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The Corporations Act
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This version is current as of May 22, 2017.
It has been in effect since June 12, 2014.

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C.C.S.M. c. C225

The Corporations Act

File 1: s. 1 to 199.3 (Parts 1 to 16)
File 2: s. 200 to 376 (Parts 17 to 24)

PART XVII

LIQUIDATION, DISSOLUTION AND REVIVAL

Revival by the Director

200         Where a corporation is dissolved under section 203, 204 or 205 or under any similar provision of any Act for which this Act is substituted, any interested person may apply to the Director to have the corporation revived by filing articles of revival in the form the Director requires.

S.M. 2006, c. 10, s. 33.

Revival by court

201         Where a corporation is dissolved on the order of a court, any interested person may apply to the court to have the corporation revived.

Certificate of revival

202(1)      Upon the receipt of articles of revival in the required form, or an order of the court to revive the corporation, the Director shall issue a certificate of revival in accordance with section 255.

Rights preserved

202(2)      A corporation is revived as a corporation under this Act on the date shown on the certificate of revival, and thereafter the corporation, subject to such reasonable terms as may be imposed by the court or the Director and to the rights acquired by any person after its dissolution, has all the rights and privileges and is liable for the obligations that it would have had if it had not been dissolved.

S.M. 2006, c. 10, s. 34.

Dissolution before commencing business

203(1)      A corporation that has not issued any shares may be dissolved at any time by resolution of all the directors.

Dissolution if no property

203(2)      A corporation that has no property and no liabilities may be dissolved by special resolution of the shareholders or, where it has issued more than one class of shares, by special resolution of the holders of each class whether or not they are otherwise entitled to vote.

Dissolution where property disposed of

203(3)      A corporation that has property or liabilities or both may be dissolved by special resolution of the shareholders or, where it has issued more than one class of shares, by special resolutions of the holders of each class whether or not they are otherwise entitled to vote, if

(a) by the special resolution or resolutions the shareholders authorize the directors to cause the corporation to distribute any property and discharge any liabilities; and

(b) the corporation has distributed any property and discharged any liabilities before it sends articles of dissolution to the Director pursuant to subsection (4).

Articles of dissolution

203(4)      A corporation shall send the Director articles of dissolution, in the form the Director requires, if

(a) the corporation has not issued any shares and all of its directors have resolved to dissolve it under subsection (1);

(b) the corporation has no property and no liabilities, and the necessary resolutions to dissolve it have been passed as required by subsection (2); or

(c) the necessary resolutions to dissolve the corporation have been passed, its property has been distributed and its liabilities have been discharged, as required by subsection (3).

Certificate of dissolution

203(5)      Upon receipt of articles of dissolution, the Director shall issue a certificate of dissolution in accordance with section 255.

Effect of certificate

203(6)      The corporation ceases to exist on the date shown in the certificate of dissolution.

S.M. 1988-89, c. 11, s. 5; S.M. 2006, c. 10, s. 35.

Proposing liquidation and dissolution

204(1)      The directors may propose, or a shareholder who is entitled to vote at an annual meeting of shareholders may, in accordance with section 131, make a proposal for, the voluntary liquidation and dissolution of a corporation.

Notice of meeting

204(2)      Notice of any meeting of shareholders at which voluntary liquidation and dissolution is to be proposed shall set out the terms thereof.

Shareholders resolution

204(3)      A corporation may liquidate and dissolve by special resolution of the shareholders or, where the corporation has issued more than one class of shares, by special resolution of the holders of each class whether or not they are otherwise entitled to vote.

Statement of intent to dissolve

204(4)      A corporation that wishes to obtain a certificate of intent to dissolve shall send the Director a statement of intent to dissolve in the form the Director requires.

Certificate of intent to dissolve

204(5)      Upon receipt of a statement of intent to dissolve, the Director shall issue a certificate of intent to dissolve in accordance with section 255.

Effect of certificate

204(6)      Upon issue of a certificate of intent to dissolve, the corporation shall cease to carry on business except to the extent necessary for the liquidation, but its corporate existence continues until the Director issues a certificate of dissolution.

Liquidation

204(7)      After issue of a certificate of intent to dissolve, the corporation shall

(a) immediately cause notice thereof to be sent or delivered to each known creditor of the corporation;

(b) forthwith publish notice in the Manitoba Gazette and once in a newspaper published or distributed in the place where the corporation has its registered office and take reasonable steps to give notice thereof in every jurisdiction where the corporation carries on business;

(c) proceed to collect its property, to dispose of properties that are not to be distributed in kind to its shareholders, to discharge all its obligations and to do all other acts required to liquidate its business; and

(d) after giving the notice required under clauses (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, among its shareholders according to their respective rights.

Supervision by court

204(8)      The Director or any interested person may, at any time during the liquidation of a corporation, apply to a court for an order that the liquidation be continued under the supervision of the court as provided in this Part, and upon the application the court may so order and make any further order it thinks fit.

Notice to Director

204(9)      An applicant under this section shall give the Director notice of the application, and the Director is entitled to appear and be heard in person or by counsel.

Revocation

204(10)     At any time after issue of a certificate of intent to dissolve and before issue of a certificate of dissolution, a certificate of intent to dissolve may be revoked by sending to the Director a statement of revocation of intent to dissolve in the form the Director requires, if the revocation is approved in the same manner as the resolution under subsection (3).

Certificate of revocation of intent to dissolve

204(11)     Upon receipt of a statement of revocation of intent to dissolve, the Director shall issue a certificate of revocation of intent to dissolve in accordance with section 255.

Effect of certificate

204(12)     On the date shown in the certificate of revocation of intent to dissolve, the revocation is effective and the corporation may continue to carry on its business or businesses.

Right to dissolve

204(13)      If a certificate of intent to dissolve has not been revoked and the corporation has complied with subsection (7), the corporation shall prepare articles of dissolution in the form the Director requires.

Articles of dissolution

204(14)     After complying with subsection (13), the corporation shall send the Director the articles of dissolution if it wishes to obtain a certificate of dissolution under this section.

Certificate of dissolution

204(15)     Upon receipt of articles of dissolution, the Director shall issue a certificate of dissolution in accordance with section 255.

Effect of certificate

204(16)     The corporation ceases to exist on the date shown in the certificate of dissolution.

S.M. 2006, c. 10, s. 36.

Dissolution by Director

205(1)      Subject to subsections (2) and (5), the Director may dissolve a corporation by issuing a certificate of dissolution under this section, or may apply to the court for an order dissolving the corporation, if

(a) the corporation is in default for a period of two consecutive years in sending the Director any notice or document required by this Act;

(b) the Director has reasonable cause to believe that the corporation is not carrying on business or is not in operation;

(c) the corporation is in default in sending the Director any fee required by this Act;

(d) the corporation does not have any directors or subsection 114.1(1) applies in respect of the corporation;

(e) the corporation has fewer directors who are residents of Canada than this Act requires; or

(f) without limiting the generality of clause (d), the corporation is a corporation without share capital and it has fewer than three directors.

Notice and publication

205(2)      The Director shall not dissolve a corporation under this section

(a) until he or she has given the corporation notice of the decision to dissolve it; and

(b) when the dissolution is for a reason set out in clause (1)(a), (b) or (c), until he or she has published, in the manner set out in the regulations, a notice of the decision to dissolve the corporation.

Length of Notice

205(3)      The notice referred to in clause (2)(a) shall be dated and sent at least 90 days prior to the date of dissolution.

Corporation not in operation

205(4)      Where a corporation, in writing, notifies the Director that it is not carrying on business or is not in operation, clause (2)(a) does not apply and the Director may publish a notice in compliance with clause (2)(b).

Certificate of dissolution

205(5)      Unless the corporation remedies the default or cause to the contrary is shown or an order is made by a court under section 239, the corporation is deemed to be dissolved on the date specified in the notice under clause (2)(b).

Effect of certificate

205(6)      The corporation ceases to exist on the date shown in the certificate of dissolution.

S.M. 1988-89, c. 11, s. 5; S.M. 2000, c. 41, s. 13; S.M. 2006, c. 10, s. 37.

Grounds for dissolution

206(1)      The Director or any interested person may apply to a court for an order dissolving a corporation if the corporation has

(a) failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings of shareholders; or

(b) contravened subsection 16(2) or section 21, 151 or 153; or

(c) procured any certificate under this Act by misrepresentation.

Notice to Director

206(2)      An applicant under this section shall give the Director notice of the application, and the Director is entitled to appear and be heard in person or by counsel.

Dissolution order

206(3)      Upon an application under this section or section 205, the court may order that the corporation be dissolved, or that the corporation be liquidated and dissolved under the supervision of the court, and the court may make any other order it thinks fit.

Certificate

206(4)      Upon receipt of an order under this section, section 205 or section 207, the Director shall

(a) if the order is to dissolve the corporation, issue a certificate of dissolution in the approved form; or

(b) if the order is to liquidate and dissolve the corporation under the supervision of the court, issue a certificate of intent to dissolve in the approved form and publish a notice of the order in the manner set out in the regulations.

Effect of certificate

206(5)      The corporation ceases to exist on the date shown in the certificate of dissolution.

S.M. 2000, c. 41, s. 14; S.M. 2006, c. 10, s. 38.

Further grounds

207(1)      A court may order the liquidation and dissolution of a corporation or any of its affiliated corporations upon the application of a shareholder,

(a) if the court is satisfied that in respect of the corporation or any of its affiliates

(i) any act or omission of the corporation or any of its affiliates effects a result, or

(ii) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner, or

(iii) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner,

that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer; or

(b) if the court is satisfied that

(i) a unanimous shareholder agreement entitles a complaining shareholder to demand dissolution of the corporation after the occurrence of a specified event and that event has occurred, or

(ii) it is just and equitable that the corporation should be liquidated and dissolved.

Alternative order

207(2)      Upon an application under this section, a court may make such order under this section or section 234 as it thinks fit.

Application of section 235

207(3)      Section 235 applies to an application under this section.

Application for supervision

208(1)      An application to a court to supervise a voluntary liquidation and dissolution under subsection 204(8) shall state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation and dissolution.

Court supervision

208(2)      If a court makes an order applied for under subsection 204(8), the liquidation and dissolution of the corporation shall continue under the supervision of the court in accordance with this Act.

Application to court

209(1)      An application to a court under subsection 207(1) shall state the reasons, verified by an affidavit of the applicant, why the corporation should be liquidated and dissolved.

Show cause order

209(2)      Upon an application under subsection 207(1), the court may make an order requiring the corporation and any person having an interest in the corporation or claim against it to show cause, at a time and place therein specified, not less than four weeks after the date of the order, why the corporation should not be liquidated and dissolved.

Powers of court

209(3)      Upon an application under subsection 207(1), the court may order the directors and officers of the corporation to furnish to the court all material information known to or reasonably ascertainable by them, including

(a) financial statements of the corporation;

(b) the name and address of each shareholder of the corporation; and

(c) the name and address of each creditor or claimant, including any creditor or claimant with unliquidated, future or contingent claims and any person with whom the corporation has a contract.

Publication

209(4)      A copy of an order made under subsection (2) shall be

(a) published as directed in the order, at least once in each week before the time appointed for the hearing, in a newspaper published or distributed in the place where the corporation has its registered office; and

(b) served upon the Director and each person named in the order.

Person responsible

209(5)      Publication and service of an order under this section shall be effected by the corporation or by such other person and in such manner as the court may order.

Powers of court

210         In connection with the dissolution or the liquidation and dissolution of a corporation, the court may, if it is satisfied that the corporation is able to pay or adequately provide for the discharge of all its obligations make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order to liquidate;

(b) an order appointing a liquidator, with or without security, fixing his remuneration and replacing a liquidator;

(c) an order appointing inspectors or referees, specifying their powers, fixing their remuneration and replacing inspectors or referees;

(d) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

(e) an order determining the validity of any claims made against the corporation;

(f) an order at any stage of the proceedings, restraining the directors and officers from

(i) exercising any of their powers, or

(ii) collecting or receiving any debt or other property of the corporation, and from paying out or transferring any property of the corporation, except as permitted by the court;

(g) an order determining and enforcing the duty or liability of any director, officer or shareholder

(i) to the corporation, or

(ii) for an obligation of the corporation;

(h) an order approving the payment, satisfaction or compromise of claims against the corporation and the retention of assets for that purpose, and determining the adequacy of provisions for the payment or discharge of obligations of the corporation, whether liquidated, unliquidated, future or contingent;

(i) an order disposing of or destroying the documents and records of the corporation;

(j) upon the application of a creditor, the inspectors or the liquidator, an order giving directions on any matter arising in the liquidation;

(k) after notice has been given to all interested parties, an order relieving a liquidator from any omission or default on such terms as the court thinks fit and confirming any act of the liquidator;

(l) subject to section 216, an order approving any proposed interim or final distribution to shareholders in money or in property;

(m) an order disposing of any property belonging to creditors or shareholders who cannot be found;

(n) upon the application of any director, officer, security holder, creditor or the liquidator,

(i) an order staying the liquidation on such terms and conditions as the court thinks fit,

(ii) an order continuing or discontinuing the liquidation proceedings, or

(iii) an order to the liquidator to restore to the corporation all its remaining property; and

(o) after the liquidator has rendered his final account to the court, an order dissolving the corporation.

Effect of order

211         The liquidation of a corporation commences when a court makes an order therefor.

Cessation of business and powers

212(1)      If a court makes an order for liquidation of a corporation

(a) the corporation continues in existence but shall cease to carry on business, except the business that is in the opinion of the liquidator required for an orderly liquidation; and

(b) the powers of the directors and shareholders cease and vest in the liquidator, except as specifically authorized by the court.

Delegation by liquidator

212(2)      The liquidator may delegate any of the powers vested in him by clause (1)(b) to the directors or shareholders.

Appointment of liquidator

213(1)      When making an order for the liquidation of a corporation or at any time thereafter, the court may appoint any person, including a director, an officer or a shareholder of the corporation or any other body corporate, as liquidator of the corporation.

Vacancy

213(2)      Where an order for the liquidation of a corporation is made and the office of liquidator is or becomes vacant, the property of the corporation is under the control of the court until the office of liquidator is filled.

Duties of liquidator

214         A liquidator shall

(a) forthwith after his appointment, give notice thereof to the Director and to each claimant and creditor known to the liquidator;

(b) forthwith publish notice in the Manitoba Gazette and by insertion once a week for two consecutive weeks in a newspaper published or distributed in the place where the corporation has its registered office and take reasonable steps to give notice thereof in every jurisdiction where the corporation carries on business, requiring any person

(i) indebted to the corporation, to render an account and pay to the liquidator at the time and place specified any amount owing, or

(ii) possessing property of the corporation, to deliver it to the liquidator at the time and place specified, or

(iii) having a claim against the corporation, whether liquidated, unliquidated, future or contingent, to present particulars thereof in writing to the liquidator not later than two months after the first publication of the notice;

(c) take into his custody and control the property of the corporation;

(d) open and maintain a trust account for the moneys of the corporation;

(e) keep accounts of the moneys of the corporation received and paid out by him;

(f) maintain separate lists of the shareholders, creditors and other persons having claims against the corporation;

(g) if at any time the liquidator determines that the corporation is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;

(h) deliver to the court and to the Director, at least once in every 12 month period after his appointment or more often as the court may require, financial statements of the corporation in the form required by section 149 or in such other form as the liquidator may think proper or as the court may require; and

(i) after his final accounts are approved by the court, distribute any remaining property of the corporation among the shareholders according to their respective rights.

Powers of liquidator

215(1)      A liquidator may

(a) retain lawyers, accountants, engineers, appraisers and other professional advisers;

(b) bring, defend or take part in any civil, criminal or administrative action or proceeding in the name and on behalf of the corporation;

(c) carry on the business of the corporation as required for an orderly liquidation;

(d) sell by public auction or private sale any property of the corporation;

(e) do all acts and execute any documents in the name and on behalf of the corporation;

(f) borrow money on the security of the property of the corporation;

(g) settle or compromise any claims by or against the corporation; and

(h) do all other things necessary for the liquidation of the corporation and distribution of its property.

Defence of due diligence

215(2)      A liquidator is not liable if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including, reliance in good faith on

(a) financial statements of the corporation represented to the liquidator, by an officer of the corporation or in a written report of the auditor of the corporation, to reflect fairly the financial condition of the corporation; or

(b) a report of a person whose profession lends credibility to a statement made by the professional person.

Application for examination

215(3)      If a liquidator has reason to believe that any person has in his possession or under his control, or has concealed, withheld or misappropriated any property of the corporation, he may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

Power of court

215(4)      If the examination referred to in subsection (3) discloses that a person has concealed, withheld or misappropriated property of the corporation, the court may order that person to restore it or pay compensation to the liquidator.

S.M. 2006, c. 10, s. 39.

Costs of liquidation

216(1)      A liquidator shall pay the costs of liquidation out of the property of the corporation and shall pay or make adequate provision for all claims against the corporation.

Final account

216(2)      Within one year after his appointment and after paying or making adequate provision for all claims against the corporation, the liquidator shall apply to the court

(a) for approval of his final accounts and for an order permitting him to distribute in money or in kind the remaining property of the corporation to its shareholders according to their respective rights; or

(b) for an extension of time, setting out the reasons therefor.

Shareholder application

216(3)      If a liquidator fails to make the application required by subsection (2), a shareholder of the corporation may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

Publication

216(4)      A liquidator shall give notice of his intention to make an application under subsection (2) to the Director, each inspector appointed under section 210, each shareholder and any person who provided a security or fidelity bond for the liquidator, and he shall publish the notice in a newspaper published or distributed in the place where the corporation has its registered office or as otherwise directed by the court.

Final order

216(5)      If the court approves the final accounts rendered by a liquidator, the court shall make an order

(a) directing the Director to issue a certificate of dissolution;

(b) directing the custody or disposal of the documents and records of the corporation; and

(c) subject to subsection (6), discharging the liquidator.

Delivery of order

216(6)      The liquidator shall forthwith send or deliver a certified copy of the order referred to in subsection (5) to the Director.

Certificate of dissolution

216(7)      Upon receipt of the order referred to in subsection (5), the Director shall issue a certificate of dissolution in accordance with section 255.

Effect of certificate

216(8)      The corporation ceases to exist on the date shown in the certificate of dissolution.

Right to distribution in money

217(1)      If in the course of liquidation of a corporation, the shareholders resolve or the liquidator proposes to

(a) exchange all or substantially all the property of the corporation for securities of another body corporate that are to be distributed to the shareholders; or

(b) distribute all or part of the property of the corporation to the shareholders in kind;

a shareholder may apply to the court for an order requiring the distribution of the property of the corporation to be in money.

Powers of court

217(2)      Upon an application under subsection (1), the court may order

(a) all the property of the corporation to be converted into and distributed in money; or

(b) the claims of any shareholder applying under this section to be satisfied by a distribution in money, and in that case subsections 184(20) to (22) apply.

Custody of records

218(1)      A person who is granted custody of the documents and records of a dissolved corporation remains liable to produce the documents and records for six years following the date of its dissolution or until the expiry of such other shorter period as may be ordered under subsection 216(5).

Offence

218(2)      A person who, without reasonable cause, contravenes subsection (1) 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.

"Shareholder" defined

219(1)      In this section, "shareholder" includes the heirs and legal representatives of a shareholder.

Continuation of actions

219(2)      Notwithstanding the dissolution of a corporation under this Act,

(a) a civil, criminal or administrative action or proceeding commenced by or against the corporation before its dissolution may be continued as if the corporation had not been dissolved;

(b) a civil, criminal or administrative action or proceeding may be brought against the corporation within two years after its dissolution as if the corporation had not been dissolved; and

(c) any property that would have been available to satisfy any judgment or order if the corporation had not been dissolved remains available for that purpose.

Service

219(3)      Service of a document on a corporation after its dissolution may be effected by serving the document upon a person shown in the most recent notice on the records of the Director.

Reimbursement

219(4)      Notwithstanding the dissolution of a corporation, a shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount received by that shareholder upon the distribution, and an action to enforce that liability may be brought within two years after the date of the dissolution of the corporation.

Representative action

219(5)      A court may order an action referred to in subsection (4) to be brought against the persons who were shareholders as a class, subject to such conditions as the court thinks fit and, if the plaintiff establishes his claims, the court may refer the proceedings to a referee or other officer of the court who may

(a) add as a party to the proceedings before him each person who was a shareholder found by the plaintiff;

(b) determine, subject to subsection (4), the amount that each person who was a shareholder shall contribute towards satisfaction of the plaintiff's claim; and

(c) direct payment of the amounts so determined.

Unknown claimants

220(1)      Upon the dissolution of a corporation, the portion of the property distributable to a creditor or shareholder who cannot be found shall be converted into money and paid to the Minister of Finance.

Constructive satisfaction

220(2)      A payment under subsection (1) is deemed to be in satisfaction of the debt or claim of the creditor or shareholder.

Recovery

220(3)      If at any time a person establishes that he is entitled to any moneys paid to the Minister of Finance under this Act, the Minister of Finance shall pay an equivalent amount to him out of the Consolidated Fund.

S.M. 1999, c. 18, s. 7.

Vesting in Crown

221(1)      Subject to subsection 219(2) and section 220, property of a corporation that has not been disposed of at the date of its dissolution vests in Her Majesty in right of the Province.

Return of property on revival

221(2)      If a corporation is revived under section 202, any property other than money that vested in Her Majesty pursuant to subsection (1) and that has not been disposed of shall be returned to the corporation and there shall be paid to the corporation out of the Consolidated Fund

(a) an amount equal to any money received by Her Majesty pursuant to subsection (1); and

(b) where property other than money vested in Her Majesty pursuant to subsection (1) and that property has been disposed of, an amount equal to the lesser of

(i) the value of the property at the date it vested in Her Majesty, and

(ii) the amount realized by Her Majesty from the disposition of the property.

Registration

221(3)      Any certificate of dissolution or revival under this Part has, ipso facto, the effect of cancelling or reviving the registration of the corporation under Part XVI as the case may be.

S.M. 1999, c. 18, s. 7.

PART XVIII

INVESTIGATION

Investigation

222(1)      A security holder or the Director may apply to the court, ex parte or upon such notice as the court may require, for an order directing an investigation to be made of a corporation or any of its affiliated corporations.

Grounds

222(2)      If, upon an application under subsection (1), it appears to the court that

(a) the business of the corporation or any of its affiliates is or has been carried on with intent to defraud any person; or

(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of a security holder; or

(c) the corporation or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose; or

(d) persons concerned with the formation, business or affairs of the corporation or any of its affiliates have in connection therewith acted fraudulently or dishonestly;

the court may order an investigation to be made of the corporation or affiliated corporation.

Notice to Director

222(3)      A security holder who makes an application under subsection (1) shall give the Director reasonable notice thereof and the Director is entitled to appear and be heard in person or by counsel.

No security for costs

222(4)      An applicant under this section is not required to give security for costs.

Ex parte application

222(5)      An ex parte application under this section shall be heard in camera.

No publication

222(6)      No person may publish anything relating to ex parte proceedings under this section except with the authorization of the court or the written consent of the corporation being investigated.

R.S.M. 1987 Supp., c. 10, s. 14 and 15.

Powers of court

223(1)      In connection with an investigation under this Part, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order to investigate;

(b) an order appointing an inspector and fixing his remuneration or replacing an inspector;

(c) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

(d) an order authorizing an inspector to enter any premises in which the court is satisfied there might be relevant information, and to examine any thing and make copies of any document or record found on the premises;

(e) an order requiring any person to produce documents or records to an inspector;

(f) an order authorizing an inspector to conduct a hearing, administer oaths and examine any person upon oath, and prescribing rules for the conduct of the hearing;

(g) an order requiring any person to attend a hearing conducted by an inspector and to give evidence upon oath;

(h) an order giving directions to an inspector or any interested person on any matter arising in the investigation;

(i) an order requiring an inspector to make an interim or final report to the court;

(j) an order determining whether a report of an inspector should be published and, if so, ordering the Director to publish the report in whole or in part or to send copies to any person the court designates;

(k) an order requiring an inspector to discontinue an investigation; and

(l) an order requiring the corporation to pay the costs of the investigation.

