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C.C.S.M. c. C223
The Cooperatives Act
| Table of Contents | Regulations |
| Sections: 1 - 91 | 92 - 217 | 218 - 321 | 322 - 404 |
PART 9
MEMBERS AND SHAREHOLDERS
218 Subject to this Act and any provision in its articles, membership in a cooperative is governed by its by-laws.
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.
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.
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.
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.
219(5) Unless otherwise provided by its by-laws, a person of the full age of 16 years may become a member of a cooperative, but no person under the full age of 18 years is eligible to act as a director or officer of a cooperative.
Members bound by articles and by-laws
220 The articles and by-laws of a cooperative bind the cooperative and its members.
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.
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.
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.
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.
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.
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.
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.
222(8) A person participating in a meeting referred to in subsection (7) is deemed to be present at the meeting.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
244(1) The directors of a cooperative may by special resolution of the directors terminate the membership of a member of the cooperative.
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.
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.
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).
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.
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).
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.
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).
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 by-laws applicable to continuing members and their estates.
Withdrawal not to have certain effects
246(4) Unless the directors of a cooperative determine otherwise,
(a) the withdrawal of a member from the cooperative does not release the member from any debt or obligation to the cooperative or contract with the cooperative; and
(b) the cooperative need not, notwithstanding subsection (1) repay to the member amounts outstanding on loans made by the member to the cooperative that have a fixed maturity day until that day arrives.
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.
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.
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
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 »)
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.
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.
250(2) A proxy of a shareholder shall be executed by the shareholder or by the shareholder's attorney authorized in writing.
250(3) A proxy of a shareholder is valid only at the meeting in respect of which it is given or any adjournment thereof.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
263(2) An auditor of a cooperative appointed under subsection 182(1) is eligible for appointment under subsection (1) as auditor of the cooperative.
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.
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.
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.
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.
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.
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.
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.
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.
267(1) Subject to subsection (3), the directors of a cooperative shall forthwith fill any vacancy in the office of its auditor.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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) An auditor or former auditor of a cooperative who fails without reasonable excuse to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000., or to imprisonment for a term not exceeding six months, or to both.
S.M. 2000, c. 14, s. 17; S.M. 2001, c. 43, s. 3.
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).
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.
270(3) For the purposes of subsection (2), reasonableness is a question of fact.
270(4) Subsection (2) applies whether or not the financial statements of the cooperative reported on by the auditor are in consolidated form.
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.
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.
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.
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.
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.
272(3) An audit committee of a cooperative shall perform such duties and functions as may be prescribed.
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.
272(5) The auditor of a cooperative or a member of its audit committee may call a meeting of the committee.
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.
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.
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) Every director or officer of a cooperative who knowingly fails to comply with subsection (1) or (3) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000., or to imprisonment for a term not exceeding six months, or to both.
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
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.
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.
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".
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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).
280(9) Each housing cooperative shall in December of each year submit to the Registrar the names and addresses of not less than two individuals, who are members of the cooperative and at least one of whom is not a director of the cooperative, and who are willing to act as members of appeal tribunals under this section for the next following year, and the Registrar shall create and maintain a list of those individuals for participation on appeal tribunals during the next following year.
Remuneration of tribunal members
280(10) The presiding member and each other member of an appeal tribunal convened under this section is entitled to be paid honoraria in prescribed amounts.
Responsibility for costs of tribunals
280(11) Where an appeal tribunal is convened to hear an appeal respecting the termination of a person's membership in a housing cooperative, the honoraria for the members of the tribunal and the costs of obtaining accommodation for the hearing shall be paid by the cooperative.
