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The Cooperatives Act
This is an unofficial archived version.
This version was current from June 17, 2010 to June 15, 2011.

Note: It does not reflect any retroactive amendment enacted after June 15, 2011.
To find out if an amendment is retroactive, see the coming-into-force provisions
at the end of the amending Act.

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C.C.S.M. c. C223

The Cooperatives Act

File 1: s. 1 to 217 (Parts 1 to 8)
File 2: s. 218 to 404 (Parts 9 to 21)

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 has paid for 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.

S.M. 2002, c. 27, s. 5.

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 auditor of the cooperative to hold office until the close of the first annual meeting of its members.

S.M. 2000, c. 14, s. 10.

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 be 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) written notice to each stock exchange in Canada on which the investment shares of the cooperative are listed for trading.

S.M. 2000, c. 14, s. 11.

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 a resolution is passed under subsection (1), the cooperative shall in writing notify the person whose membership was terminated,

(a) by pre-paid ordinary mail addressed to the person at his or her latest address shown in the cooperative's records; or

(b) by delivering the notice to that address.

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.

S.M. 2000, c. 14, s. 12.

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 returns 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 returns 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 articles and the by-laws of the cooperative.

Rights and obligations re former member's shares

246(3.1)    After a person ceases to be a member of a cooperative, the provisions of this Act and the regulations relating to membership shares or their holders continue to apply in respect of his or her membership shares in the cooperative as if he or she were still a member.

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.

S.M. 2000, c. 14, s. 13; S.M. 2009, c. 19, s. 25.

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 auditor is disqualified from being an auditor of a cooperative if he or she is not independent of the cooperative and all of its subsidiaries, and the directors and officers of the cooperative and its subsidiaries.

Independence

262(2)      For the purposes of this section,

(a) independence is a question of fact; and

(b) an auditor is deemed not to be independent of a cooperative if the auditor or a business partner of the auditor

(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 auditor 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).

S.M. 2000, c. 14, s. 14.

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 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.

S.M. 2000, c. 14, s. 15.

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 one and fix his or her remuneration, 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.

S.M. 2000, c. 14, s. 16.

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 person shall accept an appointment or consent to be appointed as auditor of a cooperative if the person is replacing a former auditor who has resigned or has been removed from office or whose term of office has expired or is about to expire, unless and until the person has requested and received from that former auditor a written statement of the circumstances and the reasons why, in the opinion of the former auditor, he or she is being replaced.

Exception

269(8)      Notwithstanding subsection (7), a person 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 person 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 a person who has not complied with subsection (7) is null and void.

269(10)     Repealed, S.M. 2009, c. 19, s. 26.

S.M. 2000, c. 14, s. 17; S.M. 2001, c. 43, s. 3; S.M. 2009, c. 19, s. 26.

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.

273(4)      Repealed, S.M. 2009, c. 19, s. 27.

S.M. 2009, c. 19, s. 27.

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, excluding Saturdays and holidays, 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, excluding Saturdays and holidays, 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, excluding Saturdays and holidays, 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.

S.M. 2002, c. 27, s. 6.

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.

Member failing to give up residential unit

282(1)      This section applies when a housing cooperative member's right to possession and occupancy of residential premises of the cooperative has been terminated because of section 279 or 281 and he or she does not go out of possession of the premises.

Order of possession

282(2)      In the circumstances described in subsection (1), the provisions of The Residential Tenancies Act providing for an order of possession against a tenant who does not go out of possession of residential premises after his or her tenancy expires or is terminated apply, with necessary changes, to the member and to the cooperative.

Appeal to Court of Appeal

282(3)      Despite subsection (2), section 161 of The Residential Tenancies Act (appeal to Residential Tenancies Commission) does not apply to a decision of the Director of Residential Tenancies about an order of possession against a member, and any appeal of such a decision must be made to The Court of Appeal under section 175 of that Act.

S.M. 2002, c. 27, s. 7.

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;

(e) convert it from a cooperative without membership shares to one with membership shares and establish the par value of the membership shares;

(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) establish, change or remove a limit to the number of shares of any class that may be issued;

(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 shares or new classes of shares in the cooperative;

(j) change the designation of all or any of its 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 shares, whether issued or unissued;

(k) change its shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series;

(l) divide a class of its shares, whether issued or unissued, into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions of them;

(m) authorize its directors to divide any class of its unissued shares into series and fix the number of 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 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 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.

S.M. 2009, c. 19, s. 28.

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 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 shares of a class having rights or privileges equal or superior to the shares of the class;

(b) to effect an exchange, reclassification or cancellation of all or part of its shares of the class;

(c) to add, change or remove the rights, privileges, restrictions or conditions attached to its 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 shares of the class;

(e) to create a new class of its shares equal or superior to the shares of the class;

(f) to make any class of its shares having rights or privileges inferior to the shares of the class equal or superior to the shares of the class;

(g) to effect an exchange or create a right or exchange of all or part of its shares of another class into the shares of the class; or

(h) to constrain the issue, transfer or ownership of the 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 holders of a particular series of a class of shares of a cooperative are entitled to vote under subsection (1) on an amendment to its articles separately from the holders of another series of that class only if the particular series is affected by the amendment in a manner different from other shares of the same class.

Right to vote

299(5)      A person entitled to vote under subsection (1) in respect of an amendment affecting a class or series of shares has the following right to vote, even if the shares do not otherwise carry a voting right:

(a) in the case of a class or series of membership shares, each member holding one or more shares belonging to that class or series is entitled to one vote;

(b) in the case of a class or series of investment shares, each shareholder holding one or more shares belonging to that class or series is entitled to one vote for each such share.

