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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)

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

PART I

INTERPRETATION AND APPLICATION

Definitions

1(1)        In this Act,

"affairs" means the relationships among a body corporate, its affiliates and the shareholders, directors and officers of those bodies corporate but does not include the business carried on by those bodies corporate; (« affaires internes »)

"affiliate" means an affiliated body corporate within the meaning of subsection (2); (« groupe »)

"articles" means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution, articles of revival and any amendments thereto, and includes any Act, statute or ordinance by or under which a body corporate has been incorporated, and any letters patent, supplementary

letters patent, certificate of incorporation, memorandum of association, and any other document evidencing corporate existence; (« statuts »)

"associate" when used to indicate a relationship with any person means

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

(b) a partner of that person acting on behalf of the partnership of which they are partners, or

(c) a trust or estate in which that person has a substantial beneficial interest or in respect of which he serves as a trustee or in a similar capacity, or

(d) a spouse, common-law partner or child of that person, or

(e) a relative of that person or of his spouse or common-law partner if that relative has the same residence as that person; (« liens »)

"auditor" includes a partnership of auditors; (« vérificateur »)

"beneficial interest" means an interest arising out of the beneficial ownership of securities; (« propriété véritable »)

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

"body corporate" includes a company or other body corporate wherever or however incorporated; (« personne morale »)

"business" includes the undertaking carried on by a body corporate, without share capital; (« entreprise »)

"commission" means The Manitoba Securities Commission; (« Commission »)

"common-law partner" of a person means a person who, not being married to the other person, is cohabiting with him or her in a conjugal relationship of some permanence; (« conjoint de fait »)

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

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

"Crown" means the Crown in right of the province; (« Couronne »)

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

"Director" means the Director appointed under section 253; (« directeur »)

"director" means a person occupying the position of director by whatever name called, and "directors" and "board of directors" includes a single director; (« administrateur »)

"extra-provincial body corporate" means a body corporate that is incorporated otherwise than by or under the authority of an Act of the Legislature or of the Parliament of Canada; (« personne morale extra-provinciale »)

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

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

"liability" includes a debt of a corporation arising under section 38, subsection 184(25) or clause 234(3)(f) or 234(3)(g); (« passif »)

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

"ordinary resolution" means a resolution passed by a majority of the votes cast by the shareholders who voted in respect of that resolution; (« résolution ordinaire »)

"person" includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative; (« personne »)

"prescribed" means prescribed by the regulations; (« prescrit » ou « réglementaire »)

"redeemable share" means a share issued by a corporation

(a) that the corporation may purchase or redeem upon the demand of the corporation, or

(b) that the corporation is required by its articles to purchase or redeem at a specified time or upon the demand of a shareholder; (« action rachetable »)

"registered form" means a registered form as defined in The Securities Transfer Act; (« nominatif »)

"resident of Canada" means an individual who is

(a) ordinarily resident in Canada, or

(b) not ordinarily resident in Canada, but who is a member of a prescribed class of persons; (« résident canadien »)

"security" means a share of any class or series of shares or a debt obligation of a body corporate and includes a certificate evidencing a share or debt obligation; (« valeur mobilière »)

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

"send" includes deliver; (« envoyer »)

"series" in relation to shares means a division of a class of shares; (« série »)

"shareholder" includes a member of a corporation without share capital except where inconsistent with the provisions of Part XXII; (« actionnaire »)

"special Act" means an Act of the Legislature other than this Act or any Act for which this Act is substituted; (« loi spéciale »)

"special resolution" means a resolution passed by a majority of not less than 2/3 of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution; (« résolution spéciale »)

"unanimous shareholder agreement" means an agreement described in subsection 140(2) or a declaration of a shareholder described in subsection 140(3). (« convention unanime des actionnaires »)

Affiliated corporations

1(2)        For the purposes of this Act,

(a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and

(b) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

Control

1(3)        For the purposes of this Act, a body corporate is controlled by a person if

(a) 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 held, other than by way of security only, by or for the benefit of that person; and

(b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate.

Holding body corporate

1(4)        A body corporate is the holding body corporate of another if that other body corporate is its subsidiary.

Subsidiary body corporate

1(5)        A body corporate is a subsidiary of another body corporate if it is controlled by that other body corporate.

Deemed distribution to the public

1(6)        For the purposes of this Act, securities of a body corporate

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

(b) issued in exchange for other securities;

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

Distribution to the public

1(7)        For the purposes of this Act, a body corporate has made a distribution to the public, where a security of the body corporate

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

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

(c) is listed on a stock exchange.

Registered common-law relationship

1(8)        For the purposes of this Act, while they are cohabiting, persons who have registered their common-law relationship under section 13.1 of The Vital Statistics Act are deemed to be cohabiting in a conjugal relationship of some permanence.

S.M. 2002, c. 24, s. 15; S.M. 2002, c. 48, s. 28; S.M. 2008, c. 14, s. 135.

Application of Act

2(1)        Subject to subsections (2) and (3) and section 3, this Act, except where it is otherwise expressly provided, applies to every corporation.

Inconsistent provisions

2(2)        Where a provision of Part XXI, XXII, XXIII, or XXIV is inconsistent with or repugnant to any other provision of this Act, the provision of that Part in so far as it affects a corporation to which that Part applies supersedes and prevails over the other provision of this Act.

Where Part applies to class of corporation

2(3)        Where in this Act, it is expressly provided that a Part applies to a particular type or class of corporations, that Part does not apply to a corporation that is not of that type or class.

Exceptions

3(1)        Except where it is otherwise expressly provided,

(a) this Act does not apply to a body corporate that is a bank incorporated under an Act of Parliament; and

(b) Parts II, V and VI, Division I of Part X, and Parts XIII to XIX and Parts XXI to XXIV do not apply to a corporation created for government purposes or municipal purposes or to corporations created under The Public Schools Act or The Health Services Act.

Exceptions

3(2)        This Act does not apply

(a) to a corporation that is a cooperative within the meaning of The Cooperatives Act except to the extent that The Cooperatives Act makes this Act or any provision of this Act apply to cooperatives;

(b) to a corporation that is a credit union within the meaning of The Credit Unions and Caisses Populaires Act except to the extent that The Credit Unions and Caisses Populaires Act makes this Act or any provision of this Act apply to credit unions; or

(c) to The City of Winnipeg or to a municipality that is formed or continued under The Municipal Act.

Non-application of certain provisions to insurers

3(3)        The following provisions do not apply to an insurer to which Part XXIII applies:

(a) section 97;

(b) subsections 100(1) and (3);

(c) subsections 105(2) to (4);

(d) subsections 109(3) and (4);

(e) subsection 140(2);

(f) section 157;

(g) subsection 162(6);

(h) subsection 165(1) to (3).

R.S.M. 1987 Supp., c. 10, s. 1; S.M. 1996, c. 58, s. 448; S.M. 2002, c. 39, s. 524; S.M. 2004, c. 42, s. 19; S.M. 2007, c. 10, s. 39.

Objects of existing corporations

4(1)        Where before the coming into force of this Act, the words "and capable forthwith of exercising all the functions of an incorporated company, with powers and privileges, and subject to the provisions and restrictions applicable thereto, set forth in the said Act, for the objects following, that is to say:" or words of like effect are contained in the articles of a corporation, those words are deemed to be struck out and the words "and capable forthwith of exercising all the functions of a corporation, subject to the provisions and restrictions applicable thereto, and the business of the corporation is restricted to the following:" are deemed to be substituted therefor.

Powers of existing corporation

4(2)        Where the articles of a corporation excluded, immediately before the coming into force of this Act, any of the powers authorized by any former Companies Act, the articles are deemed to restrict the corporation from exercising the power so excluded.

PART II

INCORPORATION

Incorporators

5(1)        One or more persons, being a body corporate or a natural person, may incorporate a corporation by signing and delivering to the Director articles of incorporation.

Exception

5(2)        No person who

(a) is less than 18 years of age; or

(b) has the status of a bankrupt;

may incorporate a corporation.

Articles of incorporation

6(1)        Articles of incorporation shall be in the form the Director requires and shall set out, in respect of the proposed corporation,

(a) the name of the corporation;

(b) the place in Manitoba where the registered office is to be situated, and the address, giving the street and number, if any;

(c) the classes and any maximum number of shares that the corporation is authorized to issue, and

(i) if there will be two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares, and

(ii) if a class of shares may be issued in series, the authority given to the directors to fix the number of shares in, and to determine the designation of, and the rights, privileges, restrictions and conditions attaching to, the shares of each series;

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

(e) the number of directors or, subject to clause 102(a), the minimum and maximum number of directors of the corporation, and in every case the names in full of each first director and his residence address giving the street and number, if any; and

(f) any restrictions on the businesses that the corporation may carry on.

Additional provisions in articles

6(2)        The articles may set out any provisions permitted by this Act or by law to be set out in the by-laws of the corporation.

Special majorities

6(3)        Subject to subsection (4), if the articles or a unanimous shareholder agreement require a greater number of votes of directors or shareholders than that required by this Act to effect any action, the provisions of the articles or of the unanimous shareholder agreement prevail.

Exception

6(4)        The articles may not require a greater number of votes of shareholders to remove a director than the number required by section 104.

Consent required

6(5)        The articles shall have attached, in the form the Director requires, the consent of any first director who is not an incorporator.

R.S.M. 1987 Supp., c. 10, s. 2; S.M. 2006, c. 10, s. 2.

Filing of Articles

7           An incorporator shall send to the Director articles of incorporation.

Certificate of incorporation

8           Upon receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 255.

Effect of certificate

9           A corporation comes into existence on the date shown in the certificate of incorporation.

Name of corporation

10(1)       The word "Limited", "Limitee", "Incorporated", "Incorporee" or "Corporation", or the abbreviation "Ltd.", "Ltee.", "Inc." or "Corp.", shall be part, other than only in a figurative or descriptive sense, of the name of every corporation, but a corporation may use and may be legally designated by either the full or the abbreviated form.

Alternative name

10(2)       Subject to subsection 12(2), a corporation may set out its name in its articles in an English form or a French form, an English form and a French form, or in a combined English and French form and it may be legally designated by any such form.

Name in any language form

10(3)       Subject to subsection 12(2), a corporation may set out its name in its articles in any language form and it may be legally designated by any such form.

Publication of corporate name

10(4)       A corporation shall set out its corporate name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the corporation.

Other name

10(5)       Subject to subsection (4), section 12 and the provisions of The Business Names Registration Act, a corporation may carry on business under or identify itself by a name other than its corporate name.

Offence

10(6)       Any person that, while not incorporated, uses or carries on business under a name containing the word "Limited", "Limitee", "Incorporated", "Incorporee" or "Corporation", or the abbreviation "Ltd.", "Ltee.", "Inc." or "Corp.", is guilty of an offence and liable on summary conviction to a fine not exceeding $500.

Reservation of name

11(1)       The Director may, upon the request in writing of any person, and upon payment of the prescribed fee, reserve a corporate name for the use and benefit of the person or his nominee for a period of 90 days.

Designating number

11(2)       If requested to do so by the incorporators, the Director shall assign to a corporation as its name, a designating number determined by him.

Notation of name

11(3)       Any person, partnership or association may give the Director notice of the name under which his or its business or undertaking is carried on and thereupon the Director may, if in his opinion the name is not objectionable, make a notation of the name in his records.

Notice of use of name

11(4)       The person, partnership or association may

(a) within three years of the date when the notation is made pursuant to subsection (3); and

(b) within three years of the date when the latest renewal date is noted pursuant to subsection (5);

give the Director notice that he or it is still carrying on his or its business or undertaking under the name noted in his records.

Notice to be recorded

11(5)       The Director shall note in his records the date upon which he receives any notice given pursuant to subsection (3) or (4).

Cancellation of notice

11(6)       Where the Director does not receive a notice pursuant to subsection (4) within the time required by that subsection, he shall cancel the notation, and thereupon it is deemed for the purposes of subsection 12(4) that the Director has not received notice of the name under this section.

S.M. 2014, c. 32, s. 4.

"Business or association" defined

12(1)       In this section, "business or association" means an individual, an association or a partnership carrying on business.

Prohibited names

12(2)       A corporation shall not have a name

(a) that, except as prescribed, is identical with the name of an existing body corporate or of a dissolved body corporate; or

(b) that, except as prescribed and subject to subsection (4), is the same as the name of a business or association; or

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

(d) that includes the words "Loan" or "Trust", unless it is a corporation to which Part XXIV applies; or

(e) that the Director for any good and valid reason disapproves; or

(f) that is, as prescribed, prohibited or deceptively misdescriptive.

Corporation not to be given similar name

12(3)       A corporation shall not have a name that is similar to the name of any other body corporate if the use of that name by the corporation would be likely to confuse or mislead, unless the body corporate consents in writing to its name being given in whole or in part to the corporation and, if required by the Director, the body corporate undertakes to dissolve or to change its name within six months after the incorporation of the corporation.

Corporation not to be given similar name of business or association

12(4)       A corporation shall not have a name that is the same as or similar to the name of a business or association, if the use of that name by the corporation would be likely to confuse or mislead, unless the business or association consents in writing to its name being given in whole or in part to the corporation and, if required by the Director, the business or association undertakes to cease carrying on business or to change its name within six months after the incorporation of the corporation.

Reserved name

12(5)       A corporation shall not have a name that is reserved for another body corporate, unless the consent in writing is obtained from the person for whose use and benefit the name is reserved.

Undertaking not carried out

12(6)       Where a corporation obtains a name subject to an undertaking given under subsection (3) or (4) and the undertaking is not carried out within the specified time, the Director may direct the corporation that gives the undertaking or the corporation that has obtained the name to change its name to a name that complies with this Act; and if the corporation fails to comply with the directive within 60 days of the service thereof, the Director may revoke the name of the corporation and assign to it a number, and until changed in accordance with section 167 the name of the corporation is thereafter the number so assigned.

Directing change of name

12(7)       Where, through inadvertence or otherwise, a corporation

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

(b) upon a change of name, obtains a name;

that contravenes this section, the Director may direct the corporation to change its name in accordance with section 167.

Directing change of name of professional corporation

12(7.1)     Where the Director is notified in writing by the proper officer of the governing body of a profession that a corporation whose name was approved by the governing body

(a) has not applied for a permit or licence, or a renewal of a permit or licence, to practise the profession;

(b) having applied, has been denied a permit or licence or a renewal of a permit or licence to practise the profession; or

(c) having been granted a permit or licence to practise the profession, has had the permit or licence suspended, revoked or cancelled;

the Director shall direct the corporation to change its name in accordance with section 167 to a name that complies with this Act and the regulations and does not require the written consent of the governing body.

Directing change of name

12(8)       Where a corporation has a designating number as its name, the Director may direct the corporation to change its name in accordance with section 167, to a name that complies with this Act.

Revocation of name

12(9)       Where a corporation has been directed under subsection (7), (7.1) or (8) to change its name and has not within 60 days from the service of the directive to that effect changed its name to a name that complies with this Act, the Director may revoke the name of the corporation and assign to it a number and until changed in accordance with section 167, the name of the corporation is thereafter the number so assigned.

S.M. 1999, c. 41, s. 62.

Certificate of amendment

13(1)       Where a corporation has had its name revoked and a number assigned to it under subsection 12(6) or 12(9), the Director shall issue a certificate of amendment showing the new name of the corporation and shall publish a notice of the change of name in the manner set out in the regulations.

Effect of certificate

13(2)       The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.

S.M. 2000, c. 41, s. 8.

Personal liability in pre-incorporation contracts

14(1)       Except as provided in this section, a person who enters into a written contract in the name of or on behalf of a corporation before it comes into existence is personally bound by the contract and is entitled to the benefits thereof.

Adoption of pre-incorporation contracts

14(2)       A corporation may, within a reasonable time after it comes into existence, by any action or conduct signifying its intention to be bound thereby, adopt a written contract made before it came into existence, in its name or on its behalf, and upon the adoption

(a) the corporation is bound by the contract and is entitled to the benefits thereof as if the corporation had been in existence at the date of the contract and had been a party thereto; and

(b) the person who purported to act in the name of or on behalf of the corporation ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.

Application to court

14(3)       Except as provided in subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order fixing obligations under the contract as joint and several or apportioning liability between or among the corporation and any person who purported to act in the name of or on behalf of the corporation, and upon the application the court may make any order it thinks fit.

Exemption from personal liability

14(4)       If expressly so provided in the written contract, a person who purported to act in the name of or on behalf of the corporation before it came into existence is not in any event bound by the contract or entitled to the benefits thereof.

PART III

CAPACITY AND POWERS

Capacity of a corporation

15(1)       A corporation has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

Extra-territorial capacity

15(2)       A corporation has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Manitoba to the extent that the laws of that jurisdiction permit.

Professional practice by corporation

15(3)       Where the practice of a profession is governed by an Act, a corporation may practise the profession only if the Act expressly permits the practice of the profession by a corporation and subject to the provisions of such Act.

R.S.M. 1987 Supp., c. 10, s. 3.

Powers of a corporation

16(1)       It is not necessary for a by-law to be passed in order to confer any particular power on the corporation or its directors.

Restricted business or powers

16(2)       A corporation shall not carry on any business or exercise any power that it is restricted by its articles from carrying on or exercising, nor shall the corporation exercise any of its powers in a manner contrary to its articles.

Rights preserved

16(3)       No act of a corporation, including any transfer of property to or by a corporation, is invalid by reason only that the act or transfer is contrary to its articles or this Act.

No constructive notice

17          No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a corporation by reason only that the document has been filed by the Director or is available for inspection at an office of the corporation.

Authority of directors, officers and agents

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

(a) the articles, by-laws or any unanimous shareholder agreement have not been complied with;

(b) the persons named in the articles or in the most recent notice sent to the Director under section 108 are not the directors of the corporation;

(c) the place named in the most recent notice sent to the Director under section 19 is not the registered office of the corporation;

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

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

(f) the sale, lease or exchange of property referred to in subsection 183(3) was not authorized;

except where the person has or ought to have, by virtue of his or her position with or relationship to the corporation, knowledge to the contrary.

S.M. 1988-89, c. 11, s. 5; S.M. 2006, c. 10, s. 3.

PART IV

REGISTERED OFFICE AND RECORDS

Registered office

19(1)       A corporation shall at all times have a registered office in the place within Manitoba specified in its articles or in a special resolution under subsection (2).

Change of location

19(2)       A corporation may by special resolution change the location of its registered office to another place within Manitoba.

Change of address

19(3)       The directors of a corporation may change the address of the registered office within the place specified in the articles or a special resolution.

Notice of change

19(4)       A corporation shall send to the Director, within 15 days of any change in the location or address of its registered office, a notice of the change in the form the Director requires.

Annexation or amalgamation of municipalities

19(5)       Where the location of the registered office of a corporation is changed by reason only of the annexation or amalgamation of the place in which the registered office is situate to or with another municipality, that change does not constitute and is not deemed to constitute a change within the meaning of subsection (2).

Exception

19(6)       Notwithstanding this or any other Act or law, no corporation that is restricted by its articles to any undertaking that is in whole or part of a social nature, other than a corporation commonly known as a service club, shall change the location of any of its premises without the prior consent in writing of the minister.

Consent discretionary

19(7)       The giving of the consent mentioned in subsection (6) is in the discretion of the minister.

S.M. 2006, c. 10, s. 4.

Corporate records

20(1)       A corporation shall prepare, and maintain at its registered office or at another place in Manitoba designated by the directors, records containing

(a) the articles and the by-laws, and the amendments to them, and a copy of any unanimous shareholder agreement;

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

(c) a register of directors setting out the name, address and other occupation of each person who is or has been a director of the corporation, and the dates on which he or she became and, if applicable, ceased to be a director; and

(d) a securities register that complies with section 46.

Other records

20(2)       A corporation shall also prepare, and maintain at its registered office or at another place in Manitoba designated by the directors, adequate accounting records and records containing minutes of meetings and resolutions of the directors and of any committee of directors.

Directors' access to other records

20(3)       A director may, at any reasonable time, inspect a record described in subsection (2).

Records in Manitoba

20(4)       If the accounting records of a corporation are kept outside Manitoba, the corporation shall keep accounting records, adequate to enable the directors to ascertain the financial position of the corporation with reasonable accuracy on a quarterly basis, at the registered office or at another place in Manitoba designated by the directors.

Exception

20(5)       Despite subsections (1), (2) and (4), a corporation may keep all or any of the records described in subsections (1) and (2) at a place outside Manitoba if

(a) the records are available to be inspected, by means of a computer terminal or other technology, during regular office hours at the corporation's registered office or another place in Manitoba designated by the directors; and

(b) the corporation provides the technical assistance to facilitate such inspections.

20(6)       [Repealed] S.M. 2006, c. 10, s. 5.

Duplicate register of securities

20(7)       The trustee for security holders may maintain at their office a duplicate register of securities.

20(8)       [Repealed] S.M. 2006, c. 10, s. 5.

Offence

20(9)       A corporation that, without reasonable cause, fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

S.M. 2000, c. 41, s. 9; S.M. 2006, c. 10, s. 5.

Access to corporate records

21(1)       Shareholders and creditors of a corporation, their agents and legal representatives, and the Director may examine the records referred to in subsection 20(1) during the usual business hours of the corporation, and may take extracts therefrom free of charge and, where the corporation has made a distribution to the public, any other person may do so upon payment of a reasonable fee.

