissolved or that it is just and equitable that the cooperative be liquidated and dissolved.

Alternate order

347(2)     On an application under this section, the court may make any order under this section or section 365 that it thinks fit.

Application of section 366

347(3)    Section 366 applies to an application under this section.

Application for supervision

348(1)    An application under subsection 342(1) to the court to supervise a voluntary liquidation and dissolution of a cooperative shall state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation and dissolution.

Court supervision

348(2)    If the court makes an order applied for under subsection 342(1) to supervise the liquidation and dissolution of a cooperative, the liquidation and dissolution of the cooperative continues under the supervision of the court in accordance with this Act.

Application to court

349(1)    An application to the court under subsection 347(1) for the liquidation and dissolution of a cooperative shall state the reasons, verified by an affidavit of the applicant, why the cooperative should be liquidated and dissolved.

Show cause order

349(2)    On an application under subsection 347(1) for the liquidation and dissolution of a cooperative, the court may make an order requiring the cooperative and any person who has an interest in it or claim against it to show cause, at a specified time and place, not less than four weeks after the day the order is made, why the cooperative should not be liquidated and dissolved.

Powers of court

349(3)    On an application under subsection 347(1) for the liquidation and dissolution of a cooperative, the court may order the directors and officers of the cooperative to provide the court with all material information known to or reasonably ascertainable by them, including

(a) financial statements of the cooperative;

(b) the name and address of each of its members and shareholders; and

(c) the name and address of each known creditor of the cooperative or claimant against the cooperative, including any creditor or claimant with unliquidated, future or contingent claims, and any person with whom the cooperative has a contract.

Publication

349(4)    A copy of an order made under subsection (2) shall be

(a) published as directed in the order, at least once in each week before the time appointed for the hearing, in a publication generally available to the public; and

(b) served on the Registrar and each person named in the order.

Person responsible

349(5)    Publication and service of an order under this section that is in respect of a cooperative shall be effected by the cooperative or by any other person and in any manner that the court may order.

Powers of court

350       In connection with the liquidation and dissolution of a cooperative, the court may, if it is satisfied that the cooperative is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit, including an order,

(a) to liquidate the cooperative;

(b) appointing a liquidator to carry out the liquidation, with or without security, and fixing the remuneration of, or replacing, the liquidator;

(c) appointing inspectors or referees to carry out duties and functions under the order, specifying those duties and functions and their powers, and fixing their remuneration, or replacing the inspectors or referees;

(d) determining the notice to be given to any interested person, or dispensing with notice to any person;

(e) determining the validity of any claim made against the cooperative;

(f) at any stage of the proceedings, restraining the directors and officers of the cooperative from

(i) exercising any of their powers, or

(ii) collecting or receiving any debt or other property of the cooperative, and from paying out or transferring any property of the cooperative, except as permitted by the court;

(g) determining and enforcing the duty or liability of any present or former director, officer, member or shareholder of the cooperative

(i) to the cooperative, or

(ii) for an obligation of the cooperative;

(h) approving the payment, satisfaction or compromise of claims against the cooperative and the retention of its assets for those purposes, and determining the adequacy of provisions for the payment or discharge of its obligations, whether liquidated, unliquidated, future or contingent;

(i) disposing of or destroying the documents and records of the cooperative;

(j) on the application of a creditor, the inspectors or the liquidator, directions on any matter arising on the liquidation;

(k) after notice has been given to all interested parties, relieving the liquidator from an omission or default on any terms that the court thinks fit and confirming any act of the liquidator;

(l) subject to section 356, approving any proposed interim or final distribution to members or shareholders of the cooperative in money or in property in accordance with their respective rights;

(m) disposing of any property that belongs to creditors, members or shareholders of the cooperative who cannot be found;

(n) on the application of any director, officer, member, shareholder or creditor of the cooperative, or the liquidator,

(i) staying the liquidation on any terms and conditions that the court thinks fit,

(ii) continuing or discontinuing the liquidation proceedings, or

(iii) requiring the liquidator to restore to the cooperative all its remaining property; and

(o) after the liquidator has rendered a final account to the court, dissolving the cooperative.

Effect of order

351       The liquidation of a cooperative commences when the court makes an order for its liquidation.

Cessation of business and powers

352(1)    If the court makes an order for liquidation of a cooperative

(a) the cooperative continues in existence but shall cease to carry on business, except business that is in the liquidator's opinion required for an orderly liquidation; and

(b) the powers of the directors, members and shareholders of the cooperative cease and vest in the liquidator, except as specifically authorized by the court.

Delegation by liquidator

352(2)    The liquidator of a cooperative may delegate any of the powers vested in the liquidator by clause (1)(b) to the directors or members of the cooperative.

Appointment of liquidator

353(1)    When making an order for the liquidation of a cooperative or at any time after making one, the court may appoint any person, including a director, officer, member or shareholder of the cooperative, as liquidator of the cooperative.

Vacancy

353(2)    If an order for the liquidation of a cooperative has been made and the office of liquidator of the cooperative is or becomes vacant, the property of the cooperative is under the control of the court until the office of the liquidator is filled.

Duties of liquidator

354        A liquidator of a cooperative shall, without delay after being appointed,

(a) give notice of the appointment to each claimant against, and creditor of, the cooperative known to the liquidator;

(b) publish notice of the appointment in a publication generally available to the public and take reasonable steps to give notice of the appointment in each province or other jurisdiction where the cooperative carries on business, requiring

(i) any person who is indebted to the cooperative to render an account and pay any amount owing to the liquidator at the time and place specified,

(ii) any person who possesses property of the cooperative to deliver it to the liquidator at the time and place specified, and

(iii) any person who has a claim against the cooperative, whether liquidated, unliquidated, future or contingent, to present particulars of it in writing to the liquidator not later than two months after the first publication of the notice;

(c) take the property of the cooperative into custody and control;

(d) open and maintain a trust account for money received by the liquidator in the course of liquidation;

(e) keep accounts of the moneys of the cooperative received and paid out in the course of liquidation;

(f) maintain separate lists of the members, shareholders and creditors of the cooperative and other persons who have claims against the cooperative;

(g) if at any time the liquidator determines that the cooperative is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;

(h) deliver to the court and to the Registrar, at least once in every twelve month period after appointment or more often as the court may require, financial statements of the cooperative in the form required by section 257, or in any other form as the liquidator may think proper or that the court may require; and

(i) after the final accounts are approved by the court, distribute any remaining property of the cooperative among its members and shareholders according to their respective rights.