Copy of report

223(2)      An inspector shall send to the Director a copy of every report made by the inspector under this Part.

R.S.M. 1987 Supp., c. 10, s. 16 and 17.

Powers of inspector

224(1)      An inspector under this Part has the powers set out in the order appointing him.

Exchange of information

224(2)      In addition to the powers set out in the order appointing him, an inspector appointed to investigate a corporation may furnish to, or exchange information and otherwise co-operate with, any public official in Canada or elsewhere who is authorized to exercise investigatory powers and who is investigating, in respect of the corporation, any allegation of improper conduct that is the same as or similar to the conduct described in subsection 222(2).

Court order

224(3)      An inspector shall upon request produce to any interested person a copy of any order made under subsection 223(1).

Hearing in camera

225(1)      Any interested person may apply to the court for an order that a hearing conducted by an inspector under this Part be heard in camera and for directions on any matter arising in the investigation.

Right to counsel

225(2)      A person whose conduct is being investigated or who is being examined at a hearing conducted by an inspector under this Part has a right to be represented by counsel.

Criminating statements

226         No person is excused from attending and giving evidence and producing documents and records to an inspector under this Part by reason only that the evidence tends to criminate the person or subject the person to any proceeding or penalty,but the evidence shall not be used and is not receivable against the person in any proceeding under any Act, except a prosecution under section 133 (perjury) or 136 (giving contradictory evidence) of the Criminal Code (Canada).

S.M. 1991-92, c. 41, s. 4.

Absolute privilege (defamation)

227         Any oral or written statement or report made by an inspector or any other person in an investigation under this Part has absolute privilege.

Information respecting ownership and control

228(1)      If the Director is satisfied that, for the purposes of Part X or XII, or for the purposes of enforcing any regulation made under section 168, there is reason to inquire into the ownership or control of a security of a corporation or any of its affiliates, the Director may require any person that he reasonably believes has or has had an interest in the security or acts or has acted on behalf of a person with that interest, to report to him or to any person he designates

(a) information that the person has or can reasonably be expected to obtain as to present and past interests in the security; and

(b) the names and addresses of the persons so interested and of any person who acts or has acted in relation to the security on behalf of the persons so interested.

Constructive interest in securities

228(2)      For the purposes of subsection (1), a person is deemed to have an interest in a security if

(a) he has a right to vote or to acquire or dispose of the security or any interest therein;

(b) his consent is necessary for the exercise of the rights or privileges of any other person interested in the security; or

(c) any other person interested in the security can be required or is accustomed to exercise rights or privileges attached to the security in accordance with his instructions.

Offence

228(3)      A person who fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Liability of directors, etc.

228(4)      If the person guilty of an offence under subsection (3) is a body corporate, then, whether or not the body corporate is prosecuted or convicted, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the failure is also guilty of the 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.

R.S.M. 1987 Supp., c. 10, s. 18.

Solicitor-client privilege

229         Nothing in this Part shall be construed to affect the privilege that exists in respect of a solicitor and his client.

Inquiries

230         The Director may make inquiries of any person relating to compliance with this Act.

R.S.M. 1987 Supp., c. 10, s. 19.

PART XIX

REMEDIES, OFFENCES AND PENALTIES

Definitions

231         In this Part,

"action" means an action under this Act; (« action »)

"complainant" means

(a) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of a corporation or any of its affiliates, or

(b) a director or an officer or a former director or officer of a corporation or of any of its affiliates, or

(c) the Director, or

(d) any other person who, in the discretion of a court, is a proper person to make an application under this Part. (« plaignant »)

R.S.M. 1987 Supp., c. 10, s. 18.

Commencing derivative action

232(1)      Subject to subsection (2), a complainant may apply to a court for leave to bring an action in the name and on behalf of a corporation or any of its subsidiaries, or intervene in an action to which any such body corporate is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the body corporate.

Conditions precedent

232(2)      No action may be brought and no intervention in an action may be made under subsection (1) unless the court is satisfied that

(a) the complainant has given reasonable notice to the directors of the corporation or its subsidiary of his intention to apply to the court under subsection (1) if the directors of the corporation or its subsidiary do not bring, diligently prosecute or defend or discontinue the action;

(b) the complainant is acting in good faith; and

(c) it appears to be in the interests of the corporation or its subsidiary that the action be brought, prosecuted, defended or discontinued.

Powers of court

233         In connection with an action brought or intervened in under section 232, the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order authorizing the complainant or any other person to control the conduct of the action;

(b) an order giving directions for the conduct of the action;

(c) an order directing that any amount adjudged payable by a defendant in the action shall be paid, in whole or in part, directly to former and present security holders of the corporation or its subsidiary instead of to the corporation or its subsidiary; and

(d) an order requiring the corporation or its subsidiary to pay reasonable legal fees incurred by the complainant in connection with the action.

Application to court re oppression

234(1)      A complainant may apply to a court for an order under this section.

Grounds

234(2)      If, upon an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates

(a) any act or omission of the corporation or any of its affiliates effects a result; or

(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner; or

(c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner;

that is oppressive or unfairly prejudicial or that unfairly disregards the interests of any security holder, creditor, director or officer, the court may make an order to rectify the matters complained of.

Powers of court

234(3)      In connection with an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing,

(a) an order restraining the conduct complained of;

(b) an order appointing a receiver or receiver-manager;

(c) an order to regulate a corporation's affairs by amending the articles or by-laws or creating or amending a unanimous shareholder agreement;

(d) an order directing an issue or exchange of securities;

(e) an order appointing directors in place of or in addition to all or any of the directors then in office;

(f) an order directing a corporation, subject to subsection (6), or any other person, to purchase securities of a security holder;

(g) an order directing a corporation, subject to subsection (6), or any other person, to pay to a security holder any part of the moneys paid by him for securities;

(h) an order varying or setting aside a transaction or contract to which a corporation is a party and compensating the corporation or any other party to the transaction or contract;

(i) an order requiring a corporation, within a time specified by the court, to produce to the court or an interested person financial statements in the form required by section 149 or an accounting in such other form as the court may determine;

(j) an order compensating an aggrieved person;

(k) an order directing rectification of the registers or other records of a corporation under section 236;

(l) an order liquidating and dissolving the corporation;

(m) an order directing an investigation under Part XVIII to be made; and

(n) an order requiring the trial of any issue.

Duty of directors

234(4)      If an order made under this section directs amendment of the articles or by-laws of a corporation,

(a) the directors shall forthwith comply with subsection 185(4); and

(b) no other amendment to the articles or by-laws shall be made without the consent of the court, until a court otherwise orders.

Exclusion

234(5)      A shareholder is not entitled to dissent under section 184 if an amendment to the articles is effected under this section.

Limitation

234(6)      A corporation shall not make a payment to a shareholder under clause (3)(f) or (3)(g) if there are reasonable grounds for believing that

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

(b) the realizable value of the corporation's assets would thereby be less than the aggregate of its liabilities.

Alternative order

234(7)      An applicant under this section may apply in the alternative for an order under section 207.

S.M. 2008, c. 42, s. 14.

Evidence of shareholder approval not decisive

235(1)      An application made or an action brought or intervened in under this Part shall not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the corporation or its subsidiary has been or may be approved by the shareholders of such body corporate, but evidence of approval by the shareholders may be taken into account by the court in making an order under section 207, 233 or 234.

Court approval to discontinue

235(2)      An application made or an action brought or intervened in under this Part shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given upon such terms as the court thinks fit and, if the court determines that the interests of any complainant may be substantially affected by the stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice to the complainant.

No security for costs

235(3)      A complainant is not required to give security for costs in any application made or action brought or intervened in under this Part.

Interim costs

235(4)      In an application made or an action brought or intervened in under this Part, the court may at any time order the corporation or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable for the interim costs upon final disposition of the application or action.

Application to court to rectify records

236(1)       If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the registers or other records of a corporation, the corporation, a security holder of the corporation or any aggrieved person may apply to a court for an order that the registers or records be rectified.

Notice to Director

236(2)      An applicant under this section shall give the Director notice of the application, and the Director is entitled to appear and be heard in person or by counsel.

Powers of court

236(3)      In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order requiring the registers or other records of the corporation to be rectified;

(b) an order restraining the corporation from calling or holding a meeting of shareholders or paying a dividend before rectification;

(c) an order determining the right of a party to the proceedings to have his name entered or retained in, or deleted or omitted from, the registers or records of the corporation, whether the issue arises between two or more security holders or alleged security holders, or between the corporation and any security holders or alleged security holders; and

(d) an order compensating a party who has incurred a loss.

Application for directions

237         The Director may apply to a court for directions in respect of any matter concerning his duties under this Act, and on the application the court may give such directions and make such further orders as it thinks fit.

Notice of refusal by Director

238(1)      If the Director refuses to file any articles or other document required by this Act to be filed by him before the articles or other document become effective, he shall, within 60 days after receipt thereof by him or 60 days after he receives any approval that may be required under any other Act, whichever is the later, and after giving the person who sent the articles or document an opportunity to be heard, give written notice of his refusal to the person together with reasons therefor.

Deemed refusal

238(2)      If the Director does not file or give written notice of his refusal to file any articles or document within the time limited therefor in subsection (1), he is deemed for the purposes of section 239 to have refused to file the articles or document.

Appeal from Director's decision

239         A person who feels aggrieved by a decision of the Director

(a) to refuse to file in the form submitted to him any articles or other document required by this Act to be filed by him; or

(b) to give a name, to change or revoke a name, or to refuse to reserve, accept, change or revoke a name under section 12; or

(c) to refuse to grant an exemption under subsection 154(3) and any regulations thereunder; or

(d) to refuse to issue a certificate of discontinuance under section 182; or

(e) to refuse to revive a corporation under section 202; or

(f) to dissolve a corporation under section 205;

may apply to a court for an order requiring the Director to change his decision, and upon the application the court may so order and make any further order it thinks fit.

Restraining or compliance order

240         If a corporation or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator of a corporation does not comply with this Act, the regulations, articles, by-laws, or a unanimous shareholder agreement, a complainant or a creditor of the corporation may, in addition to any other right he has, apply to a court for an order directing any such person to comply with, or restraining any such person from acting in breach of, any provisions thereof, and upon such application the court may so order and make any further order it thinks fit.

Summary application to court

241         Where this Act states that a person may apply to a court, the application may be made in a summary manner by notice of application or otherwise as the rules of the court provide, and subject to any order respecting notice to interested parties or costs, or any other order the court thinks fit.

S.M. 2013, c. 54, s. 20.

Offences with respect to reports

242(1)      A person who makes or assists in making a report, return, notice or other document required by this Act or the regulations to be sent to the Director or to any other person that

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

(b) omits to state a material fact required therein or necessary to make a statement contained therein not misleading in the light of the circumstances in which it was made;

is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Liability of directors, etc.

242(2)      Where the person guilty of an offence under subsection (1) is a body corporate, and a director or officer of the body corporate knowingly authorized, permitted or acquiesced in the commission of the offence, whether or not the body corporate is prosecuted or convicted, the director or officer is also guilty of the 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.

Immunity

242(3)      No person is guilty of an offence under subsection (1) or (2) if the untrue statement or omission was unknown to him and in the exercise of reasonable diligence could not have been known to him.

Offence

243         Every person who, without reasonable cause, contravenes a provision of this Act or the regulations for which no punishment is provided is guilty of an offence and is liable on summary conviction to a fine not exceeding $500.

Order to comply

244         Where a person is guilty of an offence under this Act or the regulations, any court in which proceedings in respect of the offence are taken may, in addition to any punishment it may impose, order that person to comply with the provisions of the Act or the regulations for the contravention of which he has been convicted.

Time limited for proceedings

245(1)      A prosecution for an offence under this Act may be instituted at any time within two years from the time when the subject-matter of the complaint arose.

Civil remedy not affected

245(2)      No civil remedy for an act or omission is suspended or affected by reason that the act or omission is an offence under this Act.

PART XX

GENERAL

Notice to directors and shareholders

246(1)      A notice or document required by this Act, the regulations, the articles or the by-laws to be sent to a shareholder or director of a corporation may be sent by prepaid mail addressed to, or may be delivered personally to,

(a) the shareholder at his latest address as shown in the records of the corporation or its transfer agent; and

(b) the director at his latest address as shown in the records of the corporation or in the last notice filed under section 108.

Effect of notice

246(2)      A director named in the articles or in a notice sent by the corporation to the Director under section 108 and filed by the Director is presumed for the purposes of this Act to be a director of the corporation referred to in the notice.

Deemed receipt

246(3)      A notice or document sent in accordance with subsection (1) to a shareholder or director of a corporation is deemed to be received by him at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the shareholder or director did not receive the notice or document at that time or at all.

Undelivered notices

246(4)      If a corporation sends a notice or document to a shareholder in accordance with subsection (1) and the notice or document is returned on three consecutive occasions because the shareholder cannot be found, the corporation is not required to send any further notices or documents to the shareholder until he informs the corporation in writing of his new address.

Notice to and service upon a corporation

247         A notice or document required to be sent to or served upon a corporation may be sent by registered mail to the registered office of the corporation shown in the articles or in the last notice filed under section 19 and, if so sent, is deemed to be received or served at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the corporation did not receive the notice or document at that time or at all.

Waiver of notice

248         Where a notice or document is required by this Act or the regulations to be sent, the sending of the notice or document may be waived or the time for the notice or document may be waived or abridged at any time with the consent in writing of the person entitled thereto.

Certificate of Director

249(1)      When this Act requires or authorizes the Director to issue a certificate or to certify any fact, the certificate shall be signed by the Director or by a Deputy Director authorized under section 253.

Evidence

249(2)      Except in a proceeding under section 206 to dissolve a corporation, a certificate referred to in subsection (1) or a certified copy thereof, when introduced as evidence in any civil, criminal or administrative action or proceeding, is conclusive proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

Certificate of corporation

250(1)      A certificate issued on behalf of a corporation stating any fact that is set out in the articles, the by-laws, a unanimous shareholder agreement, the minutes of the meetings of the directors, a committee of directors or the shareholders, or in a trust indenture or other contract to which the corporation is a party may be signed by a director, an officer or a transfer agent of the corporation.

Proof

250(2)      When introduced as evidence in any civil, criminal or administrative action or proceeding,

(a) a fact stated in a certificate referred to in subsection (1); or

(b) a certified extract from a securities register of a corporation; or

(c) a certified copy of minutes or extract from minutes of a meeting of shareholders, directors or a committee of directors of a corporation;

is, in the absence of evidence to the contrary, proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

Security certificate

250(3)      An entry in a securities register of, or a security certificate issued by, a corporation is, in the absence of evidence to the contrary, proof that the person in whose name the security is registered is owner of the securities described in the register or in the certificate.

Copies

251         Where a notice or document is required to be sent to the Director under this Act, the Director may accept a photostatic or photographic copy thereof.

Execution of documents in counterparts

251.1(1)    A document that is to be filed with the Director and is required or permitted to be executed or signed by more than one person may be

(a) executed or signed in several documents of identical form, each of which is executed or signed by one or more of the persons; and

(b) filed with the Director if the requirements of subsection (2) are met.

Counterparts deemed to be one document

251.1(2)    The documents are deemed to be one document for the purpose for which they are filed, if

(a) they are duly executed or signed by all the required or permitted persons;

(b) a lawyer who is entitled to practise law in Manitoba certifies in writing, in the form the Director requires, that he or she has reviewed the executed or signed documents and that they are identical, except with respect to the details of execution or signing; and

(c) the certificate is filed with the documents.

S.M. 2006, c. 10, s. 40.

Proof required by Director

252(1)      The Director may require that a document or a fact stated in a document required by this Act or the regulations to be sent to him shall be verified in accordance with subsection (2).

Form of proof

252(2)      A document or fact required by this Act or by the Director to be verified may be verified by affidavit or affirmation.

Authentication of document

252(3)      The Director may require of a body corporate the authentication of a document, and the authentication may be signed by the secretary, or any director or authorized person or by the solicitor for the body corporate.

Appointment of Director

253         The Minister may appoint a Director and one or more Deputy Directors to carry out the duties and exercise the powers of the Director under this Act.

Regulations

254(1)      For the purpose of carrying out the provisions of this Act according to their intent, the Lieutenant Governor in Council may make such regulations and orders as are ancillary thereto and are not inconsistent therewith; and every regulation and order made under, and in accordance with the authority granted by, this section has the force of law; and, without restricting the generality of the foregoing, the Lieutenant Governor in Council may make regulations and orders

(a) prescribing any matter required or authorized by this Act to be prescribed;

(b) requiring the payment of a fee in respect of the filing, examination or copying of any document, or in respect of any action that the Director is required or authorized to take under this Act, and prescribing the amount thereof;

(c) prescribing the format and contents of returns, notices and other documents, including electronic documents, required to be sent to the Director or to be issued by him;

(c.1) respecting the publication of any notice required to be published by a provision of this Act;

(d) prescribing rules with respect to exemptions permitted by this Act;

(d.1) respecting participation in directors' and shareholders' meetings by means of telephonic, electronic or other communication facilities;

(d.2) respecting shareholders' meetings that are held entirely by means of telephonic, electronic or other communication facilities;

(d.3) respecting voting at shareholders' meetings when shareholders or other persons entitled to vote are participating by means of telephonic, electronic or other communication facilities;

(e) respecting the names of corporations or classes thereof;

(f) respecting the authorized capital of corporations;

(g) respecting the preferences, rights, conditions, restrictions, limitations, or prohibitions attaching to shares or classes of shares of corporations;

(h) respecting the designation of classes of shares;

(h.1) requiring the payment of an annual fee by a body corporate that has a business authorization under Part XXIV and a certificate of registration under Part XVI, and prescribing the amount of the fee;

(h.2) defining any word or expression used in this Act but not specifically defined;

(h.3) respecting the determination of the amount or value of loans, investments and interests for the purposes of Division IV of Part XXIV;

(h.4) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by a corporation and its prescribed subsidiaries to or in a person and any persons connected with that person;

(h.5) specifying the classes of persons who are connected with any persons for the purposes of clause (h.4);

(h.6) permitting a corporation to acquire or increase a substantial investment for the purposes of clause 329.5(4)(c);

(h.7) permitting a corporation to divest itself of shares for the purposes of subsection 329.5(5);

(h.8) restricting the ownership by a corporation of shares of a body corporate or interests in a real property holding vehicle pursuant to sections 329.5 to 329.10 and imposing terms and conditions applicable to corporations that own such shares or interests;

(h.9) determining the method of valuing a corporation's interests in real property for the purposes of Division IV of Part XXIV;

(h.10) determining a method of allocating costs for the purposes of subsection 359(1);

(i) respecting any matter required for the efficient administration of this Act.

Forms

254(2)      Regulations made under subsection (1) may prescribe certain forms, statements or circulars that are from time to time prescribed under The Securities Act.

Fees not fixed in regulations

254(3)      Where no fee is fixed in the regulations made under this Act for any services performed under this Act, the minister may fix the fee therefor.

S.M. 1993, c. 18, s. 6; S.M. 1997, c. 26, s. 3; S.M. 2000, c. 41, s. 15; S.M. 2006, c. 10, s. 41.

"Statement" defined

255(1)      In this section, "statement" means a statement of intent to dissolve and a statement of revocation of intent to dissolve referred to in section 204.

Execution and filing

255(2)      Where this Act requires that articles or a statement relating to a corporation shall be sent to the Director, unless otherwise specifically provided,

(a) two copies (in this section called "duplicate originals") of the articles or the statement shall be signed by a director or an officer of the corporation or, in the case of articles of incorporation, by an incorporator; and

(b) upon receiving duplicate originals of any articles or statement in the form the Director requires, any other documents that may be required under this Act and the prescribed fees, the Director shall

(i) endorse on each of the duplicate originals the approved certificate and the date of endorsement,

(ii) file one of the duplicate originals, endorsed in accordance with sub-clause (i),

(iii) send to the corporation or its representative the remaining duplicate original, endorsed in accordance with sub-clause (i), and

(iv) publish a notice of the issuance and date of the certificate in the manner set out in the regulations.

Date of certificate

255(3)      A certificate referred to in subsection (2) issued by the Director may be dated as of the day he receives the articles, statement or court order pursuant to which the certificate is issued or as of any later day specified by the court or person who signed the articles or statement.

Date of certificate of discontinuance

255(4)      Notwithstanding subsection (3), a certificate of discontinuance may be dated as of the day a corporation is continued under the laws of another jurisdiction.

Endorsement of certificate

255(5)      A certificate endorsed in accordance with subsection (2) constitutes a certificate issued under this Act, and the articles or a statement so endorsed are effective on the date set out in the certificate, notwithstanding that any action required to be taken by the Director under this Act with respect to the articles or statement is taken at a later date.

Mechanically reproduced signature

255(6)      A signature required on a certificate referred to in this section or section 256 may be printed or otherwise mechanically reproduced thereon.

Use of French in articles and other documents

255(7)      A person may send articles or a statement relating to a corporation to the Director in the French language. When that is the case, the approved certificate on the duplicate originals shall be in the French language.

Prior approval deemed to be given

255(8)      Any prior approval of the minister required for the filing or issuance of certain articles under this Act shall be deemed to have been given upon the endorsement of the certificate in accordance with this section.

R.S.M. 1987 Supp., c. 10, s. 20; S.M. 2000, c. 41, s. 16; S.M. 2006, c. 10, s. 42.

Form and content of documents

255.1       The Director may

(a) approve the form and content of any document that this Act or the regulations require a person to file with or send to the Director;

(b) approve the form and content of any document that this Act or the regulations require the Director to issue, publish or provide to a person;

(c) require that additional information or documents must be provided when documents are filed with or sent to the Director; and

(d) direct how many originals or copies of a document must be filed, sent, provided or issued.

S.M. 2006, c. 10, s. 43.

Certificate of search or compliance

256         The Director may furnish any person with a certificate of search or with a certificate that a corporation or other person has filed with the Director a document required to be filed with him under this Act or any predecessor thereof, or with a certified copy of any document.

Alteration

257         The Director may alter a notice or document, other than an affidavit or statutory declaration, if so authorized by the person who sent the document or by his representative.

Meaning of "document"

258(1)      In this section and section 258.1, "document" means articles, or an application, certificate, notice, order, statement or other document in relation to a body corporate, that is

(a) filed with the Director; or

(b) issued by the Director.

Corrections by the Director

258(2)      The Director may correct an error in a document if the error was made by the Director or a person acting under the Director's control.

Director may request body corporate to act

258(3)      If a document contains an error, the directors or shareholders of a body corporate shall, at the Director's request, do the following so that the Director may correct the document:

(a) pass the resolutions and send the Director the documents required to comply with this Act;

(b) take any other steps that the Director may reasonably require.

Application to court

258(4)      If a document filed with the Director in relation to a body corporate contains an error other than one referred to in subsection (2), the body corporate or an interested person may apply to the court for

(a) an order that the document be corrected; and

(b) an order determining the rights of the body corporate's shareholders or creditors.

Court must consider prejudice to shareholders and creditors

258(5)      The court must not order the error to be corrected unless it considers whether any of the body corporate's shareholders and creditors are prejudiced by the correction.

Notice to the Director

258(6)      An applicant under subsection (4) shall give the Director notice of the application. The Director is entitled to appear before the Court and to be heard in person or by counsel.

Surrender of original document

258(7)      For the purpose of correcting a document under this section, the Director may at any time demand the return of the original document. The person who possesses the original document shall, upon receiving the Director's demand, surrender it to the Director without delay.

Director's action after correction

258(8)      After a document is corrected under this section, the Director may issue or file the corrected document.

Date of corrected document

258(9)      A document corrected under this section shall bear the date of the document it replaces

(a) unless the correction is made with respect to the date of the document, in which case the document shall bear the corrected date; or

(b) in the case of a document corrected by court order, unless the court decides otherwise.

Notice in certain circumstances

258(10)     If a corrected certificate or order materially amends the terms of the original certificate or order, the Director shall publish a notice of the correction in the manner set out in the regulations.

S.M. 2000, c. 41, s. 17; S.M. 2006, c. 10, s. 44.