Copies of corporate record

21(2)        A shareholder of a corporation is entitled upon request and without charge to one copy of the articles and by-laws and of any unanimous shareholder agreement.

Shareholder lists

21(3)       Shareholders and creditors of a corporation, their agents and legal representatives, the Director and, where the corporation has made a distribution to the public, any other person may, upon payment of a reasonable fee and upon sending to the corporation or its transfer agent the affidavit referred to in subsection (7), require the corporation or its agent to furnish within 10 days from the receipt of the affidavit a list (in this section referred to as the "basic list") made up to a date not more than 10 days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

Supplemental lists

21(4)       A person requiring a corporation to supply a basic list may, if he states in the affidavit referred to in subsection (3) that he requires supplemental lists, require the corporation or its agent upon payment of a reasonable fee to furnish supplemental lists setting out any changes from the basic list in the names and addresses of shareholders and the number of shares owned by each shareholder for each business day following the date the basic list is made up to.

When supplemental lists to be furnished

21(5)       The corporation or its agent shall furnish a supplemental list required under subsection (4)

(a) on the date the basic list is furnished, where the information relates to changes that took place prior to that date; and

(b) on the business day following the day to which the supplemental list relates, where the information relates to changes that take place on or after the date the basic list is furnished.

Holders of options

21(6)       A person requiring a corporation to supply a basic list or a supplemental list, may also require the corporation to include in that list the name and address of any known holder of an option or right to acquire shares of the corporation.

Contents of affidavit

21(7)       The affidavit required under subsection (3) shall state

(a) the name and address of the applicant;

(b) the name and address for service of the body corporate, if the applicant is a body corporate; and

(c) that the basic list and any supplemental lists obtained pursuant to subsection (4) will not be used except as permitted under subsection (9).

Where applicant a body corporate

21(8)       If the applicant is a body corporate, the affidavit shall be made by a director or officer of the body corporate.

Use of shareholder list

21(9)       A list of shareholders obtained under this section shall not be used by any person except in connection with

(a) an effort to influence the voting of shareholders of the corporation; or

(b) an offer to acquire shares of the corporation; or

(c) any other matter relating to the affairs of the corporation.

Offence

21(10)      A person who, without reasonable cause, contravenes 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.

Form of records

22(1)       All registers and other records required by this Act to be prepared and maintained may be in a bound or loose-leaf form or in a photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

Precautions

22(2)       A corporation and its agents shall take reasonable precautions to

(a) prevent loss or destruction of;

(b) prevent falsification of entries in; and

(c) facilitate detection and correction of inaccuracies in;

the registers and other records required by this Act to be prepared and maintained.

Offence

22(3)       A person who without reasonable cause contravenes 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.

Corporate seal

23          An instrument or agreement executed on behalf of a corporation by a director, an officer or an agent of the corporation is not invalid merely because a corporate seal is not affixed thereto.

PART V

CORPORATE FINANCE

Shares

24(1)       Shares of a corporation shall be in registered form and shall be without par value.

Transitional

24(2)       Where a corporation is incorporated before the commencement of this Act or where a body corporate is continued under this Act, an issued share with par value of the corporation is, for the purpose of subsection (1), deemed to be a share without par value, and the maximum consideration for which the shares of a particular class may be issued shall not, for the purposes of this Part, exceed the total of the products of the number of shares of each class multiplied by the par value thereof.

Class of shares

24(3)       The articles may provide for more than one class of shares and, if they so provide, there shall be set out therein the rights, privileges, restrictions and conditions attaching to the shares of each class.

Class voting

24(4)       Unless the articles otherwise provide, each share of a corporation entitles the holder thereof

(a) to vote at all meetings of shareholders except meetings at which only holders of a specified class of shares are entitled to vote;

(b) to receive any dividend declared by the corporation; and

(c) to receive the remaining property of the corporation upon a dissolution.

Pre-existing corporations

24(5)       Where prior to November 16, 1964, conditions attaching to shares are set out in the by-laws of a corporation, those conditions are deemed to be conditions contained in the articles.

Transitional

24(6)       Where conditions attaching to shares of a corporation incorporated before the commencement of this Act refer to par value, the reference shall be deemed to be to the equivalent of the par value as stated in the articles.

Issue of shares

25(1)       Subject to the articles, the by-laws and any unanimous shareholder agreement and to section 28, shares may be issued at such times and to such persons and for such consideration as the directors may determine.

Shares non-assessable

25(2)       Shares issued by a corporation are non-assessable and the holders are not liable to the corporation or to its creditors in respect thereof.

Consideration

25(3)       A share shall not be issued until the consideration for the share is fully paid in money, or in property or past services that is not less in value than the fair equivalent of the money that the corporation would have received if the share had been issued for money.

Consideration other than money

25(4)       In determining whether property or past services is the fair equivalent of a money consideration, the directors may take into account reasonable charges and expenses of organization and re-organization and payments for property and past services reasonably expected to benefit the corporation.

Property

25(5)       For the purposes of this section, "property" does not include a promissory note or a promise to pay.

Stated capital account

26(1)       A corporation shall maintain a separate stated capital account for each class and series of shares it issues.

Entries in stated capital account

26(2)       A corporation shall add to the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.

Exception for non-arm's length transactions

26(3)       Notwithstanding subsections 25(3) and 26(2), where a corporation issues shares

(a) in exchange for

(i) property of a person who immediately before the exchange does not deal with the corporation at arm's length within the meaning of that term in the Income Tax Act, or

(ii) shares of a body corporate that immediately before the exchange or that, because of the exchange, does not deal with the corporation at arm's length within the meaning of that term in the Income Tax Act, or

(b) pursuant to an agreement referred to in subsection 176(1) or an arrangement referred to in clause (b) of the definition "arrangement" in subsection 185(1), to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate,

the corporation may, subject to subsection (4), add to the stated capital accounts maintained for the shares of the classes or series issued the whole or any part of the amount of the consideration it received in the exchange.

Limit on addition to a stated capital account

26(4)       On the issue of a share a corporation shall not add to a stated capital account in respect of the share it issues an amount greater than the amount of the consideration it received for the share.

Constraint on addition to a stated capital account

26(5)        Where a corporation proposes to add any amount to a stated capital account it maintains in respect of a class or series of shares, if

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

(b) the corporation has any outstanding shares of more than one class or series;

the addition to the stated capital account must be approved by special resolution.

Other additions to stated capital

26(6)       Where a corporation is incorporated before the commencement of this Act, it may add to a stated capital account any consideration received by it for a share it issued.

Retained earnings added to stated capital

26(7)       A corporation at any time may, subject to subsection (5), add to a stated capital account any amount it credited to a retained earnings or other surplus account.

Transitional

26(8)       Where a corporation is incorporated before the commencement of this Act, subsection (2) does not apply to the consideration received by it before the commencement of this Act unless the share in respect of which the consideration is received is issued after the commencement of this Act.

Continuance

26(9)       Where a body corporate is continued under this Act, subsection (2) does not apply to the consideration received by it before it was so continued unless the share in respect of which the consideration is received is issued after the corporation is so continued.

Transitional

26(10)      Where a corporation is incorporated before the commencement of this Act, any amount unpaid in respect of a share issued by the body corporate before the commencement of this Act and paid after the commencement of this Act shall be added to the stated capital account maintained for the shares of that class or series.

Transitional

26(11)      For the purposes of subsection 32(2), sections 36 and 40 and clause 179(2)(a), where a corporation is incorporated before the commencement of this Act, its stated capital is deemed to include the amount that would have been included in the stated capital account if the corporation had been incorporated under this Act.

Restriction

26(12)      A corporation shall not reduce its stated capital or any stated capital account except in the manner provided in this Act.

Exception for an open-end mutual fund

26(13)      Subsections (1) to (12) and any other provisions of this Act relating to stated capital do not apply to an open-end mutual fund.

"Open-end mutual fund" defined

26(14)      For the purposes of this section, "open-end mutual fund" means a corporation that makes a distribution to the public of its shares and that carries on only the business of investing the consideration it receives for the shares it issues, and all or substantially all of those shares are redeemable upon the demand of a shareholder.

R.S.M. 1987 Supp., c. 10, s. 4; S.M. 1994, c. 20, s. 3; S.M. 2006, c. 10, s. 6.

Shares in series

27(1)       Subject to the limitations set out in the articles, the articles of a corporation may authorize the issue of any class of shares in one or more series and may do either or both of the following:

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

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

Series participation

27(2)       If any cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

Restrictions on series

27(3)       No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section shall confer upon a series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding.

Amendment of articles when series designated

27(4)       If the directors exercise their authority under clause (1)(b), they shall, before the corporation issues shares of the series, send articles of amendment to the Director to designate a series of shares.  The articles of amendment must be in the form the Director requires.

Certificate of amendment

27(5)       Upon receipt of articles of amendment designating a series of shares, the Director shall issue a certificate of amendment in accordance with section 255.

Effect of certificate

27(6)       The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.

S.M. 2006, c. 10, s. 7.

Pre-emptive right

28(1)       If the articles so provide, no shares of a class shall be issued unless the shares have first been offered to the shareholders holding shares of that class, and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others.

Exception

28(2)       Notwithstanding that the articles provide the pre-emptive right referred to in subsection (1), shareholders have no pre-emptive right in respect of shares to be issued

(a) for a consideration other than money; or

(b) as a share dividend; or

(c) pursuant to the exercise of conversion privileges, options or rights previously granted by the corporation.

Options and rights

29(1)       A corporation may issue certificates, warrants or other evidences of conversion privileges, options or rights to acquire securities of the corporation, and shall set out the conditions thereof

(a) in the certificates, warrants or other evidences; or

(b) in certificates evidencing the securities to which the conversion privileges, options or rights are attached.

Transferable rights

29(2)       Conversion privileges, options and rights to purchase securities of a corporation may be made transferable or non-transferable, and options and rights to purchase may be made separable or inseparable from any securities to which they are attached.

Convertible shares

29(3)       Where shares of a class are converted into shares of another class, the shares converted become the same in all respects as the shares of the class or classes respectively into which they are converted and the number of shares of each class affected by the conversion is changed and the articles are amended accordingly.

Convertible debt obligations

29(4)       Where a corporation has granted privileges to convert any debt obligation into shares or has issued or granted options or rights to acquire shares, the corporation shall reserve and continue to reserve sufficient authorized shares to meet the exercise of the conversion privileges, options and rights.

Corporation holding its own shares

30(1)       Except as provided in subsection (2) and sections 31 to 34 a corporation

(a) shall not hold shares in itself or in its holding body corporate; and

(b) shall not permit any of its subsidiary bodies corporate to acquire shares of the corporation.

Subsidiary holding shares of a corporation

30(2)       A corporation shall cause a subsidiary body corporate of the corporation that holds shares of the corporation to sell or otherwise dispose of those shares within five years from the date that the body corporate became a subsidiary of the corporation.

Exception

31(1)       A corporation may in the capacity of a legal representative hold shares in itself or in its holding body corporate unless it or the holding body corporate or a subsidiary of either of them has a beneficial interest in the shares.

Exception

31(2)       A corporation may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money.

Exception

31(3)       A subsidiary corporation that, before November 16, 1964, held shares in itself or in its holding body corporate may continue to hold those shares.

Voting shares

31(4)       A corporation holding shares in itself or in its holding body corporate, or a subsidiary corporation holding shares as described in subsection (3), shall not vote or permit those shares to be voted unless the corporation or subsidiary

(a) holds the shares in the capacity of a legal representative; and

(b) has complied with section 147.

Acquisition of corporation's own shares

32(1)       Subject to subsection (2) and to its articles, a corporation may purchase or otherwise acquire shares issued by it.

Limitation

32(2)       A corporation shall not make any payment to purchase or otherwise acquire shares issued by it if there are reasonable grounds for believing that

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

(b) the realizable value of the corporation's assets would after the payment be less than the aggregate of its liabilities and stated capital of all classes.

Alternative acquisition of corporation's own shares

33(1)       Notwithstanding subsection 32(2), but subject to subsection (3) and to its articles, a corporation may purchase or otherwise acquire shares issued by it to

(a) settle or compromise a debt or claim asserted by or against the corporation; or

(b) eliminate fractional shares; or

(c) fulfil the terms of a non-assignable agreement under which the corporation has an option or is obliged to purchase shares owned by a director, an officer or an employee of the corporation.

Alternative acquisition of corporation's own shares

33(2)       Notwithstanding subsection 32(2), a corporation may purchase or otherwise acquire shares issued by it to

(a) satisfy the claim of a shareholder who dissents under section 184; or

(b) comply with an order under section 234.

Limitation

33(3)       A corporation shall not make any payment to purchase or acquire under subsection (1) shares issued by it if there are reasonable grounds for believing that

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

(b) the realizable value of the corporation's assets would after the payment be less than the aggregate of its liabilities and the amounts required for payment on a redemption or in a liquidation of all shares the holders of which have the right to be paid prior to the holders of the shares to be purchased or acquired.

Redemption of shares

34(1)       Notwithstanding subsection 32(2) or 33(3), but subject to subsection (2) and to its articles, a corporation may purchase or redeem any redeemable shares issued by it at prices not exceeding the redemption price thereof stated in the articles or calculated according to a formula stated in the articles.

Limitation

34(2)       A corporation shall not make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that

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

(b) the realizable value of the corporation's assets would after the payment be less than the aggregate of

(i) its liabilities, and

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

Donated shares

35          Subject to subsection 37(5), a corporation may accept from any shareholder a share of the corporation surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on the share except in accordance with section 36.

Other reduction of stated capital

36(1)       Subject to subsection (3), a corporation may by special resolution reduce its stated capital for any purpose, including, without limiting the generality of the foregoing, for the purpose of

(a) extinguishing or reducing a liability in respect of an amount unpaid on any share;

(b) distributing to the holder of an issued share of any class or series of shares an amount not exceeding the stated capital of the class or series; and

(c) declaring its stated capital to be reduced by an amount that is not represented by realizable assets.

Contents of special resolution

36(2)       A special resolution under this section shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted.

Limitation

36(3)       A corporation shall not reduce its stated capital for any purpose other than the purpose mentioned in clause (1)(c) if there are reasonable grounds for believing that

(a) the corporation is, or would after the reduction 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.

Recovery

36(4)       A creditor of a corporation is entitled to apply to a court for an order compelling a shareholder or other recipient

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

(b) to pay or deliver to the corporation any money or property that was paid or distributed to the shareholder or other recipient as a consequence of a reduction of capital made contrary to this section.

Limitation

36(5)       An action to enforce a liability imposed by this section may not be commenced after two years from the date of the action complained of.

Remedy preserved

36(6)       This section does not affect any liability that arises under section 113.

Adjustment of stated capital account

37(1)       Upon a purchase, redemption or other acquisition by a corporation under section 32, 33, 34, 43 or 184 or clause 234(3)(f), of shares or fractions thereof issued by it, the corporation shall deduct from the stated capital account maintained for the class or series of shares of which the shares purchased, redeemed or otherwise acquired form a part an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series or fractions thereof purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

Adjustment of stated capital account

37(2)       A corporation shall deduct the amount of a payment made by the corporation to a shareholder under clause 234(3)(g) from the stated capital account maintained for the class or series of shares in respect of which the payment was made.

Adjustment of stated capital account

37(3)       A corporation shall adjust its stated capital account or accounts in accordance with any special resolution referred to in subsection 36(2).

Adjustment of stated capital account

37(4)       Upon a conversion of issued shares of a corporation into shares of another class or series or a change under section 167, 185 or 234 of issued shares of a corporation into shares of another class or series, the corporation shall

(a) deduct from the stated capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, divided by the number of issued shares of that class or series immediately before the conversion or change; and

(b) add the result obtained under clause (a) and any additional consideration pursuant to the conversion or change to the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed.

Stated capital of interconvertible shares

37(5)       For the purposes of subsection (4) and subject to its articles, where a corporation issues two classes of shares and there is attached to each class a right to convert a share of the one class into a share of the other class, if a share of one class is converted into a share of the other class, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of issued shares of both classes immediately before the conversion.

Cancellation or restoration of shares

37(6)       Shares or fractions thereof of any class or series of shares issued by a corporation and purchased, redeemed or otherwise acquired by it shall be cancelled or, if the articles limit the number of authorized shares, may be restored to the status of authorized but unissued shares of the class.

Exception

37(7)       For the purposes of this section, a corporation holding shares in itself as permitted by subsections 31(1) and (2) is deemed not to have purchased, redeemed or otherwise acquired the shares.

Conversion or change of shares

37(8)       Shares issued by a corporation and converted into shares of another class or series or changed under section 167, 185 or 234 into shares of another class or series shall become issued shares of the class or series of shares into which the shares have been converted or changed.

Effect of change of shares on number of unissued shares

37(9)       Where the articles limit the number of authorized shares of a class of shares of a corporation and issued shares of that class or of a series of shares of that class have become, pursuant to subsection (8), issued shares of another class or series, the number of unissued shares of the first-mentioned class shall, unless the articles otherwise provide, be increased by the number of shares that, pursuant to subsection (8), became shares of another class or series.

Repayment

37(10)      Debt obligations issued, pledged, hypothecated or deposited by a corporation are not redeemed by reason only that the indebtedness evidenced by the debt obligations or in respect of which the debt obligations are issued, pledged, hypothecated or deposited is repaid.

Acquisition and reissue of debt obligations

37(11)      Debt obligations issued by a corporation and purchased, redeemed or otherwise acquired by it may be cancelled or, subject to any applicable trust indenture or other agreement, may be reissued, pledged or hypothecated to secure any obligation of the corporation then existing or thereafter incurred, and that acquisition and reissue, pledge or hypothecation is not a cancellation of the debt obligations.

R.S.M. 1987 Supp., c. 10, s. 5 to 9.

Enforceability of contract

38(1)       A contract with a corporation providing for the purchase of shares of the corporation is specifically enforceable against the corporation except to the extent that the corporation cannot perform the contract without thereby being in breach of section 32 or 33.

Burden of proof

38(2)       In any action brought on a contract referred to in subsection (1), the corporation has the burden of proving that performance thereof is prevented by section 32 or 33.

Status of contracting party

38(3)       Until the corporation has fully performed a contract referred to in subsection (1), the other party retains the status of a claimant entitled to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors but in priority to the other shareholders.

Commission for sale of shares

39          The directors of a corporation may authorize the corporation to pay a commission to any person in consideration of his purchasing or agreeing to purchase shares of the corporation from the corporation or from any other person, or procuring or agreeing to procure purchasers for the shares.

Dividends

40          A corporation shall not declare or pay a dividend if there are reasonable grounds for believing that

(a) the corporation is, or would after the 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 and stated capital of all classes.

Form of dividend

41(1)       A corporation may pay a dividend by issuing fully paid shares of the corporation and, subject to section 40, a corporation may pay a dividend in money or property.

Adjustment of stated capital account

41(2)       If shares of a corporation are issued in payment of a dividend, the declared amount of the dividend stated as an amount of money shall be added to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend.

Dividends payable on transition

41(3)       Where dividends are payable on shares with par value of a corporation incorporated before the commencement of this Act, the dividends shall be calculated in accordance with the provisions set forth in the articles of the corporation.

42          [Repealed]

S.M. 2006, c. 10, s. 8.

Shareholder immunity

43(1)       The shareholders of a corporation are not, as shareholders, liable for any liability, act or default of the corporation except under subsections 36(4), 140(5) and 219(5).

Lien on shares

43(2)       The articles may provide that the corporation has a lien on a share registered in the name of a shareholder or his legal representative for a debt of that shareholder to the corporation, including an amount unpaid in respect of a share issued by a body corporate on the date it was continued under this Act.

Enforcement of lien

43(3)       A corporation may enforce a lien referred to in subsection (2) in accordance with its by-laws.

Liability continues

43(4)       Except as provided in subsection 36(1), a shareholder of a corporation incorporated before the commencement of this Act remains liable for any amount unpaid in respect of an issued share and the corporation may call in and by notice in writing demand from a shareholder the whole or any part of the amount unpaid on a share and if the call is not paid in accordance with the demand, the corporation may forfeit any share on which the call is not paid.

S.M. 1988-89, c. 11, s. 5; S.M. 2008, c. 14, s. 135.

PART VI

SECURITY CERTIFICATES, REGISTERS AND TRANSFERS

Transfers of securities

44          Except as otherwise provided in this Act and The Executions Act, the transfer or transmission of a security is governed by The Securities Transfer Act.

S.M. 1993, c. 29, s. 176; S.M. 2008, c. 14, s. 135.

Rights of holder

45(1)       Every security holder is entitled at his option to a security certificate that complies with this Act or a non-transferable written acknowledgment of his right to obtain a security certificate from a corporation in respect of the securities of that corporation held by him.

Fee for certificate

45(2)       A corporation may charge a fee of not more than $3. for a security certificate issued in respect of a transfer.

Joint holders

45(3)       A corporation is not required to issue more than one security certificate in respect of securities held jointly by several persons, and delivery of a certificate to one of several joint holders is sufficient delivery to all.

Signatures

45(4)        A security certificate shall be signed manually by at least one director or officer of the corporation or by or on behalf of a registrar, transfer agent or branch transfer agent of the corporation, or by a trustee who certifies it in accordance with a trust indenture, and any additional signatures required on a security certificate may be printed or otherwise mechanically reproduced thereon.