Powers of liquidator

355(1)    A liquidator of a cooperative may

(a) retain lawyers, notaries, accountants, engineers, appraisers and other professionals;

(b) bring, defend or take part in any civil, criminal, administrative, investigative or other action or proceeding in the name and on behalf of the cooperative;

(c) carry on the business of the cooperative as required for an orderly liquidation;

(d) sell any property of the cooperative by public auction or private sale;

(e) do all acts and execute any documents in the name and on behalf of the cooperative;

(f) borrow money on the security of the property of the cooperative;

(g) settle or compromise any claims by or against the cooperative; and

(h) do all other things necessary for the liquidation of the cooperative and distribution of its property.

Defence

355(2)    A liquidator of a cooperative is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the failure to fulfill their duties, including reliance in good faith on financial statements of the cooperative, on the reports of experts and on information presented by professionals or by officers of the cooperative.

Application to court

355(3)    If a liquidator of a cooperative has reason to believe that any property of the cooperative is in the possession or control of a person or that anyone has concealed, withheld or misappropriated any property of the cooperative, the liquidator may apply to the court for, and the court may make, an order requiring the person to appear before the court at the time and place designated in the order and to be examined.

Power of court

355(4)    If the examination conducted pursuant to an order made under subsection (3) discloses that any person has concealed, withheld or misappropriated property of the cooperative, the court may order the person to restore it or pay compensation to the liquidator.

Costs of liquidation

356(1)    A liquidator of a cooperative shall pay the costs of its liquidation out of its property and shall pay or make adequate provision for all claims against it.

Final accounts

356(2)    The liquidator of a cooperative shall, not later than one year after appointment and after paying or making adequate provision for all claims against the cooperative,

(a) apply to the court for approval of the final accounts of the liquidator and, subject to the articles and Parts 12 and 13, an order permitting a distribution in money or in kind of the remaining property of the cooperative to the members and shareholders, if any, according to their respective rights; or

(b) apply to the court for an extension of time for making an application under clause (a), setting out the reasons for the extension.

Application

356(3)    If a liquidator of a cooperative fails to make the application required by subsection (2), a member or shareholder of the cooperative may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

Publication

356(4)    A liquidator of a cooperative shall give notice of the intention of the liquidator to make an application under subsection (2) to the Registrar, to each inspector appointed under section 350, to each member or shareholder of the cooperative and to any person who provided a security or fidelity bond for the liquidation, and shall publish the notice in a newspaper published or distributed in the place where the cooperative has its registered office, in any manner set out in the by-laws or as otherwise directed by the court.

Final order

356(5)    If the court approves the final accounts rendered by the liquidator of a cooperative, the court shall make an order

(a) directing the Registrar to issue a certificate of dissolution of the cooperative;

(b) directing the custody or disposal of the documents of the cooperative; and

(c) discharging the liquidator, subject to the remaining duty required under subsection (6).

Delivery of order

356(6)    The liquidator of a cooperative shall send to the Registrar without delay a certified copy of the order described in subsection (5) in respect of the liquidation of the cooperative.

Certificate of dissolution

356(7)    On receipt of the order described in subsection (5) in respect of the liquidation of a cooperative, the Registrar shall issue a certificate of dissolution of the cooperative.

Effect of certificate

356(8)    A cooperative ceases to exist on the day indicated in the certificate of its dissolution.

Right to distribution in money

357       A member or shareholder of a cooperative may apply to the court for an order requiring the distribution of the property of the cooperative to be in money if, in the course of the liquidation of the cooperative, the members and shareholders resolve or the liquidator proposes to

(a) exchange all or substantially all the property of the cooperative for securities of another body corporate that are to be distributed to the members and shareholders, if any, of the cooperative; or

(b) distribute all or part of the property of the cooperative in kind to the members and shareholders, if any, of the cooperative.

Powers of court

358        On an application under subsection 357 in respect of a cooperative, the court, subject to the articles and Parts 12 and 13, may order

(a) that all the property of the cooperative be converted into and distributed in money; or

(b) that the claims of a member or shareholder of the cooperative applying under this section be satisfied by a distribution in money, in which case subsections 320(19) and (20) apply.

Custody of records

359       A person who has been granted custody of the documents of a dissolved cooperative remains liable to produce them for six years after its dissolution or until the end of any other shorter period that may be ordered under subsection 356(5).

Heirs and representatives

360(1)    In this section, "member" and "shareholder" includes their heirs and legal representatives.

Continuation of actions

360(2)    Notwithstanding the dissolution of a cooperative under this Act,

(a) a civil, criminal, administrative, investigative or other action or proceeding commenced by or against the cooperative before its dissolution may be continued as if it had not been dissolved;

(b) a civil, criminal, administrative, investigative or other action or proceeding may be brought against the cooperative within two years after its dissolution as if it had not been dissolved; and

(c) any property that would have been available to satisfy a judgment or order if the cooperative had not been dissolved remains available for those purposes.

Service

360(3)    Service of a document on a cooperative after its dissolution may be effected by serving the document on a person named as an officer of the cooperative in the most recent notice on the records of the Registrar.

Reimbursement

360(4)    Notwithstanding the dissolution of a cooperative under this Act, a member or shareholder of the cooperative to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount distributed to that member or shareholder, and an action to enforce the liability may be brought within two years after the dissolution of the cooperative.

Representative action

360(5)    The court may order an action referred to in subsection (4) against a cooperative to be brought against the persons who were its members or shareholders as a class, subject to any conditions that the court thinks fit, and, if the plaintiff establishes a claim, the court may refer the proceedings to a referee or other officer of the court who may

(a) add as a party to the proceedings each member or shareholder of the cooperative who was found by the plaintiff;

(b) determine, subject to subsection (4), the amount that each of those members and shareholders shall contribute towards satisfaction of the plaintiff's claim; and

(c) direct payment of the amounts so determined.

Unknown claimants

361(1)    On the dissolution of a cooperative under this Act, the portion of the property to be distributed to a creditor, member or shareholder of the cooperative who cannot be found shall be converted into money and paid to the Minister of Finance.