Cancellation of a document by Director

258.1(1)    The Director may cancel a document filed with or issued by the Director in relation to a body corporate if

(a) the document contains an error attributable to the Director or a person acting under the Director's control;

(b) the document was filed due to an error made by the Director or a person acting under the Director's control; or

(c) the document was issued due to the Director's error or the error of a person acting under the Director's control.

Application to court

258.1(2)     If a document in relation to a body corporate contains or is filed due to an error other than an error described in subsection (1), the body corporate or an interested person may apply to the court for

(a) an order that the document be cancelled; and

(b) an order determining the rights of the body corporate's shareholders or creditors.

Court must consider prejudice to shareholders and creditors

258.1(3)    The court must not order the error to be corrected unless it considers whether any of the body corporate's shareholders and creditors are prejudiced by the correction.

Notice to the Director

258.1(4)    An applicant under subsection (2) shall give the Director notice of the application. The Director is entitled to appear before the Court and to be heard in person or by counsel.

Surrender of original document

258.1(5)    For the purpose of cancelling a document under this section, the Director may at any time demand the return of the original document. The person who possesses the original document shall, upon receiving the Director's demand, surrender it to the Director without delay.

S.M. 2006, c. 10, s. 44.

Inspection

259(1)      A person who pays the prescribed fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, and to make copies of or extracts therefrom.

Copies

259(2)      The Director shall furnish any person with a copy or a certified copy of a document required by this Act or the regulations to be sent to the Director.

Records of Director

260(1)      Records required by this Act to be prepared and maintained by the Director may be in bound or loose-leaf form or in photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or by any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

Obligation to furnish

260(2)      Where records maintained by the Director are prepared and maintained other than in written form,

(a) the Director shall furnish any copy required to be furnished under subsection 259(2) in intelligible written form; and

(b) a report reproduced from those records, if it is certified by the Director, is admissible in evidence to the same extent as the original written records would have been.

No requirement to produce original

260(3)      The Director is not required to produce any document where a copy of the document is furnished in compliance with clause (2)(a).

Changes in letters patent

261(1)      Any additions or amendments to or deletions from any provision in the letters patent, supplementary letters patent or by-laws of a corporation shall be made in accordance with this Act.

References to former Act

261(2)      Any reference in an Act, letters patent, supplementary letters patent, by-laws or resolutions to The Companies Act as it existed before the coming into force of this Act or to any procedure under The Companies Act, shall be deemed to be a reference to the equivalent procedure in accordance with this Act.

PART XXI

COMMUNITY DEVELOPMENT CORPORATIONS

Application

262(1)      Except where it is otherwise expressly provided this Part applies to every corporation with share capital heretofore or hereafter incorporated as a community development corporation.

Consent of minister required

262(2)      No articles shall be accepted for filing without the prior approval of the minister.

Additional requirements in articles

262(3)      The articles shall be in the form the Director requires and in addition shall

(a) state that the business of the corporation is restricted to fostering the social and economic development of a municipality or other local area in the province; and

(b) state the name of the municipality, or clearly describe the area, in respect of which the corporation is incorporated.

S.M. 2006, c. 10, s. 45.

One corporation in any area

263         Where a corporation is incorporated in respect of any municipality or area, the Director shall not issue any articles to any other corporation in respect of the same municipality or area or in respect of an area that includes the whole or any part of the same municipality or area.

Limitation on the distribution of profits or assets

264         A corporation to which this part applies shall not

(a) make any distribution of profits; or

(b) make any distribution of capital or assets on a liquidation, dissolution or otherwise;

unless the distribution is approved by order of the Lieutenant Governor in Council; but this section does not apply to the winding-up of an insolvent corporation.

PART XXII

CORPORATIONS WITHOUT SHARE CAPITAL

Application

265         Except where it is otherwise expressly provided this Part applies to every corporation without share capital.

Interpretation

266         Where used in relation to a corporation without share capital,

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

"security" means a debt obligation of a body corporate including a certificate evidencing the debt obligation. (« valeur mobilière »)

Consent of minister required

267(1)      No articles shall be accepted for filing without the prior approval of the minister, and the corporation shall restrict its undertaking to one that is only of a patriotic, religious, philanthropic, charitable, educational, agricultural, scientific, literary, historical, artistic, social, professional, fraternal, sporting or athletic nature or the like.

Other consents required

267(2)      Notwithstanding subsection (1), no corporation that is restricted by its articles to the carrying on of any undertaking that is designed, with respect to a region in the province,

(a) to promote, encourage, and assist the economic development of the region, or programs that will assist that development;

(b) to assess the economic potential of the region;

(c) to investigate circumstances and situations that may inhibit or retard economic development in the region, and make recommendations for the improvement or removal of those circumstances and situations; and

(d) to co-operate with other persons in achieving the purposes set out in clauses (a) to (c);

shall be incorporated without the prior approval of the Minister of Agriculture, Food and Rural Development, and the approval shall limit the undertaking of the corporation to a specific region.

S.M. 1994, c. 20, s. 3; S.M. 2000, c. 35, s. 31; S.M. 2004, c. 42, s. 64; S.M. 2008, c. 42, s. 14; S.M. 2010, c. 33, s. 76; S.M. 2013, c. 54, s. 20; S.M. 2014, c. 32, s. 4.

Additional requirements in articles

268         The articles shall be in the form the Director requires and in addition shall state

(a) the restrictions on the undertaking that the corporation may carry on;

(b) that the corporation has no authorized share capital and shall be carried on without pecuniary gain to its members, and that any profits or other accretions to the corporation shall be used in furthering its undertaking;

(c) where the undertaking of the corporation is of a social nature, the address in full of the clubhouse or similar premises that the corporation is maintaining; and

(d) that each first director becomes a member of the corporation upon its incorporation.

S.M. 2006, c. 10, s. 46.

Three directors required

269(1)      A corporation shall have not fewer than three directors.

Directors ex officio

269(2)      The articles or by-laws of a corporation may provide for persons becoming directors ex officio.

Use of word "Incorporated"

270(1)      Notwithstanding subsection 10(1), the word "Incorporated", "Incorporée" or "Corporation", or the abbreviation "Inc." or "Corp.", shall be the last word of the name of each corporation without share capital, but a corporation may use and may be legally designated by either the full or the abbreviated form.

Application of section

270(2)      This section does not apply to a corporation incorporated before November 16, 1964; but this section applies to any corporation so incorporated that changes its name by amended articles.

S.M. 2010, c. 33, s. 9.

Number of members

271(1)      Unless the articles or by-laws of a corporation otherwise provide, there is no limit on the number of members of the corporation.

Classes of membership

271(2)      The articles or by-laws of a corporation may provide for more than one class of membership and, in that case, shall set forth the designation of and the terms and conditions attaching to each class.

Admission to membership

272         Subject to its articles or by-laws, persons may be admitted to membership in a corporation by resolution of the directors, but the articles or by-laws may provide

(a) that the resolution is not effective until confirmed by the members in general meeting; and

(b) that members may be admitted ex officio.

Voting powers of members

273(1)      Subject to subsection (2), each member of each class of members has one vote.

Voting powers of members

273(2)      The articles or by-laws of a corporation may provide that each member of a specified class has more than one vote or has no vote.

Memberships not transferable

274(1)      Unless the articles otherwise provide, the interest of a member in a corporation is not transferable and lapses and ceases to exist upon his death or when he ceases to be a member by resignation or otherwise in accordance with the by-laws of the corporation.

Exception

274(2)      Where the articles provide that the interest of a member in the corporation is transferable, the by-laws shall not restrict the transfer of that interest.

By-laws

275         The directors of a corporation may pass by-laws, not contrary to this Act or to the articles of the corporation, regulating

(a) the admission of persons and unincorporated associations as members and as ex officio members, and the qualifications of and the conditions of membership;

(b) the fees and dues of members;

(c) the issue of membership cards and certificates;

(d) the suspension and termination of membership by the corporation and by a member;

(e) where the articles provide that the interest of a member is transferable, the method of transfer of membership;

(f) the qualifications of, and the remuneration of, the directors and the ex officio directors, if any;

(g) the time for and the manner of election of directors;

(h) the appointment, remuneration, functions, duties, and removal of agents, officers and employees of the corporation, and the security, if any, to be given by them to the corporation;

(i) the time and place, and the notice to be given, for the holding of meetings of the members and of the board of directors, the quorum at meetings of members, the requirement as to proxies, and the procedure in all things at meetings of the members and at meetings of the board of directors;

(j) the conduct in all other particulars of the affairs of the corporation.

By-laws re groups and delegates

276(1)      The directors of a corporation may pass by-laws providing for

(a) the division of its members into groups, either territorially or on the basis of common interest;

(b) the election of some or all of the directors

(i) by the groups on the basis of the number of members in each group, or

(ii) for the groups in a defined geographical area, by the delegates of the groups meeting together, or

(iii) by the groups on the basis of common interest,

(c) the election of delegates and alternate delegates to represent each group on the basis of the number of members in each group;

(d) the number and qualification of delegates and the method of their election;

(e) the holding of meetings of members or delegates;

(f) the powers and authority of delegates at meetings;

(g) the holding of meetings of members or delegates territorially or on the basis of common interest.

Delegates

276(2)      A by-law passed under clause (1)(f) may provide that a meeting of delegates shall be deemed for all purposes to be and have all the powers of a meeting of the members.

Confirmation

276(3)      A by-law passed under subsection (1) is not effective until it is confirmed by at least 2/3 of the votes cast at a general meeting of the members duly called for that purpose.

Voting

276(4)      A delegate has only one vote and shall not vote by proxy.

Saving

276(5)      A by-law passed under subsection (1) shall not prohibit members from attending meetings of delegates and participating in the discussions at the meetings.

Disposition of property on dissolution

277(1)       The articles of incorporation may provide that upon dissolution, the remaining property may be distributed among all the members or among the members of a class or classes of members or to one designated organization or more, or any combination thereof.

No provision in articles for distribution

277(2)      Where the articles of incorporation do not provide for a distribution of its remaining property under subsection (1), the corporation shall, by special resolution, after payment of all debts and liabilities, distribute or dispose of the remaining property to any organization in Canada the undertaking of which is charitable or beneficial to the community.

Consent of Lieutenant Governor in Council required

277(3)      Notwithstanding subsection (2), the remaining property of a corporation to which subsection 267(2) applies, shall not be distributed or disposed of without the consent of the Lieutenant Governor in Council.

Compliance

277(4)      A distribution or disposition in accordance with subsections (1) and (2) is sufficient compliance with clauses 204(7)(d) and 214(i).

Amendment prohibited

277(5)      Where the articles of incorporation do not contain a provision for the distribution of remaining property to the members, the articles shall not be amended so to provide.

PART XXIII

INSURANCE CORPORATIONS

Interpretation

278(1)      Unless the context otherwise requires, any word or expression defined in The Insurance Act and used in this Part has the meaning given to it in that Act.

"Superintendent of Insurance" defined

278(2)      In this Part, "Superintendent of Insurance" means the Superintendent of Insurance appointed under The Insurance Act.

Application

279         This Part, except where it is otherwise expressly provided, applies to all insurers heretofore or hereafter incorporated by or under an Act of the Legislature.

Approval of Superintendent of Insurance

280(1)      No articles shall be accepted for filing by the Director without the prior approval of the Superintendent of Insurance.

Exception

280(2)      This section does not apply to a friendly society, an employees' mutual benevolent society, or a trade union benefit society.

By-laws to be filed with Superintendent of Insurance

281         A copy of every by-law of an insurer required to be licensed under The Insurance Act, certified by an officer to be a true copy, shall be filed with the Superintendent of Insurance within seven days of the passing thereof, and may be disallowed by the Superintendent of Insurance within one month after the filing thereof, by notice to that effect.

Restrictions on incorporation, etc.

282(1)      Except as provided in subsection (3), no corporation shall

(a) be incorporated; or

(b) be revived; or

(c) file articles of amendment;

under this Act, if it is empowered

(d) to pay to its members or their beneficiaries, as a benefit payable by the corporation, the proceeds of a contingency levy; or

(e) to pay sickness, accident, disability, unemployment, funeral, hospital, medical, or dental benefits, or benefits payable on death or on any contingency dependent on human life, in an amount that is fixed at the discretion of the directors or an executive or management committee of the corporation.

Contingency levy

282(2)      For the purposes of this section, "contingency levy" means an assessment or levy made on members of a corporation on the occasion of the happening to any member of the corporationof any one or more of certain contingencies upon the happening of which that member or his beneficiaries become entitled to receive the proceeds of that assessment or levy.

Exception

282(3)      Subsection (1) does not apply to an insurer that

(a) is a mutual benefit society; or

(b) was licensed under The Insurance Act before March 17, 1943;

and the application of which for any one or more of the things mentioned in clauses (1)(a), (1)(b) and (1)(c) has been approved in writing by the Superintendent of Insurance.

Revocation of charter

283         The Lieutenant Governor in Council may dissolve an insurer if

(a) the insurer does not obtain a licence under The Insurance Act within one year of incorporation; or

(b) the insurer fails to renew its licence under The Insurance Act for a period of one year; or

(c) the licence of the insurer under The Insurance Act is cancelled and not revived within one year.

DIVISION I

SHARE CAPITAL INSURANCE CORPORATIONS

Application

284         This Division applies to every insurer with share capital except mutual insurance corporations.

Incorporation

285(1)      Except as provided in Division II, a corporation with share capital may be incorporated by filing articles of incorporation in the prescribed form and, in addition, the articles shall set out that the business of the corporation is restricted to the transaction of a particular class or classes of insurance for which the corporation may be licensed under The Insurance Act.

Contents of articles

285(2)      The articles of a corporation to which this Part applies shall set out the authorized capital of the corporation, expressed as one class of shares or more, the number of shares in each class and the maximum consideration for which each share or each class of shares or all the shares may be issued.

Applicants to give notice

286         Applicants for incorporation shall, immediately prior to the application, publish in at least four consecutive issues of The Manitoba Gazette notice of their intention so to apply, and shall, if so required by the Director, publish elsewhere notice of their intention, and shall also give at least one month's notice of their intention so to apply to the Superintendent of Insurance.

287(1) and (2) [Repealed] S.M. 2007, c. 10, s. 39.

Money on shares paid to bank or trust company

287(3)      All money received on account of shares shall be paid into a branch or agency in the province of a bank or into a registered trust corporation, in trust for the proposed corporation; and no money paid on account of shares, before the first general meeting of the company is organized, shall be withdrawn or paid over to the corporation until after that meeting and an election of directors thereat.

Money to be returned

287(4)      Every subscription for shares made prior to the granting of a licence under The Insurance Act shall contain the stipulation that all moneys received on account of shares will be returned to the subscribers without any deduction for promotion, organization, or other expenses, in case the insurer fails to procure a licence.

Promotion expenses

287(5)      Every subscription for shares shall contain the stipulation that no sum will be used or paid before or after incorporation, for commission, promotion or organization expenses in excess of a percentage, not exceeding 15, of the amount of money received on account of shares.

S.M. 2002, c. 47, s. 30; S.M. 2007, c. 10, s. 39.

DIVISION II

MUTUAL INSURANCE CORPORATIONS

Application

288(1)      This Division applies to every corporation incorporated as a mutual insurance corporation.

Incorporation

288(2)      A corporation without share capital may be incorporated by filing articles of incorporation in the prescribed form and, in addition, the articles shall state that the undertaking of the corporation is restricted to the sole purpose of undertaking contracts of insurance including mutual insurance but the articles shall also provide that the corporation shall not issue contracts of life insurance or accident or sickness insurance.

Name

289         The name of a mutual insurance corporation shall include the word "Mutual" or "Mutuelle" and the word "Insurance" or "Assurance".

Subscription book

290         If 25 or more persons, each having an insurable interest in property of a kind to be insured in a proposed corporation, are present at a meeting, and a majority of them determine that it is expedient to establish a mutual insurance corporation, they may elect from among themselves three persons to open and keep a subscription book in which owners of that property within the province may sign their names and addresses and enter the sum for which they respectively bind themselves to effect insurance with the corporation, giving the description and location of the property to be insured.

Calling meeting of subscribers

291(1)      When the subscription has been completed and the aggregate amount subscribed is not less than $50,000., any 10 of the subscribers may call the first meeting of the proposed corporation, at such time and place as they determine, by advertisement and by sending a printed notice by mail, addressed to every subscriber at his post office address, at least 10 days before the day of the meeting.

Notice

291(2)      The notice and advertisement shall state the object of the meeting and the time and place at which it is to be held.

Election of board of directors, etc.

292         At the meeting, or at any adjournment thereof, the name and style of the corporation shall be adopted, a secretary ad interim shall be appointed, a board of directors elected, and a central and generally accessible place within the province named at which the registered office of the company is to be located.

Documents filed with application

293(1)      With the articles of incorporation, the applicants shall produce to the Director, certified as correct under the hands of the chairman and secretary,

(a) a copy of the minutes of the meeting, including all resolutions respecting the business of the proposed corporation, its name or style, and the location of its registered office;

(b) a copy of the subscription book;

(c) a list showing the names and addresses of the directors elected and of the officers appointed; and

(d) such further information as the Director requires.

Originals

293(2)      The applicants shall produce for verification to the Director, if requested, the originals of the documents required under subsection (1).

Members

294(1)      Every person who is insured under a policy issued by a corporation for $1,000. or more of insurance shall, while the insurance is in effect, be deemed to be a member of the corporation.

Liability of member

294(2)      No member is liable in respect of any loss or claim or demand against the corporation beyond the amount unpaid upon a premium note signed by him in favour of the corporation.

Withdrawal of member

294(3)      Any member may, with the consent of the directors, withdraw from the corporation upon such terms as the directors lawfully prescribe and upon the withdrawal his policy shall be cancelled but, if he has signed a premium note in favour of the corporation that is still in effect he is nevertheless liable to be assessed for, and to pay, his proportion of the losses, expense and reserve, to the time of cancellation of the policy and, on payment of the amount then payable, he is entitled to a return of his premium note.

Cash premium

295         No contract of insurance issued by a corporation wholly on the cash plan makes the insured under the contract liable to contribute or pay any sum to the corporation, or to its funds, or to any member of the corporation, beyond the cash premium agreed upon under the contract.

Voting

296(1)      Each member of the corporation is entitled at all meetings of the corporation to a number of votes in proportion to the amount by him insured, as follows:

(a) For $15,000. or less, one vote.

(b) For more than $15,000. but less than $30,000., two votes.

(c) For more than $30,000., two votes plus one additional vote for every $30,000. over $30,000.

One vote restriction

296(2)      Notwithstanding subsection (1), the corporation may provide by its articles or by-laws that each member is entitled to one vote only at its meetings.

Member in arrears

296(3)      No member is entitled to vote while he is in arrears for any assessment or premium due from him to the corporation.

Vote where two or more persons

297         Where a policy on the mutual plan is issued to two or more persons, one only is entitled to vote, and the right of voting belongs to the one first named on the register of policyholders if he is present, and if not present, to the one who stands second, and so on.

Vote of trustee member

298         Where property is insured by a trustee board or a corporation, any person duly appointed in writing pursuant to its resolution may vote on its behalf.

Quorum

299         At all meetings of the corporation 12 members actually present in person form a quorum.

Persons eligible as directors

300         No person is eligible to be, or shall act as, a director unless he is a member of the corporation and insured therein, for the time he holds office, to the amount of not less than $2,000.

Member corporation

301(1)      The president or director of a member corporation that has the qualifications that would qualify an individual to be a director is eligible to be a director of the corporation.

Partnership

301(2)       Where a partnership has the qualifications that would qualify an individual to be a director, one member of the partnership is eligible to be a director of the corporation.

302         [Repealed]

S.M. 2007, c. 10, s. 39.

Meeting of directors

303         The board of directors shall hold a meeting at least every three months for transacting the business of the corporation.

Establishment of branches

304         Any corporation may separate its business into branches or departments, with reference to the nature or classification of risks or of the localities in which insurance is or is to be effected.

Rates

305         The directors of every corporation separating its business as described in section 304 shall make a scale of risks and tariffs of rates for each branch or department, and direct that the amounts of each be kept separate and distinct the one from the other.

Liability of branch members

306         Members insuring in one branch are not liable, and may not be assessed, for claims in any other branch or department, but this section shall not be construed to apply to any reserve fund of the corporation.

Expenses divided

307         All necessary expenses incurred in the conduct and management of a corporation shall be assessed upon and divided among the several branches or departments in such proportion as the directors determine.

DIVISION III

BENEVOLENT CORPORATIONS

Application

308         This Division applies to every corporation without share capital the undertaking of which is restricted by its articles to that of a fraternal society, a mutual benefit society, a friendly society, a trade union benefit society, or an employee's mutual benefit society.

Incorporation

309         A corporation without share capital may be incorporated by filing articles of incorporation in the prescribed form and in addition the articles shall state that the undertaking of the corporation is restricted to the sole purpose of carrying on the business of a fraternal society, a mutual benefit society, a friendly society, a trade union benefit society, or an employees' mutual benefit society pursuant to the provisions of The Insurance Act.

Investments

310         The corporation shall not invest its funds otherwise than in securities authorized for investment by insurers under The Insurance Act.

Limit benefits

311         The corporation may limit any insurance or benefits to such class or classes of persons as its rules determine, notwithstanding the provisions of any other statute or law to the contrary, unless the other statute is declared specifically to apply to corporations to which this Division applies.

Borrowing power

312         For the purposes of carrying out its undertaking a corporation may borrow or raise or secure the payment of money in such manner as it thinks fit, and in particular by the issue of bills of exchange or debt obligations; but that power shall be exercised only under the authority of its rules, and in no case shall debt obligations be issued without the sanction of a special resolution and in the case of a corporation required to be licensed under The Insurance Act undertaking an insurance business, the approval of the Superintendent of Insurance.

Treasurer

313         The treasurer or other officer having charge of the money of the corporation shall give security to the satisfaction of the board of directors, in a sum that in the opinion of the board of directors is adequate, but in no case less than $2,000., for the faithful discharge of his duties.

Disputes

314         Unless the rules of the corporation otherwise provide, any dispute arising out of the affairs of the corporation between any members thereof or between a member or any person aggrieved who has not more than six months prior thereto ceased to be a member or any person claiming through that member or person aggrieved or claiming under the rules, and the corporation or a director or officer thereof, shall be decided by arbitration under The Arbitration Act; and the decision so made is binding on all parties, and may be enforced on application to the court, and unless the rules otherwise provide there is no appeal from the decision.