No manual signature required

45(5)       Notwithstanding subsection (4), a manual signature is not required on

(a) a security certificate representing

(i) a promissory note that is not issued under a trust indenture,

(ii) a fractional share, or

(iii) an option or a right to acquire a security; or

(b) a scrip certificate.

Continuation of signature

45(6)       If a security certificate contains a printed or mechanically reproduced signature of a person, the corporation may issue the security certificate, notwithstanding that the person has ceased to be a director or an officer of the corporation, and the security certificate is as valid as if he were a director or an officer at the date of its issue.

Contents of share certificate

45(7)       There shall be stated upon the face of each share certificate issued by a corporation

(a) the name of the corporation;

(b) the words "Incorporated under the Laws of Manitoba" or words of like effect;

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

(d) the number and class of shares and the designation of any series that the certificate represents.

45(8)       [Repealed] S.M. 2008, c. 14, s. 135.

Transfer restriction on public shares

45(9)       A corporation any of the issued shares of which are or were part of a distribution to the public and remain outstanding and are held by more than one person shall not restrict the transfer of those shares except by way of a constraint permitted under section 168.

Transitional

45(10)      Where a corporation or body corporate continued under this Act has outstanding security certificates, and the words "private company" appear on the certificates, those words are deemed to be a notice of a restriction, lien, agreement or endorsement for the purpose of subsection (8).

Particulars of class

45(11)      There shall be stated legibly on a share certificate issued by a corporation that is authorized to issue shares of more than one class or series

(a) the rights, privileges, restrictions and conditions attached to the shares of each class and series that exists when the share certificate is issued; or

(b) that the class or series of shares that it represents has rights, privileges restrictions or conditions attached thereto and that the corporation will furnish to a shareholder, on demand and without charge, a full copy of the text of

(i) the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series in so far as the same have been fixed by the directors, and

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

Duty

45(12)      Where a share certificate issued by a corporation contains the statement mentioned in clause (11)(b), the corporation shall furnish to a shareholder on demand and without charge a full copy of the text of

(a) the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series in so far as the same have been fixed by the directors; and

(b) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series.

Fractional share

45(13)      A corporation may issue a certificate for a fractional share or may issue in place thereof scrip certificates in bearer form that entitle the holder to receive a certificate for a full share by exchanging scrip certificates aggregating a full share.

Scrip certificates

45(14)      The directors may attach conditions to any scrip certificates issued by a corporation, including conditions that

(a) the scrip certificates become void if not exchanged for a share certificate representing a full share before a specified date; and

(b) any shares for which such scrip certificates are exchangeable may, notwithstanding any pre-emptive right, be issued by the corporation to any person and the proceeds thereof distributed rateably to the holders of the scrip certificates.

Holder of fractional share

45(15)      A holder of a fractional share issued by a corporation is not entitled to exercise voting rights or to receive a dividend in respect of the fractional share, unless

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

(b) the articles of the corporation otherwise provide.

Holder of scrip certificate

45(16)      A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate.

S.M. 2008, c. 14, s. 135.

Securities records

46(1)       A corporation shall maintain a securities register in which it records the securities issued by it in registered form showing with respect to each class or series of securities

(a) the names, alphabetically arranged, and the latest known address of each person who is or has been a security holder;

(b) the number of securities held by each security holder; and

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

Central and branch registers

46(2)       A corporation may appoint an agent to maintain a central securities register and branch securities registers.

Where registers are to be kept

46(3)       Subject to subsection 20(5), a corporation shall maintain its central securities register at its registered office or at another place in Manitoba designated by the directors.  A corporation may maintain a branch securities register at any place designated by the directors, whether in Manitoba or not.

Effect of registration

46(4)       Registration of the issue or transfer of a security in the central securities register or in a branch securities register is a complete and valid registration for all purposes.

Branch register

46(5)       A branch securities register shall only contain particulars of securities issued or transferred at that branch.

Central register

46(6)       Particulars of each issue or transfer of a security registered in a branch securities register shall also be kept in the corresponding central securities register.

Destruction of certificates

46(7)       A corporation, its agent or a trustee defined in subsection 77(1) is not required to produce

(a) a cancelled security certificate in registered form, an instrument referred to in subsection 29(1) that is cancelled or a like cancelled instrument in registered form six years after the date of its cancellation;

(b) a cancelled security certificate in bearer form or an instrument referred to in subsection 29(1) that is cancelled or a like cancelled instrument in bearer form after the date of its cancellation; or

(c) an instrument referred to in subsection 29(1) or a like instrument, irrespective of its form, after the date of its expiry.

S.M. 2006, c. 10, s. 9.

Dealings with registered holder

47(1)       A corporation or a trustee defined in subsection 77(1) may, subject to The Executions Act and sections 128, 129 and 132 of this Act, treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payments in respect of the security, and otherwise to exercise all the rights and powers of an owner of the security.

Constructive registered holder

47(2)       Notwithstanding subsection (1), a corporation whose articles restrict the right to transfer its securities shall, and any other corporation may, treat a person as a registered security holder entitled to exercise all the rights of the security holder he represents, if that person furnishes evidence as described in subsection 87(3) of The Securities Transfer Act to the corporation that he is

(a) the executor, administrator, heir or legal representative of the heirs, of the estate of a deceased security holder;

(b) a guardian, committee, trustee, curator or tutor representing a registered security holder who is an infant, an incompetent person or a missing person;

(c) a liquidator of, or a trustee in bankruptcy for, a registered security holder; or

(d) a substitute decision maker for property for a registered security holder, who has been appointed under The Vulnerable Persons Living with a Mental Disability Act, and who has the power to exercise such rights on behalf of the registered owner.

Permissible registered holder

47(3)       If a person upon whom the ownership of a security devolves by operation of law, other than a person described in subsection (2), furnishes proof of his authority to exercise rights or privileges in respect of a security of the corporation that is not registered in his name, the corporation shall treat that person as entitled to exercise those rights or privileges.

Immunity of corporation

47(4)       A corporation is not required to inquire into the existence of, or see to the performance or observance of any duty owed to a third person by a registered holder of any of its securities or by anyone whom it treats, as permitted or required by this section, as the owner or registered holder thereof.

Infants

47(5)       If an infant exercises any rights of ownership in the securities of a corporation, no subsequent repudiation or avoidance is effective against the corporation.

Joint holders

47(6)       A corporation may treat as the owner of a security any survivor of the persons to whom the security was issued as joint holders, if it receives proof satisfactory to it of the death of any of the joint holders.

Transmission of securities

47(7)       Subject to any applicable law relating to the collection of taxes, a person referred to in clause (2)(a) is entitled to become a registered holder or to designate a registered holder, if he deposits with the corporation or its transfer agent

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

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

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

(iii) a lawyer or notary acting on behalf of the person referred to in clause (2)(a); or

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

together with

(c) an affidavit or declaration of transmission made by the person referred to in clause (2)(a), stating particulars of the transmission; and

(d) the security certificate that was owned by the deceased holder

(i) in case of a transfer to the person referred to in clause (2)(a), with or without the endorsement of that person, and

(ii) in case of a transfer to any other person, endorsed in accordance with section 29 of The Securities Transfer Act,

and accompanied by any assurance the corporation may require under section 87 of The Securities Transfer Act.

Excepted transmissions

47(8)        Notwithstanding subsection (7), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a legal representative of the deceased holder is entitled, subject to any applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder, if he deposits with the corporation or its transfer agent

(a) the security certificate that was owned by the deceased holder; and

(b) reasonable proof of the governing laws, of the deceased holder's interest in the security and of the right of the legal representative or the person he designates to become the registered holder.

Right of corporation

47(9)       Deposit of the documents required by subsection (7) or (8) empowers a corporation or its agent to record in a securities register the transmission of a security from the deceased holder to a person referred to in clause (2)(a) or to such person as the person referred to in that clause may designate and, thereafter, to treat the person who thus becomes a registered holder as the owner of those securities.

S.M. 1993, c. 29, s. 176; S.M. 2008, c. 14, s. 135.

Overissue

48(1)       When there has been an overissue within the meaning of The Securities Transfer Act and the corporation subsequently amends its articles, or a trust indenture, to increase its authorized securities to a number equal to or in excess of the number of securities previously authorized plus the amount of the securities overissued, the securities so overissued are valid from the date of their issue.

Non-application

48(2)       Subsection (1) does not apply if the issuer has purchased and delivered a security in accordance with subsection 67(2) or (3) of The Securities Transfer Act.

Purchase or payment under Securities Transfer Act

48(3)       A purchase or payment in accordance with subsection 67(2) or (3) of The Securities Transfer Act is not a purchase or payment to which section 32, 33, 34 or 37 applies.

S.M. 2008, c. 14, s. 135.

49 to 76    [Repealed]

S.M. 1991-92, c. 41, s. 4; S.M. 2008, c. 14, s. 135.

PART VII

TRUST INDENTURES

Definitions

77(1)       In this Part,

"event of default" means an event specified in a trust indenture on the occurrence of which

(a) a security interest constituted by the trust indenture becomes enforceable, or

(b) the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity,

but the event is not an event of default until all conditions prescribed by the trust indenture in connection with the event for the giving of notice or the lapse of time or otherwise have been satisfied; (« cas de défaut »)

"trustee" means any person appointed as trustee under the terms of a trust indenture to which a corporation is a party and includes any successor trustee; (« fiduciaire »)

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

Application

77(2)       This Part applies to a trust indenture if the debt obligations issued or to be issued under the trust indenture are part of a distribution to the public.

Conflict of interest

78(1)       No person shall be appointed as trustee if there is a material conflict of interest between his role as trustee and his role in any other capacity.

Eliminating conflict of interest

78(2)       A trustee shall, within 90 days after he becomes aware that a material conflict of interest exists

(a) eliminate the conflict of interest; or

(b) resign from office.

Validity

78(3)       A trust indenture, any debt obligations issued thereunder and a security interest effected thereby are valid notwithstanding a material conflict of interest of the trustee.

Removal of trustee

78(4)       If a trustee contravenes subsection (1) or (2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit.

Qualification of trustee

79          A trustee, or at least one of the trustees if more than one is appointed, shall be a body corporate incorporated under the laws of Canada or a province of Canada and authorized to carry on the business of a trust company.

List of security holders

80(1)       A holder of debt obligations issued under a trust indenture may, upon payment to the trustee of a reasonable fee, require the trustee to furnish within 15 days after delivering to the trustee the statutory declaration referred to in subsection (4), a list setting out

(a) the names and addresses of the registered holders of the outstanding debt obligations;

(b) the principal amount of outstanding debt obligations owned by each of the holders described in clause (a); and

(c) the aggregate principal amount of the debt obligations outstanding;

as shown on the records maintained by the trustee on the day that the statutory declaration is delivered to that trustee.

Duty of issuer

80(2)       Upon the demand of a trustee, the issuer of debt obligations shall furnish the trustee with the information required to enable the trustee to comply with subsection (1).

Corporate applicant

80(3)       If the person requiring the trustee to furnish a list under subsection (1) is a body corporate, the statutory declaration required under that subsection shall be made by a director or officer of the body corporate.

Contents of statutory declaration

80(4)       The statutory declaration required under subsection (1) shall state

(a) the name and address of the person requiring the trustee to furnish the list and, if the person is a body corporate, the address for service thereof; and

(b) that the list will not be used except as permitted under subsection (5).

Use of list

80(5)       A list obtained under this section shall not be used by any person except in connection with

(a) an effort to influence the voting of the holders of debt obligations; or

(b) an offer to acquire debt obligations; or

(c) any other matter relating to the debt obligations or the affairs of the issuer or guarantor thereof.

Offence

80(6)       A person who, without reasonable cause, contravenes subsection (5) 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.

Evidence of compliance

81(1)       An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall, before doing any act under clause (a), (b) or (c), furnish the trustee with evidence of compliance with the conditions in the trust indenture relating to

(a) the issue, certification and delivery of debt obligations under the trust indenture; or

(b) the release or release and substitution of property subject to a security interest constituted by the trust indenture; or

(c) the satisfaction and discharge of the trust indenture.

Duty of issuer or guarantor

81(2)       Upon the demand of a trustee, the issuer or guarantor of debt obligations issued or to be issued under a trust indenture shall furnish the trustee with evidence of compliance with the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

Contents of declarations

82          Evidence of compliance as required by section 81 shall consist of

(a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that section have been complied with; and

(b) where the trust indenture requires compliance with conditions that are subject to review

(i) by legal counsel, an opinion of legal counsel that the conditions referred to in that section have been complied with, and

(ii) by an auditor or accountant, an opinion or report of the auditor of the issuer or guarantor, or such other accountant as the trustee may select, that the conditions referred to in that section have been complied with.

Further evidence of compliance

83          The evidence of compliance referred to in section 82 shall include a statement by the person giving the evidence

(a) declaring that he has read and understands the conditions of the trust indenture described in section 81;

(b) describing the nature and scope of the examination or investigation upon which he based the certificate, statement or opinion; and

(c) declaring that he has made such examination or investigation as he believes necessary to enable him to make the statements or give the opinions contained or expressed therein.

Trustee may require evidence of compliance

84(1)       Upon the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with evidence in such form as the trustee may require as to compliance with any condition thereto relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

Certificate of compliance

84(2)       At least once in each 12 month period beginning on the date of the trust indenture and at any other time upon the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with a certificate that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars thereof.

Notice of default

85          The trustee shall give to the holders of debt obligations issued under a trust indenture, within 30 days after the trustee becomes aware of the occurrence thereof, notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs the issuer or guarantor in writing.

Duty of care

86          A trustee in exercising his powers and discharging his duties shall

(a) act honestly and in good faith with a view to the best interests of the holders of the debt obligations issued under the trust indenture; and

(b) exercise the care, diligence and skill of a reasonably prudent trustee.

Reliance on statements

87          Notwithstanding section 86, a trustee is not liable if he relies in good faith upon statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

No exculpation

88          No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued thereunder or between the trustee and the issuer or guarantor shall operate so as to relieve a trustee from the duties imposed upon him by section 86.

PART VIII

RECEIVERS AND RECEIVER-MANAGERS

Functions of receiver

89           A receiver of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property and pay the liabilities connected with the property and realize the security interest of those on behalf of whom he is appointed, but, except to the extent permitted by a court, he may not carry on the business of the corporation.

Functions of receiver-manager

90          A receiver of a corporation may, if he is also appointed receiver-manager of the corporation, carry on any business of the corporation to protect the security interest of those on behalf of whom he is appointed.

Directors' powers cease

91          If a receiver-manager is appointed, by a court or under an instrument, the powers of the directors of the corporation that the receiver-manager is authorized to exercise may not be exercised by the directors until the receiver-manager is discharged.

Duty to act

92          A receiver or receiver-manager appointed by a court shall act in accordance with the directions of the court.

Duty under instrument

93          A receiver or receiver-manager appointed under an instrument shall act in accordance with that instrument and any direction of a court given under section 95.

Duty of care

94          A receiver or receiver-manager of a corporation appointed under an instrument shall

(a) act honestly and in good faith; and

(b) deal with any property of the corporation in his possession or control in a commercially reasonable manner.

Directions given by court

95          Upon an application by a receiver or receiver-manager, whether appointed by a court or under an instrument, or upon an application by any interested person, a court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order appointing, replacing or discharging a receiver or receiver-manager and approving his accounts;

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

(c) an order fixing the remuneration of the receiver or receiver-manager;

(d) an order requiring the receiver or receiver-manager, or a person by or on behalf of whom he is appointed, to make good any default in connection with the receiver's or receiver-manager's custody or management of the property and business of the corporation, or to relieve the person from any default on such terms as the court thinks fit, and to confirm any act of the receiver or receiver-manager;

(e) an order giving directions on any matter relating to the duties of the receiver or receiver-manager.

Duties of receiver and receiver-manager

96(1)       A receiver or receiver-manager shall

(a) immediately notify the Director of his appointment or discharge;

(b) take into his custody and control the property of the corporation in accordance with the court order or instrument under which he is appointed;

(c) open and maintain a bank account in his name as receiver or receiver-manager of the corporation for the moneys of the corporation coming under his control;

(d) keep detailed accounts of all transactions carried out by him as receiver or receiver-manager;

(e) keep accounts of his administration and have the accounts available during usual business hours for inspection by the directors of the corporation;

(f) prepare at least once in every six-month period after the date of his appointment financial statements of his administration as far as is practicable in the form required by section 149; and

(g) upon completion of his duties, render a final account of his administration in the form adopted for interim accounts under clause (f).

Liability of receiver for wages

96(2)       Where, under the provisions of a security of a body corporate secured by a floating charge or by a charge that includes a floating charge upon the property of the body corporate, a receiver or receiver-manager of the property is appointed or possession of any of the property is taken by or on behalf of a holder of the security, there shall be paid out of any assets secured by the floating charge but not subject to a fixed charge that comes into the hands of the receiver or receiver-manager or holder, in priority to any claim for payment under the security the unpaid wages for a period not exceeding three months of all clerks, labourers, servants, apprentices and other wage earners in the employ of the body corporate as at the date the receiver or receiver-manager is appointed or the holder takes possession, or so much of those wages as may be realized out of those assets.

Receiver subrogated

96(3)       A receiver or receiver-manager or holder making payment under subsection (2) is subrogated, to the extent of the amount of the payment, to the rights that the person receiving payment has under section 114 but subject to the person's prior right to enforce payment under that section of any balance of wages due to and not received by him under subsection (2).

Rights of director who pays receiver

96(4)       Where a receiver or receiver-manager or holder receives payment from a director of the body corporate under subsection (3), the director is entitled to any preference that the person to whose rights the receiver or receiver-manager or holder was subrogated would have, or, if a judgment has been recovered for the amount paid by the director, the director is entitled to an assignment of the judgment.

S.M. 1988-89, c. 11, s. 5.

PART IX

DIRECTORS AND OFFICERS

Duty to manage or supervise management

97(1)       Subject to any unanimous shareholder agreement, the directors shall manage, or supervise the management of, the business and affairs of a corporation.

Number of directors

97(2)       A corporation shall have one or more directors but a corporation, any of the issued securities of which are or were part of a distribution to the public and remain outstanding and are held by more than one person, shall have not fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates.

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

By-laws

98(1)       Unless the articles or by-laws or a unanimous shareholder agreement otherwise provide, the directors may, by resolution, make, amend, or repeal any by-laws that regulate the business or affairs of the corporation.

Shareholder approval

98(2)       The directors shall submit a by-law, or an amendment or a repeal of a by-law, made under subsection (1) to the shareholders at the next meeting of shareholders, and the shareholders may, by ordinary resolution, confirm, reject or amend the by-law, amendment or repeal.

Effective date

98(3)       A by-law, or an amendment or a repeal of a by-law, is effective from the date of the resolution of the directors under subsection (1) until it is confirmed, confirmed as amended or rejected by the shareholders under subsection (2) or until it ceases to be effective under subsection (4) and, where the by-law is confirmed or confirmed as amended, it continues in effect in the form in which it was so confirmed.

Effective date

98(4)       If a by-law, or an amendment or repeal thereof is rejected by the shareholders, or if the directors do not submit the by-law, amendment or repeal to the shareholders as required under subsection (2), the by-law, amendment or repeal ceases to be effective and no subsequent resolution of the directors to make, amend or repeal a by-law having substantially the same purpose or effect is effective until it is confirmed or confirmed as amended by the shareholders.

Shareholder proposal

98(5)       A shareholder entitled to vote at an annual meeting of shareholders may, in accordance with section 131, make a proposal to make, amend or repeal a by-law.

Organization meeting

99(1)       After the issue of the certificate of incorporation, a meeting of the directors of the corporation shall be held at which the directors may

(a) make by-laws;

(b) adopt forms of security certificates and corporate records;

(c) authorize the issue of securities;

(d) appoint officers;

(e) appoint an auditor to hold office until the first meeting of shareholders;

(f) make banking arrangements; and

(g) transact any other business.

Exception

99(2)       Subsection (1) does not apply to a body corporate to which a certificate of amalgamation has been issued under subsection 179(4) or to which a certificate of continuance has been issued under subsection 181(5).

Calling meeting

99(3)       An incorporator or a director may call the meeting of directors referred to in subsection (1) by giving not less than five days notice thereof by mail to each director, stating the time and place of the meeting.

S.M. 1988-89, c. 11, s. 5.

Qualifications of directors

100(1)      The following persons are disqualified from being a director of a corporation:

(a) anyone who is less than 18 years of age;

(b) a person who is not an individual; and

(c) a person who has the status of a bankrupt.

Further qualifications

100(2)      Unless the articles otherwise provide, a director of a corporation is not required to hold shares issued by the corporation.

Residency

100(3)      Subject to subsection (3.1), at least 25% of a corporation's directors must be residents of Canada.

Residency when directors are three or fewer

100(3.1)    If a corporation's board is comprised of three or fewer directors, one of them must be a resident of Canada.

100(4)      [Repealed] S.M. 2006, c. 10, s. 11.

S.M. 2006, c. 10, s. 11.

Term of office

101(1)      Each director named in the articles holds office from the issue of the certificate of incorporation until the first meeting of shareholders.

Election of directors

101(2)      Subject to clause 102(b), shareholders of a corporation shall, by ordinary resolution at the first meeting of shareholders and at each succeeding annual meeting at which an election of directors is required, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election.

Staggered terms

101(3)      It is not necessary that all directors elected at a meeting of shareholders hold office for the same term.

No stated terms

101(4)      A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following his election.