Deemed satisfaction

361(2)    A payment under subsection (1) in respect of a creditor, member or shareholder of a cooperative is deemed to be in satisfaction of a debt or claim of the creditor, member or shareholder.

Recovery

361(3)    If at any time a person establishes their entitlement to any money paid to the Minister of Finance under subsection (1), the Minister of Finance shall pay the person an equivalent amount out of the Consolidated Revenue Fund.

Vesting in Crown

362(1)    Subject to subsection 360(2) and section 361, property of a cooperative that has not been disposed of at the day of its dissolution under this Act vests in the Crown.

Return of property on revival

362(2)    If a cooperative is revived as a cooperative under section 339, any property, other than money, that vested in the Crown under subsection (1) and that has not been disposed of shall be returned to the cooperative, and there shall be paid to the cooperative out of the Consolidated Revenue Fund

(a) an amount equal to any money received by the Crown under subsection (1); and

(b) if property other than money vested in the Crown under subsection (1) and the property has been disposed of, an amount equal to the lesser of

(i) the value of the property at the date it vested in the Crown, and

(ii) the amount realized by the Crown from the disposition of the property.

PART 18

REMEDIES, OFFENCES AND PENALTIES

Definitions

363       In this Part,

"action" means an action taken under this Act; (« action »)

"complainant" means

(a) a member or former member of a cooperative,

(b) a registered holder or beneficial owner, or a former registered holder or beneficial owner, of a security of a cooperative or any of its affiliates,

(c) a director or an officer, or a former director or officer, of a cooperative or any of its affiliates,

(d) a creditor of a cooperative,

(e) the Registrar, or

(f) any other person who, in the opinion of the court, is a proper person to make an application under this Part. (« plaignant »)

Commencement of derivative action

364(1)    Subject to subsection (2) a complainant may apply to the court for leave to bring an action in the name and on behalf of a cooperative or any of its subsidiaries, or to intervene in an action to which the cooperative or any of its subsidiaries is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the cooperative or subsidiary.

Condition precedent

364(2)    The court shall not grant an order on an application made under subsection (1) by a complainant to bring an action in the name and on behalf of a cooperative or its subsidiary, or to intervene in an action to which the cooperative or its subsidiary is a party unless the court is satisfied that

(a) if the directors of the cooperative or its subsidiary do not bring, diligently prosecute, defend or discontinue the application, the complainant has given reasonable notice to the directors of the cooperative or its subsidiary of the complainant's intention to apply to the court under subsection (1);

(b) the complainant is acting in good faith; and

(c) it appears to be in the interests of the cooperative or its subsidiary to bring, prosecute, defend or discontinue the action.

Powers of court

364(3)    In granting an order on an application made under subsection (1) by a complainant to bring an action in the name and on behalf of a cooperative or its subsidiary, or to intervene in an action to which the cooperative or its subsidiary is a party, the court may make any order it considers appropriate, including an order

(a) authorizing the complainant or any other person to control the conduct of the action to the extent that the control would otherwise be at the discretion of the cooperative or its subsidiary;

(b) giving directions for the conduct of the action;

(c) directing that an amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to a former or present member of the cooperative or to a former or present security holder of the cooperative or its subsidiary instead of to the cooperative or its subsidiary; or

(d) requiring the cooperative or its subsidiary to pay reasonable costs incurred by the complainant in connection with the application or the action or both.

Application to court re oppression

365(1)    A complainant may apply to the court for an order under this section.

Grounds

365(2)    Where, on an application under subsection (1) in respect of a cooperative, the court is satisfied that

(a) any act or omission of the cooperative effects a result; or

(b) the business or affairs of the cooperative are or have been carried on or conducted in a manner; or

(c) the powers of the directors of the cooperative are or have been exercised in a manner;

that is oppressive or unfairly prejudicial or that unfairly disregards the interests of any member, security holder, creditor, director or officer of the cooperative, the court may make an order to rectify the matters complained of.

Types of order

365(3)    Where the court is authorized under subsection (2) to make an order on an application made under subsection (1) in respect of a cooperative, the court may make any order that it considers appropriate, including an order

(a) restraining the conduct complained of;

(b) appointing a receiver or receiver-manager of the cooperative;

(c) requiring the cooperative to amend an agreement with its members generally or with a member of the cooperative;

(d) regulating the affairs of the cooperative by amending its articles or by-laws or creating or amending a unanimous agreement;

(e) directing an issue or exchange of its securities;

(f) directing changes in its directors;

(g) determining whether a person is or is qualified to be a member of the cooperative;

(h) determining any matter in regard to the relations between the cooperative and its members or any of them;

(i) subject to subsection (6), directing the cooperative or any other person to purchase its securities owned by any holder of the securities;

(j) subject to subsection (6), directing the cooperative or any other person to pay to a holder of securities of the cooperative any part of the money paid by the holder for the securities;

(k) subject to subsection (6), directing the cooperative to redeem its membership shares, repay its member loans or to pay to a member of the cooperative any other amount standing to the member's credit in the records of the cooperative;

(l) varying or setting aside a transaction or contract to which the cooperative is a party and compensating the cooperative or any other party to the transaction or contract;

(m) directing the production and delivery within a specified time of financial statements of the cooperative;

(n) directing an audit of the cooperative or an accounting for any transaction entered into, or business carried on, by the cooperative;

(o) compensating an aggrieved person;

(p) directing rectification of the registers or other records of the cooperative under section 368;

(q) liquidating and dissolving the cooperative;

(r) directing a special audit or an investigation under section 323; or

(s) requiring the trial of an issue.

Duty of directors members and shareholders

365(4)    If an order made under this section directs an amendment of the articles or by-laws of a cooperative,

(a) its directors, members and shareholders shall comply with subsection 321(5); and

(b) no other amendment to its articles or by-laws may be made without the consent of the court, until the court orders otherwise.

Exclusion

365(5)    A member or shareholder of a cooperative is not entitled to dissent under section 320 if an amendment to the articles of the cooperative is effected under this section.

Limitation

365(6)    No cooperative may make a payment to a member or shareholder of the cooperative under an order of the court if there are reasonable grounds for believing that

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

(b) the realizable value of the cooperative's assets after the payment would be less than the total of

(i) its liabilities, and

(ii) the amount that would be required to pay the holders of securities who have a right to be paid on a redemption or liquidation, rateably with or in priority to the holders of the securities to be purchased or redeemed by the payment.