PART XXIV

TRUST AND LOAN CORPORATIONS

Definitions

315         In this Part,

"business authorization" means a business authorization issued under Division XI; (« autorisation »)

"corporation" means a trust corporation or a loan corporation; (« corporation »)

"entity" means

(a) a body corporate,

(b) a trust,

(c) a partnership,

(d) a fund,

(e) an unincorporated association or organization,

(f) Her Majesty in the right of Canada or of a province,

(g) an agency of Her Majesty in the right of Canada or of a province, or

(h) the government of, or of a political subdivision of, a foreign country or any agency thereof; (« entité »)

"extra-provincial corporation" means an extra-provincial trust corporation or an extra-provincial loan corporation; (« corporation extra-provinciale »)

"extra-provincial loan corporation" means

(a) an extra-provincial corporation incorporated in Canada, in any province other than Manitoba or in any territory of Canada that is a loan corporation in its jurisdiction of incorporation, and

(b) a cooperative credit association that is incorporated under the Cooperative Credit Associations Act (Canada) and is a retail association, as defined in that Act; (« corporation de prêt extra-provinciale »)

"extra-provincial trust corporation" means an extra-provincial corporation incorporated in Canada, in any province other than Manitoba or in any territory of Canada that is a trust corporation in its jurisdiction of incorporation; (« corporation de fiducie extra-provinciale »)

"financial institution" means

(a) a bank to which the Bank Act (Canada) applies,

(b) an association to which the Cooperative Credit Associations Act (Canada) applies,

(c) an insurance company or a fraternal benefit society to which the Insurance Companies Act (Canada) applies,

(d) a trust, loan or insurance corporation incorporated by or under an Act of the Parliament of Canada, of the Legislature or of the legislature of another province of Canada,

(e) a cooperative credit society incorporated and regulated by or under an Act of the Legislature or of the legislature of another province of Canada,

(f) an entity that is incorporated or formed by or under an Act of the Parliament of Canada, of the Legislature or of the legislature of another province of Canada and that is primarily engaged in dealing in securities, including portfolio management and investment counselling, and

(g) an entity that is

(i) engaged in the business of banking, the trust, loan or insurance business, the business of a cooperative credit society or the business of dealing in securities or is otherwise engaged primarily in the business of providing financial services, and

(ii) incorporated or formed otherwise than by or under an Act of the Parliament of Canada, of the Legislature or of the legislature of another province of Canada; (« établissement financier »)

"loan corporation" means a corporation incorporated in Manitoba that carries on the business or exercises the powers set forth in section 327 and that accepts deposits from the public within the meaning of The Canada Deposit Insurance Corporation Act (Canada); (« corporation de prêt »)

"subordinated note" means an instrument evidencing an indebtedness of a corporation that by its terms provides that the indebtedness evidenced by it shall, in the event of the insolvency, liquidation or dissolution of the corporation, rank equally with the indebtedness evidenced by the other subordinated notes of the corporation but be subordinate in right of payment to all other indebtedness of the corporation except indebtedness in respect of subordinated shareholder loans; (« billet subalterne »)

"subordinated shareholder loan" means a loan made to a corporation by

(a) a shareholder of the corporation, or

(b) a person who controls a shareholder of the corporation,

for a fixed term and under the condition that the indebtedness arising therefrom shall, in the event of the insolvency or winding-up of the corporation, rank equally with the indebtedness in respect of other subordinated shareholder loans but be subordinate in right of payment to all other indebtedness of the corporation; (« prêt subalterne consenti par un actionnaire »)

"trust corporation" means a corporation incorporated in Manitoba that carries on any of the businesses or exercises any of the powers set forth in subsection 322(1). (« corporation de fiducie »)

S.M. 1993, c. 18, s. 7; S.M. 1997, c. 26, s. 4; S.M. 2008, c. 42, s. 14.

Appointment of Director

315.1       The Minister may appoint a Director and one or more Deputy Directors to carry out the duties and exercise the powers of the Director under this Part.

S.M. 1993, c. 18, s. 7.

DIVISION I

GENERAL

Application

316(1)      Notwithstanding any other Act of the Legislature, this Part applies to every loan corporation and to every trust corporation incorporated by or under any Act for which this Act is substituted or by a special Act of the Legislature and to every extra-provincial loan corporation and to every extra-provincial trust corporation.

Limitations on loan operations

316(2)      No corporation shall carry on the business of a loan corporation and accept deposits, as defined for the purposes of the Canada Deposit Insurance Corporation Act (Canada), from the public in Manitoba unless it is incorporated and has a business authorization.

S.M. 1993, c. 18, s. 8; S.M. 1994, c. 20, s. 3.

Deposit insurance required

317(1)      The Director may authorize a corporation to apply to the Canada Deposit Insurance Corporation for deposit insurance and no corporation or extra-provincial corporation shall carry on the business of a trust corporation or loan corporation and accept deposits, as defined for the purposes of the Canada Deposit Insurance Corporation Act, from the public in Manitoba unless it is insured under a policy of deposit insurance by the Canada Deposit Insurance Corporation.

317(2) and (3) [Repealed] S.M. 1993, c. 18, s. 9.

Capital requirements on insurance

317(4)      No corporation that is not a member of the Canada Deposit Insurance Corporation shall apply for deposit insurance until it has an unimpaired capital account and reserve of at least $5,000,000.

S.M. 1992, c. 58, s. 3; S.M. 1993, c. 18, s. 9; S.M. 1994, c. 20, s. 3; S.M. 1997, c. 26, s. 5; S.M. 1999, c. 18, s. 8.

Purchases of business by corporation

318(1)      A corporation may acquire the whole or any part of the business, rights and property of any other body corporate carrying on the business that the corporation is authorized to carry on, exercise and hold, conditional upon the assumption by that corporation of the duties, obligations and liabilities of that other body corporate with respect to the business, rights and property so acquired as are not performed or discharged by that other body corporate, but no agreement therefor shall take effect until it has been submitted to and approved by the Director.

Sale of business and property

318(2)      A corporation may sell or dispose of the whole or any part of its business, rights, and property for such consideration as it may think fit.

Approval of shareholders

318(3)      A sale or disposal under subsection (2) shall not be made unless it is approved by a vote of at least three-quarters of the shares

(a) represented in person or by proxy at a meeting of the shareholders duly called for that purpose; and

(b) representing at least 50% of the issued capital of the corporation.

Approval by Director

318(4)      A sale or disposal under subsection (2) does not take effect until it has been submitted to and approved by the Director.

Consideration for sale

318(5)      Where a sale under subsection (2) is a sale of the whole of the business, rights and property of a corporation to any other body corporate, the consideration for the sale may, notwithstanding anything in this Act contained, be

(a) fully paid-up shares of the purchasing company; or

(b) part cash and part shares of the purchasing company; or

(c) in such other forms as may be agreed upon.

Amalgamation

319(1)      Two or more bodies corporate, of which at least one is a corporation, may amalgamate and continue as one corporation or extra-provincial corporation, except that, if any of the bodies corporate being amalgamated is required to be insured under subsection 317(1), the Director shall not issue a certificate of amalgamation unless the Canada Deposit Insurance Corporation confirms in writing that either

(a) an existing policy of deposit insurance relating to one of the bodies corporate will continue in force in relation to the corporation or extra-provincial corporation; or

(b) a new policy of deposit insurance will be issued to the corporation or extra-provincial corporation.

Incorporating Acts lapse

319(2)      Upon the issue of articles of amalgamation, any special Act of the Legislature incorporating a corporation being amalgamated ceases to be in force, and the amalgamated corporation is deemed to be a corporation incorporated under this Act with all the powers and privileges, and subject to the limitations, liabilities, and provisions, of this Act and the articles of amalgamation.

S.M. 1997, c. 26, s. 6.

DIVISION II

INCORPORATION

Minister's approval required

320(1)      No articles shall be issued without the prior approval of the Minister.

Contents of articles

320(2)      The articles of incorporation shall be in the prescribed form and in addition shall set out that the business of the corporation is restricted to that of a trust corporation or a loan corporation, as the case may be, and that the corporation is subject to the specific provisions of Part XXIV of this Act.

Contents of articles

320(3)      The articles of a corporation to which this Part applies shall set out the authorized capital of the corporation, expressed as one class of shares or more, the number of shares in each class and the maximum consideration for which each share or each class of shares or all the shares may be issued.

Capital requirements

321(1)      The authorized capital of a corporation

(a) that intends to accept deposits from the public within the meaning of the Canada Deposit Insurance Corporation Act shall not be less than $5,000,000.; or

(b) that is a trust corporation whose business authorization will be subject to a condition prohibiting it from carrying on any deposit-taking business shall not be less than $2,000,000.

No redeemable cumulative shares

321(2)      Notwithstanding section 34, a corporation shall not redeem any redeemable shares issued by it, unless the approval of the Director is first obtained.

Application of subsection 10(1)

321(3)      Subsection 10(1) does not apply to a corporation to which this Part applies.

Minimum number of directors

321(4)      The number of directors of a corporation shall be not less than five, a majority of whom constitute a quorum for the transaction of business at a meeting thereof.

Directors need not hold shares

321(5)      Unless the articles or by-laws of a corporation otherwise provide, a director of the corporation is not required to hold shares issued by the corporation.

Resident Canadian directors

321(6)      A majority of the directors of a corporation shall at all times be residents of Canada.

S.M. 1997, c. 26, s. 7.

DIVISION III

POWERS

Trust corporation powers

322(1)      A trust corporation may

(a) take, receive, hold and administer estates and property that are granted, committed, transferred or conveyed to the corporation with its consent, upon any trust whatsoever not contrary to law, at any time, by any person, or by any court;

(b) take and receive as trustees or as bailee, upon such terms and for such remuneration as is agreed upon, deeds, wills, policies of insurance, securities or other valuable papers or securities for money, jewellery, plate or other chattel property of any kind, and guarantee the safekeeping thereof;

(c) accept and execute the offices of executor, administrator, trustee, receiver, liquidator, guardian, assignee for the benefit of creditors, custodian or trustee in cases relating to insolvency or under the Bankruptcy Act (Canada), guardian of the person or estate of any minor, substitute decision maker for property for a vulnerable person under The Vulnerable Persons Living with a Mental Disability Act, or committee of the person or estate of any mentally incompetent person, and accept the duty of, and act generally in, the winding-up of estates, partnerships, and bodies corporate; and

(d) subject to subsections (2) to (7), receive deposits of money payable upon demand or after notice, and receive money for the purpose of its being invested by the corporation.

Deposits

322(2)      A trust corporation may receive deposits of money repayable upon demand or after notice and may pay interest thereon at such rates and on such terms as the corporation from time to time establishes, and the corporation is entitled to retain the interest and profit resulting from the investment or loaning of the deposit money in excess of the amount of interest payable to depositors.

Deposits deemed trust moneys and guaranteed

322(3)      Every trust corporation receiving deposits in the manner authorized under subsection (2) is deemed to hold the deposits as trustee for the depositors and to guarantee repayment thereof; and there shall be earmarked and definitely set aside in respect thereof securities, or cash and securities, equal to the full aggregate amount thereof; and for the purposes of this subsection "cash" includes moneys on deposit and "securities" includes loans made upon securities.

Record of Deposits

322(4)      Every trust corporation receiving deposits in the manner authorized under subsection (2) shall keep a record in the form approved by the Director in which shall be entered all sums so received and the names and addresses, so far as known, of the persons from whom they are received.

Investment certificates

322(5)      A trust corporation may receive money for the purpose of its being invested by the corporation and may issue investment certificates or receipts and may guarantee the repayment of money so received and the payment of the interest thereon at such rates as is agreed upon on fixed days.

Nature of guarantee

322(6)      A guarantee by a trust corporation made under subsection (5) is not a security and the money is not money borrowed by the corporation by issuing securities but is money received in trust; but the corporation is entitled to retain the interest and profits resulting from the investment or loaning of the moneys in excess of the amount of interest payable thereon.

Securities allocated to guaranteed investment

322(7)      Where it is provided by the agreement under which moneys are received by the corporation for guaranteed investment under subsection (5) that specific securities shall be allocated in respect thereof, those securities shall be earmarked and definitely set aside in respect thereof, and in respect of all other moneys received for guaranteed investment as mentioned in subsection (5) there shall be earmarked and definitely set aside in respect thereof securities, or cash and securities, equal to the full aggregate amount thereof; and for the purposes of this subsection "cash" includes moneys on deposit and "securities" includes loans made upon securities.

Combined trust accounts

322(8)      A corporation may combine in one trust account, securities that are required to be earmarked and definitely set aside under subsections (3) and (7).

S.M. 1993, c. 29, s. 176; S.M. 1997, c. 26, s. 8.

Security not necessary

323(1)      A trust corporation or extra-provincial trust corporation with a business authorization may be appointed to execute the office of executor, administrator, trustee, receiver, liquidator, assignee, guardian, substitute decision maker for property under The Vulnerable Persons Living with a Mental Disability Act or committee, by the Court of Queen's Bench, and it is not necessary for the trust corporation or extra-provincial trust corporation to give security for the due performance of the duty of that office.

Appointment as trustee, etc.

323(2)      The court may, with the consent of the trust corporation or extra-provincial trust corporation, appoint it to exercise any of the offices mentioned in subsection (1) in respect of any estate or person under the authority of the court or judge and may grant to the trust corporation or extra-provincial trust corporation probate of any will in which the trust corporation or extra-provincial trust corporation is named as an executor.

323(3)      [Repealed] S.M. 1997, c. 26, s. 9.

S.M. 1993, c. 29, s. 176; S.M. 1997, c. 26, s. 9.

Account of administration

324         Where a trust corporation is appointed to any trust or office by any court, or any judge, officer, or person having lawful authority in that behalf, the court, judge, officer or person may require the trust corporation to render an account of its administration of the trust or office to which it is appointed, and may appoint a suitable person to investigate the management of the trust by the corporation and as to the security afforded to those by or for whom its engagements are held, and the person shall report thereon to the court, judge, officer, or person, and the expenses of the investigation shall be borne as ordered by the court, judge or officer.

Trust funds separate

325         The moneys and securities given, acquired or held in trust by a trust corporation shall always be kept distinct from those of the trust corporation, and in separate accounts, and so marked for each particular trust as always to be distinguished from any other in the books of account of the corporation, so that at no time shall trust moneys form part of or be mixed with the general assets of the trust corporation, and the trust company shall, in the administration of a trust, keep distinct records and accounts of all operations connected therewith.

Additional trust corporation powers

326         A trust corporation may also

(a) act generally as attorney or agent for the transaction of business, the management of estates, and the collection of loans, rents, interest, dividends, debts and securities for money;

(b) act as agent for the purpose of issuing or countersigning certificates of shares, bonds or other obligations of any association or municipal or other corporation, and receive, invest and manage any sinking fund therefor on such terms as are agreed upon;

(c) guarantee repayment of the principal or payment of the interest, or both, of any moneys entrusted to the company for investment, on such terms and conditions as are agreed upon;

(d) sell, exchange, pledge, or mortgage any mortgage or other security, or any property held by the corporation, and make and execute all requisite conveyances and assurances in respect thereof;

(e) make, enter into, deliver, accept and receive, all deeds, conveyances, assurances, transfers, assignments, grants and contracts, necessary to carry out the purposes of the corporation and to promote its objects;

(f) hold real estate which, having been mortgaged or hypothecated to it, is acquired by it for the protection of its investments, and from time to time sell, mortgage, lease or otherwise dispose thereof; and

(g) for all the services, duties and trusts set out in this section, charge, collect and receive all proper remuneration and all legal and other usual and customary costs, charges and expenses.

Loan corporation powers

327         A loan corporation may lend money on the security of, or purchase or invest in, mortgages, charges or hypothecs upon improved real property in Manitoba or elsewhere where the corporation is carrying on business.

DIVISION IV

AUTHORIZED LOANS AND INVESTMENTS

328         [Repealed]

S.M. 1995, c. 33, s. 4; S.M. 1997, c. 26, s. 11.

329         [Repealed]

S.M. 1997, c. 26, s. 11.

Definitions

329.1(1)    In this Division,

"commercial loan"means

(a) any loan made or acquired by a corporation or any investment in debt obligations, other than

(i) a loan to a natural person in an amount of $250,000. or less,

(ii) a loan to or debt obligation issued by the Government of Canada, the government of a province of Canada or a municipality, or to or by any agency of any of them, or to or by the government of a foreign country or a political subdivision of a foreign country, or any agency thereof, or to or by an international agency prescribed in the regulations,

(iii) a loan or debt obligation that is guaranteed by, or fully secured by securities issued by, a government, a municipality or an agency referred to in subclause (ii),

(iv) a loan that is secured by a mortgage on real property

(A) where the mortgage is on residential property and the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, does not exceed 75% of the value of the property at the time the loan is made, or

(B) where the mortgage is on a real property other than residential property and the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, does not exceed 75% of the value of the property at the time the loan is made and the property provides an annual income sufficient to pay all annual expenses related to the property, including the payments owing under the mortgage, and the mortgages having an equal or prior claim against the property,

(v) a loan that is secured by a mortgage on real property and the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, exceeds 75% of the value of the property at the time the loan is made if repayment of the amount of the loan that exceeds 75% of the value of the property is guaranteed or insured by an agency of the government of the country in which the real property is situated or of a province or state of that country or a private insurer approved by the Director,

(vi) a loan or debt obligation that

(A) consists of a deposit made by the corporation with another financial institution,

(B) is fully secured by a deposit with any financial institution, including the corporation,

(C) is fully secured by debt obligations guaranteed by any financial institution other than the corporation, or

(D) is guaranteed by any financial institution other than the corporation, or

(vii) debt obligations that are widely distributed, as that expression is defined by the regulations,

(b) an investment in shares of a body corporate or ownership interests in an unincorporated entity, other than

(i) shares or ownership interests that are widely distributed, as that expression is defined by the regulations, and

(ii) participating shares,

(c) financial leasing, and

(d) any other prescribed investment; (« prêt commercial »)

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

"factoring body corporate" means a body corporate the activities of which are limited to acting as a factor in respect of accounts receivable, which activities include the raising of money for the purpose of acting as a factor and the lending of money while acting as such a factor; (« personne morale d'affacturage »)

"financial leasing body corporate" means a body corporate

(a) the activities of which are limited to the financial leasing of personal property and such related activities as are prescribed and whose activities conform to such restrictions and limitations thereon as are prescribed, and

(b) that, in conducting the activities referred to in clause (a) in Canada, does not direct its customers or potential customers to particular dealers in the leased property or the property to be leased; (« personne morale de crédit-bail »)

"information processing services" means the collection, manipulation and transmission of information that is primarily financial or economic in nature or that relates to the business of an entity referred to in any of clauses 329.5(2)(a) to (n) or subsection 329.5(3) or any other information that the Director may, by order, specify; (« services de traitement des données »)

"information services body corporate" means a body corporate that, except as may be prescribed, is primarily engaged in

(a) providing information processing services,

(b) providing advisory and other services in the design, development and implementation of information management systems, or

(c) designing, developing and marketing computer software,

and the activities of which may include, as an ancillary activity, the design, development, manufacture or sale of special purpose computer hardware; (« personne morale d'information  »)

"investment counselling and portfolio management body corporate" means a body corporate the principal activity of which consists of

(a) the offering of advice, or advising, on investments, or

(b) the investment or control, in any way that involves an element of discretionary judgment by the body corporate, of money, property, deposits or securities that

(i) are not owned by the body corporate, or

(ii) are not moneys deposited with the body corporate in the ordinary course of business; (« personne morale de conseil en placement et de gestion de portefeuille »)

"loan" includes an acceptance, endorsement or other guarantee, a deposit, a financial lease, a conditional sales contract, a repurchase agreement and any other similar arrangement for obtaining funds or credit but does not include investments in securities; (« prêt » ou « emprunt »)

"mutual fund body corporate" means a body corporate whose activities are limited to the investing of the funds of the body corporate, and includes a body corporate that is an issuer of securities that entitle the holder to receive, on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in a part of the net assets, including a separate fund or trust account, of the issuer of the securities; (« personne morale de fonds mutuel »)

"mutual fund distribution body corporate" means a body corporate whose principal activity is acting as a selling agent of units, shares or other interests in a mutual fund and acting as a collecting agent in the collection of payments for any such interests if

(a) the proceeds of the sales of any such interests, less any sales commissions and service fees, are paid to the fund, and

(b) the existence of a sales commission and service fee in respect of the sale of any such interest is disclosed to the purchaser of the interest prior to the purchase thereof; (« personne morale de courtage de fonds mutuels »)

"participating share" means a share of a body corporate that carries the right to participate in the earnings of the body corporate to an unlimited degree and to participate in a distribution of the remaining property of the body corporate on dissolution; (« action participante »)

"prescribed subsidiary" means a subsidiary that is one of a prescribed class of subsidiaries; (« filiale réglementaire »)

"real property body corporate" means a body corporate that is primarily engaged in holding, managing or otherwise dealing with real property or shares of a body corporate or ownership interests in an unincorporated entity that is also primarily engaged in holding or otherwise dealing with real property, including another real property body corporate or a real property holding vehicle; (« personne morale de biens réels »)

"real property brokerage body corporate" means a body corporate that is primarily engaged in

(a) acting as an agent for vendors, purchasers, mortgagors, mortgagees, lessors or lessees of real property, and

(b) the provision of consulting or appraisal services in respect of real property; (« personne morale de courtage de biens réels »)

"real property holding vehicle" means a limited partnership or a trust that is primarily engaged in holding, managing or otherwise dealing with real property or shares of a body corporate or ownership interests in an unincorporated entity that is also primarily engaged in holding or otherwise dealing with real property, including a real property body corporate or another real property holding vehicle; (« société d'opérations sur biens réels »)

"service body corporate", in relation to a corporation, means a body corporate that engages exclusively in the provision of services to any or all of the following:

(a) the corporation,

(b) any entity in which the corporation has a substantial investment,

(c) a financial institution that is affiliated with the corporation,

(d) any entity in which a financial institution referred to in clause (c) has a substantial investment,

(e) any other Canadian financial institution that has a substantial investment in the service body corporate,

(f) any entity in which any Canadian financial institution referred to in clause (e) has a substantial investment,

(g) any financial institution that is affiliated with any Canadian financial institution referred to in clause (e), and

(h) any entity in which a financial institution referred to in clause (g) has a substantial investment,

so long as the body corporate is providing services to the corporation or any of the entities referred to in clauses (b) to (d); (« personne morale de services »)

"special purpose computer hardware" means computer equipment that is not generally available and that is integral to the provision of

(a) financial services, or

(b) information services related to the business of financial institutions; (« matériel informatique spécial »)

"specialized financing body corporate" means a body corporate that is primarily engaged, under prescribed terms and conditions, in providing specialized business management, in making investments or in providing financing or advisory services. (« personne morale de financement spécial »)

Body corporate holding shares

329.1(2)    For the purposes of this Division, a factoring body corporate, a financial leasing body corporate, an information services body corporate, an investment counselling and portfolio management body corporate, a mutual fund body corporate, a mutual fund distribution body corporate, a real property brokerage body corporate, a service body corporate and a specialized financing body corporate includes any such body corporate that also

(a) holds shares of another body corporate of the same type; or

(b) holds shares of a financial holding body corporate referred to in clause 329.5(2)(l).

Control

329.1(3)    For the purposes of this Division and Division VIII,

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

(b) a person controls an unincorporated entity, other than a limited partnership, if more than 50% of the ownership interests, however designated, into which the entity is divided are beneficially owned by that person and the person is able to direct the business and affairs of the entity;

(c) the general partner of a limited partnership controls the limited partnership; and

(d) a person controls an entity if the person has any direct or indirect influence that, if exercised, would result in control in fact of the entity.

Deemed control

329.1(4)    A person who controls an entity is deemed to control any entity that is controlled, or deemed to be controlled, by the entity.

Deemed control

329.1(5)    A person is deemed to control an entity where the aggregate of

(a) any securities of the entity that are beneficially owned by that person; and

(b) any securities of the entity that are beneficially owned by any entity controlled by that person;

is such that, if that person and all of the entities referred to in clause (b) that beneficially own securities of the entity were one person, that person would control the entity.

Subsidiary

329.1(6)    A body corporate is a subsidiary of another body corporate if it is controlled, determined without regard to clause (3)(d), by the other body corporate.

Substantial investment in body corporate

329.1(7)    A person has a substantial investment in a body corporate where

(a) the voting rights attached to the aggregate of any voting shares of the body corporate beneficially owned by the person and by any entities controlled by the person exceed 10% of the voting rights attached to all of the outstanding voting shares of the body corporate; or

(b) the aggregate of any shares of the body corporate beneficially owned by the person and by any entities controlled by the person represents ownership of greater than 25% of the shareholders' equity of the body corporate.

Non-application to shares of securities underwriter

329.1(8)     For the purposes of this section,

(a) in computing the percentage of voting rights attached to voting shares owned by a securities underwriter, there shall be excluded the voting rights attached to voting shares; and

(b) in computing the percentage of shareholders' equity comprised by shares of a body corporate beneficially owned by a securities underwriter and by any entities controlled by him or her, there shall be excluded shares;

acquired by him or her as an underwriter during the course of a distribution to the public by him or her of those shares.

Increasing substantial investment

329.1(9)    A person who has a substantial investment in a body corporate pursuant to clause (8)(a) increases that substantial investment when the person or any entity controlled by the person

(a) acquires beneficial ownership of additional voting shares of the body corporate in such number as to increase the percentage of voting rights attached to the aggregate of the voting shares of the body corporate beneficially owned by the person and by any entities controlled by the person; or

(b) acquires control of any entity that beneficially owns any voting shares of the body corporate in such number as to increase the percentage of voting rights attached to the aggregate of the voting shares of the body corporate beneficially owned by the person and by any entities controlled by the person.