Incumbent directors

101(5)      Notwithstanding subsections (1), (2) and (4), if directors are not elected at a meeting of shareholders the incumbent directors continue in office until their successors are elected.

Vacancy among candidates

101(6)      If a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles by reason of the disqualification, incapacity or death of any candidates, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.

Cumulative voting

102         Where the articles provide for cumulative voting,

(a) the articles shall require a fixed number and not a minimum and maximum number of directors;

(b) each shareholder entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by him multiplied by the number of directors to be elected, and he may cast all those votes in favour of one candidate or distribute them among the candidates in any manner;

(c) a separate vote of shareholders shall be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting two or more persons to be elected by a single resolution;

(d) if a shareholder has voted for more than one candidate without specifying the distribution of his votes among the candidates, he is deemed to have distributed his votes equally among the candidates for whom he voted;

(e) if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled;

(f) each director ceases to hold office at the close of the first annual meeting of shareholders following his election;

(g) a director may not be removed from office if the votes cast against his removal would be sufficient to elect him and the votes could be voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the articles were then being elected; and

(h) the number of directors required by the articles may not be decreased if the votes cast against the motion to decrease would be sufficient to elect a director and the votes could be voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the articles were then being elected.

Ceasing to hold office

103(1)      A director of a corporation ceases to hold office when he

(a) dies or resigns; or

(b) is removed from office in accordance with section 104; or

(c) becomes disqualified under subsection 100(1).

Effective date of resignation

103(2)      A resignation of a director becomes effective at the time a written resignation is sent to the corporation, or at the time specified in the resignation, whichever is later.

Removal of directors

104(1)      Subject to clause 102(g), the shareholders of a corporation may by ordinary resolution at a special meeting remove any director or directors from office.

Exception

104(2)      Where the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors, a director so elected may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series.

Vacancy

104(3)      Subject to clauses 102(b) to (e), a vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed or, if not so filled, may be filled under section 106.

Attendance at meetings

105(1)      A director of a corporation is entitled to receive notice of and to attend and be heard at every meeting of shareholders.

Statement of director

105(2)      A director who

(a) resigns; or

(b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing him from office; or

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill his office as director, whether because of his resignation or removal or because his term of office has expired or is about to expire,

is entitled to submit to the corporation a written statement giving the reasons for his resignation or the reasons why he opposes any proposed action or resolution.

Circulating statement

105(3)      A corporation shall forthwith send a copy of the statement referred to in subsection (2) to every shareholder entitled to receive notice of any meeting referred to in subsection (1) and to the Director, unless the statement is included in or attached to a management proxy circular required by section 144.

Immunity

105(4)      No corporation or person acting on its behalf incurs any liability by reason only of circulating a director's statement in compliance with subsection (3).

Filling vacancy

106(1)      Notwithstanding subsection 109(3) but subject to subsections (3) and (4), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number or minimum number of directors or from a failure to elect the number or minimum number of directors required by the articles.

Calling meeting

106(2)      If there is not a quorum of directors, or if there has been a failure to elect the number or minimum number of directors required by the articles, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder.

Class director

106(3)      Where the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors and a vacancy occurs among those directors,

(a) subject to subsection (4), the remaining directors elected by that class or series may fill the vacancy except a vacancy resulting from an increase in the number or minimum number of directors for that class or series or from a failure to elect the number or minimum number of directors for that class or series; or

(b) if there are no remaining directors elected by that class or series, any holder of shares of that class or series may call a meeting of the holders thereof for the purpose of filling the vacancy.

Shareholders filling vacancy

106(4)      The articles may provide that a vacancy among the directors shall only be filled by a vote of the shareholders, or by a vote of the holders of any class or series of shares having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by that class or series.

Unexpired term

106(5)      A director appointed or elected to fill a vacancy holds office for the unexpired term of his predecessor.

Number of directors

107         The shareholders of a corporation may by special resolution increase or, subject to clause 102(h), decrease the number of directors or the minimum or maximum number of directors, but no decrease shall shorten the term of an incumbent director.

Notice of change of directors

108(1)      Within 15 days after a change is made among its directors, a corporation shall send to the Director a notice, in the form the Director requires, setting out the change, and the Director shall file the notice.

Application to court

108(2)      Any interested person, or the Director, may apply to a court for an order to require a corporation to comply with subsection (1), and the court may so order and make any further order it thinks fit.

S.M. 2006, c. 10, s. 12.

Meeting of directors

109(1)      Unless the articles or by-laws otherwise provide, the directors may meet at any place, and upon such notice as the by-laws require.

Quorum

109(2)      Subject to the articles or by-laws, a majority of the number of directors or minimum number of directors required by the articles constitutes a quorum at any meeting of directors, and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

Residency requirements re quorum

109(3)      Directors shall not transact business at a meeting of directors unless at least 25% of the directors present are residents of Canada or, if the corporation has three or fewer directors, at least one of the directors present is a resident of Canada.

Transacting business without resident quorum

109(4)      Despite subsection (3), directors may transact business at a meeting of directors when the number of directors who are required to be residents of Canada is not present if

(a) a director who is a resident of Canada and is unable to be present approves in writing, or by telephonic, electronic or other communication facility, the business transacted at the meeting; and

(b) the number of directors who are required to be residents of Canada would have been present had that director been present at the meeting.

Notice of meeting

109(5)      A notice of a meeting of directors shall specify any matter referred to in subsection 110(3) that is to be dealt with at the meeting but, unless the by-laws otherwise provide, need not specify the purpose of the business to be transacted at the meeting.

Waiver of notice

109(6)      A director may in any manner waive a notice of a meeting of directors; and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Adjournment

109(7)      Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.

One director meeting

109(8)      Where a corporation has only one director, that director may constitute a meeting.

Participation in meeting by electronic means

109(9)      Unless the by-laws otherwise provide, a director may participate in a meeting of directors or of a committee of directors by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if

(a) all the directors of the corporation consent; and

(b) the meeting is held in accordance with the regulations, if any.

Deemed presence of participant

109(10)     For the purposes of this Act, a director who participates in a meeting in the manner provided in subsection (9) is deemed to be present at the meeting.

S.M. 2006, c. 10, s. 13.

Delegation

110(1)      Directors of a corporation may appoint from their number a managing director who is a resident of Canada or a committee of directors and delegate to such managing director or committee any of the powers of the directors.

Resident majority

110(2)      If the directors of a corporation, other than a corporation referred to in subsection 100(4), appoint a committee of directors, a majority of the members of the committee must be residents of Canada.

Limits on authority

110(3)      Notwithstanding subsection (1), no managing director and no committee of directors has authority to

(a) submit to the shareholders any question or matter requiring the approval of the shareholders; or

(b) fill a vacancy among the directors or in the office of auditor; or

(c) issue securities except in the manner and on the terms authorized by the directors; or

(d) declare dividends; or

(e) purchase, redeem or otherwise acquire shares issued by the corporation; or

(f) pay a commission referred to in section 39; or

(g) approve a management proxy circular referred to in Part XII; or

(h) approve any financial statements referred to in section 149; or

(i) adopt, amend or repeal by-laws.

Validity of acts of directors and officers

111         An act of a director or officer is valid notwithstanding an irregularity in his election or appointment or a defect in his qualification.

Resolution in lieu of meeting

112(1)      A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors, satisfies all the requirements of this Act relating to meetings of directors and is as valid as if it had been passed at a meeting of directors or committee of directors and is effective from the date specified in the resolution, but that date shall not be prior to the date on which the first director signed the resolution.

Filing resolution

112(2)      A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or committee of directors.

Liability of directors

113(1)      Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under section 25 for a consideration other than money are jointly and severally liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution.

Further liability of directors

113(2)      Directors of a corporation who vote for or consent to a resolution authorizing

(a) a purchase, redemption or other acquisition of shares contrary to section 32, 33 or 34;

(b) a commission, contrary to section 39;

(c) a payment of a dividend contrary to section 40;

(d) [repealed] S.M. 2006, c. 10, s. 14;

(e) a payment of an indemnity contrary to section 119;

(f) a payment to a shareholder contrary to section 184 or 234; or

(g) any investment or financial assistance contrary to the provisions of Part XXIV;

are jointly and severally liable to restore to the corporation any amounts so distributed or paid and not otherwise recovered by the corporation.

Contribution

113(3)      A director who has satisfied a judgment rendered under this section is entitled to contribution from the other directors who voted for or consented to the unlawful act upon which the judgment was founded.

Recovery

113(4)      A director liable under subsection (2) is entitled to apply to a court for an order compelling a shareholder or other recipient to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 32, 33, 34, 39, 40, 119, 184 or 234 or the provisions of Part XXIV.

Order of court

113(5)      In connection with an application under subsection (4) a court may, if it is satisfied that it is equitable to do so,

(a) order a shareholder or other recipient to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 32, 33, 34, 39, 40, 119, 184 or 234 or the provisions of Part XXIV;

(b) order a corporation to return or issue shares to a person from whom the corporation has purchased, redeemed or otherwise acquired shares; and

(c) make any further order it thinks fit.

No liability

113(6)      A director is not liable under subsection (1) if he proves that he did not know and could not reasonably have known that the share was issued for a consideration less than the fair equivalent of the money that the corporation would have received if the share had been issued for money.

Limitation

113(7)      An action to enforce a liability imposed by this section may not be commenced after two years from the date of the resolution authorizing the action complained of.

S.M. 2006, c. 10, s. 14.

Liability of directors for wages

114(1)      Directors of a corporation are jointly and severally liable to employees of the corporation for all debts not exceeding six months' wages payable to each of the employees for services performed for the corporation while they are directors respectively.

Conditions precedent to liability

114(2)      A director is not liable under subsection (1) unless

(a) the corporation has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part; or

(b) the corporation has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proved within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution; or

(c) the corporation has made an assignment, or a receiving order has been made against it under the Bankruptcy Act (Canada), and a claim for the debt has been proved within six months after the date of the assignment or receiving order.

Limitation

114(3)      A director is not liable under this section unless he is sued for a debt referred to in subsection (1) while he is a director or within two years after he has ceased to be a director.

Amount due after execution

114(4)      Where the execution referred to in clause (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

Subrogation of director

114(5)      Where a director pays a debt referred to in subsection (1) that is proved in liquidation and dissolution or bankruptcy proceedings, he is entitled to any preference that the employee would have been entitled to, and where a judgment has been obtained he is entitled to an assignment of the judgment.

Contribution

114(6)      A director who has satisfied a claim under this section is entitled to contribution from the other directors who were liable for the claim.

Deemed directors

114.1(1)    If all of a corporation's directors have resigned or have been removed without replacement, a person who manages or supervises the management of the business and affairs of the corporation is deemed to be a director for the purposes of this Act.

Exceptions

114.1(2)    Subsection (1) does not apply to

(a) an officer who manages the business or affairs of the corporation under the direction or control of a shareholder or other person;

(b) a lawyer, accountant or other professional who participates in the management of the corporation solely for the purpose of providing professional services; or

(c) a trustee in bankruptcy, receiver, receiver-manager or secured creditor who participates in the management of the corporation or exercises control over its property solely for the purpose of realizing security, or, in the case of a trustee in bankruptcy, administering a bankrupt's estate.

S.M. 2006, c. 10, s. 15.

Disclosure of interested director contract

115(1)      A director or officer of a corporation who

(a) is a party to a material contract or proposed material contract with the corporation; or

(b) is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the corporation;

shall disclose in writing to the corporation or request to have entered in the minutes of meetings of directors the nature and extent of his interest.

Time of disclosure for director

115(2)      The disclosure required by subsection (1) shall be made, in the case of a director,

(a) at the meeting at which a proposed contract is first considered; or

(b) if the director was not then interested in a proposed contract, at the first meeting after he becomes so interested; or

(c) if the director becomes interested after a contract is made, at the first meeting after he becomes so interested; or

(d) if a person who is interested in a contract later becomes a director, at the first meeting after he becomes a director.

Time of disclosure for officer

115(3)      The disclosure required by subsection (1) shall be made, in the case of an officer who is not a director,

(a) forthwith after he becomes aware that the contract or proposed contract is to be considered or has been considered at a meeting of directors; or

(b) if the officer becomes interested after a contract is made, forthwith after he becomes so interested; or

(c) if a person who is interested in a contract later becomes an officer, forthwith after he becomes an officer.

Time of disclosure for director or officer

115(4)      If a material contract or proposed material contract is one that, in the ordinary course of the corporation's business, would not require approval by the directors or shareholders, a director or officer shall disclose in writing to the corporation or request to have entered in the minutes of meetings of directors the nature and extent of his interest forthwith after the director or officer becomes aware of the contract or proposed contract.

Voting

115(5)      A director referred to in subsection (1) may vote on any resolution to approve the contract if the contract is

(a) an arrangement by way of security for money lent to or obligations undertaken by him for the benefit of the corporation or an affiliate; or

(b) a contract relating primarily to his remuneration as a director, officer, employee or agent of the corporation or an affiliate; or

(c) a contract for indemnity or insurance under section 119; or

(d) a contract with an affiliate; or

(e) other than a contract referred to in clauses (a) to (d);

but, in the case of a contract as described in clause (e), the resolution shall not be valid unless it is approved by not less than 2/3 of the votes of all the shareholders of the corporation to whom notice of the nature and extent of the director's interest in the contract or transaction are declared and disclosed in reasonable detail.

Continuing disclosure

115(6)      For the purposes of this section, a general notice to the directors by a director or officer, declaring that he is a director or officer of or has a material interest in a person and is to be regarded as interested in any contract made with that person, is a sufficient declaration of interest in relation to any contract so made.

Avoidance standards

115(7)      A material contract between a corporation and one or more of its directors or officers, or between a corporation and another person of which a director or officer of the corporation is a director or officer or in which he has a material interest, is neither void nor voidable by reason only of that relationship or by reason only that a director with an interest in the contract is present at or is counted to determine the presence of a quorum at a meeting of directors or committee of directors that authorized the contract, if the director or officer disclosed his interest in accordance with subsection (2), (3), (4) or (6), as the case may be, and the contract was approved by the directors or the shareholders and it was reasonable and fair to the corporation at the time it was approved.

Application to court

115(8)      Where a director or officer of a corporation fails to disclose his interest in a material contract in accordance with this section, a court may, upon the application of the corporation or a shareholder of the corporation, set aside the contract on such terms as it thinks fit.

Officers

116         Subject to the articles and by-laws, and any unanimous shareholder agreement,

(a) the directors may designate the offices of the corporation, appoint as officers persons of full capacity, specify their duties and delegate to them powers to manage the business and affairs of the corporation, except powers to do anything referred to in subsection 110(3);

(b) a director may be appointed to any office of the corporation; and

(c) two or more offices of the corporation may be held by the same person.

Duty of care of directors and officers

117(1)      Every director and officer of a corporation in exercising his powers and discharging his duties shall

(a) act honestly and in good faith with a view to the best interests of the corporation; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Duty to comply

117(2)      Every director and officer of a corporation shall comply with this Act and the regulations, the articles and by-laws, and any unanimous shareholder agreement.

No exculpation

117(3)      Subject to subsection 140(5), no provision in a contract, the articles, the by-laws or a resolution relieves a director or officer from the duty to act in accordance with this Act or the regulations or relieves him from liability for a breach thereof.

Interpretation

117(4)      This section is in addition to and not in derogation of, any enactment or rule of law relating to the duty or liability of directors or officers of a corporation.

S.M. 1988-89, c. 11, s. 5.

Dissent

118(1)      A director who is present at a meeting of directors or committee of directors is deemed to have consented to any resolution passed or action taken thereat, unless

(a) he requests that his dissent be or his dissent is entered in the minutes of the meeting; or

(b) he sends his written dissent to the secretary of the meeting before the meeting is adjourned; or

(c) he sends his dissent by registered mail or delivers it to the registered office of the corporation immediately after the meeting is adjourned.

Loss of right to dissent

118(2)      A director who votes for or consents to a resolution is not entitled to dissent under subsection (1).

Dissent of absent director

118(3)      A director who was not present at a meeting at which a resolution was passed or action taken is deemed to have consented thereto, unless within seven days after he becomes aware of the resolution he

(a) causes his dissent to be placed with the minutes of the meeting; or

(b) sends his dissent by registered mail or delivers it to the registered office of the corporation.

Defence of reasonable diligence

118(4)      A director is not liable under section 113 or 114, and has complied with his or her duties under subsection 117(2), if the director 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 director, 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.

Defence of good faith

118(5)      A director has complied with his or her duties under subsection 117(1) if the director relied in good faith on financial statements or a report described in clause (4)(a) or (b).

S.M. 2006, c. 10, s. 16.

Indemnification

119(1)      Except in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favour, a corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation's request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate, if

(a) he acted honestly and in good faith with a view to the best interests of the corporation; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

Indemnification in derivative actions

119(2)      A corporation may with the approval of a court indemnify a person referred to in subsection (1) in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favour, to which he is made a party by reason of being or having been a director or an officer of the corporation or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with the action if he fulfils the conditions set out in clauses (1)(a) and (b).

Indemnity as of right

119(3)      Notwithstanding anything in this section, a person referred to in subsection (1) is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by him in connection with the defence of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity

(a) was substantially successful on the merits in his defence of the action or proceeding; and

(b) fulfils the conditions set out in clauses (1)(a) and (b).

Directors' and officers' insurance

119(4)      A corporation may purchase and maintain insurance for the benefit of any person referred to in subsection (1) against any liability incurred by him

(a) in his capacity as a director or officer of the corporation, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the corporation; or

(b) in his capacity as a director or officer of another body corporate where he acts or acted in that capacity at the corporation's request, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the body corporate.

Application to court

119(5)      A corporation or a person referred to in subsection (1) may apply to a court for an order approving an indemnity under this section and the court may so order and make any further order it thinks fit.

Notice to director

119(6)      An applicant under subsection (5) shall give the Director notice of the application, and the Director is entitled to appear and be heard in person or by counsel.

Other notice

119(7)      Upon an application under subsection (5), the court may order notice to be given to any interested person and that person is entitled to appear and be heard in person or by counsel.

Remuneration

120         Subject to the articles, the by-laws and any unanimous shareholder agreement, the directors of a corporation may fix the remuneration of the directors, officers and employees of the corporation.

PART X

RETURNS AND INSIDERS

DIVISION I

RETURNS

Annual return

121(1)      Every body corporate required to register under this Act shall, on or before the prescribed date, send to the Director an annual return in the form the Director requires, and the Director shall file it.

Who shall sign

121(2)      A director, officer, or agent of the body corporate shall sign the return under subsection (1) and certify it to be correct.

S.M. 2006, c. 10, s. 17.

Special return

122(1)      The minister may, at any time, by notice, require a body corporate or a director or an officer thereof to make a special return upon any subject connected with the affairs of the body corporate, within the time specified in the notice.

Contents of special return

122(2)      The special return under subsection (1) may be in respect of any matter that is certified by the minister to be in the public interest and may include information in respect of the beneficial ownership or interest in the securities of the body corporate.

Ownership of shares

123         The minister may by notice require the person shown on any return as the registered holder of 10% or more of the issued voting shares of a body corporate, to file, in the form the minister requires, a declaration with respect to the ownership of the shares.

S.M. 2006, c. 10, s. 18.

Offence

124(1)      A person who fails, within the time specified in the notice sent by the minister, to file the special return under subsection 122(1), or the declaration under section 123, is guilty of an offence and liable on summary conviction to a fine not exceeding $2,000. or to imprisonment for a term not exceeding one year or to both.

Relief by court

124(2)      Where it appears to the court that a person is or may be liable in respect of a breach or non-compliance with subsection (1) but that he has acted honestly and reasonably, and that, having regard to all the circumstances of the case, he ought fairly to be excused for the breach or non-compliance, the court may relieve him, either wholly or partly, from his liability on such terms as the court thinks fit.

DIVISION II

INSIDERS

"Insider" defined

125(1)      In this section "insider" means, with respect to a corporation,

(a) the corporation;

(b) an affiliate of the corporation;

(c) a director or an officer of the corporation;

(d) a person who beneficially owns more than 10% of the shares of the corporation or who exercises control or direction over more than 10% of the votes attached to the shares of the corporation;

(e) a person employed or retained by the corporation; and

(f) a person who receives specific confidential information from a person described in this subsection or in subsection (3), including a person described in this clause, and who has knowledge that the person giving the information is a person described in this subsection or in subsection (3), including a person described in this clause.

Further interpretation

125(2)      For the purposes of this section, a director or officer of a body corporate that is an insider of a corporation is deemed to be an insider of the corporation.

Deemed insiders

125(3)      For the purposes of this section,

(a) if a body corporate becomes an insider of a corporation, or enters into a business combination with a corporation, a director or officer of the body corporate is deemed to have been an insider of the corporation for the previous six months or for such shorter period as he was a director or an officer of the body corporate; and

(b) if a corporation becomes an insider of a body corporate, or enters into a business combination with a body corporate, a director or an officer of the body corporate is deemed to have been an insider of the corporation for the previous six months or for such shorter period as he was a director or officer of the body corporate.

"Business combination" defined

125(4)      In subsection (3), "business combination" means an acquisition of all or substantially all the property of one body corporate by another or an amalgamation of two or more bodies corporate.

