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C.C.S.M. c. C225
The Corporations Act
| Table of Contents | Regulations |
| Sections: 1 - 133(3) | 133(4) - 270 | 271 - 362 |
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.
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.
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.
273(1) Subject to subsection (2), each member of each class of members has one vote.
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.
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.
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.
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.
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.
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.
276(4) A delegate has only one vote and shall not vote by proxy.
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.
277(4) A distribution or disposition in accordance with subsections (1) and (2) is sufficient compliance with clauses 204(7)(d) and 214(i).
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
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.
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.
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.
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 corporation of 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.
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.
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
284 This Division applies to every insurer with share capital except mutual insurance corporations.
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.
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.
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.
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.
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
288(1) This Division applies to every corporation incorporated as a mutual insurance corporation.
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.
289 The name of a mutual insurance corporation shall include the word "Mutual" or "Mutuelle" and the word "Insurance" or "Assurance".
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.
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.
293(2) The applicants shall produce for verification to the Director, if requested, the originals of the documents required under subsection (1).
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.
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.
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.
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.
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.
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.
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.
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.
299 At all meetings of the corporation 12 members actually present in person form a quorum.
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.
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.
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.
303 The board of directors shall hold a meeting at least every three months for transacting the business of the corporation.
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.
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.
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.
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
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.
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.
310 The corporation shall not invest its funds otherwise than in securities authorized for investment by insurers under The Insurance Act.
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.
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.
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.
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
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.
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.
DIVISION I
GENERAL
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.
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.
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.
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.
318(4) A sale or disposal under subsection (2) does not take effect until it has been submitted to and approved by the Director.
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.
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.
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.
DIVISION II
INCORPORATION
320(1) No articles shall be issued without the prior approval of the Minister.
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.
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.
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.
321(3) Subsection 10(1) does not apply to a corporation to which this Part applies.
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.
321(6) A majority of the directors of a corporation shall at all times be residents of Canada.
DIVISION III
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 »)
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
329.22 A loan or investment referred to in section 329.21 is deemed not to be prohibited by the provisions of this Division.
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.
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.
330 to 335 Repealed.
DIVISION VI
BORROWING POWERS AND STATUTORY LIMITS
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.
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).
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.
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.
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.
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).
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.
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.
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 s