Alternate order

365(7)    An applicant under this section may apply for an order under section 347 instead of the order under this section.

Member or shareholder approval not decisive

366(1)    No application made and no action brought or intervened in under this Part is to be stayed or dismissed solely because it is shown that an alleged breach of a right or duty owed to the cooperative or any of its subsidiaries has been or may be approved by the members or shareholders, but evidence of approval by the members or shareholders may be taken into account by the court in making an order under section 347 or this Part.

Court approval to discontinue

366(2)    No application made and no action brought or intervened in under this Part is to be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given on any terms that the court considers appropriate.

Notice

366(3)    If the court determines that the interests of a complainant may be substantially affected by a stay, discontinuance, settlement or dismissal mentioned in subsection (2), the court may order any party to the application or action to give notice of the application or action to the complainant.

No security for costs

366(4)    A complainant is not required to give security for costs in an application made or action brought or intervened in under this Part.

Interim costs

366(5)    In an application made or an action brought or intervened in under this Part in respect of a cooperative or its subsidiary, the court may at any time order the cooperative or the subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable for any interim costs so paid on the final disposition of the application or action.

Interpretation

367(1)    In this section

"business combination" means an acquisition of all or substantially all the property of one entity by another or an amalgamation of two or more entities; (« regroupement d'entreprises »)

"call" means an option transferable by delivery, to demand delivery of a specified number or amount of securities at a fixed price within a specified time but does not include an option or right to acquire securities of the cooperative that granted the option or right to acquire; (« option d'achat »)

"insider", in respect of a cooperative, means

(a) the cooperative,

(b) an affiliate of the cooperative,

(c) a director or an officer of the cooperative,

(d) a member who controls more than 10% of the voting rights that may be exercised to elect or appoint a director of the cooperative,

(e) a person who beneficially owns more than 10% of the shares of the cooperative or who exercises control or direction over more than 10% of the votes attached to the shares of the cooperative,

(f) a person employed or retained by the cooperative, and

(g) an individual who receives specific confidential information from a person described in this subsection or in subsection (2), including from an individual described in this clause, and who has knowledge that the information is given by such a person; (« initié »)

"investment share" means an investment share of a cooperative, and includes

(a) a security currently convertible into such an investment share, and

(b) a currently exercisable option or right to acquire such an investment share or such a convertible security; (« part de placement »)

"officer" of an entity means:

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

(b) where the entity is a distributing cooperative, each of the five highest paid employees of the cooperative, including any individual mentioned in clause (a); (« dirigeant »)

"put" means an option, transferable by delivery, to deliver a specified number or amount of securities at a fixed price within a specified time. (« option de vente »)

Further interpretation

367(2)    For the purposes of this section,

(a) a director or an officer of an entity, or an individual acting in a similar capacity, that is an insider of a distributing cooperative is deemed to be an insider of the distributing cooperative;

(b) a director or an officer of an entity, or an individual acting in a similar capacity, that is a subsidiary of a distributing cooperative is deemed to be an insider of its holding distributing cooperative;

(c) a person is deemed to beneficially own investment shares beneficially owned by an entity controlled directly or indirectly by the person;

(d) an entity is deemed to beneficially own investment shares beneficially owned by its affiliates; and

(e) the acquisition or disposition by a person of an option or right to acquire an investment share is deemed to be a change in the beneficial ownership of the share to which the option or right to acquire relates.

Membership shares

367(3)    For the purpose of this section, the sale of membership shares of a cooperative to its members or the making of a member loan or patronage loan to a cooperative is not a distribution to the public.

Deemed insiders

367(4)    Where at any time an entity becomes an insider of a cooperative or enters into a business combination with a cooperative or the cooperative becomes an insider of the entity, for the purposes of this section, an individual who at that time is a director or officer of the entity is deemed to have been an insider of the cooperative for six months, or any shorter period during which the individual was a director or an officer of the entity, before that time.

Prohibition of short sale

367(5)    An insider of a distributing cooperative shall not knowingly sell, directly or indirectly, an investment share of the distributing cooperative or any of its affiliates if the insider selling the share does not own or has not fully paid for the share.

Calls and puts

367(6)    An insider of a cooperative shall not knowingly, directly or indirectly, buy a put or sell a call in respect of an investment share of the cooperative or any of its affiliates.

Exception

367(7)    Notwithstanding subsection (5), an insider of a cooperative may sell an investment share of the cooperative that the insider does not own if the insider owns another investment share convertible into the share sold or an option or right to acquire the share sold and, no later than ten days after the sale, the insider

(a) exercises the conversion privilege, option or right and delivers the share so acquired to the purchaser; or

(b) transfers the convertible share, option or right to the purchaser.

Civil liability

367(8)    An insider of a cooperative who, in connection with a transaction in a security, membership share or member loan of the cooperative or any of its affiliates, makes use of any specific confidential information for the insider's own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security

(a) is liable to compensate any person for any direct loss suffered by them as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to them; and

(b) is accountable to the cooperative for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

Limitation

367(9)    An action to enforce a right created under subsection (8) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Application to court to rectify records

368(1)    Where the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the registers or other records of a cooperative, the cooperative or a member or other security holder thereof or any aggrieved person may apply to the court for an order that the registers or records be rectified.

Power of court

368(2)    On an application made under this section in respect of the registers or records of a cooperative, the court may make any order it considers appropriate, including an order

(a) requiring the registers or records of the cooperative to be rectified;

(b) restraining the cooperative from calling or holding a meeting or allocating or paying a dividend or interest on shares or a patronage return before rectification of the registers or records;

(c) determining the right of a party to the proceedings to have the party's name entered or retained in or deleted or omitted from the registers or records of the cooperative, whether the issue arises between two or more members or security holders, or alleged members or security holders, or between the cooperative and a member or security holder or alleged member or security holder; or

(d) compensating a party who has incurred a loss because of the wrongful entry, retention, deletion or omission.

Application for directions

369       The Registrar may apply to the court for directions in respect of any matter concerning the Registrar's duties under this Act, and, on the application, the court may give any directions that it thinks fit.