Civil liability

125(5)      An insider who, in connection with a transaction in a security of the corporation or any of its affiliates, makes use of any specific confidential information for his own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security

(a) is liable to compensate any person for any direct loss suffered by that person as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to that person; and

(b) is accountable to the corporation for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

Limitation

125(6)      An action to enforce a right created by subsection (5) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

PART XI

SHAREHOLDERS

Place of meetings

126(1)      Subject to subsection (3), meetings of shareholders of a corporation shall be held at the place within Manitoba provided in the by-laws or, in the absence of that provision, at such place within Manitoba as the directors may determine.

Meetings outside Manitoba

126(2)      Notwithstanding subsection (1), a meeting of shareholders of a corporation may be held outside Manitoba if all the shareholders entitled to vote at that meeting so agree, and a shareholder who attends a meeting of shareholders held outside Manitoba is deemed to have so agreed except where he attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

Meetings outside Manitoba

126(3)      The articles of the corporation may provide that meetings of the shareholders may be held at one place or more outside of Manitoba.

Participation in meeting by electronic means

126(4)      Unless the by-laws otherwise provide, a person entitled to attend a shareholders' meeting may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if

(a) the corporation makes available such a communication facility; and

(b) the meeting is held in accordance with the regulations, if any.

Deemed presence of participant

126(5)      For the purposes of this Act, a person who participates in a shareholders' meeting in the manner provided in subsection (4) is deemed to be present at the meeting.

S.M. 2006, c. 10, s. 19.

Meetings held by electronic means

126.1       If the by-laws so provide, directors or shareholders of a corporation who call a meeting of shareholders in accordance with any provision of this Act may determine that the meeting is to be held entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.  The meeting shall be held in accordance with the regulations, if any.

S.M. 2006, c. 10, s. 20.

Calling meetings

127         The directors of a corporation

(a) shall call an annual meeting of shareholders not later than 18 months after the corporation comes into existence, and subsequently not later than 15 months after holding each preceding annual meeting; and

(b) may at any time call a special meeting of shareholders.

Fixing record date

128(1)      For the purpose of determining the shareholders

(a) entitled to receive payment of a dividend; or

(b) entitled to participate in a liquidation distribution; or

(c) for any other purpose, except the right to receive notice of or to vote at a meeting;

the directors may fix in advance a date as the record date for the determination of shareholders, but that record date shall not precede by more than 50 days the particular action to be taken.

Notice of meeting

128(2)      For the purpose of determining the shareholders entitled to receive notice of a meeting of shareholders, the directors may fix in advance a date as the record date for the determination of shareholders, but that record date shall not precede by more than 50 days or by less than 21 days the date on which the meeting is to be held.

No record date fixed

128(3)      If no record date is fixed,

(a) the record date for the determination of shareholders entitled to receive notice of a meeting of shareholders shall be

(i) at the close of business on the day immediately preceding the day on which the notice is given, or,

(ii) if no notice is given, the day on which the meeting is held; and

(b) the record date for the determination of shareholders for any purpose other than to establish a shareholder's right to receive notice of a meeting or to vote, shall be at the close of business on the day on which the directors pass the resolution relating thereto.

Where record date fixed

128(4)      If a record date is fixed, notice thereof shall, not less than seven days before the date so fixed, be given

(a) by mailing to each shareholder a notice of the fixing of the record date at his latest address shown on the records of the corporation or its transfer agent;

(b) by advertisement in a newspaper published or distributed in the place where the corporation has its registered office and in each place in Manitoba where it has a transfer agent or where a transfer of its shares may be recorded; and

(c) by written notice to each stock exchange in Canada on which the shares of the corporation are listed for trading.

Notice of meeting

129(1)      Notice of the time and place of a meeting of shareholders shall be sent not less than 21 days nor more than 50 days before the meeting,

(a) to each shareholder entitled to vote at the meeting;

(b) to each director; and

(c) to the auditor of the corporation.

Exception

129(2)      A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the corporation or its transfer agent on the record date determined under subsection 128(2) or 128(3), but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

Adjournment

129(3)      If a meeting of shareholders is adjourned for less than 30 days it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.

Notice of adjourned meeting

129(4)      If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for an aggregate of more than 90 days subsection 143(1) does not apply.

Business

129(5)      All business transacted at a special meeting of shareholders and all business transacted at an annual meeting of shareholders, except consideration of the financial statements, auditor's report, election of directors and re-appointment of the incumbent auditor, is deemed to be special business.

Notice of business

129(6)      Notice of a meeting of shareholders at which special business is to be transacted shall state

(a) the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment thereon; and

(b) the text of any special resolution to be submitted to the meeting.

Waiver of notice

130         A shareholder or any other person entitled to attend a meeting of shareholders may in any manner waive notice of a meeting of shareholders, and attendance of the shareholder or other person at a meeting of shareholders is a waiver of notice of the meeting, except where he attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Shareholder proposal

131(1)      A shareholder entitled to vote at an annual meeting of shareholders may

(a) submit to the corporation notice of any matter that he proposes to raise at the meeting, hereinafter referred to as a "proposal"; and

(b) discuss at the meeting any matter in respect of which he would have been entitled to submit a proposal.

Information circular

131(2)      A corporation that solicits proxies shall set out the proposal in the management proxy circular required by section 144 or attach the proposal thereto.

Supporting statement

131(3)      If so requested by the shareholder, the corporation shall include in the management proxy circular or attach thereto a statement by the shareholder of not more than 200 words in support of the proposal, and the name and address of the shareholder.

Nomination for director

131(4)      A proposal may include nominations for the election of directors if the proposal is signed by one or more holders of shares representing in the aggregate not less than 5% of the shares or 5% of the shares of a class of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented, but this subsection does not preclude nominations made at a meeting of shareholders of a corporation other than a corporation that has made a distribution to the public.

Exemptions

131(5)      A corporation is not required to comply with subsections (2) and (3) if

(a) the proposal is not submitted to the corporation at least 90 days before the anniversary date of the previous annual meeting of shareholders; or

(b) it clearly appears that the proposal is submitted by the shareholder primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the corporation or its directors, officers or security holders, or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes; or

(c) the corporation, at the shareholder's request, included a proposal in a management proxy circular relating to a meeting of shareholders held within two years preceding the receipt of the request, and the shareholder failed to present the proposal, in person or by proxy, at the meeting; or

(d) substantially the same proposal was submitted to shareholders in a management proxy circular or a dissident's proxy circular relating to a meeting of shareholders held within two years preceding the receipt of the shareholder's request and the proposal was defeated; or

(e) the rights conferred by this section are being abused to secure publicity.

Immunity

131(6)      No corporation or person acting on its behalf incurs any liability by reason only of circulating a proposal or statement in compliance with this section.

Notice of refusal

131(7)      If a corporation refuses to include a proposal in a management proxy circular, the corporation shall, within 10 days after receiving the proposal, notify the shareholder submitting the proposal of its intention to omit the proposal from the management proxy circular and send to him a statement of the reasons for the refusal.

Shareholder application to court

131(8)      Upon the application of a shareholder claiming to be aggrieved by a corporation's refusal under subsection (7), a court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

Corporation's application to court

131(9)      The corporation or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the corporation to omit the proposal from the management proxy circular, and the court, if it is satisfied that subsection (5) applies, may make such order as it thinks fit.

Director entitled to notice

131(10)     An applicant under subsection (8) or (9) shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel.

Shareholder list

132(1)      A corporation shall prepare a list of shareholders entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of shares held by each shareholder,

(a) if a record date is fixed under subsection 128(2), not later than 10 days after that date; or

(b) if no record date is fixed,

(i) at the close of business on the day immediately preceding the day on which the notice is given, or

(ii) where no notice is given, on the day on which the meeting is held.

Effect of list

132(2)      Where a corporation fixes a record date under subsection 128(2), a person named in the list prepared under clause (1)(a) is entitled to vote the shares shown opposite his name at the meeting to which the list relates, except to the extent that

(a) the person has transferred the ownership of any of his shares after the record date; and

(b) the transferee of the shares referred to in clause (a)

(i) produces properly endorsed share certificates, or

(ii) otherwise establishes that he owns the shares,

and demands, not later than 10 days before the meeting or such shorter period before the meeting as the by-laws of the corporation may provide, that his name be included in the list before the meeting;

in which case the transferee is entitled to vote his shares at the meeting.

Effect of list

132(3)      Where a corporation does not fix a record date under subsection 128(2), a person named in a list prepared under clause (1)(b) is entitled to vote the shares shown opposite his name at the meeting to which the list relates except to the extent that

(a) the person has transferred the ownership of any of his shares after the date on which a list referred to in sub-clause (1)(b)(i) is prepared; and

(b) the transferee of those shares

(i) produces properly endorsed share certificates, or

(ii) otherwise establishes that he owns the shares,

and demands not later than 10 days before the meeting or such shorter period before the meeting as the by-laws of the corporation may provide that his name be included in the list before the meeting;

in which case the transferee is entitled to vote his shares at the meeting.

Examination of list

132(4)      A shareholder may examine the list of shareholders

(a) during usual business hours at the registered office of the corporation or at the place where its central securities register is maintained; and

(b) at the meeting of shareholders for which the list was prepared.

Quorum

133(1)      Unless the by-laws otherwise provide, a quorum of shareholders is present at a meeting of shareholders irrespective of the number of persons actually present at the meeting, if the holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy.

Opening quorum sufficient

133(2)      If a quorum is present at the opening of a meeting of shareholders, the shareholders present may, unless the by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

Adjournment

133(3)      If a quorum is not present at the opening of a meeting of shareholders, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business.

One shareholder meeting

133(4)      If a corporation has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting.

Representative

134(1)      If a body corporate or association is a shareholder of a corporation, the corporation shall recognize any individual authorized by a resolution of the directors or governing body of the body corporate or association to represent it at meetings of shareholders of the corporation.

Powers of representative

134(2)      An individual authorized under subsection (1) may exercise, on behalf of the body corporate or association he represents, all the powers it could exercise if it were an individual shareholder.

Joint shareholders

134(3)      Unless the by-laws otherwise provide, if two or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if two or more of those persons who are present, in person or by proxy, vote, they shall vote as one on the shares jointly held by them.

Voting

135(1)      Unless the by-laws otherwise provide, voting at a meeting of shareholders shall be by show of hands except where a ballot is demanded by a shareholder or proxyholder entitled to vote at the meeting.

Ballot

135(2)      A shareholder or proxyholder may demand a ballot either before or after any vote by show of hands.

Electronic voting

135(3)      Despite subsection (1), unless the by-laws otherwise provide, any vote referred to in subsection (1) may be held entirely by means of a telephonic, electronic or other communication facility, if

(a) the corporation makes available such a communication facility; and

(b) the vote is held in accordance with the regulations, if any.

Voting while participating electronically

135(4)      Unless the by-laws otherwise provide, any person participating in a meeting of shareholders under subsection 126(4) or section 126.1 and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the corporation has made available for that purpose.  The vote shall be held in accordance with the regulations, if any.

S.M. 2006, c. 10, s. 21.

Resolution in lieu of meeting

136(1)      Except where a written statement is submitted by a director under subsection 105(2) or by an auditor under subsection 162(5),

(a) a resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders; and

(b) a resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of shareholders, and is effective from the date specified in the resolution, but that date shall not be prior to the date on which the first shareholder has signed.

Filing resolution

136(2)      A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the meetings of shareholders.

Requisition of meeting

137(1)      The holders of not less than 5% of the issued shares of a corporation that carry the right to vote at a meeting sought to be held may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition.

Form

137(2)      The requisition referred to in subsection (1), which may consist of several documents of like form each signed by one or more shareholders, shall state the business to be transacted at the meeting and shall be sent to the registered office of the corporation.

Directors calling meeting

137(3)      Upon receiving the requisition referred to in subsection (1), the directors shall call a meeting of shareholders to transact the business stated in the requisition, unless

(a) a record date has been fixed under subsection 128(2) and notice thereof has been given under subsection 128(4); or

(b) the directors have called a meeting of shareholders and have given notice thereof under section 129; or

(c) the business of the meeting as stated in the requisition includes matters described in clauses 131(5)(b) to 131(5)(e).

Shareholder calling meeting

137(4)      If the directors do not within 21 days after receiving the requisition referred to in subsection (1) call a meeting, any shareholder who signed the requisition may call the meeting.

Procedure

137(5)      A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to the by-laws, this Part and Part XII.

Reimbursement

137(6)      Unless the shareholders otherwise resolve at a meeting called under subsection (4), the corporation shall reimburse the shareholders for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

Meeting called by court

138(1)      If for any reason it is impracticable to call a meeting of shareholders of a corporation in the manner in which meetings of those shareholders may be called, or to conduct the meeting in the manner prescribed by the by-laws and this Act, or if for any other reason a court thinks fit, the court, upon the application of a director, a shareholder entitled to vote at the meeting or the Director, may order a meeting to be called, held and conducted in such manner as the court directs.

Varying quorum

138(2)      Without restricting the generality of subsection (1), the court may order that the quorum required by the by-laws or this Act be varied or dispensed with at a meeting called, held and conducted pursuant to this section.

Valid meeting

138(3)      A meeting called, held and conducted pursuant to this section is for all purposes a meeting of shareholders of the corporation duly called, held and conducted.

Court review of election

139(1)      A corporation or a shareholder or director may apply to a court to determine any controversy with respect to an election or appointment of a director or auditor of the corporation.

Powers of court

139(2)      Upon 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 restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute;

(b) an order declaring the result of the disputed election or appointment;

(c) an order requiring a new election or appointment, and including in the order directions for the management of the business and affairs of the corporation until a new election is held or appointment made;

(d) an order determining the voting rights of shareholders and of persons claiming to own shares.

Pooling agreement

140(1)      A pooling agreement between two or more shareholders may provide that in exercising voting rights the shares held by them shall be voted as therein provided.

Unanimous shareholder agreement

140(2)      An otherwise lawful written agreement among all the shareholders of a corporation, or among all the shareholders and a person who is not a shareholder, that restricts, in whole or in part, the powers of the directors to manage the business and affairs of the corporation is valid.

Declaration of single shareholder

140(3)      Where a person who is the beneficial owner of all the issued shares of a corporation makes a written declaration that restricts in whole or in part the powers of the directors to manage the business and affairs of a corporation, the declaration is deemed to be a unanimous shareholder agreement.

Constructive party

140(4)      A transferee of shares subject to a unanimous shareholder agreement is deemed to be a party to the agreement.

Rights of shareholder

140(5)      A shareholder who is a party to a unanimous shareholder agreement has all the rights, powers and duties and incurs the liabilities of a director of the corporation to which the agreement relates to the extent that the agreement restricts the discretion or powers of the directors to manage the business and affairs of the corporation, and the directors are thereby relieved of their duties and liabilities to the same extent.

Filing of notice of agreement

140(6)      Where a unanimous shareholder agreement is executed or terminated, written notice of that fact together with the date of the execution or termination thereof shall be filed with the Director within 15 days.

S.M. 2008, c. 14, s. 135.

PART XII

PROXIES

Definitions

141         In this Part,

"form of proxy" means a written or printed form that, upon completion and execution by or on behalf of a shareholder, becomes a proxy; (« formulaire de procuration »)

"proxy" means a completed and executed form of proxy by means of which a shareholder appoints a proxyholder to attend and act on his behalf at a meeting of shareholders; (« procuration »)

"registrant" means a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction; (« courtier attitré »)

"solicit" or "solicitation" includes

(a) a request for a proxy whether or not accompanied by or included in a form of proxy,

(b) a request to execute or not to execute a form of proxy or to revoke a proxy,

(c) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

(d) the sending of a form of proxy to a shareholder under section 143,

but does not include

(e) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder, or

(f) the performance of administrative acts or professional services on behalf of a person soliciting a proxy, or

(g) the sending by a registrant of the documents referred to in section 147, or

(h) a solicitation by a person in respect of shares of which he is the beneficial owner; (« sollicitation »)

"solicitation by or on behalf of the management of a corporation" means a solicitation by any person pursuant to a resolution or instructions of, or with the acquiescence of, the directors or a committee of the directors. (« sollicitation effectuée par la direction ou pour son compte »)

Appointing proxyholder

142(1)      A shareholder entitled to vote at a meeting of shareholders may by means of a proxy appoint a proxyholder or one or more alternative proxyholders, who are not required to be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.

Execution of proxy

142(2)      A proxy shall be executed by the shareholder or by his attorney authorized in writing.

Validity of proxy

142(3)      A proxy is valid only at the meeting in respect of which it is given or any adjournment thereof.

Revocation of proxy

142(4)      A shareholder may revoke a proxy

(a) by depositing an instrument in writing executed by him or by his attorney authorized in writing

(i) at the registered office of the corporation at any time up to and including the last business day preceding the day of the meeting, or an adjournment thereof, at which the proxy is to be used, or

(ii) with the chairman of the meeting on the day of the meeting or an adjournment thereof; or

(b) in any other manner permitted by law.

Deposit of proxies

142(5)      The directors may specify in a notice calling a meeting of shareholders a time not exceeding 48 hours, excluding Saturdays and holidays, preceding the meeting or an adjournment thereof before which time proxies to be used at the meeting must be deposited with the corporation or its agent.

Mandatory solicitation

143(1)      Subject to subsection (2), the management of a corporation which has made a distribution to the public shall, concurrently with giving notice of a meeting of shareholders, send a form of proxy in the form required under The Securities Act to each shareholder who is entitled to receive notice of the meeting.

Exception

143(2)      Where a corporation has fewer than 15 shareholders, two or more joint holders being counted as one shareholder, the management of the corporation is not required to send a form of proxy under subsection (1).

Offence of corporation

143(3)      If the management of a corporation fails to comply without reasonable cause with subsection (1), the corporation is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Offence of director or officer

143(4)      Where a corporation is guilty of an offence under subsection (3), then, whether or not the corporation has been prosecuted or convicted, any director or officer of the corporation who knowingly authorizes, permits or acquiesces in the failure is also guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

S.M. 2006, c. 10, s. 22.

Soliciting proxies

144(1)      A person shall not solicit proxies unless

(a) in the case of solicitation by or on behalf of the management of a corporation, a management proxy circular in the form required under The Securities Act, either as an appendix to or as a separate document accompanying the notice of the meeting; or

(b) in the case of any other solicitation, a dissident's proxy circular, in the form required under The Securities Act, stating the purposes of the solicitation;

is sent to the auditor of the corporation, to each shareholder whose proxy is solicited and, if clause (b) applies, to the corporation.

Copy to commission

144(2)      A person required to send a management proxy circular or dissident's proxy circular shall send concurrently a copy thereof to the commission together with a copy of the notice of meeting, form of proxy and any other documents for use in connection with the meeting.

Offence

144(3)      A person who fails to comply with subsections (1) and (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Offence of director or officer

144(4)      If the person guilty of an offence under subsection (3) is a body corporate, then, whether or not the body corporate has been prosecuted or convicted, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the failure is also guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

S.M. 2006, c. 10, s. 23.

Exemption order

145          Upon the application of an interested person, the commission may make an order on such terms as it thinks fit exempting the person from any of the requirements of section 143 or subsection 144(1), and the order may have retrospective effect.

Attendance at meeting

146(1)      A person who solicits a proxy and is appointed proxyholder shall attend in person or cause an alternate proxyholder to attend the meeting in respect of which the proxy is given and shall comply with the directions of the shareholder who appointed him.

Right of a proxyholder

146(2)      A proxyholder or an alternate proxyholder has the same rights as the shareholder who appointed him to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of any show of hands.

Voting by proxyholders

146(3)      Notwithstanding subsections (1) and (2), where the chairman of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what to his knowledge will be the decision of the meeting in relation to any matter or group of matters, is less than 5% of all the votes that might be cast at the meeting on such ballot, unless a shareholder or proxyholder demands a ballot,

(a) the chairman may conduct the vote in respect of that matter or group of matters by a show of hands; and

(b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by a show of hands.

Offence

146(4)      A proxyholder or alternate proxyholder who without reasonable cause fails to comply with the directions of a shareholder under 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.

Duty of registrant

147(1)      Shares of a corporation that are registered in the name of a registrant or his nominee and not beneficially owned by the registrant shall not be voted unless the registrant, forthwith after receipt of the notice of the meeting, financial statements, management proxy circular, dissident's proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy thereof to the beneficial owner and, except where the registrant has received written voting instructions from the beneficial owner, a written request for such instructions.

Beneficial owner unknown

147(2)      A registrant shall not vote or appoint a proxyholder to vote shares registered in his name or in the name of his nominee that he does not beneficially own unless he receives voting instructions from the beneficial owner.

Copies

147(3)      A person by or on behalf of whom a solicitation is made shall, at the request of a registrant, forthwith furnish to the registrant at that person's expense the necessary number of copies of the documents referred to in subsection (1) other than copies of the document requesting voting instructions.

Instructions to registrant

147(4)      A registrant shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.

Beneficial owner as proxyholder

147(5)      If requested by a beneficial owner, a registrant shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

Validity

147(6)      The failure of a registrant to comply with this section does not render void any meeting of shareholders or any action taken thereat.

Limitation

147(7)      Nothing in this section gives a registrant the right to vote shares that he is otherwise prohibited from voting.

Offence

147(8)      A registrant who knowingly 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.

Offence of director or officer

147(9)      If the registrant guilty of an offence under subsection (8) is a body corporate, then, whether or not the body corporate has been prosecuted or convicted, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the failure is also guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Restraining order

148(1)      If a form of proxy, management proxy circular or dissident's proxy circular contains an untrue statement of a material fact or 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, an interested person or the commission may apply to a court and the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order restraining the solicitation, the holding of the meeting, or any person from implementing or acting upon any resolution passed at the meeting to which the form of proxy, management proxy circular or dissident's proxy circular relates;

(b) an order requiring correction of any form of proxy or proxy circular and a further solicitation;

(c) an order adjourning the meeting.