Right to possession terminated
281 Any right of a member of a housing cooperative to possession or occupancy of residential premises of the cooperative acquired because of membership in the cooperative is terminated upon the termination or other cessation of the membership of the member in the cooperative.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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
289 This Part applies to cooperatives the articles of which set out that its business is restricted to primarily providing employment to its members.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
297(1) Subject to subsection (3) and sections 298, 299 and 300, the articles of a cooperative may be amended by special resolution of its members to
(a) change its name;
(b) change its statement of the type of cooperative that it will be;
(c) add, change or remove a restriction on the business or businesses that it may carry on;
(d) change the par value of its membership shares, and establish, remove or change the limit, if any, on the maximum number of its membership shares that may be issued;
(e) convert it from a cooperative that is incorporated without membership shares to one with membership shares and establish the par value of its membership shares and the maximum number, if any, of membership shares that may be issued;
(f) convert it from a cooperative that is incorporated with member shares into one without membership shares and provide for the conversion of membership shares into member loans;
(g) change the maximum number of investment shares that the cooperative is authorized to issue;
(h) reduce or increase its stated capital which, for the purposes of the amendment, is deemed to be set out in its articles;
(i) create and authorize the issue of investment shares or new classes of investment shares in the cooperative;
(j) change the designation of all or any of its investment shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any class or series of its investment shares, whether issued or unissued;
(k) change its investment shares of any class or series, whether issued or unissued, into a different number of investment shares of the same class or series or into the same or a different number of investment shares of other classes or series;
(l) divide a class of its investment shares, whether issued or unissued, into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of them;
(m) authorize its directors to divide any class of its unissued investment shares into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of each series;
(n) authorize its directors to change the rights, privileges, restrictions and conditions attached to its unissued investment shares of any series;
(o) revoke, diminish or enlarge any authority conferred under clause (m) or (n);
(p) add, change or remove restrictions on the issue, transfer or ownership of its investment shares;
(q) subject to subsection 42(4) and section 178, increase or decrease the number of its directors or the minimum or maximum number of its directors; or
(r) add, change or remove any other provision that is permitted by this Act to be set out in its articles.
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.
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.
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.
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.
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).
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.
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.
298(2) Notice of the meeting of members or shareholders of a cooperative at which a proposal to amend its articles is to be considered shall set out the proposed amendment and, if applicable, state that a dissenting member or a dissenting shareholder is entitled to the benefit of section 320, but failure to make that statement does not invalidate an amendment.
Amendment of articles: separate votes
299(1) The holders of shares of a class or, subject to subsection (4), of a series of the investment shares of a cooperative are, unless its articles otherwise provide in the case of an amendment referred to in clause (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the articles of the cooperative
(a) to increase or decrease any maximum number of its authorized shares of the class, or increase any maximum number of its authorized investment shares of a class having rights or privileges equal or superior to the investment shares of the class;
(b) to effect an exchange, reclassification or cancellation of all or part of its investment shares of the class;
(c) to add, change or remove the rights, privileges, restrictions or conditions attached to its investment shares of the class, including
(i) rights to accrued dividends or rights to cumulative dividends,
(ii) redemption rights,
(iii) dividend preferences or liquidation preferences, or
(iv) conversion privileges, options, voting, transfer or preemptive rights, or rights to acquire securities of the cooperative, or sinking fund provisions;
(d) to increase the rights or privileges of any class of its shares having rights or privileges equal or superior to the investment shares of the class;
(e) to create a new class of its investment shares equal or superior to the investment shares of the class;
(f) to make any class of its investment shares having rights or privileges inferior to the investments shares of the class equal or superior to the investment shares of the class;
(g) to effect an exchange or create a right or exchange of all or part of its investment shares of another class into the investment shares of the class; or
(h) to constrain the issue, transfer or ownership of the investment shares of the class or change or remove a constraint on the shares.
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.
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.
299(4) The shareholders of a particular series of a class of investment shares of a cooperative are entitled to vote under subsection (1) on an amendment to its articles separately from the shareholders of another series of that class only if the particular series is affected by the amendment in a manner different from other investment shares of the same class.
299(5) Subsection (1) applies to amendments to the articles of a cooperative whether shares of a class or series of investment shares of the cooperative otherwise carry a right to vote.
299(6) A proposed amendment under subsection (1) to the articles of a cooperative is adopted when its members and its shareholders of each class or series of its investment shares entitled to vote separately thereon as a class or series have approved the amendment by a special resolution.
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.
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.
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.
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.
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.
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.
303(2) Restated articles of incorporation of a cooperative, in a form approved by the Registrar, shall be sent to the Registrar.
303(3) Upon receipt of restated articles of incorporation of a cooperative, the Registrar shall issue a restated certificate of incorporation to the cooperative.
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.
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.