Restraining or compliance order

370       If a cooperative or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator of a cooperative does not comply with this Act or the regulations, or with its articles and by-laws or with a unanimous agreement of the cooperative, a complainant or the Registrar may, in addition to any other right, apply to the court for an order directing any such person to comply with or restraining them from acting in breach of it, and on the application, the court may order compliance and make any further order it thinks fit.

Summary application to court

371       Where this Act provides for an application to the court, the application may be made in a summary manner by petition or originating notice of motion or otherwise, as the rules of the court may provide, and subject to any order of the court respecting notice to interested parties or costs or any other matter the court thinks fit.

Appeal of final order

372       An appeal lies to The Court of Appeal from any order made by the court under this Act.

Offences with respect to reports

373(1)    A person who makes or assists in making a report, return, notice or other document required by this Act or the regulations to be sent to the Registrar or to any other person that

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

(b) omits to state a material fact required therein or necessary to make a statement contained therein not misleading in the light of the circumstances in which it was made;

is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Liability of director or officer

373(2)    Where the person guilty of an offence under subsection (1) is a body corporate, then, whether the body corporate has been prosecuted or convicted, any director or officer of the body corporate who knowingly authorized, permitted or acquiesced in the offence is also guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or both.

Exception

373(3)    No person is guilty of an offence under subsection (1) or (2) if the untrue statement or omission was unknown to the person and in the exercise of reasonable diligence could not have been known to the person.

General penalty

374       Every person who, without reasonable cause, contravenes a provision of his Act or the regulations, and no other penalty therefor is provided herein, is guilty of an offence and is liable on summary conviction to a fine not exceeding $500.

Order to comply

375       Where a person is convicted of an offence under this Act or the regulations, the convicting court may, in addition to any punishment imposed, order the person to comply with the provisions of the Act or the regulations for the contravention of which the person has been convicted.

Time limited for proceedings

376(1)    A prosecution for an offence under this Act may be instituted at any time within two years from the time when the subject-matter of the complaint arose, and not later.

Civil remedy not affected

376(2)    No civil remedy for an act or omission under this Act is suspended or affected because the act or omission is an offence under this Act.

Notice of refusal by Registrar

377(1)    The Registrar shall file all documents that are required under this Act to be sent to the Registrar, and if the Registrar refused to file any of those documents, the Registrar shall, not later than 20 days after the later of the receipt of the document and the receipt of any approval that may be required under any other law, give written notice of the refusal to the person who sent the document, giving reasons for the refusal.

Deemed refusal

377(2)    If the Registrar does not file or give written reasons of refusal to file the documents within the 20 days provided for in subsection (1), the Registrar is deemed to have refused to file the document.

Appeal from Registrar's decision

378(1)     A person who feels aggrieved by a decision of the Registrar to do any of the following things may apply to the court for an order, including an order requiring the Registrar to change or revoke the decision:

(a) refusal to file in the form submitted any articles or other documents required by this Act to be sent to the Registrar;

(b) giving a name, changing or revoking a name or the refusal to reserve, accept, change or revoke a name under this Act;

(c) refusal to grant an exemption that may be granted under this Act or the regulations;

(d) refusal to issue a certificate of discontinuance;

(e) issuing, or refusing to issue, a certificate of revival or a decision in respect of the terms for revival imposed by the Registrar;

(f) dissolving a cooperative under section 345.

No liability

378(2)    No action lies against, the Registrar or any officer or employee of the government acting under the direction of the Registrar for anything done or omitted to be done in good faith in the administration of this Act or in the discharge of any powers or duties that under this Act are intended or authorized to be executed or performed.

PART 19

GENERAL PROVISIONS

Notice to directors, members, and shareholders

379(1)    A notice or document required by this Act or the regulations, or the by-laws of a cooperative, to be sent to a member, shareholder or director of the cooperative may be given in accordance with the by-laws or in the absence of a provision in the by-laws may be delivered personally or sent by prepaid mail addressed

(a) to the member at the member's latest address as shown in the records of the cooperative or its transfer agent;

(b) to the shareholder at the shareholder's latest address as shown in the records of the cooperative or its transfer agent; and

(c) to the director at the director's latest address as shown in the records of the cooperative or in the last notice filed under section 196.

Electronic delivery

379(2)    For the purposes of this Act, a notice, a document or any information required by this Act, the regulations or the articles or by-laws of a cooperative to be sent or given to a member, shareholder or director of the cooperative or to the Registrar may be sent or given electronically to the member, shareholder, director or Registrar if, and only if,

(a) it is sent or given in accordance with prescribed requirements; and

(b) the articles or by-laws of the cooperative do not provide that it may not be sent or given electronically.

Deemed receipt

379(3)    A notice or document mailed in accordance with subsection (1) to a member, shareholder or director of a cooperative is presumed to be received by the member, shareholder or director at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the member, shareholder or director did not receive the notice or document at that time or at all.

Undelivered notices

379(4)    Where, in accordance with subsection (1), a cooperative mails a notice or document to a person who is a member or shareholder of the cooperative and the notice or document is returned on three consecutive occasions because the person cannot be found, the cooperative is not required to send any further notices or documents to the person until the person informs the cooperative in writing of the person's new address.

Published notices

379(5)    Where the by-laws of a cooperative provide for the giving of a notice to members under subsection (1) by insertion of the notice in a newspaper or other publication, the notice is deemed to be received by the members at the time the publication containing the notice is distributed in the ordinary course.

Posted notices

379(6)    Where the by-laws of a cooperative provide for the giving of a notice to members under subsection (1) by posting up the notice in a specified place or places, the notice is deemed to be received by the members at the time the notice is so posted.

Notice to and service upon a cooperative

380       A notice or document required to be sent to or served upon a cooperative may be sent by registered mail to the registered office of the cooperative shown in the latest notice given under subsection 10(3) or 27(4) to the Registrar by the cooperative and, if so sent, is presumed to be received or served at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the cooperative did not receive the notice or document at that time or at all.

Waiver of notice

381       When a notice or document in respect of a cooperative is required by this Act or the regulations to be given or sent to a person,

(a) the person who is entitled to receive the notice or document may, subject to a unanimous agreement of the cooperative, waive the giving or sending of the notice or document or the time for the giving or sending of the notice or document; or

(b) the person who is entitled to receive the notice or document and the person who is required to give or send it may, subject to a unanimous agreement of the cooperative, agree in writing to shorten the time for giving or sending it.