Notice to commission

148(2)      An applicant under this section shall give to the commission notice of the application and the commission is entitled to be heard by counsel or otherwise.

PART XIII

FINANCIAL DISCLOSURE

Annual financial statements

149(1)      The directors of a corporation shall place before the shareholders at every annual meeting

(a) comparative financial statements as prescribed relating separately to

(i) the period that began on the date the corporation came into existence and ended not more than six months before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and

(ii) the immediately preceding financial year;

(b) the report of the auditor, if any; and

(c) any further information respecting the financial position of the corporation and the results of its operations required by the articles, the by-laws or any unanimous shareholder agreement.

Exception

149(2)      Notwithstanding clause (1)(a), the financial statements referred to in sub-clause (1)(a)(ii) may be omitted if the reason for the omission is set out in the financial statements, or in a note thereto, to be placed before the shareholders at an annual meeting, but a corporation which has made a distribution to the public shall not omit those statements without the consent of the commission.

Interim financial statement

149(3)      A corporation which has made a distribution to the public shall send to each shareholder a comparative interim financial statement as prescribed.

Exemption by commission

150(1)      Subject to subsection (2), upon the application of any interested person, the commission may, if satisfied that in the circumstances of the particular case there is adequate justification for so doing, make an order upon such terms and conditions as seem to the commission just and expedient

(a) exempting in whole or in part a corporation from any requirement of section 149;

(b) permitting the comparative interim financial statement of a corporation to be for such period other than six months as is specified in the order;

(c) enlarging or abridging the time for publication, sending or filing of any financial statement.

Prohibited exemption

150(2)      The commission shall not under subsection (1) grant any exemption that would have the effect of permitting a corporation that has made a distribution to the public to withhold or unreasonably delay publication of any information that is material to shareholders or potential investors, unless the commission is satisfied that in the circumstances the disclosure of that information would be unduly detrimental to the interests of the corporation.

Consolidated statements

151(1)      A corporation shall keep at its registered office a copy of the financial statements of each of its subsidiary bodies corporate and of each body corporate the accounts of which are consolidated in the financial statements of the corporation.

Examination

151(2)      Shareholders of a corporation and their agents and legal representatives may upon request therefor examine the statements referred to in subsection (1) during the usual business hours of the corporation, and may make extracts therefrom, free of charge.

Barring examination

151(3)      A corporation may, within 15 days of a request to examine under subsection (2), apply to a court for an order barring the right of any person to so examine, and the court may, if it is satisfied that the examination would be detrimental to the corporation or a subsidiary body corporate, bar that right and make any further order it thinks fit.

Notice to Director

151(4)      A corporation shall give the Director and the person asking to examine under subsection (2) notice of an application under subsection (3), and the Director and that person may appear and be heard in person or by counsel.

Approval of financial statements

152(1)      The directors of a corporation shall approve the financial statements referred to in subsection 149(1) and the approval shall be evidenced by the signature of one or more directors.

Condition precedent

152(2)      A corporation shall not issue, publish or circulate copies of the financial statements referred to in subsection 149(1) unless the financial statements are

(a) approved and signed in accordance with subsection (1); and

(b) accompanied by the report of the auditor of the corporation, if any.

Copies to shareholders

153(1)      A corporation which has made a distribution to the public shall not less than 21 days before each annual meeting of shareholders or before the signing of a resolution under clause 136(1)(b) in lieu of the annual meeting, send a copy of the documents referred to in subsection 149(1) to each shareholder, except to a shareholder who has informed the corporation in writing that he does not want a copy of those documents.

Copies supplied on demand

153(2)      A corporation that has not made a distribution to the public shall, upon demand being made therefor by a shareholder, furnish the shareholder with a copy of the documents referred to in subsection 149(1).

Offence

153(3)      A corporation that, without reasonable cause, fails to comply with subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Copies to Director

154(1)      A corporation

(a) any of the securities of which are or were part of a distribution to the public, remain outstanding and are held by more than one person; or

(b) [repealed] S.M. 1997, c. 26, s. 2;

shall, not less than 21 days before each annual meeting of shareholders or forthwith after the signing of a resolution under clause 136(1)(b) in lieu of the annual meeting, and in any event not later than 15 months after the last date when the last preceding annual meeting should have been held or a resolution in lieu of the meeting should have been signed, send a copy of the documents referred to in subsection 149(1) to the Director.

154(2) and (3)  [Repealed] S.M. 1997, c. 26, s. 2.

Further disclosure

154(4)      If a corporation referred to in subsection (1)

(a) sends to its shareholders; or

(b) is required to file with or send to a public authority or a stock exchange;

interim financial statements or related documents, the corporation shall forthwith send copies thereof to the Director.

154(5)      [Repealed] S.M. 1997, c. 26, s. 2.

Filing with commission

154(6)      A corporation referred to in clause (1)(a) shall file with the commission a copy of every document referred to in subsections (1) and (4) at the time specified in those subsections for sending a copy to the Director, accompanied by the certificate of an officer, director or transfer agent that copies have been mailed to its shareholders.

Offence

154(7)      A corporation that fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

S.M. 1997, c. 26, s. 2.

Qualification of auditor

155(1)      Subject to subsection (5), a person is disqualified from being an auditor of a corporation if he is not independent of the corporation, all of its affiliates, and the directors or officers of the corporation and its affiliates.

Independence

155(2)      For the purposes of this section,

(a) independence is a question of fact; and

(b) a person is deemed not to be independent if he or his business partner

(i) is a business partner, a director, an officer or an employee of the corporation or any of its affiliates, or a business partner of any director, officer or employee of the corporation or any of its affiliates, or

(ii) beneficially owns or controls, directly or indirectly, a material interest in the securities of the corporation or any of its affiliates, or

(iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the corporation or any of its affiliates within two years of his proposed appointment as auditor of the corporation.

Duty to resign

155(3)      An auditor who becomes disqualified under this section shall, subject to subsection (5), resign forthwith after becoming aware of his disqualification.

Disqualification order

155(4)      An interested person may apply to a court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

Exemption order

155(5)      An interested person may apply to a court for an order exempting an auditor from disqualification under this section and the court may, if it is satisfied that an exemption would not unfairly prejudice the shareholders, make an exemption order on such terms as it thinks fit, which order may have retrospective effect.

Exception

155(6)      The shareholders of a corporation may resolve to appoint as auditor, a person otherwise disqualified under subsections (1) and (2) if the resolution is consented to by all the shareholders including shareholders not otherwise entitled to vote.

Validity of resolution

155(7)      A resolution under subsection (6) is valid only until the next succeeding annual meeting of shareholders.

Auditor's relationship to be disclosed in report

155(8)      An auditor appointed under subsection (6) shall indicate in his report to the shareholders particulars of his relationship which would ordinarily disqualify him under subsection (1) or (2).

Appointment of auditor

156(1)      Subject to section 157, the shareholders of a corporation shall by ordinary resolution, at the first annual meeting of shareholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

Eligibility

156(2)      An auditor appointed under section 99 is eligible for appointment under subsection (1).

Incumbent auditor

156(3)      Notwithstanding subsection (1), if an auditor is not appointed at a meeting of shareholders, the incumbent auditor continues in office until his successor is appointed.

Remuneration

156(4)      The remuneration of an auditor may be fixed by ordinary resolution of the shareholders or, if not so fixed, may be fixed by the directors.

Dispensing with auditor

157(1)      The shareholders of a corporation that is not required to comply with section 154, may resolve not to appoint an auditor.

Limitation

157(2)      A resolution under subsection (1) is valid only until the next succeeding annual meeting of shareholders.

Unanimous consent

157(3)      A resolution under subsection (1) is not valid unless it is consented to by all the shareholders, including shareholders not otherwise entitled to vote.

Ceasing to hold office

158(1)      An auditor of a corporation ceases to hold office when he

(a) dies or resigns; or

(b) is removed from office pursuant to section 159.

Effective date of resignation

158(2)      A resignation of an auditor becomes effective at the time a written resignation is sent to the corporation, or at the time specified in the resignation, whichever is later.

Removal of auditor

159(1)      The shareholders of a corporation may by ordinary resolution at a special meeting remove from office the auditor other than an auditor appointed by a court under section 161.

Vacancy

159(2)      A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 160.

Filling vacancy

160(1)      Subject to subsection (3), the directors shall forthwith fill any vacancy in the office of auditor.

Calling meeting

160(2)      If there is not a quorum of directors, the directors then in office shall, within 21 days after a vacancy in the office of auditor occurs, call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors, the meeting may be called by any shareholder.

Shareholders filling vacancy

160(3)      The articles of a corporation may provide that a vacancy in the office of auditor shall only be filled by vote of the shareholders.

Unexpired term

160(4)      An auditor appointed to fill a vacancy holds office for the unexpired term of his predecessor.

Court appointed auditor

161(1)      If a corporation does not have an auditor, the court may, upon the application of a shareholder or the Director, appoint and fix the remuneration of an auditor and the auditor so appointed holds office until an auditor is appointed by the shareholders.

Exception

161(2)      Subsection (1) does not apply if the shareholders have resolved under section 157 not to appoint an auditor.

Right to attend meeting

162(1)      The auditor of a corporation is entitled to receive notice of every meeting of shareholders and, at the expense of the corporation, to attend and be heard thereat on matters relating to his duties as auditor.

Duty to attend

162(2)      If a director or shareholder of a corporation, whether or not the shareholder is entitled to vote at the meeting, gives written notice, not less than 10 days before a meeting of shareholders, to the auditor or a former auditor of the corporation, the auditor or former auditor shall attend the meeting at the expense of the corporation and answer questions relating to his duties as auditor.

Notice to corporation

162(3)      A director or shareholder who sends a notice referred to in subsection (2) shall send concurrently a copy of the notice to the corporation.

Offence

162(4)      An auditor or former auditor of a corporation who fails without reasonable cause to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Statement of auditor

162(5)      An auditor who

(a) resigns; or

(b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing him from office; or

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because his term of office has expired or is about to expire; or

(d) receives a notice or otherwise learns of a meeting of shareholders at which a resolution referred to in section 157 is to be proposed;

is entitled to submit to the corporation a written statement giving the reasons for his resignation or the reasons why he opposes any proposed action or resolution.

Circulating statement

162(6)      The corporation shall forthwith send a copy of the statement referred to in subsection (5) to every shareholder entitled to receive notice of any meeting referred to in subsection (1) and to the Director unless the statement is included in or attached to a management proxy circular required by section 144.

Replacing auditor

162(7)      No person shall accept an appointment or consent to be appointed as auditor of a corporation if he is replacing an auditor who has resigned, been removed or whose term of office has expired or is about to expire until he has requested and received from that auditor a written statement of the circumstances and the reasons why, in that auditor's opinion, he is to be replaced.

Exception

162(8)      Notwithstanding subsection (7), a person otherwise qualified may accept an appointment or consent to be appointed as auditor of a corporation if, within 15 days after making the request referred to in that subsection, he does not receive a reply.

Effect of non-compliance

162(9)      Unless subsection (8) applies, the appointment as auditor of a corporation of a person who has not complied with subsection (7) is void.

Examination

163(1)      An auditor of a corporation shall make the examination that is in his opinion necessary to enable him to report in the prescribed manner on the financial statements required by this Act to be placed before the shareholders, except such financial statements or part thereof as relate to the period referred to in sub-clause 149(1)(a)(ii).

Reliance on other auditor

163(2)      Notwithstanding section 164, an auditor of a corporation may reasonably rely upon the report of an auditor of a body corporate or an unincorporated business the accounts of which are included in whole or in part in the financial statements of the corporation.

Reasonableness

163(3)      For the purpose of subsection (2), reasonableness is a question of fact.

Application

163(4)      Subsection (2) applies whether or not the financial statements of the holding corporation reported upon by the auditor are in consolidated form.

Right to information

164(1)      Upon the demand of an auditor of a corporation, the present or former directors, officers, employees or agents of the corporation shall furnish such

(a) information and explanations; and

(b) access to records, documents, books, accounts and vouchers of the corporation or any of its subsidiaries;

as are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 163 and that the directors, officers, employees or agents are reasonably able to furnish.

Information from subsidiary

164(2)      Upon the demand of the auditor of a corporation, the directors of the corporation shall

(a) obtain from the present or former directors, officers, employees and agents of any subsidiary of the corporation the information and explanations that the present or former directors, officers, employees and agents are reasonably able to furnish and that are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 163; and

(b) furnish the information and explanations obtained under clause (a) to the auditor.

Audit committee

165(1)      Subject to subsection (2), a corporation that has made a distribution to the public shall, and any other corporation may, have an audit committee composed of not less than three directors of the corporation, a majority of whom are not officers or employees of the corporation or any of its affiliates.

Exemption

165(2)      A corporation may apply to the commission for an order authorizing the corporation to dispense with an audit committee, and the commission may, if it is satisfied that the shareholders will not be prejudiced by the order, permit the corporation to dispense with an audit committee on such reasonable conditions as it thinks fit.

Duty of committee

165(3)      An audit committee shall review the financial statements of the corporation before they are approved under section 152.

Auditor's attendance

165(4)      The auditor of a corporation is entitled to receive notice of every meeting of the audit committee and, at the expense of the corporation, to attend and be heard thereat; and, if so requested by a member of the audit committee, shall attend every meeting of the committee held during the term of office of the auditor.

Calling meeting

165(5)      The auditor of a corporation or a member of the audit committee may call a meeting of the committee.

Notice of errors

165(6)      A director or an officer of a corporation shall forthwith notify the audit committee and the auditor of any error or misstatement of which he becomes aware in a financial statement that the auditor or a former auditor has reported upon.

Error in financial statements

165(7)      If the auditor or former auditor of a corporation is notified or becomes aware of an error or misstatement in a financial statement upon which he has reported, and if in his opinion the error or misstatement is material, he shall inform each director accordingly.

Duty of directors

165(8)      When under subsection (7) the auditor or former auditor informs the directors or when the directors otherwise have knowledge of an error or misstatement in a financial statement, the directors shall

(a) prepare and issue revised financial statements; or

(b) otherwise inform the shareholders and, if the corporation is one that is required to comply with section 154, it shall inform the Director of the error or misstatement in the same manner as it informs the shareholders.

Offence

165(9)      Every director or officer of a corporation who knowingly fails to comply with subsection (6) or (8) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Qualified privilege (defamation)

166         Any oral or written statement or report made under this Act by the auditor or former auditor of a corporation has qualified privilege.

PART XIV

FUNDAMENTAL CHANGES

Amendment of articles

167(1)      Subject to sections 170 and 171, the articles of a corporation may by special resolution be amended to

(a) change its name; or

(b) add, change or remove any restriction upon the business or businesses that the corporation may carry on; or

(c) change any maximum number of shares that the corporation is authorized to issue and change, if desired, the maximum consideration for which the shares may be issued; or

(d) create new classes of shares; or

(e) change the designation of all or any of its shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its shares, whether issued or unissued; or

(f) reduce or increase its stated capital which, for the purposes of the amendment, is deemed to be set out in the articles; or

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

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

(i) authorize the directors to divide any class of unissued shares into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions thereof; or

(j) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series; or

(k) revoke, diminish or enlarge any authority conferred under clauses (i) and (j); or

(l) add, change or remove restrictions on the issue, transfer or ownership of shares; or

(m) add, change or remove any other provision that is permitted by this Act to be set out in the articles.

Corporation with or without share capital

167(2)      The articles of a corporation may, by resolution, be amended

(a) to convert a corporation with share capital into a corporation without share capital; or

(b) to convert a corporation without share capital into a corporation with share capital; or

(c) to vary or remove any provision contained in the articles of a corporation without share capital, which states that upon dissolution its remaining property may be distributed among all the members or among the members of a class or classes of members, to one which states that upon dissolution the remaining property shall be distributed to an organization the undertaking of which is charitable or of a beneficial nature to the community.

Resolution

167(3)      The resolution required under subsection (2) shall be signed by all the shareholders or members of the corporation, or shall be passed by the votes of 95% of the issued shares or membership of the corporation.

Formula for conversion

167(4)      The articles of amendment shall contain the formula, terms and conditions upon which the shareholders become members or the members become shareholders.

Clerical errors

167(5)      Notwithstanding subsection (1), the articles of a corporation may by resolution of the directors or by ordinary resolution of the shareholders be amended

(a) to correct any clerical error; or

(b) to change the name of the corporation where it has a designating number as a name.

Article of amendment to be filed

167(6)      Articles of amendment shall be filed with the Director within six months of the date of the resolution of the shareholders authorizing the amendment, failing which the Director shall refuse to file the articles.

Special Act corporation

167(7)      A corporation incorporated by special Act shall not under this section amend its articles, except to change its name.

Revocation of amending resolution

167(8)      The directors of a corporation may, if authorized by the shareholders in any resolution effecting an amendment under this section, revoke the resolution before it is acted upon without further approval of the shareholders.

Resolution of directors

167(9)      Notwithstanding subsection (1), a corporation may by resolution of the directors change or delete the maximum consideration for which each share or each class of shares or all the shares may be issued, but the resolution is not effective until articles are filed with the Director.

R.S.M. 1987 Supp., c. 10, s. 10; S.M. 1988-89, c. 13, s. 6; S.M. 1989-90, c. 90, s. 5.

Constraints on share transfers

168(1)      Subject to sections 170 and 171, a corporation any of the issued shares of which are or were part of a distribution to the public may by special resolution amend its articles in accordance with the regulations to constrain the issue or transfer of its shares

(a) to persons who are not residents of Canada; or

(b) to enable the corporation or any of its affiliates to qualify under any law of Canada or of any province of Canada

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

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

(iii) to acquire shares of a financial intermediary as defined in the regulations.

Removal of constraint

168(2)      A corporation referred to in subsection (1) may by special resolution amend its articles to remove any constraint on the issue or transfer of its shares.

Termination

168(3)      The directors of a corporation may, if authorized by the shareholders in the special resolution effecting an amendment under subsection (1), revoke the resolution before it is acted upon without further approval of the shareholders.

Regulations

168(4)      Subject to subsection 254(3), the Lieutenant Governor in Council may make regulations with respect to a corporation that constrains the issue or transfer of its shares prescribing

(a) the disclosure required of the constraints in documents issued or published by the corporation;

(b) the duties and powers of the directors to refuse to issue or register transfers of shares in accordance with the articles of the corporation;

(c) the limitations on voting rights of any shares held contrary to the articles of the corporation;

(d) the powers of the directors to require disclosure of beneficial ownership of shares of the corporation and the right of the corporation and its directors, employees and agents to rely on that disclosure and the effects of that reliance; and

(e) the rights of any person owning shares of the corporation at the time of an amendment to its articles constraining share issues or transfers.

Validity of acts

168(5)      An issue or a transfer of a share or an act of a corporation is valid notwithstanding any failure to comply with this section or the regulations.

Proposal to amend

169(1)      Subject to subsection (2), a director or a shareholder who is entitled to vote at an annual meeting of shareholders may, in accordance with section 131, make a proposal to amend the articles.

Notice of amendment

169(2)      Notice of a meeting of shareholders at which a proposal to amend the articles is to be considered shall set out the proposed amendment and, where applicable, shall state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184, but failure to make that statement does not invalidate the amendment.

Class vote

170(1)      The holders of shares of a class or, subject to subsection (2), of a series are, unless the articles otherwise provide in the case of an amendment referred to in clauses (a), (b) and (e), entitled to vote separately as a class or series upon a proposal to amend the articles to

(a) increase or decrease any maximum number of authorized shares of the class, or increase any maximum number of authorized shares of any other class having rights or privileges equal or superior to the shares of that class; or

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

(c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of the class and, without limiting the generality of the foregoing,

(i) remove or change prejudicially any rights to accrued dividends or rights to cumulative dividends, or

(ii) add, remove or change prejudicially any redemption rights, or

(iii) reduce or remove any dividend preference or liquidation preference, or

(iv) add, remove or change prejudicially any conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of a corporation, or sinking fund provisions; or

(d) increase the rights or privileges of any other class of shares having rights or privileges equal or superior to the shares of that class; or

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

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

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

(h) constrain the issue or transfer of the shares of the class or extend or remove the constraint.

Limitation

170(2)      The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) only if the series is affected by an amendment in a manner different from other shares of the same class.

Right to vote

170(3)      Subsection (1) applies whether or not shares of a class or series otherwise carry the right to vote.

Separate resolutions

170(4)      A proposed amendment to the articles referred to in subsection (1) is adopted when the holders of the shares of each class or series entitled to vote separately thereon as a class or series have approved the amendment by a special resolution.

Delivery of articles

171(1)      Subject to any revocation under subsection 167(8) or 168(3), after an amendment has been adopted under section 167, 168 or 170, the corporation shall send the Director articles of amendment in the form the Director requires.

Reduction of stated capital

171(2)      If an amendment effects or requires a reduction of stated capital, subsections 36(3) and 36(4) apply.

S.M. 1988-89, c. 11, s. 5; S.M. 2006, c. 10, s. 24.

Certificate of amendment

172         Upon receipt of articles of amendment, the Director shall issue a certificate of amendment in accordance with section 255.

Effect of certificate

173(1)      An amendment becomes effective on the date shown in the certificate of amendment, and the articles are amended accordingly.

