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The Cooperatives Act
This is an unofficial archived version of The Cooperatives Act
as enacted by SM 1987-88, c. 9 on July 17, 1987.

R.S.M. 1987, c. E30

The Cooperatives Act

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

PART I

INTERPRETATION

Definitions.

1(1)

In this Act,

"affairs" means the relationship among a cooperative, its subsidiaries and its members, directors and officers, but does not include the business carried on by the cooperative; ("affaires internes")

"arrangement" means a reconstruction under which a cooperative transfers or sells, or proposes to transfer or sell, to another body corporate the whole or a substantial part of its undertaking for a consideration consisting in whole or in part of securities of, or memberships in, that body corporate, and under which the cooperative proposes to distribute a part or all of that consideration among its members and to cease carrying on its undertaking or that part of its undertaking so transferred or sold or proposed to be transferred or sold: ("arrangement")

"articles" means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of reorganization, 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")

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

"body corporate" includes a cooperative or other body corporate wheresoever or howsoever incorporated; ("personne morale" )

"business" includes the undertaking carried on by a body corporate; ("entreprise")

"charter by-law" means a by-law of a cooperative that is subject to the approval of the Registrar; ("règlement constitutif )

"cooperative" means any body corporate to which this Act applies; ("coopérative" )

"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")

"court of appeal" means the court to which an appeal lies from an order of the court; ("Cour d'appel")

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

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

"delegate" means an individual elected to represent a division of the members at meetings of a cooperative; ("délégué")

"director" means a person occupying the position of director, by whatever name called: (administrateur")

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

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

"member" means a person having rights through a membership interest in a cooperative in accordance with the provisions of this Act and the articles or charter by-laws of the cooperative, and includes a shareholder of a cooperative; ("membre")

"membership" includes a share of a cooperative; ("adhésion")

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

"ordinary by-law" means a by-law that is not a charter by-law; ("règlement administratif ordinaire")

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

"patronage dividend" means an amount that under this Act is allocated among and credited or paid by a cooperative to its members, or to its members and non-member patrons, based upon the business done by each of them with or through the cooperative; (" ristourne")

"patronage loan" means a loan by a member to a cooperative of all or part of a patronage dividend; ("prêt de ristourne")

"person" includes a partnership, association, body corporate, trustee, executor, administrator or legal representative; ("personne")

"prescribed" means prescribed by the regulations; ("prescrit")

"Registrar" means the Registrar appointed under this Act: ("registraire")

"security" means a share or a debt obligation or a certificate evidencing a share or debt obligation; ("valeur mobilière")

"security holder" includes, where applicable, a member; ("détenteur de valeurs mobilières" )

"security interest" means an interest in or charge upon the property of a cooperative by way of mortgage, hypothec, pledge or otherwise, taken by a creditor to secure payment of an obligation; ("sûreté")

"share" includes, where applicable, a membership in a cooperative; ("part sociale")

"shareholder" includes, where applicable, a member; ("détenteur de parts sociales" )

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

"subsidiary" means a body corporate the shares of which carrying voting rights sufficient to elect a majority of its directors are held, directly or indirectly and other than by way of security only, by or on behalf of another body corporate. ("filiale")

Cooperative basis.

1(2)

For the purposes of this Act. a body corporate that is organized and operated in accordance with principles and methods whereby

(a) except as otherwise provided in this Act. each member or delegate has only one vote and no member or delegate may vote by proxy:

(b) interest and dividends on capital are limited by statute or by-law;

(c) the business of the body corporate is carried on primarily for the benefit of members; and

(d) the business of the body corporate is carried on as nearly as possible at cost after providing for reasonable reserves and the payment or crediting of interest or dividends on capital, and any surplus arising from the business of the body corporate after providing for the reserves and the interest or dividends, unless used to maintain or improve the services of the body corporate for its members or donated for community welfare or the propagation of cooperative principles, is distributed in whole or in part among the members or the members and patrons of the body corporate in proportion to the volume of business that each has done with or through the body corporate;

is a body corporate operated on a cooperative basis.

Deemed distribution to the public.

2(1)

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.

2(2)

For the purposes of this Act but subject to subsection (3), 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 an offering statement, a prospectus, a statement of material facts, a registration statement or a 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.

Exemption.

2(3)

Upon the application of a cooperative, the Registrar may determine that a security is not part of a distribution to the public if he is satisfied that to so determine would not prejudice any security holder.

Application of Act.

3(1)

This Act, except where it is otherwise expressly provided, applies to

(a) every corporation incorporated under this Act;

(b) every corporation heretofore incorporated under The Co-operative Associations Act or any Act for which that Act was substituted;

(c) every corporation heretofore incorporated under The Companies Act, being chapter C160 of the Revised Statutes, 1970, now repealed, as a corporation to be operated on a cooperative basis; and

(d) every body corporate that is continued under this Act.