Increasing substantial investment

329.1(10)   A person who has a substantial investment in a body corporate pursuant to clause (8)(b) increases that substantial investment when the person or any entity controlled by the person

(a) acquires beneficial ownership of additional shares of the body corporate in such number as to increase the percentage of the shareholders' equity of the body corporate represented by the aggregate of the shares of the body corporate beneficially owned by the person and by any entities controlled by the person; or

(b) acquires control of any entity that beneficially owns any shares of the body corporate in such number as to increase the percentage of the shareholders' equity of the body corporate represented by the aggregate of the shares of the body corporate beneficially owned by the person and by any entities controlled by the person.

New substantial investment

329.1(11)   For greater certainty,

(a) where a person has a substantial investment in a body corporate pursuant to clause (8)(a) and the person, or any entity controlled by the person,

(i) purchases or otherwise acquires beneficial ownership of shares of the body corporate, or

(ii) acquires control of any entity that beneficially owns shares of the body corporate,

in such number as to cause the shareholders' equity of the body corporate represented by the aggregate of the shares of the body corporate beneficially owned by the person and by any entities controlled by the person to exceed 25% of the shareholders' equity of the body corporate; or

(b) where a person has a substantial investment in a body corporate pursuant to clause (8)(b) and the person or any entity controlled by the person

(i) purchases or otherwise acquires beneficial ownership of voting shares of the body corporate, or

(ii) acquires control of any entity that beneficially owns voting shares of the body corporate,

in such number as to cause the voting rights attached to the aggregate of the voting shares beneficially owned by the person and by any entities controlled by the person to exceed 10% of the voting rights attached to all of the outstanding voting shares of the body corporate;

the acquisition is deemed to cause the person to increase a substantial investment in the body corporate.

Substantial investment in unincorporated entity

329.1(12)   A person has a substantial investment in an unincorporated entity where the aggregate of any ownership interests, however designated, into which the entity is divided, beneficially owned by the person and by any entities controlled by the person exceeds 25% of all of the ownership interests into which the entity is divided.

Non-application to interests of securities underwriter

329.1(13)   For the purposes of this section, in computing the percentage of ownership interests in an unincorporated entity comprised by ownership interests in the entity beneficially owned by a securities underwriter and by any entities controlled by him or her, there shall be excluded ownership interests acquired by him or her as an underwriter during the course of a distribution to the public by him or her of those interests.

Increasing substantial investment

329.1(14)   A person who has a substantial investment in an unincorporated entity increases that substantial investment when the person or any entity controlled by the person

(a) acquires beneficial ownership of additional ownership interests in the unincorporated entity in such number as to increase the percentage of ownership interests in the unincorporated entity beneficially owned by the person and by any entities controlled by the person; or

(b) acquires control of any entity that beneficially owns ownership interests in the unincorporated entity in such number as to increase the percentage of ownership interests beneficially owned by the person and by any entities controlled by the person.

S.M. 1997, c. 26, s. 12.

Non-application of Division

329.2       This Division does not apply in respect of

(a) money or other assets held in trust by a corporation, other than guaranteed trust money and assets held in respect thereof;

(b) the holding of a security interest in real property, unless the security interest is prescribed to be an interest in real property; or

(c) the holding of a security interest in securities of an entity.

S.M. 1997, c. 26, s. 12.

Investment standards

329.3       The directors of a corporation shall establish and the corporation shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return.

S.M. 1997, c. 26, s. 12.

Restriction on substantial investments

329.4(1)    No corporation shall acquire or increase a substantial investment in any entity, except as provided in section 329.5 or 329.6 unless the substantial investment was acquired or increased by way of

(a) an acquisition of control of a financial institution or specialized financing body corporate that has a substantial investment in the entity;

(b) an acquisition of shares of or ownership interests in the entity by a financial institution or a specialized financing body corporate that is controlled by the corporation;

(c) a temporary investment permitted by section 329.8;

(d) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 329.9; or

(e) a realization of security permitted by section 329.10.

Exception for an uncontrolled event

329.4(2)    A corporation shall be deemed not to contravene subsection (1) where the corporation acquires a substantial investment solely as the result of an event not within the control of the corporation.

S.M. 1997, c. 26, s. 12.

Definition

329.5(1)    In this section "control" means control of a body corporate within the meaning of subsection 329.1(3) determined without regard to clause 329.1(3)(d).

Permitted substantial investments

329.5(2)    Subject to subsection (4) and Division VIII, a corporation may acquire or increase a substantial investment in a body corporate if the body corporate is any of the following:

(a) a financial institution;

(b) a factoring body corporate;

(c) a financial leasing body corporate;

(d) an information services body corporate;

(e) an investment counselling and portfolio management body corporate;

(f) a mutual fund body corporate;

(g) a mutual fund distribution body corporate;

(h) a real property brokerage body corporate;

(i) a real property body corporate;

(j) a service body corporate;

(k) a specialized financing body corporate;

(l) a financial holding body corporate that does not have a substantial investment in any entity except in a body corporate referred to in this subsection or a real property holding vehicle referred to in subsection (3);

(m) a body corporate whose activities are ancillary to the business of the corporation or of a financial institution that is its subsidiary; or

(n) a body corporate that engages in two or more of the businesses or activities engaged in or carried on by bodies corporate referred to in any of clauses (b) to (m).

Real property holding vehicles

329.5(3)    Subject to Division VIII, a corporation may acquire or increase a substantial investment in a real property holding vehicle.

Where control or approval required

329.5(4)    A corporation may not acquire or increase a substantial investment in a body corporate pursuant to subsection (2) unless

(a) the corporation controls the body corporate or would thereby acquire control of the body corporate;

(b) the corporation jointly owns and controls the body corporate or would thereby jointly own or control the body corporate with another financial institution; or

(c) the corporation is permitted by regulations to acquire or increase the substantial investment.

Divestiture of shares

329.5(5)    Where a corporation controls a body corporate referred to in clause (4)(a), the corporation may only divest itself of shares of the body corporate in such number that the result would be that the corporation would no longer control the body corporate but would have a substantial investment in the body corporate if the corporation is permitted to do so by regulations.

S.M. 1997, c. 26, s. 12.

Similar activities

329.6(1)    On application in writing by a corporation, the minister may, by order and on such terms and conditions as are specified in the order, deem a body corporate named in the order to be, for all purposes of this Part, a body corporate referred to in any of clauses 329.5(2)(b) to (n) if the activities of the body corporate are substantially similar to those of a body corporate referred to in any of those clauses.

Revocation of order

329.6(2)    Where, in the opinion of the minister, a corporation has failed to comply with any term or condition set out in an order made under subsection (1) or the activities of a body corporate in respect of which an order is made under that subsection are no longer substantially similar to those of a body corporate referred to in any of clauses 329.5(2)(b) to (n), the minister may revoke the order and, where the minister does so, the corporation is deemed to have acquired, on the day the order is revoked a temporary investment in the body corporate in respect of which clause 329.8(1)(b) applies.

S.M. 1997, c. 26, s. 12.

Undertakings

329.7(1)    Where a corporation controls a financial institution or a body corporate referred to in any of clauses 329.5(2)(b) to (n), the corporation shall provide the Director with such undertakings as he or she may require regarding

(a) the activities of the financial institution or body corporate; and

(b) access to information about the financial institution or body corporate.

Agreements with other jurisdictions

329.7(2)    The minister may enter into an agreement with the appropriate official or public body responsible for the supervision of financial institutions for Canada or in each province or in any other jurisdiction concerning any matters referred to in clauses (1)(a) and (b) or any other matter the minister deems appropriate.

Access to records

329.7(3)    Notwithstanding any other provision of this Division, a corporation shall not control a body corporate referred to in any of clauses 329.5(2)(a) to (n) unless

(a) where control is acquired after the coming into force of this subsection, in the course of acquiring control or within a reasonable time thereafter; and

(b) in any other case, within a reasonable time after the coming into force of this subsection;

the corporation obtains from the body corporate an undertaking to provide the Director with reasonable access to the records of the body corporate.

S.M. 1997, c. 26, s. 12.

Temporary investment in body corporate

329.8(1)    A corporation may, by way of a temporary investment, acquire or increase a substantial investment in a body corporate, subject to the following conditions:

(a) after the acquisition or increase, the voting rights attached to the aggregate of any voting shares of the body corporate beneficially owned by the corporation and by any bodies corporate referred to in any of clauses 329.5(2)(a) to (n) that it controls shall not exceed 50% of the voting rights attached to all of the outstanding voting shares of the body corporate; and

(b) within two years, or such other period as may be specified by the Director after acquiring the substantial investment in the body corporate, the corporation shall do all things necessary to ensure that the corporation no longer has a substantial investment in the body corporate.

Temporary investments in unincorporated entity

329.8(2)    A corporation may, by way of a temporary investment, acquire or increase a substantial investment in an unincorporated entity, but within two years, or such other period as may be specified by the Director after acquiring the substantial investment the corporation shall do all things necessary to ensure that the corporation no longer has a substantial investment in the unincorporated entity.

Transitional

329.8(3)    Notwithstanding subsections (1) and (2), where on the day this section comes into force a corporation had an investment in an entity that is a substantial investment within the meaning of subsections 329.1(7) to (14) and the corporation subsequently increases that substantial investment by way of a temporary investment, the corporation shall, within two years, or such other period as may be specified by the Director, after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on that day.

Extension

329.8(4)    The Director may, in the case of any particular corporation, extend the period of two years, or the other period specified by the Director, referred to in subsections (1) to (3) for such further period or periods, and on such terms and conditions, as the Director considers necessary.

Exception

329.8(5)    Notwithstanding clause (1)(a), the Director may, on application therefor, by order, and on such terms and conditions as may be specified in the order, permit a corporation to purchase or otherwise acquire, by way of a temporary investment, voting shares of a body corporate in such number that, after the acquisition, the voting rights attached to the aggregate of any voting shares of the body corporate beneficially owned by the corporation and by any bodies corporate referred to in any of clauses 329.5(2)(a) to (n) that it controls exceed 50% of the voting rights attached to all of the outstanding voting shares of the body corporate.

S.M. 1997, c. 26, s. 12.

Loan workouts

329.9(1)    Notwithstanding anything in this Division, where a corporation has made a loan to an entity and, pursuant to the terms of the agreement between the corporation and the entity with respect to the loan and any other documents governing the terms of the loan, a default has occurred, the corporation may acquire

(a) where the entity is a body corporate, all or any of the shares of the body corporate;

(b) where the entity is an unincorporated entity, all or any of the ownership interests in the entity;

(c) all or any of the shares or all or any of the ownership interests in any entity that is an affiliate of the entity; or

(d) all or any of the shares of a body corporate that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates;

but the corporation shall within two years after acquiring the shares or ownership interests do all things necessary to ensure that the corporation does not have a substantial investment in any entity referred to in clauses (a) to (d).

Transitional

329.9(2)    Notwithstanding subsection (1), where on the day this section comes into force a corporation had an investment in an entity that is a substantial investment within the meaning of subsections 329.1(7) to (14) and the corporation subsequently increases that substantial investment by way of an investment made pursuant to subsection (1), the corporation shall, within two years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on that day.

Extension

329.9(3)    The Director may, in the case of any particular corporation, extend the period of two years referred to in subsections (1) and (2) for such further period or periods, and on such terms and conditions, as the Director considers necessary.

Exception for entities controlled by governments of foreign countries

329.9(4)    Notwithstanding anything in this Division, where a corporation has made a loan to, or holds a debt obligation of, the government of a foreign country or an entity controlled by the government of a foreign country and, pursuant to the terms of the agreement between the corporation and that government or the entity, as the case may be, and any other documents governing the terms of the loan or debt obligation, a default has occurred, the corporation may acquire all or any of the shares of, or ownership interests in, that entity, or in any other entity designated by that government, if the acquisition is part of a debt restructuring program of that government.

Time for holding shares

329.9(5)    Where a corporation acquires any shares or ownership interests, pursuant to subsection (4), the corporation, on such terms and conditions as the Director considers appropriate, may hold those shares or ownership interests for an indeterminate period or for such other period as the Director may specify.

S.M. 1997, c. 26, s. 12.

Realizations

329.10(1)   Notwithstanding anything in this Part, a corporation may acquire

(a) an investment in a body corporate;

(b) an interest in an unincorporated entity; or

(c) an interest in real property;

if the investment or interest is acquired through the realization of a security interest held by the corporation.

Disposition

329.10(2)   Subject to subsection (6), where, pursuant to the realization of a security interest held by a corporation, the corporation acquires a substantial investment in an entity, the corporation shall, within two years after the day on which the substantial investment was acquired, do all things necessary to ensure that the corporation no longer has a substantial investment in the entity.

Transitional

329.10(3)   Notwithstanding subsection (2), where on the day this section comes into force a corporation had an investment in an entity that is a substantial investment within the meaning of subsections 329.1(7) to (14) and the corporation subsequently increases that substantial investment by way of a realization of security pursuant to subsection (1), the corporation shall, within two years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on that day.

Extension

329.10(4)   The Director may, in the case of any particular corporation, extend the period of two years referred to in subsections (2) and (3) for such further period or periods, and on such terms and conditions, as the Director considers necessary.

Exception

329.10(5)   Where, pursuant to the realization of a security interest held by a corporation, the corporation acquires or increases a substantial investment in an entity that it would otherwise be permitted to acquire or increase pursuant to section 329.5, the corporation may continue to hold the substantial investment if the approval in writing of the minister is obtained prior to the expiration of the period referred to in subsection (2) or (3), including any extension thereof granted pursuant to subsection (4).

Requirement to sell

329.10(6)   Notwithstanding section 30, where a corporation or any of its subsidiaries, through the realization of security, acquires any shares of the corporation or of any body corporate that controls the corporation or any ownership interests in an unincorporated entity that controls the corporation, the corporation shall, or shall cause its subsidiaries to, as the case may be, within six months after the day of the realization, sell or otherwise dispose of the shares or ownership interests.

S.M. 1997, c. 26, s. 12.

Exclusion from portfolio limits

329.11(1)   Subject to subsection (3), the value of all loans, investments and interests acquired by a corporation and any of its prescribed subsidiaries as a result of a realization of a security interest or pursuant to section 329.9 shall not be included in calculating the value of loans, investments and interests of the corporation and its prescribed subsidiaries under sections 329.12 to 329.17

(a) for a period of 12 years following the day on which the interest was acquired, in the case of an interest in real property; and

(b) for a period of two years following the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property.

Extension

329.11(2)   The Director may, in the case of any particular corporation, extend any period referred to in subsection (1) for such further period or periods, and on such terms and conditions, as the Director considers necessary.

Exceptions

329.11(3)   Subsection (1) does not apply to any loan, investment or interest that is defined by regulation to be an interest in real property.

S.M. 1997, c. 26, s. 12.

Lending limit where regulatory capital not more than $25,000,000.

329.12      A corporation with $25,000,000. or less of regulatory capital shall not, and shall not permit its prescribed subsidiaries to,

(a) make or acquire a commercial loan; or

(b) acquire control of a body corporate referred to in any of clauses 329.5(2)(a) to (n) that holds commercial loans;

if the aggregate value of all commercial loans held by the corporation and its prescribed subsidiaries exceeds, or the acquisition or making of the commercial loan or the acquisition of control of the body corporate would cause the aggregate value of all commercial loans held by the corporation and its prescribed subsidiaries to exceed, 7% of the total assets of the corporation.

S.M. 1997, c. 26, s. 12.

Lending limit where regulatory capital more than $25,000,000.

329.13      A corporation with more than $25,000,000. of regulatory capital may

(a) make or acquire commercial loans; or

(b) acquire control of a body corporate referred to in any of clauses 329.5(2)(a) to (n) that holds commercial loans;

where the aggregate value of all commercial loans held by the corporation and its prescribed subsidiaries would thereby exceed 7% of the total assets of the corporation only with the prior approval in writing of the Director and in accordance with such terms and conditions as the Director may specify.

S.M. 1997, c. 26, s. 12.

Meaning of "total assets"

329.14      For the purposes of sections 329.12 and 329.13, "total assets", in respect of a corporation, has the meaning given it in the regulations.

S.M. 1997, c. 26, s. 12.

Limit on total property interest

329.15      A corporation shall not, and shall not permit its prescribed subsidiaries to,

(a) purchase or otherwise acquire an interest in real property; or

(b) make an improvement to any real property in which the corporation or any of its prescribed subsidiaries has an interest;

if the aggregate value of all interests of the corporation in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, 70% of the regulatory capital of the corporation.

S.M. 1997, c. 26, s. 12.

Limits on equity acquisitions

329.16      A corporation shall not, and shall not permit its prescribed subsidiaries to,

(a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of an entity referred to in section 329.5 in which the corporation has, or by virtue of the acquisition would have, a substantial investment; or

(b) acquire control of a body corporate that holds shares or ownership interests referred to in clause (a);

if the aggregate value of

(c) all participating shares, excluding participating shares of bodies corporate referred to in section 329.5 in which the corporation has a substantial investment; and

(d) all ownership interests in unincorporated entities;

beneficially owned by the corporation and its prescribed subsidiaries exceeds, or the purchase or acquisition would cause that aggregate value to exceed, 70% of the regulatory capital of the corporation.

S.M. 1997, c. 26, s. 12.

Aggregate limit

329.17      A corporation shall not, and shall not permit its prescribed subsidiaries to,

(a) purchase or otherwise acquire

(i) participating shares of a body corporate, other than those of a body corporate referred to in section 329.5 in which the corporation has, or by virtue of the acquisition would have, a substantial investment,

(ii) ownership interests in an unincorporated entity, or

(iii) interests in real property; or

(b) make an improvement to real property in which the corporation or any of its prescribed subsidiaries has an interest;

if the aggregate value of

(c) all participating shares and ownership interests referred to in subclauses (a)(i) and (ii) that are beneficially owned by the corporation and its prescribed subsidiaries; and

(d) all interests of the corporation in real property referred to in subclause (a)(iii);

exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, 100% of the regulatory capital of the corporation.

S.M. 1997, c. 26, s. 12.

Deemed temporary investment

329.18      Where a corporation has a substantial investment in an entity as permitted by this Part and the corporation becomes aware of a change in the business or affairs of the entity that, if the change had taken place prior to the acquisition of the substantial investment, would have precluded the acquisition, the corporation shall be deemed to have acquired, on the day the corporation becomes aware of the change, a temporary investment in respect of which clause 329.8(1)(b) or subsection 329.8(2) applies.

S.M. 1997, c. 26, s. 12.

Assets transactions

329.19      A corporation shall not, without the approval in writing of the Director, in any transaction or series of transactions with the same party during a period of 12 months, acquire or dispose of, directly or indirectly, assets, other than assets that are debt obligations referred to in subclauses (a)(ii), (iii), (iv) and (vi) of the definition "commercial loan" in subsection 329.1(1), having a value in excess of 10% of the total assets of the corporation as at the beginning of the 12 month period.

S.M. 1997, c. 26, s. 12.

Restriction on amount of single investment

329.20(1)   No corporation shall, directly or indirectly, make loans to or investments in any one person or to or in two or more persons that to the knowledge of the corporation are related, in an amount exceeding the greater of

(a) $500,000.; or

(b) 1% of the corporation's total assets.

Exceptions

329.20(2)   Subsection (1) does not apply so as to restrict

(a) investments in securities issued or guaranteed by the Government of Canada, including mortgages insured under the National Housing Act (Canada), by the government of any province of Canada or by any municipality in Canada;

(b) investments in debt instruments endorsed with recourse by a bank incorporated under an Act of the Parliament of Canada; or

(c) substantial investments in entities referred to in section 329.5 or 329.6.

S.M. 1997, c. 26, s. 12.

Transitional

329.21      Nothing in this Division requires

(a) the termination of a loan or a commitment to make a loan or investment or to increase a loan or investment; or

(b) the disposal of an investment;

made before the coming into force of this section but, if the loan or investment would be precluded or limited by this Division, the amount of the loan or investment shall not, except as provided in subsections 329.8(3), 329.9(2) and 329.10(3), or pursuant to a commitment referred to in clause (a), be increased after the coming into force of this section.

S.M. 1997, c. 26, s. 12.

Saving

329.22      A loan or investment referred to in section 329.21 is deemed not to be prohibited by the provisions of this Division.

S.M. 1997, c. 26, s. 12.

Restriction on residential mortgages

329.23(1)   A corporation shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 75% of the value of the property at the time of the loan.

Exception

329.23(2)   Subsection (1) does not apply in respect of

(a) a loan made or guaranteed under the National Housing Act (Canada) or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the corporation may make a loan is established;

(b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Director; or

(c) the acquisition by the corporation from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the corporation to the entity against the issue of such securities.

S.M. 1997, c. 26, s. 12.

DIVISION V

330 to 335  [Repealed]

S.M. 1997, c. 26, s. 14.

DIVISION VI

BORROWING POWERS AND STATUTORY LIMITS

Specific borrowing

336(1)      Notwithstanding any other provision of this Act,

(a) a trust corporation may hypothecate, mortgage or pledge assets of its guaranteed trust fund to the Canada Deposit Insurance Corporation as security for a loan from that Corporation; and

(b) a loan corporation shall not hypothecate, mortgage or pledge its real or personal property, or both, except to secure money to enable it to meet short term requirements for liquid funds arising from its operations.

Loan corporation securities

336(2)      A loan corporation may borrow money and may issue securities for money borrowed, and the securities may be made payable to order or to bearer or to the registered holder or otherwise as the corporation deems advisable, and the corporation may borrow money by the issue of subordinated notes, subject to subsection (4).

Restriction

336(3)      A trust corporation shall not borrow money by the issue of bonds or debentures but may, for the purpose of investment, borrow money by the issue of subordinated notes, subject to subsection (4).

Rules for issue of subordinated notes

336(4)      A corporation shall not issue a subordinated note otherwise than in accordance with subsection (5).

Features of subordinated notes

336(5)      A subordinated note

(a) shall be issued only on application to the registered office of the corporation;

(b) shall have a denomination of $25,000. or more;

(c) shall be clearly designated on its face as a subordinated note;

(d) shall clearly indicate in its terms that the indebtedness evidenced by it shall, in the event of the insolvency or winding-up of the corporation, rank equally with the indebtedness evidenced by other subordinated notes of the corporation but be subordinate in right of payment to all other indebtedness of the corporation except indebtedness in respect of subordinated shareholder loans; and

(e) shall have a fixed term to maturity, but may include a provision making it subject to earlier redemption at the option of the corporation and with the approval of the Director.

References to subordinated notes

336(6)      A corporation, or any person acting on its behalf, shall not, in any prospectus, advertisement, correspondence or literature relating to a subordinated note issued or to be issued by the corporation, refer to the note otherwise than as a subordinated note.

Limitation on amount borrowed

336(7)      Except as authorized by subsection (12), the aggregate of the amounts of money borrowed by a corporation and in addition, the guaranteed trust money held by a trust corporation shall not at any time exceed

(a) 12 1/2 times the unimpaired capital and reserve funds of the corporation; or

(b) such higher limit as is approved or prescribed by the Director under this section.

Increasing limit

336(8)      A corporation may, by resolution sanctioned by at least three-fourths of the votes cast at a general meeting of the corporation duly called for the purpose of considering the resolution,

(a) increase the limit mentioned in clause (7)(a) to such limit as the resolution provides; or

(b) authorize the directors to increase the limit mentioned in clause (7)(a) to such limit as they may provide from time to time by resolution, subject to the maximum limit specified in the resolution;

but no limit greater than that mentioned in clause (7)(a) shall be effective unless it is approved or prescribed by the Director under this section.

Director's powers

336(9)      The Director may, subject to subsection (10),

(a) approve the limit provided by the resolution; or

(b) prescribe a limit lower than the limit provided by the resolution;

and may revoke any approval or prescription of a limit and prescribe a lower limit in lieu thereof, but in no case shall the Director prescribe a limit lower than that mentioned in clause (7)(a).

Limit exceeding 20 times

336(10)     The Director shall not approve or prescribe a limit greater than 20 times the corporation's unimpaired capital and reserve funds unless he is satisfied that the financial condition of the corporation complies with the standards established pursuant to the regulations.