Rights preserved

173(2)      No amendment to the articles affects an existing cause of action or claim or liability to prosecution in favour of or against the corporation or its directors or officers, or any civil, criminal or administrative action or proceeding to which a corporation or its directors or officers is a party.

Restated articles

174(1)      The directors may at any time, and shall when reasonably so directed by the Director, restate the articles of the corporation.

Delivery of articles

174(2)      After the directors restate the corporation's articles of incorporation, the corporation shall send the Director restated articles of incorporation in the form the Director requires.

Restated certificate

174(3)      Upon receipt of restated articles of incorporation, the Director shall issue a restated certificate of incorporation in accordance with section 255.

Effect of certificate

174(4)      Restated articles of incorporation are effective on the date shown in the restated certificate of incorporation and supersede the original articles of incorporation and any amendments thereto.

R.S.M. 1987 Supp., c. 10, s. 11 and 12; S.M. 2006, c. 10, s. 25.

Reissue of articles in English or in French

174.1(1)    Where articles have been filed in English or French under this Act, or any Act for which this Act has been substituted, and the corporation desires to obtain its articles in the other of those languages, the corporation may request the issuance of the articles in that other language by providing the Director with

(a) a translation in that other language of the articles verified in a manner satisfactory to the Director; and

(b) such other documents or information as the Director may require.

Authorization

174.1(2)    The issuance of the articles under subsection (1) may be authorized by a resolution of the directors or by ordinary resolution of the shareholders.

Translation

174.1(3)    The translation of the articles shall correctly set out, without substantive change, the provisions of the original articles.

Director to issue

174.1(4)    Upon receipt of the documents referred to in subsection (1), the Director shall issue the articles in the language requested.

Deemed date

174.1(5)    Articles issued under this section

(a) are deemed to have been issued on the day the original articles were issued; and

(b) have equal force with the original articles.

No effect on obligations

174.1(6)    The issuance of articles under this section does not affect the rights or obligations of the corporation.

Change of name

174.1(7)    If, in the articles issued under this section, the name of the corporation differs from the name obtained by it in the original articles, the Director shall publish a notice of the change in the manner set out in the regulations.

R.S.M. 1987 Supp., c. 10, s. 13; S.M. 2000, c. 41, s. 10.

Amalgamation

175(1)      Two or more corporations, including holding and subsidiary corporations, may amalgamate and continue as one corporation.

Special Act corporations excepted

175(2)      A corporation incorporated by special Act, other than a corporation to which Part XXIV applies, may not under the provisions of this Act amalgamate with any other corporation.

Amalgamation agreement

176(1)      Each corporation proposing to amalgamate shall enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out

(a) the provisions that are required to be included in articles of incorporation under section 6;

(b) the name and address of each proposed director of the amalgamated corporation;

(c) the manner in which the shares of each amalgamating corporation are to be converted into shares or other securities of the amalgamated corporation;

(d) if any shares of an amalgamating corporation are not to be converted into securities of the amalgamated corporation, the amount of money or securities of any body corporate that the holders of those shares are to receive in addition to or instead of securities of the amalgamated corporation;

(e) the manner of payment of money instead of the issue of fractional shares of the amalgamated corporation or of any other body corporate the securities of which are to be received in the amalgamation;

(f) whether the by-laws of the amalgamated corporation are to be those of one of the amalgamating corporations and, if not, a copy of the proposed by-laws; and

(g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated corporation.

Cancellation

176(2)      If shares of one of the amalgamating corporations are held by or on behalf of another of the amalgamating corporations, the amalgamation agreement shall provide for the cancellation of those shares when the amalgamation becomes effective without any repayment of capital in respect thereof, and no provision shall be made in the agreement for the conversion of those shares into shares of the amalgamated corporation.

Shareholder approval

177(1)      The directors of each amalgamating corporation shall submit the amalgamation agreement for approval to a meeting of the holders of shares of the amalgamating corporation of which they are directors and, subject to subsection (4), to the holders of each class or series of those shares.

Notice of meeting

177(2)      A notice of a meeting of shareholders complying with sections 129 shall be sent in accordance with that section to each shareholder of each amalgamating corporation, and shall

(a) include or be accompanied by a copy or summary of the amalgamation agreement; and

(b) state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184, but failure to make that statement does not invalidate an amalgamation.

Right to vote

177(3)      Each share of an amalgamating corporation carries the right to vote in respect of an amalgamation whether or not it otherwise carries the right to vote.

Class vote

177(4)      The holders of shares of a class or series of shares of an amalgamating corporation are entitled to vote separately as a class or series in respect of an amalgamation if the amalgamation agreement contains provision that, if contained in a proposed amendment to the articles, would entitle those holders to vote as a class or series under section 170.

Shareholder approval

177(5)      An amalgamation agreement is adopted when the shareholders of each amalgamating corporation have approved of the amalgamation by special resolutions of each class or series of the shareholders entitled to vote thereon.

Termination

177(6)      An amalgamation agreement may provide that at any time before the issue of a certificate of amalgamation the agreement may be terminated by the directors of an amalgamating corporation, notwithstanding approval of the agreement by the shareholders of all or any of the amalgamating corporations.

Vertical short-form amalgamation

178(1)      A holding corporation and one or more of its wholly-owned subsidiary corporations may amalgamate and continue as one corporation without complying with sections 176 and 177 if

(a) the amalgamation is approved by a resolution of the directors of each amalgamating corporation; and

(b) the resolutions required under clause (a) provide that

(i) the shares of each amalgamating subsidiary corporation shall be cancelled without any repayment of capital in respect thereof,

(ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of incorporation of the amalgamating holding corporation, and

(iii) no securities shall be issued by the amalgamated corporation in connection with the amalgamation.

Horizontal short-form amalgamation

178(2)      Two or more wholly-owned subsidiary corporations of the same holding body corporate may amalgamate and continue as one corporation without complying with sections 176 and 177 if

(a) the amalgamation is approved by a resolution of the directors of each amalgamating corporation; and

(b) the resolutions required under clause (a) provide that

(i) the shares of all but one of the amalgamating subsidiary corporations shall be cancelled without any repayment of capital in respect thereof,

(ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of incorporation of the amalgamating subsidiary corporation whose shares are not cancelled, and

(iii) the stated capital of the amalgamating subsidiary corporations whose shares are cancelled shall be added to the stated capital of the amalgamating subsidiary corporation whose shares are not cancelled.

Sending of articles

179(1)      Subject to subsection 177(6), after an amalgamation has been adopted under section 177 or approved under section 178, the amalgamating corporations shall send the Director articles of amalgamation that comply with section 6 and are in the form the Director requires.

Attached declarations

179(2)      The articles of amalgamation shall have attached thereto a statutory declaration of a director or an officer of each amalgamating corporation that establishes to the satisfaction of the Director that

(a) there are reasonable grounds for believing that

(i) each amalgamating corporation is and the amalgamated corporation will be able to pay its liabilities as they become due, and

(ii) the realizable value of the amalgamated corporation's assets will not be less than the aggregate of its liabilities and stated capital of all classes; and

(b) there are reasonable grounds for believing that

(i) no creditor will be prejudiced by the amalgamation, or

(ii) adequate notice has been given to all known creditors of the amalgamating corporations and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

Adequate notice

179(3)      For the purposes of subsection (2), adequate notice is given if

(a) a notice in writing is sent to each known creditor having a claim against the corporation that exceeds $1,000.;

(b) a notice is published once in a newspaper published or distributed in the place where the corporation has its registered office and reasonable notice is given in each province in Canada where the corporation carries on business; and

(c) each notice under clauses (a) and (b) states that the corporation intends to amalgamate with one or more specified corporations in accordance with this Act unless a creditor of the corporation objects to the amalgamation within 30 days from the date of the notice.

Certificate of amalgamation

179(4)      Upon receipt of articles of amalgamation, the Director shall issue a certificate of amalgamation in accordance with section 255.

S.M. 2006, c. 10, s. 26.

Effect of certificate

180         On the date shown in a certificate of amalgamation,

(a) the amalgamation of the amalgamating corporations and their continuance as one corporation become effective;

(b) the property of each amalgamating corporation continues to be the property of the amalgamated corporation;

(c) the amalgamated corporation continues to be liable for the obligations of each amalgamating corporation;

(d) an existing cause of action, claim or liability to prosecution is unaffected;

(e) a civil, criminal or administrative action or proceeding pending by or against an amalgamating corporation may continue to be prosecuted by or against the amalgamated corporation;

(f) a conviction against, or ruling, order or judgment in favour of or against an amalgamating corporation may be enforced by or against the amalgamated corporation; and

(g) the articles of amalgamation are deemed to be the articles of incorporation of the amalgamated corporation and the certificate of amalgamation is deemed to be the certificate of incorporation of the amalgamated corporation.

Continuance in Manitoba

181(1)      A body corporate incorporated otherwise than under an Act of the Legislature may, if so authorized by the laws of the jurisdiction where it is incorporated, and upon compliance with the provisions of this Act, apply to the Director for a certificate of continuance.

Special Act corporation

181(2)      A corporation incorporated by a special Act may, with the approval of the Director, apply for a certificate of continuance under this Act unless the special Act provides that The Corporations Act does not apply to the corporation.

Amendments in articles of continuance

181(3)      A body corporate that applies for continuance under subsection (1) or (2) may, without so stating in its articles of continuance, effect by those articles any amendments to its articles if the amendment is an amendment a corporation incorporated under this Act may make to its articles.

Articles of continuance

181(4)      A body corporate that applies for continuance under subsection (1) or (2) shall send the Director articles of continuance that comply with section 6 and are in the form the Director requires.

Certificate of continuance

181(5)      Upon the receipt of articles of continuance, the Director may issue a certificate of continuance in accordance with section 255.

Refusal by Director

181(6)      The Director may refuse to issue a certificate of continuance and in that case he shall advise the body corporate of his refusal, and the body corporate may appeal the Director's decision to the Lieutenant Governor in Council, whose decision is final.

Effect of certificate

181(7)      On the date shown in the certificate of continuance,

(a) the body corporate becomes a corporation to which this Act applies as if it had been incorporated under this Act;

(b) the articles of continuance are deemed to be the articles of incorporation of the continued corporation; and

(c) the certificate of continuance is deemed to be the certificate of incorporation of the continued corporation.

Copy of certificate

181(8)      The Director shall forthwith send a copy of the certificate of continuance to the appropriate official or public body in the jurisdiction in which continuance under this Act was authorized.

Rights preserved

181(9)      When a body corporate is continued as a corporation under this Act,

(a) the property of the body corporate continues to be the property of the corporation;

(b) the corporation continues to be liable for the obligations of the body corporate;

(c) an existing cause of action, claim or liability to prosecution is unaffected;

(d) a civil, criminal or administrative action or proceeding pending by or against the body corporate may continue to be prosecuted by or against the corporation;

(e) a conviction against, or ruling, order or judgment in favour of or against, the body corporate may be enforced by or against the corporation.

Issued shares

181(10)     A share of a body corporate issued before the body corporate was continued under this Act is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance irrespective of whether the share is fully paid or irrespective of any designation, rights, privileges, restrictions or conditions set out on or referred to in the certificate representing the share; and continuance under this section does not deprive a holder of any right or privilege that he claims under, or relieve him of any liability in respect of, an issued share.

Exception in case of convertible shares

181(11)     Where a corporation continued under this Act had, before it was so continued, issued a share certificate in registered form that is convertible to bearer form, the corporation may, if a holder of the share certificate exercises the conversion privilege attached thereto, issue a share certificate in bearer form for the same number of shares to the holder.

"Share" defined

181(12)     For the purposes of subsections (9) and (10), "share" includes an instrument referred to in subsection 29(1), a share warrant or a like instrument.

S.M. 2006, c. 10, s. 27; S.M. 2008, c. 14, s. 135.

Continuance outside Manitoba

182(1)      Subject to subsections (2), (3) and (11), a corporation may, if it is authorized by the shareholders in accordance with this section, and if it establishes to the satisfaction of the Director that its proposed continuance in another jurisdiction will not adversely affect creditors or shareholders of the corporation, apply to the appropriate official or public body of another jurisdiction requesting that the corporation be continued as if it had been incorporated under the laws of that other jurisdiction.

Limitation period

182(2)      The approval of the Director to a continuance in another jurisdiction expires 90 days after the date of the approval unless, within the 90 day period, the corporation is continued under the laws of the other jurisdiction.

Exception

182(3)      A corporation to which Part XXI, XXII, XXIII or XXIV applies and that is incorporated under this Act or under any Act for which this Act is substituted shall not apply for continuance in another jurisdiction without the prior consent of the minister.

Notice of meeting

182(4)      A notice of a meeting of shareholders complying with section 129 shall be sent in accordance with that section to each shareholder and shall state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184, but failure to make that statement does not invalidate a discontinuance under this Act.

Right to vote

182(5)      Each share of the corporation carries the right to vote in respect of a continuance whether or not it otherwise carries the right to vote.

Shareholder approval

182(6)      An application for continuance becomes authorized when the shareholders voting thereon have approved of the continuance by a special resolution.

Termination

182(7)      The directors of a corporation may, if authorized by the shareholders at the time of approving an application for continuance under this section, abandon the application without further approval of the shareholders.

Notice of discontinuance

182(8)      Upon receipt of notice satisfactory to him that the corporation has been continued under the laws of another jurisdiction, the Director shall issue a certificate of discontinuance in accordance with section 255.

Notice deemed to be articles

182(9)      For the purposes of section 255, a notice referred to in subsection (8) is deemed to be articles in the form the Director requires.

Rights preserved

182(10)     Subject to Part XVI, this Act ceases to apply to the corporation on the date that the corporation was continued under the laws of the other jurisdiction.

Prohibition

182(11)     A corporation shall not be continued as a body corporate under the laws of another jurisdiction unless those laws provide in effect that

(a) the property of the corporation continues to be the property of the body corporate;

(b) the body corporate continues to be liable for the obligations of the corporation;

(c) an existing cause of action, claim or liability to prosecution is unaffected;

(d) a civil, criminal or administrative action or proceeding pending by or against the corporation may be continued to be prosecuted by or against the body corporate; and

(e) a conviction against, or ruling, order or judgment in favour of or against the corporation may be enforced by or against the body corporate.

Continued corporation carrying on business in Manitoba

182(12)     A corporation continued as a body corporate under the laws of another jurisdiction that has not ceased to carry on business in Manitoba shall comply with the provisions of subsection 192(3).

Special Act corporation prohibited

182(13)     A corporation incorporated by a special Act of the Legislature, other than a corporation to which Part XXIV applies, shall not under this section apply for continuance in another jurisdiction.

S.M. 2006, c. 10, s. 28; S.M. 2010, c. 33, s. 9.

Borrowing powers

183(1)      Unless the articles or by-laws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the articles of a corporation are deemed to state that the directors of a corporation may, without authorization of the shareholders,

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

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

(c) give a guarantee on behalf of the corporation to secure performance of an obligation of any person; and

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

Delegation of borrowing powers

183(2)      Notwithstanding subsection 110(3) and clause 116(a), unless the articles or by-laws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the directors may, by resolution, delegate the powers referred to in subsection (1) to a director, a committee of directors or an officer.

Extraordinary sale, lease or exchange

183(3)      A sale, lease or exchange of all or substantially all the property of a corporation other than in the ordinary course of business of the corporation requires the approval of the shareholders in accordance with subsections (4) to (8).

Notice of meeting

183(4)      A notice of a meeting of shareholders complying with section 129 shall be sent in accordance with that section to each shareholder and shall

(a) include or be accompanied by a copy or summary of the agreement of sale, lease or exchange; and

(b) state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184, but failure to make that statement does not invalidate a sale, lease or exchange referred to in subsection (3).

Shareholder approval

183(5)      At the meeting referred to in subsection (4) the shareholders may authorize the sale, lease or exchange and may fix or authorize the directors to fix any of the terms and conditions thereof.

Right to vote

183(6)      Each share of the corporation carries the right to vote in respect of a sale, lease or exchange referred to in subsection (3) whether or not it otherwise carries the right to vote.

Shareholder approval

183(7)      A sale, lease or exchange referred to in subsection (3) is adopted when the holders of each class or series entitled to vote thereon have approved of the sale, lease or exchange by a special resolution.

Termination

183(8)      The directors of a corporation may, if authorized by the shareholders approving a proposed sale, lease or exchange, and subject to the rights of third parties, abandon the sale, lease or exchange without further approval of the shareholders.

S.M. 1988-89, c. 11, s. 5; S.M. 2006, c. 10, s. 29.

Right to dissent

184(1)      Subject to sections 185 and 234, and any unanimous shareholder agreement, a holder of shares of any class of a corporation may dissent if the corporation is subject to an order under clause 185(10)(d) that affects the holder or if the corporation resolves

(a) to amend its articles under section 167 or 168 to add, change or remove any provisions restricting or constraining the issue or transfer of shares of that class; or

(b) to amend its articles under section 167 to add, change or remove any restriction upon the business or businesses that the corporation may carry on; or

(c) to amalgamate with another corporation, otherwise than under section 178; or

(d) to be continued under the laws of another jurisdiction under section 182; or

(e) to sell, lease or exchange all or substantially all its property under subsection 183(3); or

(f) to amend its articles under subsection 167(2) to convert the corporation from a corporation with share capital into a corporation without share capital; or

(g) to amend its articles under subsection 167(2) to convert the corporation from a corporation without share capital into a corporation with share capital, where the articles contain a provision that upon dissolution the remaining property is to be distributed among the members as provided in section 277; or

(h) if it is a corporation without share capital, to amend its articles under section 167 to prevent a distribution to the members on dissolution.

Further right to dissent

184(2)      A holder of shares of any class or series of shares entitled to vote under section 170 may dissent if the corporation resolves to amend its articles in a manner described in that section.

Payment for shares

184(3)      In addition to any other right he may have, but subject to subsection (26), a shareholder who complies with this section is entitled, when the action approved by the resolution from which he dissents or an order made under subsection 185(10) becomes effective, to be paid by the corporation the fair value of the shares held by him in respect to which he dissents, determined as of the close of business on the day before the resolution was adopted or the order was made.

No partial dissent

184(4)      A dissenting shareholder may only claim under this section with respect to all the shares of a class held by him on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

Objection

184(5)      A dissenting shareholder shall send to the corporation, at or before any meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the corporation did not give notice to the shareholder of the purpose of the meeting or of his right to dissent.

Notice of resolution

184(6)      The corporation shall, within 10 days after the shareholders adopt the resolution, send to each shareholder who has filed the objection referred to in subsection (5) notice that the resolution has been adopted, but the notice is not required to be sent to any shareholder who voted for the resolution or who has withdrawn his objection.

Demand for payment

184(7)      A dissenting shareholder shall, within 20 days after he receives a notice under subsection (6) or, if he does not receive the notice, within 20 days after he learns that the resolution has been adopted, send to the corporation a written notice containing

(a) his name and address;

(b) the number and class of shares in respect of which he dissents; and

(c) a demand for payment of the fair value of his shares.

Share certificate

184(8)      A dissenting shareholder shall, within 30 days after sending a notice under subsection (7), send the certificates representing the shares in respect of which he dissents to the corporation or its transfer agent.

Forfeiture

184(9)      A dissenting shareholder who fails to comply with subsection (8) has no right to make a claim under this section.

Endorsing certificate

184(10)     A corporation or its transfer agent shall endorse on any share certificate received under subsection (8) a notice that the holder is a dissenting shareholder under this section and shall forthwith return the share certificates to the dissenting shareholder.

Suspension of rights

184(11)     On sending a notice under subsection (7), a dissenting shareholder ceases to have any rights as a shareholder other than the right to be paid the fair value of his shares as determined under this section except where

(a) the dissenting shareholder withdraws his notice before the corporation makes an offer under subsection (12);

(b) the corporation fails to make an offer in accordance with subsection (12) and the dissenting shareholder withdraws his notice; or

(c) the directors revoke a resolution to amend the articles under subsection 167(8) or 168(3), terminate an amalgamation agreement under subsection 177(6) or an application for continuance under subsection 182(6), or abandon a sale, lease or exchange under subsection 183(8);

and in that case his rights as a shareholder are reinstated as of the date he sent the notice referred to in subsection (7).

Offer to pay

184(12)     A corporation shall, not later than seven days after the later of the day on which the action approved by the resolution is effective or the day the corporation received the notice referred to in subsection (7), send to each dissenting shareholder who has sent the notice

(a) a written offer to pay for his shares in an amount considered by the directors of the corporation to be the fair value thereof, accompanied by a statement showing how the fair value was determined; or

(b) if subsection (26) applies, a notification that it is unable lawfully to pay dissenting shareholders for their shares.

Same terms

184(13)     Every offer made under subsection (12) for shares of the same class or series shall be on the same terms.

Payment

184(14)     Subject to subsection (26), a corporation shall pay for the shares of a dissenting shareholder within 10 days after an offer made under subsection (12) has been accepted, but that offer lapses if the corporation does not receive an acceptance thereof within 30 days after the offer has been made.

Corporation application to court

184(15)     Where a corporation fails to make an offer under subsection (12), or if a dissenting shareholder fails to accept an offer, the corporation may, within 50 days after the action approved by the resolution is effective or within such further period as a court may allow, apply to a court to fix a fair value for the shares of any dissenting shareholder.

Shareholder application to court

184(16)     If a corporation fails to apply to a court under subsection (15), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within such further period as a court may allow.