Certificate of Registrar

382(1)    Where this Act requires or authorizes the Registrar to issue a certificate or to certify any fact, the certificate shall be signed by the Registrar or by a Deputy Registrar designated under subsection 7(1).

Evidence

382(2)    Except in a proceeding under section 346 to dissolve a cooperative, a certificate referred to in subsection (1) or a certified copy thereof, when introduced as evidence in any civil, criminal or administrative action or proceeding, is conclusive proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

Certificates issued by cooperatives

383(1)    A certificate that is issued on behalf of a cooperative stating a fact that is set out in its articles or by-laws, in a unanimous agreement of the cooperative, in the minutes of the meetings of its directors, a committee of its directors, its members or its shareholders, or in a trust indenture or other contract to which the cooperative is a party, may be signed by a director, officer or transfer agent of the cooperative.

Proof

383(2)    When introduced as evidence in any civil, criminal or administrative action or proceeding,

(a) a fact stated in a certificate referred to in subsection (1);

(b) a certified extract from a list of members or from a members or securities register of a cooperative; or

(c) a certified copy of minutes or extract from minutes of a meeting of members, shareholders, directors, or a committee of directors, of a cooperative;

is, in the absence of evidence to the contrary, proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

Security certificate

383(3)    An entry in a securities register of, or a security certificate issued by, a cooperative is, in the absence of evidence to the contrary, proof that the registered holder is the owner of the securities described in the register or in the certificate.

Membership certificate

383(4)    An entry in a members' register of, or a certificate of membership or a membership share certificate issued by, a cooperative is, in the absence of evidence to the contrary, proof that the person whose name appears in it or on it is a member or owns the membership shares as set out in the membership share certificate or the register.

Registrar may rely on declarations

384       The Registrar may, for all purposes of this Act, rely on a declaration of a director or officer of a cooperative provided under subsection 308(2), 312(2), 314(4) or (5) or 317(1).

Copies

385(1)    When a notice or document is required to be sent to the Registrar under this Act, the Registrar may accept a photostatic or photographic copy of it.

Electronic submission of documents etc.

385(2)     Except to the extent that may otherwise be prescribed, notices, documents, information or fees that are authorized or required to be submitted to, or issued by, the Registrar under this Act may be submitted or issued in electronic or other form in any manner approved by the Registrar.

Time of receipt

385(3)    For the purposes of this Act, a document, information or a fee that is submitted in accordance with subsection (2) is deemed to have been received by the Registrar at the time provided in the regulations.

Electronic storage

385(4)    Subject to the regulations, a document or information that is received by the Registrar under this Act in electronic or other form shall be entered or recorded in a form, whether

(a) a bound or loose leaf form;

(b) a photographic form;

(c) a system of mechanical or electronic data processing; or

(d) any other form of or device for storing information;

that allows the document or information recorded or stored in them to be reproduced within a reasonable time in an intelligible, written English form or written French form.

When notices or documents need not be sent

386       The Registrar may, on any conditions that the Registrar considers appropriate, determine that notices or documents or classes of notices or documents need not be sent to the Registrar under this Act if they are notices or documents that contain information similar to information contained in notices or documents required to be made public under any other Act of the Legislature.

Proof required by Registrar

387(1)    The Registrar may require that a document or a fact stated in a document required by this Act or the regulations to be sent to the Registrar be verified in accordance with subsection (2).

Form of proof

387(2)    A document or fact required by this Act or by the Registrar to be verified may be verified by affidavit, affirmation statutory declaration sworn, affirmed or declared under The Manitoba Evidence Act before whom affidavits, affirmations an statutory declarations are authorized under that Act to be sworn, affirmed or declared.

Authentication

387(3)    The Registrar may require a body corporate to authenticate a document that is required under this Act to be sent to or filed by the Registrar, and the authentication may be signed by the secretary, any director of the body corporate or any other individual authorized by its board of directors to sign the authentication, or by the solicitor for the body corporate.

Regulations

388(1)    For the purpose of carrying out the provisions of this Act according to their intent, the Lieutenant Governor in Council may make such regulations and orders as are ancillary thereto and are not inconsistent therewith; and every regulation and order made under and in accordance with the authority granted by this section has the force of law; and, without restricting the generality of the foregoing, the Lieutenant Governor in Council may make regulations and orders

(a) prescribing any matter or thing required or authorized by this Act to be prescribed or providing for any matter or thing required or authorized by this Act to be provided;

(b) requiring the payment of a fee for the filing, examination or copying of any document, or for any action that the Registrar is required or authorized to take under this Act, and prescribing the amount thereof;

(c) respecting the content of offering statements required to be sent to the Registrar in respect of issues of shares or other securities of cooperatives;

(d) respecting any exemptions permitted by this Act and providing rules in respect of any such exemptions;

(e) respecting the names of cooperatives;

(f) respecting the par value of and the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to shares or classes of shares of cooperatives;

(g) respecting the purposes that cooperatives are to fulfil;

(h) respecting the types of cooperatives that may be reflected in the articles and names of cooperatives;

(i) respecting the procedures on appeals taken under section 280;

(j) respecting restrictions on the business or businesses that cooperatives may carry on;

(k) prescribing, for the purpose of clause 257(1)(a), the standards as they exist from time to time of an accounting body named in the regulations that are to be followed.

Fixing fees

388(2)    Where no fee is fixed in the regulations for any service performed under this Act, the minister may fix a fee therefor.

Definition of "statement"

389(1)    In this section, "statement" means a statement of intent to dissolve a cooperative referred to in section 341 and a statement of revocation of intent to dissolve a cooperative referred to in section 343.

Filings

389(2)    Where this Act requires articles or a statement relating to a cooperative to be sent to the Registrar, unless otherwise specifically provided herein

(a) two copies of the articles or statement shall be signed by a director or an officer of the cooperative or, in the case of articles of incorporation, by the incorporators; and

(b) if the articles or statement conform to the law and are accompanied by all the required by-laws or other documents, and the prescribed fees in respect thereof have been paid, the Registrar shall, subject, where required by this Act, to being satisfied that it is advisable,

(i) endorse on each of the two copies of the articles or statement a certificate indicating the day on which the articles or statement become effective,

(ii) file one copy of the articles or statement endorsed in accordance with sub-clause (i),

(iii) send the remaining copy of the articles or statement, endorsed in accordance with sub-clause (i), to the cooperative or its representative, and

(iv) publish in the gazette a notice of the issue of the certificate and of the day the articles or statement to which it relates become effective.