Limit exceeding 20 times

336(11)     Where the Director approves or prescribes a limit greater than twenty times the corporation's unimpaired capital and reserve funds, the corporation shall maintain outstanding subordinated notes issued by the corporation and having more than one year to run to maturity, in an amount not less than such proportion, if any, as the Director may from time to time specify, of the amount by which

(a) the aggregate of the amounts of money borrowed by a corporation and in addition, the guaranteed trust money held by the trust corporation;

exceeds

(b) 20 times the corporation's unimpaired capital and reserve funds.

Trust corporation limit exceeded

336(12)     The aggregate of the amounts of money borrowed and the guaranteed trust money held by a trust corporation may at any time exceed the limit otherwise imposed by or under this section

(a) by an amount not greater than the amount by which the aggregate of

(i) the cash

(A) owned by the trust corporation, or

(B) held by the trust corporation in respect of guaranteed trust money,

that is on hand or on deposit in a bank or other depository approved by the Director, and

(ii) the market value of the unencumbered debentures, bonds, stocks or other securities of or guaranteed by the Government of Canada or the government of a province, owned by the trust corporation or held by the trust corporation in respect of guaranteed trust money,

exceeds 20% of the aggregate of

(iii) the guaranteed trust money held by the trust corporation that is repayable on demand or on notice of less than 100 days,

(iv) the guaranteed trust money held by the trust corporation that will become repayable within 100 days,

(v) the unsecured debts of the trust corporation that are payable on demand or on notice of less than 100 days, and

(vi) the unsecured debts of the trust corporation that will become payable within 100 days; or

(b) subject to such terms and conditions as the Director deems appropriate, by an amount not greater than the sum of

(i) the amount calculated under clause (a), and

(ii) the product obtained by multiplying the outstanding amount of subordinated shareholder loans by the limit approved or prescribed by the Director under this section or, if no limit has been approved or prescribed, by 12 1/2.

Loan corporation limit exceeded

336(13)     The aggregate of the amounts of money borrowed by a loan corporation may at any time exceed the limit otherwise imposed by or under this section

(a) by an amount not greater than the amount by which the aggregate of

(i) the cash owned by the loan corporation and held on hand or on deposit in a bank or other depository approved by the Director, and

(ii) the market value of the unencumbered debentures, bonds, stocks or other securities of or guaranteed by the Government of Canada or the government of a province, owned by the loan corporation,

exceeds 20% of the aggregate of

(iii) the unsecured debts of the loan corporation that are payable on demand or on notice of less than 100 days, and

(iv) the unsecured debts of the loan corporation that will become payable within 100 days; or

(b) subject to such terms and conditions as the Director deems appropriate, by an amount not greater than the sum of

(i) the amount calculated under clause (a), and

(ii) the product obtained by multiplying the outstanding amount of subordinated shareholder loans by the limit approved or prescribed by the Director under this section or, if no limit has been so approved or prescribed, by 12 1/2.

S.M. 1997, c. 26, s. 15; S.M. 2002, c. 47, s. 30.

Regulations

337         The Lieutenant Governor in Council may make regulations respecting the establishment of standards for the purposes of subsection 336(10).

Canada Deposit Insurance Corporation Act

338         Notwithstanding the Canada Deposit Insurance Corporation Act (Canada) or any by-law made thereunder, money received by a corporation from the issue of a subordinated note or by way of a subordinated shareholder loan is deemed not to be a deposit for purposes of that Act.

DIVISION VII

LIQUIDITY REQUIREMENTS

Reserves for deposits

339(1)      A corporation shall at all times maintain

(a) cash on hand or on deposit in a bank or other depository approved by the Director;

(b) unencumbered debentures, bonds, shares or other securities of or guaranteed by the Government of Canada or of or guaranteed by the government of any province of Canada;

(c) loans payable on demand and fully secured by a class of security referred to in clause (b); and

(d) with the approval of the Director and subject to such conditions as the Director imposes, a credit from banks in Canada;

to an aggregate of at least 20% of the total amount of all securities, deposits and obligations of the corporation payable in less than 100 days.

Composition of reserves

339(2)      Of the amount maintained under clauses (1)(a), (1)(b) and (1)(d),

(a) at least 25% shall be maintained in cash on hand or on deposit in a bank or other depository approved by the Director and in unencumbered debentures, bonds, shares or other securities of or guaranteed by the Government of Canada maturing in three years or less; and

(b) at least 50% shall be maintained in cash on hand or on deposit in a bank or other depository approved by the Director and in unencumbered debentures, bonds, stocks or other securities of or guaranteed by the Government of Canada, maturing in 10 years or less.

339(3)      [Repealed] S.M. 1997, c. 26, s. 16.

S.M. 1997, c. 26, s. 16; S.M. 2002, c. 47, s. 30.

DIVISION VIII

SELF DEALING

340 to 342  [Repealed]

S.M. 1997, c. 26, s. 18.

Definition

342.1(1)    In this Division,

"loan" includes a deposit, a financial lease, a conditional sales contract, a repurchase agreement and any other similar arrangement for obtaining funds or credit, but does not include investments in securities or the making of an acceptance, endorsement or other guarantee; (« prêt »)

"officer" means

(a) in relation to a body corporate, a chief executive officer, president, vice-president, secretary, controller, treasurer and any other natural person designated as an officer of the body corporate by by-law or by resolution of the directors of the body corporate, and

(b) in relation to any other entity, any natural person designated as an officer of the entity by by-law, by resolution of the members of the entity or otherwise. (« dirigeant »)

Significant interest

342.1(2)    A person has a significant interest in a class of shares of a corporation where the aggregate of

(a) any shares of that class beneficially owned by the person; and

(b) any shares of that class beneficially owned by entities controlled by the person;

exceeds 10% of all of the outstanding shares of that class of shares of the corporation.

Increasing significant interest

342.1(3)    A person who has a significant interest in a class of shares of a corporation increases that significant interest in the class of shares where the person or any entity controlled by the person

(a) acquires beneficial ownership of additional shares of that class; or

(b) acquires control of any entity that beneficially owns shares of that class;

in such number as to increase the percentage of shares of that class that are beneficially owned by the person and by any entities controlled by the person.

Interpretation

342.1(4)    For the purposes of this Division,

(a) entering into a transaction with a related party of a corporation includes

(i) making a guarantee on behalf of the related party,

(ii) making an investment in any securities of the related party,

(iii) taking an assignment of or otherwise acquiring a loan made by a third party to the related party, and

(iv) taking a security interest in the securities of the related party; and

(b) the fulfilment of an obligation under the terms of any transaction, including the payment of interest on a loan or deposit, is part of the transaction, and not a separate transaction.

Interpretation

342.1(5)    For the purposes of this Division, a natural person is affiliated with a corporation where the person

(a) is an officer or employee of the corporation or of an affiliate of the corporation;

(b) has a significant interest in a class of shares of the corporation;

(c) has a substantial investment in an affiliate of the corporation;

(d) is a significant borrower in respect of the corporation;

(e) is an officer or employee of an entity that is a significant borrower in respect of the corporation;

(f) controls one or more entities of which the total indebtedness to the corporation or to an affiliate of the corporation would cause those entities, if treated as a single entity, to be a significant borrower of the corporation;

(g) provides goods or services to the corporation, or is a partner or an employee in a partnership that provides goods or services to the corporation or an officer or employee of, or a person who has a substantial investment in, a body corporate that provides goods or services to the corporation, if the total annual billings to the corporation in respect of the goods and services provided exceeds ten per cent of the total annual billings of the person, partnership or body corporate, as the case may be;

(h) has a loan that is not in good standing from the corporation or from an affiliate of the corporation or is a director, an officer or an employee of, or a person who controls, an entity that has a loan that is not in good standing from the corporation or from an affiliate of the corporation; or

(i) is the spouse or common-law partner of a person described in any of clauses (a) to (h).

S.M. 1997, c. 26, s. 19; S.M. 2002, c. 24, s. 15.

Acting in concert

342.2(1)    For the purposes of subsection 342.3(6), where two or more persons have agreed, pursuant to any agreement, commitment or understanding, whether formal or informal, verbal or written, to act jointly or in concert in respect of

(a) shares of a corporation that they beneficially own;

(b) shares or ownership interests that they beneficially own of any entity that beneficially owns shares of a corporation; or

(c) shares or ownership interests that they beneficially own of any entity that controls any entity that beneficially owns shares of a corporation;

those persons shall be deemed to be a single person who is acquiring beneficial ownership of the aggregate number of shares of the corporation or shares or ownership interests of the entity that are beneficially owned by them.

Acting in concert deemed

342.2(2)    Without limiting the generality of subsection (1), any agreement, commitment or understanding by or between two or more persons who beneficially own shares of a corporation or shares or ownership interests of any entity referred to in clause (1)(b) or (c),

(a) whereby any of them or their nominees may veto any proposal put before the board of directors of the corporation; or

(b) pursuant to which no proposal put before the board of directors of the corporation may be approved except with the consent of any of them or their nominees;

shall be deemed to be an agreement, commitment or understanding referred to in subsection (1).

Exceptions

342.2(3)    For the purposes of this section, persons shall be presumed not to have agreed to act jointly or in concert solely by reason of the fact that

(a) one is the proxyholder of one or more of the others in respect of shares or ownership interests referred to in subsection (1); or

(b) they vote the voting rights attached to shares or ownership interests referred to in subsection (1) in the same manner.

Designation

342.2(4)    Where in the opinion of the Director it is reasonable to conclude that an agreement, commitment or understanding referred to in subsections (1) and (2) exists by or among two or more persons, the Director may designate those persons as persons who have agreed to act jointly or in concert.

S.M. 1997, c. 26, s. 19.

Determination of substantial investment

342.3(1)    For the purpose of determining whether an entity or a person has a substantial investment for the purposes of any of clauses (4)(d) to (f), the references to "control" and "controlled" in subsections 329.1(7) to (14) shall be construed as references to "control, within the meaning of subsections 329.1(3) to (5), determined without regard to clause 329.1(3)(d)," and "controlled, within the meaning of subsections 329.1(3) to (5), determined without regard to clause 329.1(3)(d),", respectively.

Determination of control

342.3(2)    For the purposes of clause (4)(g), "controlled" means "controlled, within the meaning of subsections 329.1(3) to (5), determined without regard to clause 329.1(3)(d)".

Meaning of equity

342.3(3)    For the purposes of subsection (9), "equity" in respect of a corporation means the sum of the shareholders' equity of the corporation and the minority interests in entities controlled by the corporation as they appear in the consolidated financial statements of the corporation.

Related party of corporation

342.3(4)    For the purposes of this Division, a person is a related party of a corporation where the person

(a) is a person who has a significant interest in a class of shares of the corporation;

(b) is a director or an officer of the corporation or of a body corporate that controls the corporation or is acting in a similar capacity in respect of an unincorporated entity that controls the corporation;

(c) is the spouse, common-law partner, or a child who is less than 18 years of age, of a person described in clause (a) or (b);

(d) is an entity in which a director or an officer of the corporation has a substantial investment;

(e) is an entity in which a person who controls the corporation has a substantial investment;

(f) is an entity in which the spouse, common-law partner, or a child who is less than 18 years of age, of a person described in clause (d) or (e) has a substantial investment;

(g) is an entity that is controlled by a person referred to in any of clauses (a) to (c) or by an entity referred to in any of clauses (d) to (f); or

(h) is a person, or a member of a class of persons, designated under subsection (6) or (7) as, or deemed under subsection (8) to be, a related party of the corporation.

Exception

342.3(5)    An entity in which a corporation has a substantial investment is deemed not to be an entity referred to in clause (4)(e) unless the person referred to in that clause has a substantial investment in the entity otherwise than through the person's controlling interest in the corporation.

Designated related party

342.3(6)    For the purposes of this Division, the Director may, with respect to a particular corporation, designate as a related party of the corporation

(a) any person or class of persons whose direct or indirect interest in or relationship with the corporation or a related party of the corporation might reasonably be expected to affect the exercise of the best judgment of the corporation in respect of a transaction; or

(b) any person who is a party to any agreement, commitment or understanding referred to in section 342.2 if the corporation referred to in that section is the corporation referred to in this section.

Designated related party

342.3(7)    Where a person is designated as a related party of a corporation pursuant to subsection (6), the Director may also designate any entity in which the person has a substantial investment and any entity controlled by such an entity to be a related party of the corporation.

Deemed related party

342.3(8)    Where, in contemplation of a person becoming a related party of a corporation, the corporation enters into a transaction with the person, the person is deemed for the purposes of this Division to be a related party of the corporation in respect of that transaction.

Holders of exempted shares

342.3(9)    Notwithstanding clause (4)(a), a person shall be deemed not to be a related party of a corporation where the person would otherwise be a related party of the corporation by reason only that the person has a significant interest in a class of non-voting shares of the corporation that do not amount to more than 10% of the equity of the corporation.

Holding body corporate

342.3(10)   Where the holding body corporate of corporation is a financial institution incorporated by or under an Act of Canada or a province or territory of Canada, the holding body corporate is not a related party of the corporation under clause (4)(a).

S.M. 1997, c. 26, s. 19; S.M. 2002, c. 24, s. 15.

Non-application of this Division

342.4(1)    This Division does not apply in respect of any transaction entered into prior to the coming into force of this subsection but, after the coming into force of this subsection, any modification of, addition to, or renewal or extension of a prior transaction is subject to this Division.

Further non-application of this Division

342.4(2)    This Division does not apply in respect of

(a) money or other assets held in trust, other than guaranteed trust money and assets held in respect thereof;

(b) the issue of shares of any class of shares of a corporation when fully paid for in money or when issued

(i) in accordance with any provisions for the conversion of other issued and outstanding securities of the corporation into shares of that class of shares,

(ii) as a share dividend,

(iii) in exchange for shares of a body corporate that has been continued as a corporation under Part XIV,

(iv) in accordance with the terms of an amalgamation under Part XIV,

(v) by way of consideration in accordance with the terms of a sale agreement under section 318, or

(vi) with the approval in writing of the Director in exchange for shares of another body corporate;

(c) the payment of dividends by a corporation; or

(d) transactions that consist of the payment or provision by a corporation to persons who are related parties of the corporation of salaries, fees, stock options, pension benefits, incentive benefits or other benefits or remuneration in their capacity as directors, officers or employees of the corporation.

Exception

342.4(3)    Nothing in clause (2)(d) exempts from the application of this Division the payment by a corporation of fees or other remuneration to a person for

(a) the provision of services referred to in clause 342.12(1)(a); or

(b) duties outside the ordinary course of business of the corporation.

S.M. 1997, c. 26, s. 19.

Conduct review committee

342.5(1)    The directors of a corporation shall establish a conduct review committee to perform the duties referred to in subsection (3).

Membership of conduct review committee

342.5(2)    The conduct review committee of a corporation shall consist of at least three directors and majority of the members of the conduct review committee must consist of directors who are not persons affiliated with the corporation and none of the members of the conduct review committee may be officers or employees of the corporation or a subsidiary of the corporation.

Duties of conduct review committee

342.5(3)    The conduct review committee of a corporation shall

(a) establish procedures for the review of transactions with related parties of the corporation to which this Division applies;

(b) review all proposed transactions with related parties of the corporation in accordance with this Division; and

(c) review the practices of the corporation to ensure that any transactions with related parties of the corporation that may have a material effect on the stability or solvency of the corporation are identified.

Corporation report to Director

342.5(4)    A corporation shall report to the Director on the mandate and responsibilities of the conduct review committee and the procedures established by the committee under clause (3)(a).

Committee report to directors

342.5(5)    After each meeting of the conduct review committee of a corporation, the committee shall report to the directors of the corporation on all transactions and other matters reviewed by the committee.

Directors' report to Director

342.5(6)    Within 90 days after the end of each financial year, the directors of a corporation shall report to the Director on the proceedings of the conduct review committee and on all transactions and other matters reviewed by the committee during the year.

S.M. 1997, c. 26, s. 19.

Prohibited transactions

342.6(1)    Except as provided in this Division, a corporation shall not, directly or indirectly, enter into any transaction with a related party of the corporation.

Transaction of entity

342.6(2)    Without limiting the generality of subsection (1), a corporation is deemed to have indirectly entered into a transaction in respect of which this Division applies where the transaction is entered into by an entity that is controlled by the corporation.

Exception

342.6(3)    Subsection (2) does not apply where an entity that is controlled by a corporation is a financial institution incorporated or formed under the laws of Canada or a province or territory of Canada and is subject to regulation and supervision, satisfactory to the Director, regarding transactions with related parties of the corporation.

Exception re prescribed transactions

342.6(4)    Subsection (2) does not apply in respect of transactions entered into by an entity that is controlled by a corporation if the transaction is a prescribed transaction or is one of a class of prescribed transactions.

S.M. 1997, c. 26, s. 19.

Nominal value transactions

342.7       Notwithstanding anything in this Division, a corporation may enter into a transaction with a related party of the corporation if the value of the transaction is nominal or immaterial to the corporation when measured by criteria that have been established by the conduct review committee of the corporation and approved in writing by the Director.

S.M. 1997, c. 26, s. 19.

Secured loans

342.8       A corporation may make a loan to or a guarantee on behalf of a related party of the corporation or take an assignment of or otherwise acquire a loan to a related party of the corporation if

(a) the loan or guarantee is fully secured by securities of or guaranteed by the Government of Canada or the government of a province; or

(b) the loan is a loan permitted by section 329.23 made to a related party who is a natural person on the security of a mortgage of the principal residence of that related party.

S.M. 1997, c. 26, s. 19.

Deposits

342.9       A corporation may enter into a transaction with a related party of the corporation if the transaction consists of a deposit by the corporation with a financial institution that is a direct clearer or a member of a clearing group under the by-laws of the Canadian Payments Association and the deposit is made for clearing purposes.

S.M. 1997, c. 26, s. 19.

Borrowing from related party

342.10      A corporation may borrow money from, take deposits from, or issue debt obligations to, a related party of the corporation.

S.M. 1997, c. 26, s. 19.

Acquisition of assets

342.11(1)   A corporation may purchase or otherwise acquire from a related party of the corporation

(a) securities of, or securities guaranteed by, the Government of Canada or the government of a province;

(b) assets fully secured by securities of, or securities guaranteed by, the Government of Canada or the government of a province; or

(c) goods for use in the ordinary course of business.

Sale of assets

342.11(2)   Subject to section 329.19, a corporation may sell any assets of the corporation to a related party of the corporation if

(a) the consideration for the assets is fully paid in money; and

(b) there is an active market for those assets.

Asset transactions with financial institutions

342.11(3)   Notwithstanding any of the provisions of subsections (1) and (2), a corporation may, in the normal course of business and pursuant to arrangements that have been approved by the Director in writing, acquire or dispose of any assets, other than real property, from or to a related party of the corporation that is a financial institution.

Asset transactions in restructuring

342.11(4)   Notwithstanding any of the provisions of subsections (1) and (2), a corporation may acquire any assets from, or dispose of any assets to, a related party of the corporation as part of, or in the course of, a restructuring, if the acquisition or disposition has been approved in writing by the Director.

Goods or space for use in business

342.11(5)   A corporation may lease assets

(a) from a related party of the corporation for use in the ordinary course of business of the corporation; or

(b) to a related party of the corporation;

if the lease payments are made in money.

S.M. 1997, c. 26, s. 19.

Services

342.12(1)   A corporation may enter into a transaction with a related party of the corporation if the transaction

(a) subject to subsection (2), consists of a written contract for the purchase by the corporation of services used in the ordinary course of business;

(b) subject to subsection (4), involves the provision by the corporation of services, other than loans or guarantees, normally offered to the public by the corporation in the ordinary course of business;

(c) consists of a written contract with a financial institution or an entity in which the corporation is permitted to have a substantial investment pursuant to section 329.5 that is a related party of the corporation

(i) for the networking of any services provided by the corporation or the financial institution or entity, or

(ii) for the referral of any person by the corporation to the financial institution or entity, or for the referral of any person by the financial institution or entity to the corporation;

(d) consists of a written contract for such pension or benefit plans or their management or administration as are incidental to directorships or to the employment of officers or employees of the corporation or its subsidiaries; or

(e) involves the provision by the corporation of management, advisory, accounting, information processing or other services in relation to any business of the related party.

Order concerning management by employees

342.12(2)   Where a corporation has entered into a contract pursuant to clause (1)(a) and the contract, when taken together with all other such contracts entered into by the corporation, results in all or substantially all of the management functions of the corporation being exercised by persons who are not employees of the corporation, the Director may, by order, if the Director considers that result to be inappropriate, require the corporation, within such time as may be specified in the order, to take all steps necessary to ensure that management functions that are integral to the carrying on of business by the corporation are exercised by employees of the corporation to the extent specified in the order.

Service bodies corporate

342.12(3)   Notwithstanding subsection 342.6(2), a corporation shall be deemed not to have indirectly entered into a transaction in respect of which this Division applies where the transaction is entered into by a service body corporate, within the meaning of section 329.1, that is controlled by the corporation if subsection 342.19(1) is complied with.

S.M. 1997, c. 26, s. 19.

Directors and officers and their interests

342.13(1)   Subject to subsection (2) and sections 342.14 and 342.15, a corporation may enter into any transaction with a related party of the corporation if the related party is

(a) a natural person who is a related party of the corporation by reason only of being

(i) a director or an officer of the corporation or of an entity that controls the corporation, or

(ii) the spouse, common-law partner, or a child who is less than 18 years of age, of a director or an officer of the corporation or of an entity that controls the corporation; or

(b) an entity that is a related party of the corporation by reason only of being an entity

(i) in which a director or an officer of the corporation, or the spouse, common-law partner or a child who is less than 18 years of age of such person, has a substantial investment,

(ii) that is controlled by a director or an officer of an entity that controls the corporation, or the spouse, common-law partner or a child who is less than 18 years of age of such person, or

(iii) that is controlled by an entity in which a director or an officer of the corporation, or the spouse, common-law partner or a child who is less than 18 years of age of such person, has a substantial investment.

Loans to full-time officers

342.13(2)   A corporation may, with respect to a related party of the corporation referred to in subsection (1) who is a full-time officer of the corporation, make, take an assignment of or otherwise acquire a loan to the related party only if the aggregate principal amount of all outstanding loans to the related party that are held by the corporation and its subsidiaries, together with the principal amount of the proposed loan, does not exceed the greater of twice the annual salary of the related party and $100,000.

Exception

342.13(3)   Subsection (2) does not apply in respect of

(a) loans referred to in clause 342.8(b); and

(b) margin loans referred to in section 342.15;

and the amount of any such loans to a related party of a corporation shall not be included in determining, for the purposes of subsection (2), the aggregate principal amount of all outstanding loans made by the corporation to the related party.

Preferred terms

342.13(4)   Notwithstanding section 342.18, a corporation may make a loan, other than a margin loan, to an officer of the corporation on terms and conditions more favourable to the officer than those offered to the public by the corporation if those terms and conditions have been approved by the conduct review committee of the corporation.

Preferred terms

342.13(5)    Notwithstanding section 342.18, a corporation may make a loan referred to in clause 342.8(b) to the spouse or common-law partner of an officer of the corporation on terms and conditions more favourable to the spouse or common-law partner of that officer than those offered to the public by the corporation if those terms and conditions have been approved by the conduct review committee of the corporation.

Preferred terms

342.13(6)   Notwithstanding section 342.18, a corporation may offer financial services, other than loans or guarantees, to an officer of the corporation, or to the spouse, common-law partner or a child who is less than 18 years of age of an officer of the corporation, on terms and conditions more favourable than those offered to the public by the corporation where

(a) the financial services are offered by the corporation to employees of the corporation on such favourable terms and conditions; and

(b) the approval of the conduct review committee of the corporation has been obtained.

S.M. 1997, c. 26, s. 19; S.M. 2002, c. 24, s. 15.