No application to credit unions.

3(2)

This Act does not apply to a body corporate that is a credit union within the meaning of The Credit Unions and Caisses Populaires Act.

Powers of existing cooperatives.

4

Where the articles of a cooperative excluded, immediately before the coming into force of this Act, any of the powers authorized by any former Act by or under which the cooperative was incorporated, the articles are deemed to restrict the cooperative from exercising the power so excluded.

PART II

INCORPORATION

Application by individuals.

5(1)

Any three or more individuals, no one of whom

(a) is less than 18 years of age: or

(b) has the status of a bankrupt:

may apply for incorporation as a cooperative by sending to the Registrar, in duplicate, articles of incorporation and draft charter by-laws.

Application by corporations.

5(2)

Any two or more corporations may apply for incorporation as a cooperative by sending to the Registrar, in duplicate, articles of incorporation and draft charter by-laws.

Articles of incorporation.

6(1)

Articles of incorporation shall follow the prescribed form and shall set out, in respect of the proposed cooperative,

(a) the name of the cooperative;

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

(c) where there is share capital, the par value of the shares and, if there are two or more classes of shares, the designation of each class, the par value of the shares of each class and the preference rights, conditions, restrictions, limitations and prohibitions attaching to each class;

(d) where there is no share capital, a statement that the interest of each member is the same as that of every other member;

(e) the names in full of each first director and his residence address, giving the street and number, if any;

(f) a statement of the purpose that the cooperative is intended to fulfil; and

(g) any restrictions on the business or businesses that the cooperative may carry on.

Additional provisions in articles.

6(2)

The articles may in addition set out any provisions permitted by this Act to be set out in the charter by-laws.

Consent of first directors.

6(3)

The articles shall have attached thereto, in the prescribed form, the consent of a first director who is not an incorporator.

Charter by-laws.

6(4)

The articles shall be accompanied by charter by-laws providing for any matter required by this Act and the regulations to be included in the charter by-laws, and providing for such of the following matters as are applicable but are not set out in the articles:

(a) The authorized capital, if any, and the number of shares of each class into which it is to be divided.

(b) Conditions of membership including the rights of joint members, the qualification and withdrawal of members and the transfer of shares, the amount of the membership fee and of the annual fee, if any, to be paid by members, and the conditions upon which membership ceases or may be terminated and the disposition that may thereupon be made of a member's interest and the determination of the value thereof.

(c) The mode of holding meetings, the quorum thereat, the rights of voting and of making, repealing, or amending by-laws or regulations, the right of members to vote by ballot or mail or both, and the manner, form and effect of votes at meetings.

(d) The election, term of office, removal of and filling of vacancies among directors, committee members and officers, and their powers, duties and remuneration, and the procedure and quorum at meetings of the board of directors.

(e) The terms of the contract between the cooperative and its members that every member may be required to sign, and of any renewal thereof.

(f) The appointment of auditors and the auditing of the books and accounts of the cooperative.

(g) The holding of a referendum on any matter of general concern to the members.

(h) The establishment of branches, if any are proposed.

(i) If proposed by the cooperative, the division of the territory in which members are located into districts and the alteration thereof, the election of delegates to represent the members of each district and the defining of the powers, duties, election and voting rights of district delegates.

(j) The refunds and the interim and final payments to be made to members.

(k) The distribution of surplus.

(l) The distribution of the property of the cooperative.

Approval of charter by-laws.

6(5)

No charter by-law, and no amendment, repeal or replacement thereof, is in force or may be acted upon, unless and until the approval of the Registrar thereto is obtained and a certified copy thereof filed with him.

Cooperative basis requirement.

6(6)

A cooperative shall be organized and operated on a cooperative basis and in such manner as to fulfil the purpose stated in its articles.

Filing of articles and charter by-laws.

7

The Registrar may file any articles and draft charter by-laws sent to him under section 5 with respect to a proposed incorporation,

(a) if he is satisfied that the incorporation is advisable;

(b) if the articles are in compliance with the provisions of this Act and the regulations; and

(c) if he approves of the draft charter by-laws.

Certificate of incorporation.

8

Upon the filing of the articles and charter by-laws, the Registrar shall issue a certificate of incorporation in accordance with section 179.

Effect of certificate.

9

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

Name of cooperative.

10(1)

The corporate name of every cooperative shall include the word "Cooperative", or the abbreviation "Co-op", or the word "Pool", as part thereof; and the word "Limited" or the abbreviation "Ltd." shall be the last word of the corporate name of every cooperative with share capital, and the word "Incorporated" or the abbreviation "Inc." shall be the last word of the corporate name of every cooperative without share capital but a cooperative may use and may be legally designated by either the full or the abbreviated form.