Time of effect of articles etc.

389(3)    The day indicated on a certificate issued under subsection (2) as the day the articles or statement become effective shall not be earlier than the day on which the Registrar received the articles or statement or the court order pursuant to which the certificate is issued.

Signature

389(4)    A signature required on a certificate issued by the Registrar under this Act may be printed or otherwise reproduced on the certificate or may be made in accordance with the regulations.

Time of discontinuance

389(5)    Notwithstanding subsection (3), a certificate of discontinuance issued for the purposes of section 316 or 317 shall indicate that the discontinuance becomes effective on the day the cooperative is continued under The Corporations Act or The Condominium Act or under the laws of another jurisdiction, as the case may be.

Endorsement constitutes issue

389(6)    A certificate endorsed in accordance with subsection (2) constitutes a certificate issued under this Act and the articles or a statement so endorsed are effective on the day indicated in the certificate, notwithstanding that any action required to be taken by the Register under this Act with respect to the articles or statement is taken on a later day.

Certificate of compliance

390       The Registrar may provide any person with a certificate that a cooperative has sent to the Registrar a document required to be sent, or has paid any fees prescribed under this Act.

Alteration

391       The Registrar may alter any notice or document, other than an affidavit, affirmation or statutory declaration, if so authorized by or on behalf of the person who sent the notice or document to the Registrar.

Corrections

392(1)    Where a certificate or order relating to a cooperative containing an error is issued by the Registrar, the Registrar shall issue a corrected order or certificate and may

(a) demand the surrender of the certificate or order containing the error; and

(b) request the directors or members of the cooperative

(i) to pass resolutions,

(ii) to send or deliver to the Registrar the documents required to comply with this Act, or

(iii) to take such other steps as the Registrar may reasonably require.

Date of corrected certificate

392(2)    A corrected certificate or order issued under subsection (1) has effect from the day the certificate or order that it replaces became effective.

Notices

392(3)    Where a corrected certificate or order issued under subsection (1) materially amends the terms of the original certificate or order, the Registrar shall forthwith give notice of the correction in the gazette.

Inspection

393(1)    A person who has paid the prescribed fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Registrar, except a report sent under subsection 324(2), and to make copies of it or parts of it.

Copies and extracts

393(2)    Upon payment of the prescribed fee, the Registrar shall provide any person with a copy or certified copy of a document or part of a document required by this Act or the regulations to be sent to the Registrar, except a report sent under subsection 324(2).

Form of records of Registrar

394(1)    Records required by this Act to be prepared and maintained by the Registrar may be prepared and maintained

(a) in bound or loose-leaf form;

(b) in photographic form;

(c) by any system of mechanical or electronic data processing; or

(d) by any other form of or device for storing information;

that allows any information recorded or stored in them to be reproduced within a reasonable time in an intelligible, written English form or written French form.

Obligation to furnish

394(2)    Where records maintained by the Registrar are prepared and maintained in other than written form,

(a) the Registrar shall furnish any copy required to be furnished under subsection 393(2) in intelligible written form; and

(b) a report reproduced from those records, if it is certified by the Registrar, is admissible in evidence to the same extent as the original records would have been if they had been in written form.

Production of records limitation

394(3)    The Registrar is not required to produce any document, other than a certificate and attached articles or statement filed under section 389, after six years after the day the Registrar received it.

Form of publication

394(4)    Information or notices required by this Act to be summarized in a publication generally available to the public or to be published by the Registrar may be made available to the public or published by

(a) a system of mechanical or electronic data processing; or

(b) any other form of or device for storing information;

that allows any information recorded or stored in them to be reproduced within a reasonable time in an intelligible, written English form or written French form.

Continuation of former letters patent, etc.

395(1)    All letters patent, supplementary letters patent and licences, all cancellations, suspensions, proceedings, acts, registrations and things, and all affidavits, declarations, by-laws, resolutions, regulations and documents that were lawfully granted, issued, imposed, made, taken, done, commenced, filed or passed under any provision of an Act referred to in the definition of "former Act cooperative" in section 1, shall, insofar as

(a) they affect a former Act cooperative; and

(b) if they had been granted, issued, imposed, made, taken, done, commenced, filed or passed after this Act came into force, would have been granted, issued, imposed, made, taken, done, commenced, filed or passed under this Act;

be conclusively deemed to have been granted, issued, imposed, made, taken, done, commenced, filed or passed under this Act and shall, if in force on the coming into force of this Act, be continued under this Act as though they had in fact been granted, issued, imposed, made, taken, done, commenced, filed or passed under this Act.

Amendments

395(2)    Any addition or amendment to or deletion from any provision in the letters patent, supplementary letters patent or by-laws of a former Act cooperative shall be made in accordance with this Act.

Reference to old Companies Act

395(3)    Any reference in an Act, letters patent, supplementary letters patent, articles, by-law or resolution to Part X of The Companies Act, being chapter C160 of the Revised Statutes of Manitoba, 1970, as it existed before June 1, 1977, to any provision of that Part or to any procedure under that Part, shall be deemed to be a reference to this Act, to the equivalent provision of this Act or to the equivalent procedure under this Act, as the case may be.

Reference to former Cooperatives Act

395(4)    Any reference in an Act, letters patent, supplementary letters patent, articles, by-law or resolution

(a) to The Cooperatives Act, being chapter 47 of the Statutes of Manitoba, 1976, to any provision of that Act or to any procedure under that Act; or

(b) to The Cooperatives Act, being chapter C223 of the Re-enacted Statutes of Manitoba, 1987, to any provision of that Act or to any procedure under that Act;

shall be deemed to be a reference to this Act, to the equivalent provision of this Act or to the equivalent procedure under this Act, as the case may be.