Separate resolutions

299(6)      The articles of a cooperative may be amended as described in subsection (1) only if the proposed amendment is approved by a special resolution of the members and by separate special resolutions of those who are entitled to vote separately as a class or series.

S.M. 2009, c. 19, s. 29.

Delivery of articles

300(1)      Subject to any revocation under subsection 48(4) 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.

S.M. 2000, c. 14, s. 18.

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, membership 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.

S.M. 2009, c. 19, s. 30.

Agreement to be submitted for approval

306(1)      The directors of each amalgamating cooperative must submit the amalgamation agreement for approval to

(a) a meeting of its members;

(b) a meeting of its shareholders, if any; and

(c) each class of persons entitled under subsection (4) to vote separately as a class in respect of the agreement.

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 holders of a class or series of shares are entitled to vote separately as a class, as set out in clauses 299(5)(a) and (b), in respect of the amalgamation agreement if it contains a provision that, if contained in an amendment to the articles, would entitle them to vote on the amendment as a class or series under section 299.

Approvals required

306(5)      An amalgamation agreement for the amalgamation of two or more cooperatives may be implemented only after it is approved by separate special resolutions of

(a) the members of each amalgamating cooperative;

(b) the shareholders of each amalgamating cooperative that has issued investment shares; and

(c) each class of persons entitled under subsection (4) to vote separately as a class in respect of the agreement.

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)      Sections 305, 308 and 309 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, 308 or 309 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.

S.M. 2000, c. 14, s. 19; S.M. 2009, c. 19, s. 31.

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 in accordance with this section and sections 311 to 313.

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.

S.M. 2009, c. 19, s. 32.

Arrangement to be submitted for approval

311(1)      The directors of a cooperative proposing an arrangement must submit the scheme of arrangement for approval to

(a) a meeting of its members;

(b) a meeting of its shareholders, if any; and

(c) each class of persons entitled under subsection (4) to vote separately as a class in respect of the arrangement.

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 a class or series of shares are entitled to vote separately as a class, as set out in clauses 299(5)(a) and (b), in respect of the scheme of arrangement if it contains a provision that, if contained in an amendment to the articles, would entitle them to vote on the amendment as a class or series under section 299.

Approvals required

311(5)      A scheme of arrangement may be implemented only after it is approved by separate special resolutions of

(a) the members of the cooperative;

(b) the shareholders of the cooperative; and

(c) each class of persons entitled under subsection (4) to vote separately as a class in respect of the arrangement.

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.

S.M. 2009, c. 19, s. 33.

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 that

(i) belong to the class of shares designated in the articles as membership shares,

(ii) have the par value set out in the articles, and

(iii) have the rights, restrictions, privileges and conditions set out in this Act and the cooperative's articles and by-laws;

(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.

S.M. 2009, c. 19, s. 34.

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 clause (a) or (b), 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.

S.M. 2002, c. 27, s. 8.

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 his or her rights as a member or as a holder of a share of the cooperative;

(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 holds one or more shares of the cooperative, the number of shares held and, if applicable, the class and series of those shares;

(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.

S.M. 2009, c. 19, s. 35.

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 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.

S.M. 2000, c. 14, s. 20.

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 in one or more of the following ways:

(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) to (g) repealed, S.M. 2009, c. 19, s. 36; or

(h) in accordance with the regulations.

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 in one or more of the following ways:

(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) repealed, S.M. 2009, c. 19, s. 36; or

(e) in accordance with the regulations.

S.M. 2000, c. 14, s. 21; S.M. 2009, c. 19, s. 36.

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; or

(c) is in default for a period of two years in sending the Registrar any fee, notice or document required by this Act;

(d) repealed, S.M. 2000, c. 14, s. 22.

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.

S.M. 2000, c. 14, s. 22.

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 Fund.

S.M. 1999, c. 18, s. 6.

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 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.

S.M. 1999, c. 18, s. 6.

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 the penalties set out in subsection 374(1).

373(2)      Repealed, S.M. 2009, c. 19, s. 37.

Exception

373(3)      No person is guilty of an offence under subsection (1) 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.

S.M. 2009, c. 19, s. 37.

Offence and penalty

374(1)      A person who contravenes a provision of this Act or the regulations or who fails to comply with an order made by the Registrar is guilty of an offence and is liable, on summary conviction,

(a) in the case of an individual, to a fine not exceeding $5,000. or imprisonment for a term not exceeding six months, or both; or

(b) in any other case, to a fine not exceeding $25,000.

Liability of directors and officers

374(2)      If a body corporate commits an offence under this Act, a director or officer of the body corporate who authorized, permitted or acquiesced in the commission of the offence is also guilty of an offence and is liable on summary conviction to the penalties set out in clause (1)(a), whether or not the body corporate has been prosecuted or convicted.

S.M. 2000, c. 14, s. 23; S.M. 2009, c. 19, s. 38.

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 or statutory declaration sworn, affirmed or declared under The Manitoba Evidence Act before a person before whom affidavits, affirmations or 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.

S.M. 2000, c. 14, s. 24.

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 and to make copies of it or parts of it.  This is subject to subsection (3).

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.  This is subject to subsection (3).

Exceptions to subsections (1) and (2)

393(3)      Subsections (1) and (2) do not apply to

(a) the by-laws of a cooperative; or

(b) an inspector's report sent to the Registrar under subsection 324(2).

S.M. 2002, c. 27, s. 9.

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.

References to former Cooperatives Acts

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.

397 to 401  

NOTE:  These sections made up Part 20 of the original Act and contained consequential amendments to other Acts which are now included in those Acts.

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.

NOTE: S.M. 1998, c. 52, except section 398, was proclaimed in force July 1, 1999.