305(1) Each cooperative proposing to amalgamate under subsection 304(1) shall enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out:
(a) the provisions that are required under section 9 to be included in articles of incorporation;
(b) the name and address of each proposed director of the amalgamated cooperative;
(c) the manner in which the memberships, member loans, membership shares and patronage loans of each of the amalgamating cooperatives are to be converted into memberships, member loans, membership shares or patronage loans of the amalgamated cooperative and, if applicable, the manner in which the investment shares or other securities of the amalgamating cooperatives are to be converted into investment shares or securities of the amalgamated cooperative;
(d) if any share of an amalgamating cooperative is not to be converted into a share, membersip or security of the amalgamated cooperative, the amount of money or securities of any body corporate that the holders of those shares are to receive in addition to or instead of shares or securities of the amalgamated cooperative;
(e) the manner of payment of money instead of the issue of fractional shares, or the creating of fractional member loans, of the amalgamated cooperative or of any other body corporate the securities of which are to be received in the amalgamation;
(f) whether the by-laws of the amalgamated cooperative are to be those of one of the amalgamating cooperatives and, if not, a copy of the proposed by-laws of the amalgamated cooperative; and
(g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated cooperative.
Cancellation of certain shares
305(2) Where, in an amalgamation of two or more cooperatives under subsection 304(1), shares or member loans of one of the amalgamating cooperatives are held by or on behalf of another of the amalgamating cooperatives, the amalgamation agreement shall provide for the cancellation of those shares or member loans when the amalgamation becomes effective, without any repayment of capital in respect of the cancelled shares or member loans, and no provision shall be made in the agreement for the conversion of those shares or member loans into shares or member loans of the amalgamated cooperative.
306(1) The directors of each amalgamating cooperative shall submit the amalgamation agreement for approval to a meeting of the members of that cooperative and to a meeting of the shareholders, if any, of that cooperative and, subject to subsection (4), to the shareholders of each class or series of its investment shares.
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.
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.
306(4) The shareholders of shares of a class or series of investment shares of an amalgamating cooperative are entitled to vote separately as a class or series in respect of the amalgamation agreement if it contains a provision that, if contained in a proposed amendment to the articles, would entitle them to vote as a class or series under subsection 299(1).
306(5) Subject to subsection (4), an amalgamation agreement for the amalgamation of two or more cooperatives is adopted when the members of each of the amalgamating cooperatives and, if any of the amalgamating cooperatives has issued investment shares, their shareholders, have approved the amalgamation agreement by separate special resolutions.
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.
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.
306(10) An amalgamation agreement referred to in clause 304(2)(b) or (c)
(a) shall contain any information required by the laws of the jurisdiction in which the amalgamating body corporate is incorporated and shall be approved by the members of the amalgamating body corporate in accordance with the requirements of those laws; and
(b) shall contain any information required by the Act under which the amalgamating cooperative and body corporate propose to continue.
Vertical short-form amalgamation
307(1) A cooperative that is a holding cooperative may amalgamate with one or more of its wholly-owned subsidiary cooperatives, and in that case the cooperative and its subsidiaries continue as a single amalgamated cooperative without complying with sections 305 and 306 if
(a) the amalgamation is approved by a resolution of the directors of each of the amalgamating cooperatives; and
(b) the resolutions provide that
(i) the shares of each subsidiary be cancelled without any repayment of capital in respect of them,
(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the holding cooperative, and
(iii) no shares or securities may be issued by the amalgamated cooperative in connection with the amalgamation.
Horizontal short-form amalgamation
307(2) Two or more wholly-owned subsidiary cooperatives of a holding entity may amalgamate and continue as a single amalgamated cooperative without complying with sections 305 and 306 if
(a) the amalgamation is approved by a resolution of the directors of each of the amalgamating cooperatives; and
(b) the resolutions provide that
(i) the shares of all but one of the amalgamating subsidiaries be cancelled without any repayment of capital in respect of them,
(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the amalgamating subsidiary whose shares are not cancelled, and
(iii) the stated capital of the amalgamating subsidiaries whose shares are cancelled are added to the stated capital of the amalgamating subsidiary whose shares are not cancelled.
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.
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.
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.
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.
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.
310(1) A cooperative may make an arrangement
(a) that affects the rights of all its members; or
(b) that affects only the rights of the shareholders of a part or all of a particular class of its investment shares.
310(2) Where a cooperative proposing an arrangement has one or more subsidiaries, it may join in the arrangement with the subsidiary or subsidiaries.
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.