Venue

184(17)     An application under subsection (15) or (16) shall be made to a court having jurisdiction in the place where the corporation has its registered office or in the province where the dissenting shareholder resides if the corporation carries on business in that province.

No security for costs

184(18)     A dissenting shareholder is not required to give security for costs in an application made under subsection (15) or (16).

Parties

184(19)     Upon an application under subsection (15) or (16),

(a) all dissenting shareholders whose shares have not been purchased by the corporation shall be joined as parties and are bound by the decision of the court; and

(b) the corporation shall notify each affected dissenting shareholder of the date, place and consequences of the application and of his right to appear and be heard in person or by counsel.

Powers of court

184(20)     Upon an application to a court under subsection (15) or (16), the court may determine whether any other person is a dissenting shareholder who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting shareholders.

Appraisers

184(21)     A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.

Final order

184(22)     The final order of a court shall be rendered against the corporation in favour of each dissenting shareholder and for the amount of his shares as fixed by the court.

Interest

184(23)     A court may in its discretion allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective until the date of payment.

Notice that subsection (26) applies

184(24)     If subsection (26) applies, the corporation shall, within 10 days after the pronouncement of an order under subsection (22), notify each dissenting shareholder that it is unable lawfully to pay dissenting shareholders for their shares.

Effect where subsection (26) applies

184(25)     If subsection (26) applies, a dissenting shareholder, by written notice delivered to the corporation within 30 days after receiving a notice under subsection (24) may

(a) withdraw his notice of dissent, in which case the corporation is deemed to consent to the withdrawal and the shareholder is reinstated to his full rights as a shareholder; or

(b) retain a status as a claimant against the corporation, to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of the corporation but in priority to its shareholders.

Limitation

184(26)     A corporation shall not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that

(a) the corporation is or would after the 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.

S.M. 1988-89, c. 11, s. 5.

Definitions

185(1)      In this section,

"arrangement" includes

(a) an amendment to the articles of a corporation;

(b) an amalgamation of two or more corporations;

(c) a division of the business carried on by a corporation;

(d) a transfer of all or substantially all the property of a corporation to another body corporate in exchange for property, money or securities of the body corporate;

(e) an exchange of securities of a corporation held by security holders for property, money or other securities of the corporation or property, money or securities of another body corporate that is not a take-over bid to which The Securities Act applies;

(f) a liquidation and dissolution of a corporation; and

(g) any combination of the foregoing; (« arrangement »)

"reorganization" means a court order made under

(a) section 234; or

(b) the Bankruptcy Act (Canada), approving a proposal; or

(c) any other Act of the Legislature that affects the rights among the corporation, its shareholders and creditors. (« réorganisation »)

Powers of court

185(2)      If a corporation is subject to an order referred to in subsection (1), its articles may be amended by the order to effect any change that might lawfully be made by an amendment under section 167.

Further powers

185(3)      If a court makes an order referred to in subsection (1), the court may also

(a) authorize the issue of debt obligations of the corporation, whether or not convertible into shares of any class or having attached any rights or options to acquire shares of any class, and fix the terms thereof; and

(b) appoint directors in place of or in addition to all or any of the directors then in office.

Articles of reorganization

185(4)      After an order referred to in subsection (1) has been made, the corporation shall send the Director articles of reorganization in the form the Director requires.

Certificate of reorganization

185(5)      Upon the receipt of articles of reorganization, the Director shall issue a certificate of amendment in accordance with section 255.

Effect of certificate

185(6)      A reorganization becomes effective on the date shown in the certificate of amendment and the articles of incorporation are amended accordingly.

No dissent

185(7)      A shareholder is not entitled to dissent under section 184 if an amendment to the articles of incorporation is effected under this section.

Where corporation insolvent

185(8)      For the purposes of this section, a corporation is insolvent

(a) where it is unable to pay its liabilities as they become due; or

(b) where the realizable value of the assets of the corporation are less than the aggregate of its liabilities and stated capital of all classes.

Application to court for approval of arrangement

185(9)      Where it is not practicable for a corporation that is not insolvent to effect a fundamental change in the nature of an arrangement under any other provision of this Act, the corporation may apply to a court for an order approving an arrangement proposed by the corporation.

Powers of court

185(10)     In connection with an application under subsection (9), the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing,

(a) an order determining the notice to be given to an interested person or dispensing with notice to any person other than the Director;

(b) an order appointing counsel, at the expense of the corporation, to represent the interests of the shareholders;

(c) an order requiring a corporation to call, hold and conduct a meeting of holders of securities or options or rights to acquire securities in such manner as the court directs;

(d) an order permitting a shareholder to dissent under section 184;

(e) an order approving an arrangement as proposed by the corporation or as amended in any manner the court may direct.

Notice to Director

185(11)     An applicant under subsection (9) shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel.

Articles of arrangement

185(12)     After an order referred to in clause (10)(e) has been made, the corporation shall send the Director articles of arrangement, in the form the Director requires, together with the documents required by sections 19 and 108, if applicable.

Certificate of amendment

185(13)     Upon receipt of articles of arrangement, the Director shall issue a certificate of amendment in accordance with section 255.

Effect of certificate

185(14)     An arrangement becomes effective on the date shown in the certificate of amendment.

S.M. 2006, c. 10, s. 30.

PART XV

POWER OF ATTORNEY

Attorney required

186(1)      Every body corporate to which this Act applies

(a) that has no director or officer residing in the province; or

(b) that has its registered office outside of the province;

shall, by a duly executed power of attorney in the form the Director requires, appoint a person residing in the province to act as its attorney for the purpose of accepting service of any process or being served therewith in any suit or proceeding against the body corporate within the province, and of receiving all lawful notices, and of declaring that service of process in respect of any suit or proceeding and of any lawful notice on the attorney are legal and binding on the body corporate, and the power of attorney shall be filed with the Director.

Invalidity of power of attorney

186(2)      If the attorney for service ceases to reside in the province, or dies or resigns, or the power of attorney filed becomes invalid or ineffectual for any reason, the body corporate shall, within 10 days thereafter or within such further time as the Director may prescribe, file another power of attorney.

Failure to comply with subsec. (1) or (2)

186(3)      The Director may dissolve a corporation, or cancel the registration of a body corporate, for failure to comply with subsection (1) or (2).

Consent to act as attorney

186(4)      A person appointed by a body corporate as its attorney shall sign a consent to act as attorney in the form the Director requires.

Service of process

186(5)      Upon compliance with this section, any process in any suit or proceedings in the province against the body corporate may be served upon the attorney unless he is so replaced, and thereafter upon his successor from time to time duly appointed, in the same manner as process may be served upon the proper officer of any body corporate incorporated under the law of the province; and all proceedings may be had thereupon to judgment and execution in the same manner as in any civil suit in the province.

Binds body corporate

186(6)      Where any body corporate has heretofore empowered or hereafter empowers any person as its attorney, either generally or in respect of any specified matters, to execute deeds on its behalf, every deed signed by that attorney on behalf of the body corporate in respect of property or civil rights in the province, binds the body corporate.

S.M. 2006, c. 10, s. 31.

PART XVI

REGISTRATION OF BODIES CORPORATE

Application

187(1)      This Part, except where it is otherwise expressly provided, applies to every body corporate carrying on its business or undertaking in Manitoba, other than a body corporate licensed under the Insurance Act as an insurer, or a body corporate created solely for religious purposes.

Carrying on business

187(2)      For the purposes of this Part, a body corporate is deemed to be carrying on its business or undertaking in Manitoba if

(a) it has a resident agent or representative, or a warehouse, office or place of business in Manitoba; or

(b) its name or any name under which it carries on business, together with an address for the body corporate in Manitoba, is listed in a Manitoba telephone directory; or

(c) its name or any name under which it carries on business, together with an address for the body corporate in Manitoba, is included in any advertisement advertising the business or any product of the body corporate; or

(d) it is the registered owner of real property situate in Manitoba; or

(e) it otherwise carries on its business or undertaking in Manitoba.

Registration of corporations

187(3)      A corporation incorporated or continued under this Act is deemed to be registered concurrently with the issuance of its certificate of incorporation or continuance, an extra-provincial body corporate shall be registered before, and a body corporate incorporated under the laws of Canada shall be registered within 30 days after commencing its business or undertaking in the province; and any other class of bodies corporate carrying on their business or undertaking in the province, shall be registered before commencing to carry on the business or undertaking in the province; and no body corporate shall carry on its business or undertaking in Manitoba unless so registered.

Registration of trust and loan corporations

187(3.1)    Notwithstanding subsection (3), a body corporate incorporated under the laws of Canada that is required to have a business authorization under Part XXIV shall be registered before commencing to carry on its business or undertaking in the province.

Compliance

187(4)      Upon an application for registration under this Part, the applicant shall establish, to the satisfaction of the Director, that the provisions of this Act and the regulations made thereunder have been complied with.

Penalty

187(5)      Every body corporate that carries on its business or undertaking in the province without being registered, and every director and officer of the body corporate, and every representative or agent acting in any capacity for the body corporate so carrying on its business or undertaking, is respectively guilty of an offence and is liable to a penalty of $50. for every day the business or undertaking is so carried on.

S.M. 1993, c. 18, s. 2.

Preliminary matters

188         The provisions of this Part, or of any Act for which this Part is substituted, relating to matters preliminary to the issue of a certificate of registration, or supplementary certificate of registration, shall be deemed to be directory only; and no certificate, issued or given, or which has heretofore been issued or given, under this Part or any of those Acts, shall be held void or voidable on account of any irregularity or insufficiency of any matter preliminary to the issue of the certificate.

Transitional

189(1)      A body corporate licensed or registered under any Act for which this Act is substituted, and the licence or registration of which has not been revoked, is deemed to be registered under this Act.

Restriction on capital employed abrogated

189(2)      Any restriction on the amount of capital employed in Manitoba contained in a licence issued under any Act for which this Act is substituted, is abrogated.

Continuing restriction

189(3)      A restriction, other than that referred to in subsection (2), contained in a licence issued under any Act for which this Act is substituted, continues as a restriction on its registration.

Amending restriction

189(4)      A body corporate may apply to the Director to amend or delete a restriction contained in a certificate of registration.

Refusal to amend

189(5)      The Director may refuse to amend or delete the restriction contained in the certificate of registration of a body corporate, but the body corporate may appeal his decision to the Lieutenant Governor in Council whose decision shall be final.

Supplementary certificate

189(6)      Where the Director amends or deletes a restriction contained in the certificate of registration of a body corporate, he shall issue to the body corporate a supplementary certificate of registration in respect thereof.

189(7)      [Repealed] S.M. 2000, c. 41, s. 11.

S.M. 2000, c. 41, s. 11.

Publication of notice of certificate of registration

189.1       The Director shall, in the manner set out in the regulations, publish notice of every

(a) issuance of a certificate of registration under this Part;

(b) cancellation of a certificate or supplementary certificate of registration; and

(c) restoration of a cancelled certificate or supplementary certificate of registration.

S.M. 2000, c. 41, s. 12.

Application for registration

190(1)      A body corporate incorporated otherwise than under this Act shall file with the Director an application for registration in the form the Director requires, in duplicate, and shall in addition file with the Director or provide the Director with such other documents or information as he may require.

Approval of Registrar of Cooperatives

190(2)      No certificate of registration shall be issued to an extra-provincial body corporate that is organized and operated on a cooperative basis within the meaning of The Cooperatives Act without the prior approval of the Registrar of Cooperatives.

Compliance

190(3)      Upon compliance with the provisions of this Part, and where in any case this Act requires compliance with other provisions, upon compliance with them, and on payment of the fees prescribed, the Director shall issue to the body corporate a certificate of registration.

Issuance of certificate

190(4)      Upon the issuance of a certificate of registration under this Part and during the period the registration remains in force, but not otherwise, a body corporate may, subject to the provisions of its articles and certificate of registration, carry on its business or undertaking in Manitoba.

S.M. 2006, c. 10, s. 32.

Prohibited names

191(1)      No body corporate to which this Part applies shall carry on its business or undertaking under a name

(a) that, except as prescribed, is identical with the name of an individual, association, partnership or body corporate carrying on any business or undertaking, or so nearly resembles the name that it is likely to confuse or mislead; or

(b) that is, as prescribed, prohibited or deceptively misdescriptive; or

(c) that the Director for any other reason disapproves.

Directing change of name

191(2)      Where a body corporate to which this Part applies obtains a name which in the opinion of the Director is in contravention of subsection (1), the Director may, in writing giving his reasons, direct the body corporate to change its name to one that he approves.

Appeal

191(3)      Within 20 days after receiving a directive made under subsection (2), the body corporate may appeal to the court.

New name

191(4)      Upon receipt of a copy of the document evidencing the change of name to a name approved by him, the Director shall enter the new name on the register in place of the former name, and shall issue a supplementary certificate of registration showing the change of name.

Non-compliance

191(5)      Unless the order made under subsection (2) is set aside on appeal, the Director may cancel the registration of the body corporate for failure to comply with the order.

Corporate name

191(6)      Every body corporate to which this Part applies shall set out its corporate name in legible characters in all contracts, invoices, negotiable instruments and orders for goods and services issued or made by or on behalf of the body corporate in Manitoba.

Other name

191(7)      Subject to subsections (1) and (6) and the provisions of The Business Names Registration Act, a body corporate may carry on business under or identify itself by a name other than its corporate name.

Rights not affected

191(8)      A change of name does not affect any rights or obligations of the body corporate or render defective any legal proceedings by or against it; and proceedings that might have been continued or commenced by or against it under the former name may be continued or commenced by or against it under the new name.

Filing documents

192(1)      A body corporate to which this Part applies shall file with the Director

(a) a notice of any change in location of its registered office, within 90 days of the making of the change;

(b) an application for a supplementary certificate of registration, in duplicate, upon an amalgamation or a continuance, or a change of or addition to its name, within 90 days of the issuance of the amendment to its articles; and

(c) in the case of an amalgamation, a new power of attorney in addition to the application required under clause (b).

Supplementary certificate

192(2)      The Director may issue a supplementary certificate of registration to a body corporate previously registered under this Part that is granted articles of continuance continuing it as a body corporate in another jurisdiction.

Registration of former Manitoba corporation

192(3)      Where a corporation is continued in another jurisdiction, the Director shall not issue a supplementary certificate of registration under subsection (2) unless the body corporate files an application for a supplementary certificate of registration within 90 days of the date of continuance and, if the body corporate requires to be registered under this Part thereafter, it shall apply for registration as if it had never been registered under this Part.

Supplementary certificate

192(4)      The Director may issue a supplementary certificate of registration to a body corporate registered under this Part that obtains articles of amalgamation, or of amendment adding to or changing its name.

Exception

192(5)      Subsection (1) does not apply to a corporation that, pursuant to this Act, receives articles of continuance, articles of amalgamation or articles of amendment.

Restriction on certificate

193(1)      Upon the filing of any document pursuant to section 192, the Director may restrict the terms of the supplementary certificate of registration issued in relation thereto; but the body corporate may appeal the Director's decision to the Lieutenant Governor in Council whose decision shall be final.

Refusal to register

193(2)      The Director may refuse to register an extra-provincial body corporate, or may restrict the terms of the certificate of registration or supplementary certificate of registration, as the case may be, of a body corporate; and, where the terms of the certificate of registration or supplementary certificate of registration of a body corporate are so restricted, the body corporate shall not carry on its business or undertaking except subject to the restrictions.

Notice of refusal or restriction

193(3)      Where the Director refuses to register an extra-provincial body corporate or restricts the terms of the certificate of registration or the supplementary certificate of registration, as the case may be, of a body corporate, he shall notify the body corporate of the refusal or restriction; and the body corporate may appeal the refusal or restriction to the Lieutenant Governor in Council, and the decision of the Lieutenant Governor in Council is final.

Cancellation of registration

194(1)      The Director shall cancel the registration of any body corporate upon the forfeiture or revocation of its articles, upon its dissolution or upon the cancellation of its business authorization under Part XXIV and may do so,

(a) upon notice from the body corporate, or proof to his satisfaction, that it has ceased to carry on its business or undertaking in the province; or

(b) upon the failure of the body corporate to file any annual return required to be filed with the Director pursuant to this Act, or any Act for which this Act is substituted, for two consecutive years after the annual return should have been so filed, or for the failure for a period of three months to make a proper return or pay a tax that it is liable to pay under The Corporation Capital Tax Act; or

(c) if the body corporate makes default in observing or complying with the limitations and conditions of its certificate of registration or supplementary certificate of registration; or

(d) if the body corporate fails to comply with any of the requirements of this Act in any particular as to which no other procedure is prescribed, and the failure is established to the satisfaction of the Director.

Liability continues

194(2)      The cancellation of the registration of a body corporate does not affect the liability of the body corporate or its successors for debts or liabilities of the body corporate; and action to recover them, or any action to which the body corporate is a necessary party, or proceedings to realize upon its assets, may be commenced against the body corporate or its successors, notwithstanding any suspension or revocation heretofore or hereafter made.

Appeal

194(3)      An interested person who feels aggrieved by the decision of the Director to cancel the registration of the body corporate, may apply to the 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.

Filing of order

194(4)      In that event the applicant shall file a certified copy of the order with the Director, and the Director shall forthwith amend his records to comply with the order.

Restoration of registration

194(5)      The Director, subject to such terms and conditions as he sees fit to impose, may restore the registration of any body corporate; and thereupon the body corporate, subject to the terms of the restoration order and the rights of third parties acquired subsequent to the cancellation, shall be restored to its legal position including all its rights and privileges, actions, property, and assets, as at the time of the cancellation in the same manner and to the same extent as if there had been no cancellation.

Liability of directors continue

194(6)      The liability of every director, officer, or agent of the body corporate continues and may be enforced as if the registration of the body corporate had not been cancelled.

S.M. 1993, c. 18, s. 3.

Service of process

195         Service of any process in any action shall be deemed to have been sufficiently made upon the body corporate, if made upon any director or officer or attorney as shown in the most recent notice on the records of the Director.

Estate of minor, mentally incompetent or deceased person

196         No body corporate shall act as the executor or administrator of the estate of a deceased person, nor shall, in connection with the estate of a minor or a mentally incompetent person, act as a trustee, executor, guardian, administrator, substitute decision maker for property under The Vulnerable Persons Living with a Mental Disability Act, or committee unless

(a) it has a business authorization as a trust corporation or extra-provincial trust corporation under Part XXIV; and

(b) it is registered under this Part.

S.M. 1991-92, c. 41, s. 4; S.M. 1993, c. 18, s. 4; S.M. 1993, c. 29, s. 176.

Actions

197(1)      An extra-provincial body corporate is not capable of commencing or maintaining any action or other proceeding in a court in respect of a contract made in whole or in part in the province, in the course of, or in connection with, the business or undertaking carried on by it, without being registered under the provisions of this Part.

Proof of registration

197(2)      In any action or proceeding, the burden of showing that it is registered is upon the body corporate.

Registration authorizes all previous acts

197(3)      The registration of a body corporate is deemed to authorize all previous acts of the body corporate, and is construed as if the certificate of registration or supplementary certificate of registration had been granted before the body corporate commenced to carry on its business or undertaking in the province, except for the purpose of a prosecution for an offence under this Part.

Real property

198(1)      A body corporate to which this Part applies may, subject to this Act, its articles or certificate of registration acquire, hold, mortgage, alienate and otherwise dispose of land in Manitoba and any interest therein.

Execution of instrument affecting land

198(2)      Every instrument affecting land, executed by a body corporate registered under this Part, or executed by a director, officer or any person duly authorized by the body corporate, is binding on the body corporate according to the tenor and effect of the instrument.

Investigation

199         The Attorney-General may in accordance with Part XVIII apply, ex parte or upon such notice as the court may require, to the court for an order directing an investigation to be made of a body corporate or any of its affiliates registered under this Act.

Registration of trust and loan corporations

199.1       The Director may impose any condition on the registration of a body corporate that is required to have a business authorization under Part XXIV and shall do so in the circumstance set out in clause 199.2(d).

S.M. 1993, c. 18, s. 5.

Effect of business authorization for trust and loan corporations

199.2       Notwithstanding any provision of this Part, where a body corporate is required to have a business authorization under Part XXIV

(a) an application for registration or for a supplementary certificate of registration made by the body corporate shall not be accepted unless it has a business authorization under Part XXIV or has been issued a corresponding change to that business authorization;

(b) a certificate of registration or a supplementary certificate of registration shall not be issued to the body corporate unless it has a business authorization under Part XXIV;

(c) the body corporate shall not carry on business in Manitoba unless it has a business authorization under Part XXIV and a certificate of registration under this Part;

(d) any conditions imposed on the business authorization of the body corporate under Part XXIV shall immediately be imposed on its registration; and

(e) the cancellation of the business authorization of the body corporate under Part XXIV shall immediately result in the cancellation of its registration under this Part.

S.M. 1993, c. 18, s. 5.

Application for Supplementary Registration

199.3       Notwithstanding subsection 194(1) and clause 199.2(e), where the business authorization of a body corporate under Part XXIV is revoked because the body corporate has been continued as a kind of body corporate to which Part XXIV does not apply, the registration of the body corporate under this Part shall not be cancelled immediately but shall be cancelled on the expiry of a period of 30 days after the revocation of its business authorization unless it sooner files an Application for Supplementary Registration.

S.M. 1994, c. 20, s. 3.

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

 

 


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