Alternative name.

10(2)

Subject to section 12, a cooperative may set out its name in its articles in an English form or a French form or a combined English and French form and may be legally designated by that form.

Name in any language form.

10(3)

Subject to section 12, a cooperative may set out its name in its articles in any language form and may be legally designated by that form.

Publication of name.

10(4)

A cooperative shall set out its 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 cooperative.

Other name.

10(5)

Subject to section 12 and the provisions of The Business Names Registration Act, a cooperative may carry on business under or identify itself by a name other than its corporate name.

Prohibited use of cooperative designations.

10(6)

Subject to subsection (8), no person other than a cooperative shall use any of the words "cooperative" and "pool" or any derivative thereof, or the abbreviation "co-op" or any other abbreviation of those words, as part of its name.

Prohibition against holding out.

10(7)

Subject to subsection (8), no person other than a cooperative shall hold itself out as, or use as part of its name or otherwise any word or abbreviation suggesting, indicating or implying that it is, carrying on business on a cooperative basis.

Exception.

10(8)

Subsections (6) and (7) do not apply to a corporation incorporated by or under the authority of an Act of the Parliament of Canada or of the legislature of a province that expressly authorizes the use of any of the words "cooperative" and "pool", or the abbreviation "co-op", or to any corporation heretofore incorporated in respect of which the Registrar consents in writing to the continued use of any of those words or that abbreviation.

Reservation of name.

11(1)

The Registrar 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, if the name is not at the time contrary to section 12.

Assignment of number.

11(2)

If requested to do so by the incorporators, the Registrar shall assign to a cooperative as its name, a designating number determined by him.

"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 cooperative shall not have a name

(a) that is known to the Registrar to be identical with the name of an existing body corporate or of a dissolved body corporate; or

(b) that, subject to subsection (4), is known to the Registrar to be 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 the government of any province of Canada or any department, branch, bureau, service, agency, or activity of that government, without the consent in writing of the appropriate authority; or

(d) that includes the word "Loan" or "Trust" : or (e) that the Registrar for any good and valid reason disapproves.

Cooperative not to be given similar name to body corporate.

12(3)

A cooperative shall not have a name that is similar to the name of any other body corporate if the use of that name by the cooperative 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 cooperative and, if required by the Registrar, the body corporate undertakes to dissolve or to change its name within six months after the incorporation of the cooperative.

Cooperative not to be given similar name to business or association.

12(4)

A cooperative 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 cooperative 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 cooperative and, if required by the Registrar, the business or association undertakes to cease carrying on its business or activities or to change its name within six months after the incorporation of the cooperative.

Reserved name.

12(5)

A cooperative shall not have a name that is reserved for another body corporate under this Act or The Corporations Act, 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 cooperative is granted a name subject to an undertaking given under subsection (3) or (4) and the undertaking is not carried out within the specified time, the Registrar may direct the cooperative to which the name is granted to change its name to a name that complies with this Act: and if the cooperative fails to comply with the directive within 60 days of the service thereof, the Registrar may revoke the name of the cooperative and assign to it a number, and until changed in accordance with section 130 the name of the corporation is thereafter the number so assigned.

Directing change of name.

12(7)

Where, through inadvertence or otherwise, a cooperative

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

(b) upon an application to change its name, is granted a name;

that contravenes this section, the Registrar may direct the cooperative to change its name in accordance with section 130.

Directing change of name.

12(8)

Where a cooperative has a designating number as its name, the Registrar may direct the cooperative to change its name, in accordance with section 130, to a name that complies with this Act.

Revoking name.

12(9)

Where a cooperative is directed under subsection (7) to change its name and fails within 60 days from the service of the directive to change its name to a name that complies with this Act, the Registrar may revoke the name of the cooperative and assign to it a number and, until changed in accordance with section 130, the name of the cooperative is thereafter the number so assigned.

Certificate of amendment.

13(1)

Where a cooperative has had its name revoked and a number assigned to it under subsection 12(6) or (9), the Registrar shall issue a certificate of amendment showing the new name of the cooperative and shall forthwith give notice of the change of name in the Manitoba Gazette.

Effect of certificate.

13(2)

The articles of the cooperative are amended accordingly on the date shown in the certificate of amendment.

Personal liability under 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 cooperative 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 cooperative 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 cooperative is bound by the contract and is entitled to the benefits thereof as if the cooperative 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 cooperative 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 cooperative is adopted by the cooperative, 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 cooperative and any person who purported to act in the name of or on behalf of the cooperative, 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 cooperative 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 cooperative.

15(1)

A cooperative has the capacity and. subject to this Act, the rights, powers and privileges of a natural person.

Extra-territorial capacity.

15(2)

A cooperative 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.

Powers of a cooperative.

16(1)

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

Restricted business or powers.