311(1) The directors of a cooperative proposing to make an arrangement shall submit the scheme of the arrangement for approval to a meeting of its members and to a meeting of its shareholders, if any, and, subject to subsection (4), to the shareholders of each class or series of its investment shares.
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.
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.
311(4) The holders of shares of a class or series of investment shares of a cooperative are entitled to vote separately as a class or series in respect of a scheme of arrangement to be made by the cooperative if it contains a provision that, if contained in a proposed amendment to the articles, would entitle them to vote as a class or series under subsection 299(1).
311(5) Subject to subsection (4), a scheme of arrangement by a cooperative is adopted when its members and, if the cooperative has issued investment shares, its shareholders have approved of the scheme by separate special resolutions.
Termination of proposed arrangement
311(6) A scheme of arrangement by a cooperative may provide that, at any time before the issue of a certificate of arrangement, the scheme of arrangement may be terminated by the directors of the cooperative, even if the scheme of arrangement has been approved by the members and shareholders of the cooperative.
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.
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.
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.
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.
313(1) An arrangement of a cooperative becomes effective on the day indicated in the certificate of arrangement issued to the cooperative.
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.
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.
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.
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.
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.
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.
315(3) For the purposes of subsections (1) and (2), the Registrar may rely on the articles and the declarations sent to the Registrar.
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.
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.
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.
315(7) When a body corporate is continued as a cooperative under this Act,
(a) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions of membership shares set out in this Act and its articles, including the par value thereof as set out in its articles;
(b) the holders of the common shares of the body corporate are deemed to be the members of the cooperative; and
(c) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect.
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.
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.
315(10) For the purpose of subsections (8) and (9), "share" includes a document referred to in any of subsections 81(1) to (3), a share warrant (within the meaning assigned by subsection 38(1) of the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, and a like instrument.
Continuance: other provincial Acts
316(1) A cooperative, other than a not for profit housing cooperative, with membership share capital may, on special resolution of the members and, if the cooperative has issued investment shares, on a separate special resolution of the shareholders of each class, apply for continuance under The Corporations Act or The Condominium Act and on the day specified in the document evidencing the continuance, that Act applies and this Act ceases to apply to the body corporate continued under that Act.
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.
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.
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.
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.
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.
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.
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.
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.
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.
317(6) This Act ceases to apply to the cooperative on the day shown in the certificate of its discontinuance.
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.
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.
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.
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).
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.
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.
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.
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.
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.
320(1) Unless section 321 or 324 applies, a member or shareholder of a cooperative may dissent if the cooperative resolves to
(a) amend its articles in a manner that adversely affects a member's membership rights or that affects the rights of a shareholder in respect of an investment share;
(b) amend its articles to add, change or remove a restriction on the business the cooperative may carry on;
(c) amalgamate other than under clause 304(2)(c) or section 307;
(d) make an arrangement;
(e) apply for continuance under section 316 or subsection 317(1);
(f) sell, lease or exchange all or substantially all of its property under section 319; or
(g) amalgamate with a body corporate under clause 304(2)(c) and apply for continuance under subsection 317(2).
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.
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.
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.
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.
320(6) A dissenting member or shareholder of a cooperative may, not later than 21 days after receiving the notice under subsection (5), or if no such notice is received, not later than 21 days after learning that the resolution to which the member or shareholder objected was adopted, send to the cooperative a written notice that contains
(a) the member's or shareholder's name and address;
(b) if the person is a shareholder, the number of investment shares and the class or classes of the shares held; and
(c) a demand
(i) in the case of a dissenting member, for withdrawal from the cooperative, for payment of all membership shares at their par value and for repayment of any other interest held by the member in the cooperative, the par value being determined on the day before the resolution was adopted, and
(ii) in the case of a dissenting shareholder, for payment of the fair market value of all investment shares of each class held by the shareholder, the fair market value being determined on the day before the resolution was adopted.
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.
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.
320(9) A dissenting shareholder of a cooperative who fails to comply with subsection (8) has no right to claim under this section.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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).
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.
320(25) Every payment made under subsection (24) shall bear interest at the prescribed rate or interest calculated in accordance with the regulations.
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.
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.
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.
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.
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.
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.
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.
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.
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.
| Sections: 1 - 91 | 92 - 217 | 218 - 321 | 322 - 404 |