Board approval required

342.14(1)   Except with the concurrence of at least two thirds of the directors present at a meeting of the board of directors of the corporation, a corporation shall not, with respect to a related party of the corporation referred to in subsection 342.13(1),

(a) make, take an assignment of or otherwise acquire a loan to the related party, including a margin loan referred to in section 342.15;

(b) make a guarantee on behalf of the related party; or

(c) make an investment in the securities of the related party;

if, immediately following the transaction, the aggregate of

(d) the principal amount of all outstanding loans to the related party that are held by the corporation and its subsidiaries, other than

(i) loans referred to in clause 342.8(b), and

(ii) where the related party is a full-time officer of the corporation, loans to the related party that are permitted by subsection 342.13(2);

(e) the sum of all outstanding amounts guaranteed by the corporation and its subsidiaries on behalf of the related party; and

(f) where the related party is an entity, the book value of all investments by the corporation and its subsidiaries in the securities of the entity

would exceed 2% of the regulatory capital of the corporation.

Limit on transactions with directors and officers

342.14(2)   A corporation shall not, with respect to a related party of the corporation referred to in subsection 342.13(1),

(a) make, take an assignment of or otherwise acquire a loan to the related party, including a margin loan referred to in section 342.15;

(b) make a guarantee on behalf of the related party; or

(c) make an investment in the securities of the related party;

if, immediately following the transaction, the aggregate of

(d) the principal amount of all outstanding loans to all related parties of the corporation referred to in subsection 342.13(1) that are held by the corporation and its subsidiaries, other than

(i) loans referred to in section 342.8, and

(ii) loans permitted by subsection 342.13(2);

(e) the sum of all outstanding amounts guaranteed by the corporation and its subsidiaries on behalf of all related parties of the corporation referred to in subsection 342.13(1); and

(f) the book value of all investments by the corporation and its subsidiaries in the securities of all entities that are related parties of the corporation referred to in subsection 342.13(1);

would exceed 50% of the regulatory capital of the corporation.

Exclusion of nominal value transactions

342.14(3)   Loans, guarantees and investments that are referred to in section 342.7 shall not be included in calculating the aggregate of loans, guarantees and investments referred to in subsections (1) and (2).

S.M. 1997, c. 26, s. 19.

Margin loans

342.15      The Director may establish terms and conditions with respect to the making by a corporation of margin loans to any director or officer of the corporation.

S.M. 1997, c. 26, s. 19.

Exemption by order

342.16(1)   A corporation may enter into a transaction with a related party of the corporation if the minister, by order, on the advice of the Director, has exempted the transaction from the provisions of section 342.6.

Order may contain condition or limitation

342.16(2)   An order made by the minister under subsection (1) may contain any condition or limitation the minister considers appropriate.

Conditions for order

342.16(3)   The minister shall not make an order referred to in subsection (1) unless the minister is satisfied that the decision of the corporation to enter into the transaction has not been and is not likely to be influenced in any significant way by a related party of the corporation and does not involve in any significant way the interests of a related party of the corporation.

S.M. 1997, c. 26, s. 19.

Prescribed transactions

342.17      A corporation may enter into a transaction with a related party of the corporation if the transaction is a prescribed transaction or one of a class of prescribed transactions.

S.M. 1997, c. 26, s. 19.

Definition

342.18(1)   In this section, "market terms and conditions" means

(a) in respect of a service or a loan facility or a deposit facility offered to the public by the corporation in the ordinary course of business, terms and conditions that are no more or less favourable than those offered to the public by the corporation in the ordinary course of business; and

(b) in respect of any other transaction, terms and conditions, including those relating to price, rent or interest rate, that might reasonably be expected to apply in a similar transaction in an open market under conditions requisite to a fair transaction between parties who are at arm's length and acting prudently, knowledgeably and willingly.

Market terms and conditions

342.18(2)   Except as provided in subsections 342.13(4) to (6), any transaction entered into with a related party of the corporation shall be on terms and conditions that are at least as favourable to the corporation as market terms and conditions.

S.M. 1997, c. 26, s. 19.

Pre-approval by conduct review committee

342.19(1)   No corporation shall enter into any transaction permitted by this Division, except as provided in subsections 342.13(4) to (6), unless the conduct review committee of the corporation is satisfied that the transaction is on terms and conditions at least as favourable to the corporation as market terms and conditions, within the meaning of section 342.18, and has approved the transaction.

General arrangements

342.19(2)   Nothing in this section precludes the conduct review committee of a corporation from approving a general arrangement covering a number or series of transactions of a similar type or nature that may be entered into or made during the term of the arrangement.

Annual review

342.19(3)   An arrangement that is approved under subsection (2) shall be reviewed by the conduct review committee at least once a year during the term of the arrangement.

Exception

342.19(4)   The approval of the conduct review committee under this section need not be obtained in respect of

(a) transactions in respect of which subsection 342.14(1) applies;

(b) transactions entered into pursuant to section 342.7; and

(c) such transactions as are prescribed to be exempted from the requirements of this section.

S.M. 1997, c. 26, s. 19.

Subsequent transactions

342.20      No corporation shall enter into any transaction, other than a transaction referred to in clause 342.19(4)(b) or (c), with any person who has ceased to be a related party of the corporation during the period of 12 months after the date on which the person ceased to be a related party of the corporation, unless the conduct review committee of the corporation is satisfied that the transaction is on terms and conditions at least as favourable to the corporation as market terms and conditions, within the meaning of section 342.18, and has approved the transaction.

S.M. 1997, c. 26, s. 19.

Corporation obligation

342.21(1)   Where, in respect of any proposed transaction permitted by this Division, other than those referred to in section 342.7, a corporation has reason to believe that the other party to the transaction is a related party of the corporation, the corporation shall take all reasonable steps to obtain from the other party full disclosure, in writing, of any interest or relationship, direct or indirect, that would make the other party a related party of the corporation.

Reliance on information

342.21(2)   A corporation and any person who is a director or an officer, employee or agent of the corporation may rely on any information contained in any disclosure received by the corporation pursuant to subsection (1) or any information otherwise acquired in respect of any matter that might be the subject of such a disclosure and no action lies against the corporation or any such person for anything done or omitted in good faith in reliance on any such information.

S.M. 1997, c. 26, s. 19.

Notice to Director

342.22      Where a corporation has entered into a transaction that the corporation is prohibited from entering into by this Division or where a corporation has entered into a transaction for which approval is required under subsection 342.14(1) or 342.19(1) or section 342.20 without having obtained the approval, the corporation shall, on becoming aware of that fact, forthwith notify the Director.

S.M. 1997, c. 26, s. 19.

Voidable contracts

342.23(1)   Where a corporation enters into a transaction that it is prohibited from entering into by this Division, the corporation or the Director may apply to a court for an order setting aside the transaction and directing that the related party of the corporation involved in the transaction account to the corporation for any profit or gain realized.

Court order

342.23(2)   On an application to a court under subsection (1), the court may make such order as it thinks fit, including an order for compensation for any loss or damage incurred by the corporation.

Time limit

342.23(3)   An application under subsection (1) in respect of a particular transaction may only be made within the period of three months following the day the notice referred to in section 342.22 in respect of the transaction is given to the Director.

S.M. 1997, c. 26, s. 19.

DIVISION IX

SHAREHOLDER RESIDENCE REQUIREMENTS AND RESTRICTIONS

Report of transfer of shares

343(1)      Where a transfer is proposed of

(a) 10% or more of the total outstanding shares of a corporation; or

(b) any number of shares of a corporation being less than 10% of the total outstanding shares of the corporation if the corporation has reason to believe that the transfer of those shares would result, directly or indirectly, in the acquisition of majority control of the voting shares of the corporation by any person;

the corporation shall deposit with the Director notice of the proposed transfer of shares, including with the notice information concerning the beneficial ownership of the shares after the transfer is effected; and the transfer shall not be entered in the register maintained pursuant to section 46 until the transfer of shares has been approved by the Director.

Restriction on voting rights

343(1.1)    Where, with respect to any corporation, a person contravenes subsection (1), no person and no entity controlled by that person, shall in person or by proxy, exercise any voting rights attached to the shares of the corporation beneficially owned by the person or any entity controlled by the person but this restriction shall cease to apply in respect of a person

(a) when the shares to which the contravention relates have been disposed of; or

(b) when the Director, upon receiving the notice and information referred to in subsection 343(1) whether before or after the transfer is recorded in the register, approves the transfer of the shares.

Aggregate transfers

343(2)      A series of transfers of shares within any period of three months to any one person that in the aggregate totals 10% or more of the issued shares of a corporation is a transfer of those shares within the meaning of subsection (1).

Report of allotment and issue

343(3)      The restrictions imposed by subsections (1) and (2) apply similarly to the allotment and issue of shares.

S.M. 1997, c. 26, s. 20; S.M. 2008, c. 42, s. 14.

Definitions

344(1)      In this section, and in section 345 to 349,

"company" includes an association, partnership, body corporate or other organization; (« compagnie »)

"entered" or "entry" means entered or entry, as the case may be, in the registers required to be maintained under sections 20 and 46; (« inscrit » ou « inscription »)

"non-resident" means

(a) an individual who is not ordinarily resident in Canada, or

(b) a company incorporated, formed or otherwise organized elsewhere than in Canada, or

(c) a company that is controlled directly or indirectly by non-residents as defined in sub-clause (a) or (b), or

(d) a trust established by a non-resident as defined in sub-clause (a), (b) or (c), or a trust in which non-residents as defined in those sub-clauses have more than 50% of the beneficial interest, or

(e) a company that is controlled, directly or indirectly, by a trust as defined in sub-clause (d); (« non-résidents »)

"resident" means an individual, company or trust that is not a non-resident. (« résident »)

Associated shareholders

344(2)      For the purposes of sections 345 to 349, a shareholder is deemed to be associated with another shareholder if

(a) one shareholder is a company of which the other shareholder is an officer or director; or

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

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

(d) both shareholders are companies and one shareholder is controlled, directly or indirectly, by the same individual or company that controls, directly or indirectly, the other shareholder; or

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

(f) both shareholders are associated within the meaning of clauses (a) to (e) with the same shareholder.

Shares held jointly

344(3)      For the purposes of sections 345 to 349, where a share of the capital of a corporation is held jointly and one or more of the joint holders is a non-resident, the share is deemed to be held by a non-resident.

S.M. 2008, c. 42, s. 14.

Limit on shares held by non-residents

345(1)      The directors of a corporation shall refuse to permit the entry of a transfer of any share of the capital of the corporation to a non-resident

(a) if, when the total number of shares of the capital of the corporation held by non-residents exceeds 25% of the total number of issued and outstanding shares of the corporation, that entry would increase the percentage of shares held by non-residents; or

(b) if, when the total number of shares of the capital of the corporation held by non-residents is 25% or less of the total number of issued and outstanding shares of the corporation, that entry would cause the total number of shares held by non-residents to exceed 25% of the total number of issued and outstanding shares of the corporation; or

(c) if, when the total number of shares of the capital of the corporation held by the non-resident and by other shareholders associated with him, if any, exceeds 10% of the total number of issued and outstanding shares of the corporation, that entry would increase the percentage of shares held by the non-resident and by the other shareholders associated with him, if any; or

(d) if, when the total number of shares of the capital of the corporation held by the non-resident and by other shareholders associated with him, if any, is 10% or less of the total number of issued and outstanding shares of the corporation, that entry would cause the number of shares held by the non-resident and by the other shareholders associated with him, if any, to exceed 10% of the issued and outstanding shares of the corporation.

Exception

345(2)      Notwithstanding subsection (1), the directors of a corporation may permit the entry of a transfer of any share of the capital of the corporation to a non-resident when it is shown to the directors on evidence satisfactory to them that the share was, prior to June 18, 1971, held in the right of or for the use or benefit of the non-resident.

Allotment to non-resident

345(3)      The directors of a corporation shall not allot, or permit the allotment of, any shares of the capital of the corporation to a non-resident in circumstances where, if the allotment were a transfer, the entry thereof would be required, under subsection (1), to be refused by the directors.

Penalty

345(4)      Default in complying with this section does not affect the validity of a transfer or allotment of a share of the capital of the corporation that has been entered, but every director or officer who knowingly authorizes or permits the default is guilty of an offence and is liable, on summary conviction, to a fine of not more than $5,000. or to imprisonment for a term of not more than one year, or both.

Voting by non-residents

346(1)      A non-resident shall not exercise the voting rights attached to shares of a corporation unless he is entered as a shareholder in respect of the shares.

Voting rights of nominees suspended

346(2)      Where a resident holds shares of the capital of a corporation in the right of or for the use or benefit of a non-resident and in respect of which the non-resident is not entered as the holder, the resident shall not, either in person or by proxy or by a voting trust, exercise the voting rights pertaining to those shares.

Change of status while entered

346(3)      Where a resident becomes a non-resident while entered as a shareholder, and the number of shares entered as owned by that shareholder, together with those entered as owned by other non-residents, exceed the limit set out in section 345, the shareholder shall not exercise, directly, by proxy or by a voting trust, any voting rights in respect of the shares that exceed that limit.

Voting rights where associated shareholders

346(4)      Notwithstanding subsections (1), (2) and (3), where any shares of the capital of a corporation are held in the name of or for the use or benefit of a non-resident, other than shares in respect of which the non-resident was entered before this section comes into force or is entered under subsection 345(2), no person shall, either directly or as proxy or by a voting trust, exercise the voting rights pertaining to those shares, if the total thereof together with any shares held in the name or right of or for the use or benefit of,

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

(b) any person who would, under subsection 344(2), be deemed to be associated with the non-resident were such person and the non-resident themselves shareholders;

exceed in number 10% of the issued and outstanding shares of the corporation.

Penalty

346(5)      Every person who knowingly contravenes this section is guilty of an offence and is liable, on summary conviction, to a fine of not more than $5,000. or to imprisonment for a term of not more than one year, or both.

Effect of contravention

346(6)      If any provision of this section is contravened at a general meeting of the corporation, no proceeding, matter or thing at that meeting is void by reason only of the contravention, but is voidable at the option of the shareholders by a resolution passed at a special general meeting of the corporation at any time within one year from the day of commencement of the general meeting at which the contravention occurred.

By-laws and resolutions

347(1)      The directors of a corporation may pass such resolutions or by-laws as they consider necessary to carry out the intent of sections 345 and 346 and, in particular but without restricting the generality of the foregoing, may pass resolutions or by-laws

(a) requiring any person holding a share of the capital of the corporation to submit a written declaration as to

(i) the ownership of the share,

(ii) the place in which the shareholder and any person for whose use or benefit the share is held are ordinarily resident,

(iii) whether the shareholder is associated with any other shareholder, and

(iv) such other matters as the directors consider relevant for the purposes of those sections;

(b) prescribing the time and manner of submission of the declaration described in clause (a); and

(c) requiring any person desiring to have a transfer of a share to him entered, to submit the same declaration as may be required under this section in the case of a shareholder.

Where declaration required

347(2)      Where, by or under any by-law or resolution made under subsection (1), a declaration is required to be submitted in respect of the transfer of a share, the directors may refuse to permit the entry of the transfer until the required declaration is completed and submitted.

Penalty

347(3)      Any person who makes a wilfully false or deceptive statement in a declaration required by a by-law or resolution made under subsection (1) is guilty of an offence and is liable, on summary conviction, to a fine of not more than $5,000. or to imprisonment for a term of not more than one year, or both.

Liability of directors

348         In determining, for the purposes of sections 344 to 347, whether a person is a resident or non-resident, by whom a corporation is controlled or any other circumstances relevant to the performance of their duties under those sections, the directors of the corporation may rely upon any statement made in a declaration submitted under section 347, or upon their own knowledge of the circumstances; and the directors are not liable in any action for anything done or omitted by them in good faith on the basis of that statement or knowledge.

DIVISION X

EXAMINATION OF CORPORATIONS

Examination and report by Director

349(1)      The Director shall visit personally or cause a duly qualified member of his or her staff or a duly qualified agent to visit, at least once in each year, the registered office in Manitoba of each corporation to which this Part applies, and examine carefully the statements of the condition and affairs of the corporation, and report thereon to the minister as to all matters requiring his or her attention and decision.

Inspection of books

349(2)      In addition to the statement and return required under section 121 for the purpose of an examination under subsection (1), the corporation and its subsidiaries shall within 60 days of its fiscal year end prepare and submit to the Director or person conducting the examination statements with respect to the business, finances or other affairs of the corporation and its subsidiaries required by the Director or person conducting the examination, and the officers, agents, and servants of the corporation and its subsidiaries shall cause their books to be open for inspection and shall otherwise facilitate the examination so far as it is within their power.

349(3)      [Repealed] S.M. 1997, c. 26, s. 22.

Examination under oath

349(4)      The Director, or some person appointed by him or her for the purpose, may examine under oath the officers, agents and employees of the corporation and its subsidiaries for the purpose of obtaining any information he or she considers necessary for the purpose of the examination, audit or inspection.

349(5)       [Repealed] S.M. 1997, c. 26, s. 22.

S.M. 1993, c. 18, s. 10; S.M. 1997, c. 26, s. 22.

Examination by Director

349.1       The Director, or a person designated by the Director,

(a) may at any reasonable time examine any books, vouchers, securities and documents of or in the possession of a corporation or extra-provincial corporation with a business authorization or any of its subsidiaries relating to its business, wherever situated; and

(b) may require the directors, officers and auditor of a corporation or extra-provincial corporation with a business authorization to provide information and explanations, to the extent that they are reasonably able to do so, in respect of the condition and affairs of the corporation or its subsidiaries.

S.M. 1997, c. 26, s. 23.

Director's direction to corporation

349.2(1)    Where, in the opinion of the Director, a corporation or an extra-provincial corporation, or a person with respect to it, is committing, or is about to commit, an act that is an unsafe or unsound practice in conducting the business of the corporation or extra-provincial corporation, or is pursuing or is about to pursue any course of conduct that is an unsafe or unsound practice in conducting the business of the corporation or extra-provincial corporation, the Director may direct the corporation, extra-provincial corporation or person to

(a) cease or refrain from committing the act or pursuing the course of conduct; and

(b) perform such acts as in the opinion of the Director are necessary to remedy the situation.

Opportunity for representations

349.2(2)    Subject to subsection (3), no direction shall be issued to a corporation, extra-provincial corporation or person under subsection (1) unless the corporation, extra-provincial corporation or person is provided with a reasonable opportunity to make representations in respect of the matter.

Temporary direction

349.2(3)    Where, in the opinion of the Director, the length of time required for representations to be made under subsection (2) might be prejudicial to the public interest, the Director may make a temporary direction with respect to the matters referred to in clauses (1)(a) and (b) having effect for a period of not more than 15 days.

Continuation of temporary direction

349.2(4)    Subject to subsection (5), a temporary direction under subsection (3) continues to have effect after the expiration of the 15 day period referred to in that subsection if no representations are made to the Director within that period or, if representations have been made, the Director notifies the corporation, extra-provincial corporation or person that the Director is not satisfied that there are sufficient grounds for revoking the direction.

Appeal from Director's decision

349.2(5)    A corporation, extra-provincial corporation or person in respect of which or to whom a direction has been issued under subsection (1) or (3) may, by notice in writing served on the minister and the Director not later than

(a) 15 days after the date of the direction; or

(b) in the case of a temporary direction that is continued pursuant to subsection (4), 30 days after the date of the direction;

appeal the matter to the minister, and on any such appeal, the minister may allow or dismiss the appeal or make such other order as he or she considers appropriate in the circumstances.

No stay on appeal

349.2(6)    A direction or temporary direction shall not be stayed by an appeal under subsection (5) without the consent in writing of the Director.

S.M. 1997, c. 26, s. 23.

350         [Repealed]

S.M. 1997, c. 26, s. 24.

Report to minister

351(1)      Where the Director is of the opinion

(a) that a corporation is in violation of subsections 336(7) to (13);

(b) that any asset appearing on the books or records of a corporation or held in trust by or under the administration of the corporation is not satisfactorily accounted for;

(c) that a corporation has failed to pay any liability that has become due and payable, or will not be able to pay its liabilities as they become due and payable, or, the assets of a corporation are not sufficient, having regard to all the circumstances, to give adequate protection to persons who have been issued securities of the corporation, or who have entrusted money to the corporation for investment the repayment of which is guaranteed by the corporation, or to creditors of the corporation;

(d)  that there exists any other state of affairs within a corporation that is or may be materially prejudicial to persons who have been issued securities of the corporation, or who have entrusted money to the corporation for investment the repayment of which is guaranteed by the corporation, or to creditors of the corporation; or

(e) a corporation with a business authorization, or a person who is a shareholder, director, officer, employee or agent of the corporation, has failed to comply with a direction issued to the corporation or the person under subsection 349.2(1) or (3);

he or she shall so report to the minister.

Remedial powers of minister

351(2)      Where the minister, after due consideration and after a reasonable opportunity has been provided to a corporation or a person to make representations, believes that any circumstances described in subsection (1) exist, the minister may

(a) fix a time within which the corporation or the person, as the case may be, must

(i) correct the non-compliance referred to in clause (1)(d),

(ii) produce satisfactory accounts,

(iii) make good the deficiency of assets referred to in clause (1)(a) or (b), or

(iv) cease the practice or remedy the state of affairs; or

(b) direct the Director to take control of the corporation.

Immediate order

351(3)      Where, in the opinion of the minister, the length of time required for representations to be made under subsection (2) might be prejudicial to the public interest, the minister may make an immediate direction with respect to the matters referred to in subsection (2).

Direction to Director to take control

351(4)      On the failure of a corporation or a person to

(a) correct the non-compliance;

(b) produce satisfactory accounts;

(c) make good the deficiency of assets; or

(d) cease the practice or remedy the state of affairs;

within the time that may have been fixed pursuant to clause (2)(a) or any extension thereof subsequently given by the minister, the minister may direct the Director to take control of the corporation.

Appointment of appraisers

351(5)      For the purpose of carrying out this section, the minister may appoint such persons as the minister considers necessary to appraise and report on the condition of the corporation and its ability to meet its obligations and guarantees, and the remuneration of any person so appointed shall be fixed by the minister and included in the expenditure assessed against the corporation under subsection 354(3) or (4).

S.M. 1993, c. 18, s. 11; S.M. 1997, c. 26, s. 25.

Effect of Director's control

352(1)      Where the Director has control of a corporation under section 351,

(a) the corporation shall not make, acquire or transfer any loan or make any purchase, sale or exchange of securities or any disbursement or transfer of cash of any kind without the prior approval of the Director or a representative designated by him or her;

(b) no director, officer or employee of the corporation shall have access to any cash or securities held by or under the administration of the corporation unless

(i) a representative of the Director accompanies the director, officer or employee, or

(ii) the access is previously authorized by the Director or the Director's representative; and

(c) expenses incurred by the Director in having control of the corporation shall be included in the expenditure assessed against the corporation under subsection 354(4).

Objectives of Director

352(1.1)    Where the Director has control of a corporation under section 351, he or she may do all things necessary or expedient to protect the rights and interests of the creditors of the corporation or the beneficiaries of any trust under the administration of the corporation.

Powers of directors and officers suspended

352(1.2)    Where the Director has control of a corporation under section 351, the powers, duties, functions, rights and privileges of the directors and officers of the corporation responsible for its management are suspended.

Director to manage corporation

352(1.3)    Where the Director has control of a corporation under section 351, the Director shall manage the business and affairs of the corporation, and in so doing, the Director

(a) may perform any of the duties and functions that the persons referred to in subsection (1.2) were performing prior to the taking of control; and

(b) has and may exercise any power, right or privilege that any such person had or could have exercised prior to the taking of control.

Not liable as director

352(1.4)    Where the Director has control of a corporation, neither the Director nor the minister is a director of the corporation and neither is liable as a director of the corporation.

Application to court

352(2)      While the Director has control of a corporation under section 351, the minister may apply to the court for an order for the liquidation of the corporation.

Persons to assist

352(3)      Where the Director has control of a corporation under section 351, he or she may appoint one or more persons to manage and operate the business of the corporation and

(a) each person so appointed is a representative of the Director; and

(b) the remuneration of any persons appointed under clause (a) shall be fixed by the Director and shall be included, together with any other expenses incurred by the Director in the management of the corporation, in the expenditure assessed against the corporation under subsection 354(4).

S.M. 1997, c. 26, s. 26.

353         [Repealed]

S.M. 1997, c. 26, s. 27.