Continuance of former Act cooperatives

396(1)    On the coming into force of this Act,

(a) each former Act cooperative is deemed to be a cooperative incorporated under this Act;

(b) every provision that is required by this Act to be set out in the articles of incorporation of a cooperative is deemed to be set out in the articles of each former Act cooperative;

(c) every provision that is required by this Act to be provided in the by-laws of a cooperative is deemed to be provided in the by-laws of each former Act cooperative; and

(d) every share that has been issued by a former Act cooperative that is not a membership share, or a share purchased with patronage returns, of the cooperative is deemed to be an investment share of the cooperative.

Amendment of articles

396(2)    Each former Act cooperative shall, not later than five years after the coming into force of this Act, amend its articles to comply with section 9 and amend its by-laws to comply with section 12 and file the amended articles and by-laws with the Registrar.

Failure to comply

396(3)    If a former Act cooperative fails to comply with subsection (2), the Registrar may, after the expiry of the five years referred to in subsection (2) and after giving not less than 180 days notice to the cooperative, dissolve the cooperative, and subsections 345(3) and (4) apply, with such modifications as the circumstances require.

Effect on members' and shareholders' rights

396(4)    An amendment to the articles of a former Act cooperative as required under subsection (2) does not give any member or shareholder of the cooperative a right to dissent under section 320.

PART 20

CONSEQUENTIAL AMENDMENTS

C.C.S.M. c. C220 amended

397        The definition "co-operative association" in section 1 of The Co-operative Associations Loans and Loans Guarantee Act is repealed and the following is substituted:

"co-operative association" means a cooperative as defined in section 1 of The Cooperatives Act; (« coopérative »)

R.S.M. 1987, c. C223 amended

398(1)     The Cooperatives Act, R.S.M. 1987, c. C223, is amended by this section.

398(2)     Section 137 is amended by renumbering it as subsection 137(1) and adding the following as subsection 137(2):

Amalgamation with a body corporate

137(2)    A cooperative may enter into an amalgamation agreement with a body corporate for the purpose of amalgamating with that body corporate and

(a) continuing as one cooperative under this Act;

(b) continuing as a body corporate under another Act of the Legislature of Manitoba; or

(c) continuing as a body corporate under the laws of another jurisdiction;

if the body corporate is authorized to enter into the agreement by the laws of the jurisdiction in which the body corporate is incorporated.

398(3)     Subsection 138(1) is amended in the part preceding clause (a) by adding "under subsection 137(1)" after "amalgamate".

398(4)     Subsection 138(2) is amended by adding ", in an amalgamation of cooperatives under subsection 137(1)," after "Where".

398(5)     The following is added after subsection 139(5):

Amalgamations under clause 137(2)(a)

139(6)    Section 138 and subsections (1) to (5) of this section apply, with necessary modifications, to the amalgamation of a cooperative and a body corporate for the purpose of continuing as one cooperative under this Act, as provided for in clause 137(2)(a), and, in this regard, a reference to "cooperative" in section 138 includes the body corporate.

Further requirements

139(7)    An amalgamation agreement referred to in clause 137(2)(a) shall contain any information required by the laws of the jurisdiction in which the amalgamating body corporate is incorporated and shall be approved by the members of the amalgamating body corporate in accordance with the requirements of those laws.

Amalgamations under clause 137(2)(b) or (c)

139(8)    Subject to subsection (9), clauses 138(1)(b) to (g), subsection 138(2) and subsections (1) to (5) of this section apply, with necessary modifications, to the amalgamation of a cooperative and a body corporate for the purpose of continuing as a body corporate under another Act of the Legislature of Manitoba, as provided for in clause 137(2)(b), or the laws of another jurisdiction, as provided for in clause 137(2)(c), and, in this regard, a reference to "cooperative" in section 138 includes the body corporate.

Further requirements

139(9)    An amalgamation agreement referred to in clause 137(2)(b) or (c)

(a) shall contain any information required by the laws of the jurisdiction in which the amalgamating body corporate is incorporated and shall be approved by the members of the amalgamating body corporate in accordance with the requirements of those laws; and

(b) shall contain any information required by the Act under which the amalgamating cooperative and body corporate propose to continue.

398(6)     The following is added after subsection 147(1):

Continuance and amalgamation

147(1.1)  If authorized by the members and shareholders of a cooperative in accordance with this section, and if made pursuant to an amalgamation agreement referred to in clause 137(2)(b) or (c) that is approved in accordance with section 139, an application for continuance under subsection (1) may include an application to the official body referred to in that subsection for a certificate of amalgamation.

398(7)     Subsection 149(1) is amended

(a) in clause (b), by adding "other than under clause 137(2)(c)" after"cooperative";

(b) in clause (d), by striking out "section 147" and substituting "subsection 147(1)";

(c) by adding "or" at the end of clause (f); and

(d) by adding the following after clause (f):

(g) amalgamate with a body corporate under clause 137(2)(c) and apply for continuance under subsection 147(1.1).

C.C.S.M. c. C224 amended

399        The definition "cooperative organizations" in section 1 of The Cooperative Promotion Trust Act is repealed and the following substituted:

"cooperative organizations" means cooperatives as defined in section 1 of The Cooperatives Act, and includes credit unions; (« coopératives »)

C.C.S.M. c. R119 amended

400        Clause 3(1)(c) of The Residential Tenancies Act is repealed and the following substituted:

(c) except as provided in Part 12 of The Cooperatives Act, living accommodation provided by a housing cooperative, as defined in section 1 of that Act, to its members who occupy the living accommodation;

C.C.S.M. c. S50 amended

401       Clause 19(2)(g) of The Securities Act is repealed and the following is substituted:

(g) securities

(i) to which sections 89 to 91 of The Cooperatives Act apply, or

(ii) that are memberships or shares issued by a cooperative entity, as defined in section 1 of The Cooperatives Act, for the purpose of qualifying a person or company as a member of the cooperative entity;

PART 21

REPEAL, C.C.S.M. REFERENCE, COMING INTO FORCE

Repeal

402       The Cooperatives Act, R.S.M. 1987, c. C223, is repealed.

C.C.S.M. reference

403       This Act may be cited as The Cooperatives Act and referred to as chapter C223 of the Continuing Consolidation of the Statutes of Manitoba.

Coming into force

404(1)    This Act, except section 398, comes into force on a day fixed by proclamation.

404(2)    Section 398 comes into force on the day this Act receives royal assent.