Revesting control in the corporation

354(1)      Where the minister believes that a corporation in the control of the Director meets all the requirements of this Act and that it is otherwise proper for the corporation to resume control of its property and the conduct of its business, he or she may direct the Director to relinquish control of the corporation, subject to such terms and conditions, if any, as the minister thinks fit, and from the date specified in the direction the powers of the Director under section 352 cease.

354(2)      [Repealed] S.M. 1997, c. 26, s. 28.

Payment of expenses

354(3)      Where the Director relinquishes control of a corporation under subsection (1), the corporation is liable for repayment of all expenses incurred by the Director in accordance with or assessed against the corporation under section 352 and interest in respect thereof on such terms and conditions as may be approved by the Director.

Expenses on liquidation

354(4)      Where a corporation is liquidated under subsection 352(2) or subsection (2), expenses assessed against the corporation in accordance with section 352, and interest in respect thereof as approved by the Director, constitute a claim against the assets of the corporation that ranks after all other claims but prior to any claim in respect of the subordinated debt and the shares of the corporation.

Sales prior to liquidation

354(5)      Notwithstanding this section or section 352, the directors of a corporation against whom a seizure, direction or order is made under section 351, 352 or this section, may, at any time before a liquidation order is issued by the court, negotiate for the sale of the assets of the corporation and for the transfer of its liabilities to some other corporation under section 318.

S.M. 1997, c. 26, s. 28.

Application to court

354.1(1)    Notwithstanding any other provision of this Act, where the Director has control of a corporation under section 351, the minister may apply to the court for an order

(a) authorizing some other person to conduct the business of the corporation on the terms and conditions the court considers appropriate;

(b) authorizing and directing the sale of the assets of the corporation in whole or in part;

(c) appointing an interim or permanent substitute trustee in respect of all or any part of the fiduciary obligations and duties of the corporation;

(d) staying any civil proceeding against the corporation while the Director is in control of the corporation; or

(e) authorizing or directing any other action the court considers appropriate and in the best interest of the depositors, the persons for whom the corporation acts in a fiduciary capacity, the creditors and the public.

Substituted trustee

354.1(2)    Where the court makes an order under subsection (1)(c), the fiduciary duties vest in, bind and may be enforced against the substituted trustee as fully and effectually as if the substituted trustee were originally named as trustee.

S.M. 1997, c. 26, s. 29.

355         [Repealed]

S.M. 1997, c. 26, s. 30.

Divestment order

356(1)      The Director may, by order, direct a corporation to dispose of, within such period as the Director considers reasonable, any loan, investment or interest made or acquired in contravention of this Part.

Divestment order - control

356(2)      Where, in the opinion of the Director,

(a) an investment by a corporation or any entity it controls in shares of a body corporate or in ownership interests in an unincorporated entity enables the corporation to control the body corporate or the unincorporated entity; or

(b) the corporation or any entity it controls has entered into an arrangement whereby it or its nominee may veto any proposal put before

(i) the board of directors of a body corporate, or

(ii) a similar group or committee of an unincorporated entity,

or whereby no proposal may be approved except with the consent of the corporation, the entity it controls or the nominee;

the Director may, by order, require the corporation, within such period as the Director considers reasonable, to do all things necessary to ensure that the corporation no longer controls the body corporate or unincorporated entity or has the ability to veto or otherwise defeat any proposal referred to in clause (b).

Divestment order re undertakings

356(3)      Where

(a) a corporation

(i) fails to provide or obtain within a reasonable time the undertakings referred to in subsection 329.7(1) or (3), or

(ii) is in default of an undertaking referred to in subsection 329.7(1) and the default is not remedied within 90 days after the day of receipt by the corporation of a notice from the Director of the default; or

(b) a body corporate referred to in subsection 329.7(3) is in default of an undertaking referred to in subsection 329.7(3) and the default is not remedied within 90 days after the day of receipt by the corporation of a notice from the Director of the default;

the Director may, by order, require the corporation, within such period as the Director considers reasonable, to do all things necessary to ensure that the corporation no longer has a substantial investment in the body corporate to which the undertaking relates.

Exception

356(4)      Subsection (2) does not apply in respect of an entity in which a corporation has a substantial investment permitted by this Part.

S.M. 1997, c. 26, s. 31.

357 and 358 [Repealed]

S.M. 1997, c. 26, s. 32.

Recovery of costs

359(1)      Where an examination of a corporation is made under subsection 349(1), the Director may require the corporation to pay the costs incurred in connection with the examination in accordance with the method specified in the regulations for allocating the costs.

Assessment a debt payable to government

359(2)      The amount assessed against each corporation under subsection (1) constitutes a debt payable to the government, and shall be payable to the Director on demand, and may be recovered as a debt in the court.

S.M. 1997, c. 26, s. 33.

360(1)      [Repealed] S.M. 1997, c. 26, s. 34.

Agreements

360(2)      Notwithstanding anything in this or any other Act of the Legislature, with the approval of the Lieutenant Governor in Council, the minister, for and on behalf of the government, may, from time to time, enter into an agreement with the Government of Canada or the government of a province of Canada under which a designated official of Canada or the province who is responsible for the supervision or examination or both of trust and loan corporations, shall perform specified duties imposed on the Director under this Division.

Provision as to remuneration

360(3)      Without restricting the generality of subsection (2), an agreement made under that subsection may provide that the remuneration of the Government of Canada or of the government of the other province shall consist of the assessments collected by the designated official under section 359 and the provisions of the agreement in respect of that matter prevail over any statute inconsistent therewith.

Regulations respecting agreement

360(4)      The Lieutenant Governor in Council may make regulations respecting the carrying into effect of any agreement made under subsection (2), and may authorize the designated official of the government with which the agreement is made to exercise and perform any powers granted to, and the duties imposed upon, the Director under this Division.

S.M. 1993, c. 18, s. 12; S.M. 1997, c. 26, s. 34.

DIVISION XI

BUSINESS AUTHORIZATION

Business authorization required

361(1)      No corporation or extra-provincial corporation, or person acting on its behalf, shall carry on business in Manitoba unless the corporation or extra-provincial corporation has a business authorization.

Offence and penalty

361(2)      A corporation or extra-provincial corporation that carries on business in Manitoba

(a) without having a business authorization;

(b) without complying with any condition imposed on its business authorization; or

(c) after having its business authorization revoked or suspended;

and every director and officer of the corporation or extra-provincial corporation, and each person acting on its behalf, is guilty of an offence and is liable to a penalty not exceeding $50,000. plus the costs incurred in connection with investigating these circumstances.

S.M. 1988-89, c. 11, s. 5; S.M. 1993, c. 18, s. 13; S.M. 1994, c. 20, s. 3.

Definition of foreign body corporate

361.1(1)    In this section, "foreign body corporate" means a body corporate that is incorporated elsewhere than in Canada and carries on the business of a trust corporation or borrows money from the public in the form of deposits for the purpose of making loans or investments.

Prohibition on carrying on business

361.1(2)    No foreign body corporate shall carry on business in Manitoba.

Offence and penalty

361.1(3)    A foreign body corporate that carries on business in Manitoba in contravention of subsection (2) and every director and officer of the foreign body corporate, and each person acting on its behalf, is guilty of an offence and is liable to a penalty of not more than $50,000. plus the costs incurred in connection with investigating these circumstances.

S.M. 1997, c. 26, s. 35.

362         Renumbered as section 376.

S.M. 1993, c. 18, s. 14.

Application for business authorization

363(1)      A corporation or extra-provincial corporation may apply for a business authorization as a trust corporation, loan corporation, extra-provincial trust corporation or extra-provincial loan corporation.

Change of business authorization

363(2)      A corporation or extra-provincial corporation with a business authorization may apply to amend its business authorization by changing it to that of a trust corporation, loan corporation, extra-provincial trust corporation or extra-provincial loan corporation.

Amendment to business authorization

363(3)      A corporation or extra-provincial corporation with a business authorization may apply to amend any condition imposed on its business authorization.

Change of name or jurisdiction

363(4)      Where a corporation with a business authorization changes its name, or where an extra-provincial corporation with a business authorization changes its name or jurisdiction of incorporation, the corporation or extra-provincial corporation shall apply to amend its business authorization within seven days after the effective date of the change.

Amalgamation

363(5)      Where two or more corporations each with a business authorization propose to amalgamate and continue as one corporation under sections 179 and 319, those corporations shall apply to amend their business authorizations when their articles of amalgamation are sent to the Director.

Continuance

363(6)      Where an extra-provincial corporation with a business authorization proposes to continue as a corporation under section 181, the extra-provincial corporation shall apply to amend its business authorization when its articles of continuation are sent to the Director.

Discontinuance

363(7)      Where a corporation with a business authorization proposes to continue in another jurisdiction under section 182, the corporation shall apply to amend its business authorization when it requests the prior consent of the minister to the continuance, unless the corporation has ceased to carry on business in Manitoba.

S.M. 1993, c. 18, s. 15.

Form and filing of application

364(1)      An application to obtain or amend a business authorization shall be made in the prescribed form and shall be filed with the Director accompanied by

(a) any other documents and information specified by the form;

(b) the consent and resolution referred to in subsection 365(3); and

(c) the prescribed fee.

Additional information

364(2)      On receipt of an application to obtain or amend a business authorization, the Director may require the applicant to provide any information the Director considers necessary in addition to that specified by the prescribed form.

S.M. 1993, c. 18, s. 15.

Examination of extra-provincial corporation

365(1)      The Director may make or cause to be made an examination of the business, finance and other affairs of an extra-provincial corporation in order to be satisfied that it is in compliance with this Act and in sound financial condition.

Place of examination

365(2)      Where the Director makes or causes to be made an examination of an extra-provincial corporation under this section, or of a corporation under section 349, the examination may be made at its head office or at any of its offices, branches or subsidiaries, wherever located, at any time.

Consent to examination

365(3)      An application to obtain or amend a business authorization shall be accompanied by

(a) a consent in writing that

(i) permits the Director, or any official acting under an agreement under subsection 360(2), or any person appointed by the Director, to make or cause to be made the examination referred to in this section or in section 349, and

(ii) is signed by the proper officers of the corporation or extra-provincial corporation; and

(b) a certified copy of the resolution of the board of directors of the corporation or extra-provincial corporation that authorizes the consent.

Costs of examination

365(4)      Where an examination of an extra-provincial corporation under this section is made at any office, branch or subsidiary located outside Manitoba, the Director may require the extra-provincial corporation to pay the costs incurred in connection with the examination.

S.M. 1993, c. 18, s. 15; S.M. 1997, c. 26, s. 36.

Approval of application

366(1)      On receipt of an application to obtain or amend a business authorization, the Director shall, subject to subsection (3), reject the application in any of the circumstances set out in subsection (2) and the Director may, in any other case,

(a) issue a business authorization;

(b) amend a business authorization; or

(c) amend any condition imposed on a business authorization.

Rejection of application

366(2)      Subject to subsection (3), the Director shall reject an application to obtain or amend a business authorization where

(a) the Director is not satisfied that the applicant has an adequate capital base;

(b) if the applicant proposes to accept deposits in the course of carrying on its business, the applicant is not a member of the Canada Deposit Insurance Corporation;

(c) if the applicant is an extra-provincial corporation, the applicant is not licensed, registered or authorized to carry on the business of a trust corporation or loan corporation in its jurisdiction of incorporation, or the applicant is not authorized by its jurisdiction of incorporation to carry on business in other jurisdictions;

(d) the applicant is not a trust corporation, loan corporation, extra-provincial trust corporation or extra-provincial loan corporation;

(e) the Director is not satisfied that

(i) the proposed plan of operations for the future conduct and development of the business of the applicant is sound and feasible,

(ii) the applicant will be operated in a responsible manner by persons who have the character, competence and experience suitable for involvement in the operation of a financial institution, or

(iii) the applicant intends to offer to the public, within a reasonable time after its business authorization is issued, the services set out in the application and the applicant has the capability to provide such services; or

(f) the Director is not satisfied as to the adequacy of any information received with or in support of the application.

Conditional approval

366(3)      In the case of any circumstance set out in clause (2)(a), (b) or (e), the Director may, instead of rejecting an application to obtain or amend a business authorization, issue or amend the business authorization, subject to any conditions the Director considers appropriate.

Conditional approval by consent

366(4)      At the request or with the consent of a corporation or extra-provincial corporation with a business authorization, the Director may

(a) impose any conditions on the business authorization in addition to any conditions imposed under subsection (3); or

(b) revoke or suspend the business authorization subject to any conditions the Director considers appropriate.

S.M. 1993, c. 18, s. 15.

Issuing of business authorization

367(1)      No corporation shall be issued a business authorization later than one year after the date shown in the certificate of incorporation of the corporation or later than any further period not exceeding one year as the Director permits before the expiration of the first year.

Rights cease

367(2)      A corporation that has not been issued a business authorization within the period referred to in subsection (1) shall cease to exist except for the purpose of winding up its affairs and returning to its subscribers the amounts paid by them upon the subscribed capital or so much thereof as they are entitled to have returned.

S.M. 1993, c. 18, s. 15.

Application on amalgamation

368(1)      Where an extra-provincial corporation with a business authorization amalgamates with

(a) one or more extra-provincial corporations with or without business authorizations; or

(b) one or more bodies corporate incorporated outside of Manitoba;

and continues as an extra-provincial corporation, the amalgamated extra-provincial corporation shall apply for a business authorization within seven days after the effective date of the amalgamation.

Application pending

368(2)      Where an amalgamated extra-provincial corporation has filed an application for a business authorization, the corporation may carry on business in Manitoba under the business authorization of one of the amalgamating corporations, as the Director permits, until the application has been approved or rejected.

Application rejected

368(3)      Where an amalgamated extra-provincial corporation has filed an application for a business authorization and the application has been rejected, the corporation may carry on business in Manitoba, and shall continue to be liable, to the extent provided by subsections 370(6), (8) and (9).

S.M. 1993, c. 18, s. 15; S.M. 1994, c. 20, s. 3.

Previous licence

369(1)      A corporation that was licensed under Part XXIV immediately before the coming into force of this Division shall be deemed to have filed an application for a business authorization and the Director shall issue a business authorization to the corporation for the same type of business that was permitted by its licence, subject to any conditions that were imposed on that licence.

Previous registration

369(2)      An extra-provincial trust or extra-provincial loan corporation that was registered under Part XVI immediately before the coming into force of this Division shall be deemed to be issued a business authorization under this Division as an extra-provincial trust corporation or extra-provincial loan corporation and shall file an application for a business authorization within four months after the coming into force of this Division.

Change of business authorization

369(3)      If the Director is satisfied that, had an extra-provincial corporation to which subsection (2) applies been required to make an application for a business authorization, he or she would not have approved the application except as provided in subsection 366(3), the Director may, by order,

(a) change the business authorization of the extra-provincial corporation from that of an extra-provincial trust corporation to that of an extra-provincial loan corporation or vice versa; or

(b) impose any conditions on its business authorization.

Notice

369(4)      The Director shall not make an order under subsection (3) unless, within one year after the coming into force of this section, the Director gives the extra-provincial corporation notice of the intention to make the order.

Hearing

369(5)      After receiving notice under subsection (4), the extra-provincial corporation may make representations to the Director within 15 days after the date of the notice or within such further period as the Director permits.

S.M. 1993, c. 18, s. 15.

Revocation or suspension of business authorization

370(1)      The Director may revoke or suspend the business authorization of a corporation or extra-provincial corporation or impose any conditions on its business authorization

(a) for any reason for which the Director may or shall reject an application for a business authorization;

(b) where the Director is satisfied that the corporation or extra-provincial corporation has made a material error in its application for a business authorization;

(c) where the corporation or extra-provincial corporation has contravened or failed to comply with any provision of

(i) an order of the Director,

(ii) a condition imposed on its business authorization,

(iii) this Act or the regulations, or

(iv) a law of any jurisdiction in Canada in which the corporation or extra-provincial corporation carries on business;

(d) where the authority of the corporation or extra-provincial corporation to carry on business has been cancelled or suspended or any conditions have been imposed on its authority to carry on business under a law of Canada or of any province or territory of Canada;

(e) where grounds exist for the possession and control by the Director of the assets of the corporation or extra-provincial corporation;

(f) where the corporation or extra-provincial corporation has ceased to carry on business in Manitoba or has ceased to carry on in Manitoba any kind of business that it is authorized to carry on; or

(g) for any other prescribed reason.

Mandatory revocation or suspension

370(2)      The Director shall revoke or suspend the business authorization of an extra-provincial corporation where the authority of the extra-provincial corporation to carry on business has been cancelled or suspended under a law of its jurisdiction of incorporation.

Mandatory conditions

370(3)      The Director shall impose any conditions on the business authorization of an extra-provincial corporation the Director considers appropriate where any conditions have been imposed on its authority to carry on business under a law of its jurisdiction of incorporation.

Notice of revocation or suspension

370(4)      The Director shall not revoke or suspend a business authorization under subsection (1) unless the Director gives the corporation or extra-provincial corporation notice of the intention to revoke or suspend its business authorization.

Representations

370(5)      After receiving notice under subsection (4), the corporation or extra-provincial corporation may make representations to the Director within 15 days after the date of the notice.

Cessation of business on revocation

370(6)      Where the business authorization of a corporation or extra-provincial corporation is revoked, the corporation or extra-provincial corporation shall cease to carry on business in Manitoba except for the purpose of winding up its business in Manitoba.

Cessation of business on suspension

370(7)      Where the business authorization of a corporation or extra-provincial corporation is suspended, the corporation or extra-provincial corporation shall cease to carry on business in Manitoba in accordance with any conditions set out in the suspension.

Liability continues

370(8)      The revocation or suspension of the business authorization of a corporation or extra-provincial corporation does not affect the liability of the corporation or extra-provincial corporation or its successors for its debts or liabilities, and any action to recover them, any action to which the corporation or extra-provincial corporation is a necessary party or any proceedings to realize upon its assets may be commenced against the corporation or extra-provincial corporation or its successors.

Liability of directors continue

370(9)      Where the business authorization of a corporation or extra-provincial corporation is revoked or suspended, the liability of every director and officer of the corporation or extra-provincial corporation, and each person acting on its behalf, continues and may be enforced as if that business authorization had not been revoked or suspended.

Discretion of Director

370(10)     The Director may

(a) cancel any condition imposed on a business authorization under this section; or

(b) reinstate a business authorization that was revoked or suspended, subject to any conditions the Director considers appropriate.

S.M. 1993, c. 18, s. 15; S.M. 1997, c. 26, s. 37.

Right of appeal

371(1)      Subject to subsection (3), where a corporation or extra-provincial corporation files an application to obtain or amend a business authorization and the Director under subsection 366(1), (2) or (3)

(a) rejects the application;

(b) amends the business authorization;

(c) imposes any condition on the business authorization; or

(d) amends any condition imposed on the business authorization;

the corporation or extra-provincial corporation has the right of appeal to the Lieutenant Governor in Council against the decision of the Director and the decision of the Lieutenant Governor in Council on the appeal is final.

Application to court

371(2)      Subject to subsection (3), where

(a) a corporation has a business authorization and the Director under subsection 370(1) revokes or suspends it or imposes any conditions on it; or

(b) an extra-provincial corporation has a business authorization and the Director

(i) under subsection 369(3) changes its business authorization or imposes any conditions on it, or

(ii) under subsection 370(1) revokes or suspends its business authorization or imposes any conditions on it;

the corporation or extra-provincial corporation may apply to the court for an order requiring the Director to change his or her decision and upon the application the court may make any order it thinks fit.

Exceptions

371(3)      The decision of the Director is final where

(a) in the case of subsection (1), the decision is based on any matter set out in clause 366(2)(b), (c) or (d); or

(b) in the case of subsection (2), the decision is made under subsection 370(2) or (3).

S.M. 1993, c. 18, s. 15.

DIVISION XII

RETURNS

Annual business return

372(1)      In addition to the return required under section 121, a corporation or extra-provincial corporation that has a business authorization shall, for each fiscal year of the corporation or extra-provincial corporation, prepare an annual business return in the prescribed form and file the return with the Director within 90 days after the end of the fiscal year to which it relates.

Additional information

372(2)      The annual business return shall be accompanied by

(a) in the case of a corporation, the financial statements and report of the auditor of the corporation for the fiscal year to which the return relates prepared in accordance with subsection 149(1) and the regulations;

(b) in the case of an extra-provincial corporation, the financial statements and report of the auditor of the extra-provincial corporation for the fiscal year to which the return relates that were provided or were required to be provided to a Minister of the Crown or a government official or agency under trust or loan corporation legislation governing the extra-provincial corporation in its jurisdiction of incorporation;

(c) [repealed] S.M. 1997, c. 26, s. 38;

(d) any other prescribed documents and information; and

(e) the prescribed fee.

Late filing fee

372(3)      A corporation or extra-provincial corporation that does not file its annual business return within the period specified in subsection (1) shall pay a late filing fee in the prescribed amount in addition to the prescribed fee.

S.M. 1993, c. 18, s. 15; S.M. 1997, c. 26, s. 38.

Filing of additional information

373         A corporation or extra-provincial corporation that has a business authorization shall provide to the Director any information the Director considers necessary in any form and at any time as he or she considers appropriate.

S.M. 1993, c. 18, s. 15.

Filing of financial information

374(1)      A corporation or extra-provincial corporation that has a business authorization shall file with the Director a copy of every statement of a financial nature relating to the corporation that is distributed to its shareholders within seven days after the distribution.

Filing of corporate documents

374(2)       A corporation or extra-provincial corporation that has a business authorization shall file with the Director

(a) a copy of any application and supporting documents filed under a law of Canada, of any province other than Manitoba or of any territory of Canada for any change to its instrument of incorporation or registration status and shall also send to the Director a copy of any approval or refusal received in respect of the application within seven days after the filing or receipt, as the case may be;

(b) a copy of any change made to its instrument of incorporation or its authority to carry on business in Canada, in any province other than Manitoba or in any territory of Canada within seven days after the effective date of the change;

(c) a copy of any agreement with or undertaking given to a regulatory authority of Canada, of any province other than Manitoba or of any territory of Canada in which it carries on business that restricts its business activities or requires it to take specific actions to return to regulatory compliance and the copy shall be filed within seven days after the effective date of the agreement or undertaking; and

(d) a copy of any change made to its by-laws within seven days after the effective date of the change.

Notice of court order

374(3)      A corporation or extra-provincial corporation that has a business authorization shall file with the Director notice of the making of an order by a court or person in Canada, in any province other than Manitoba or in any territory of Canada that is in the nature of an order or direction made under sections 350, 351, 352, 354 and 356 within seven days after the order is made.

Notice of change

374(4)      A corporation or extra-provincial corporation that has a business authorization shall file with the Director notice of

(a) a change in the membership of its board of directors;

(b) a change in the address of its head office;

(c) a change of its auditor; and

(d) a change of its fiscal year;

within 15 days after the effective date of the change.

S.M. 1993, c. 18, s. 15; S.M. 1997, c. 26, s. 39.

Penalty

375(1)      A corporation or extra-provincial corporation that, without reasonable cause, fails to comply with

(a) an order of the Director; or

(b) a requirement to provide any document, information or return to the Director;

is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Director's liability

375(2)      Where a corporation or extra-provincial corporation is guilty of an offence under subsection (1), every director and officer of the corporation or extra-provincial corporation, and each person acting on its behalf, who knowingly authorizes, permits or acquiesces in the failure underlying the offence is guilty of an offence, whether or not the corporation or extra-provincial corporation has been prosecuted or convicted in respect of the offence, and is liable on summary conviction to a fine not exceeding $5,000. or imprisonment for a term not exceeding six months or both.

S.M. 1993, c. 18, s. 15.

Commencement

376         Clause 154(1)(b) and subsections 154(2), (3) and (5) come into force on a day fixed by proclamation.

S.M. 1993, c. 18, s. 14.

NOTE: Clause 154(1)(b) and subsections 154(2), (3) and (5) were never proclaimed in force and were repealed by S.M. 1997, c. 26, s. 2.

File 1: s. 1 to 199.3 (Parts 1 to 16)
File 2: s. 200 to 376 (Parts 17 to 24)