16(2)

A cooperative 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 cooperative exercise any of its powers in a manner contrary to its articles.

Rights preserved.

16(3)

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

No constructive notice.

17(1)

Subject to subsection (2), no person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a cooperative by reason only that the document has been filed with the Registrar or is available for inspection at an office of the cooperative.

Constructive notice of articles and charter by-laws.

17(2)

A member of a cooperative is deemed to have notice and knowledge of the contents of the articles and charter by-laws of the cooperative.

Authority of directors, officers and agents.

18

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

(a) the articles or by-laws have not been complied with; or

(b) the persons named in the most recent notice sent to the Registrar under this Act are not the directors of the cooperative; or

(c) the place named in the most recent notice sent to the Registrar under this Act is not the registered office of the cooperative; or

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

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

(f) any financial assistance to members or directors or any sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized;

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

PART IV

REGISTERED OFFICE AND RECORDS

Registered office.

19(1)

A cooperative 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 cooperative 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 cooperative 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 cooperative shall send to the Registrar, within 15 days of any change,

(a) a copy of the resolution changing the location of its registered office to another place in Manitoba; or

(b) a notice, in prescribed form, of any change of address of its registered office;

as the case may be.

Annexation or amalgamation of municipalities.

19(5)

Where the location of the registered office of a cooperative 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).

Records.

20(1)

A cooperative shall prepare and maintain, at its registered office or subject to subsection (5) at any other place in Manitoba designated by the directors, records containing

(a) the articles, the charter by-laws and any other by-laws, and all amendments thereto;

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

(c) a register of directors setting out the names, addresses and other occupations, if any, of all persons who are or have been directors of the cooperative with the several dates on which each became or ceased to be a director; and

(d) a members register setting out the names, alphabetically arranged, and the latest known addresses of all members, and the number of shares and other securities, if any, held by each.

Directors records.

20(2)

In addition to the records described in subsection (1), a cooperative shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committee thereof.

Place of directors records.

20(3)

The records described in subsection (2) shall be kept at the registered office of the cooperative or at such other place in Manitoba as the directors think fît and shall at all reasonable times be open to inspection by the directors.

Records in Manitoba.

20(4)

Where accounting records of a cooperative are kept at a place outside Manitoba, there shall be kept at the registered office or other office in Manitoba accounting records adequate to enable the directors to ascertain the financial position of the cooperative with reasonable accuracy.

Exception.

20(5)

Where a cooperative

(a) shows, to the satisfaction of the Registrar, the necessity of keeping any of the minutes, documents, registers, books of account and accounting records mentioned in subsections (1) and (2) at a place other than the registered office of the cooperative; and

(b) gives assurance, to the satisfaction of the Registrar, that those minutes, documents, registers, books of account and accounting records will at all reasonable times be open for inspection, at the registered office of the cooperative or some other place in Manitoba approved by the Registrar, by any person who is entitled to inspect them and who applies to the cooperative for an inspection thereof;

the Registrar may, by order and upon such terms as he thinks fit, permit the cooperative to keep such of them at such place or places, other than the registered office, as he thinks fit.

Rescind order.

20(6)

The Registrar for any good and valid reason may, by order and upon such terms as he think fit, vary or rescind any order made under subsection (5).

Trustee's register of securities.

20(7)

The trustee for security holders may maintain at its office a duplicate register setting out the securities held by each member.

Notice of order.

20(8)

The Registrar shall cause notice of every order made by him under this section to be given forthwith in the Manitoba Gazette.

Examination of records.

21(1)

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

Copies of records.

21(2)

A member of a cooperative is entitled upon request and without charge to one copy of the articles and charter by-laws.

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

Corporate seal.

23

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

PART V

CORPORATE FINANCE

Shares.

24(1)

Shares of a cooperative shall be in registered form, unless otherwise provided by the charter by-laws, and shall have a par value fixed by the articles.

Class of shares.

24(2)

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.

Entitlement to vote.

24(3)

Unless the charter by-laws otherwise provide, no person has the right to vote as a shareholder of a cooperative unless he owns one share thereof and has paid therefor in full.

Authorized capital.

24(4)

The authorized capital of a cooperative shall be expressed in the charter by-laws as an amount of money divided into a specified number of shares of the class or classes set out in the articles.

Limitation on holding.

24(5)

Unless the charter by-laws otherwise provide, no person shall hold more than 1/20 of the total number of common shares comprised in the capital of the cooperative.

Issue of shares.

25(1)

Subject to subsection (2) shares may be issued at such times and for such consideration as the directors may determine.

Common shares at par value.

25(2)

Unless otherwise prescribed, a cooperative shall sell its common shares at the par value thereof, and this subsection applies to the resale of shares purchased by the cooperative.

Liability of shareholder.

25(3)

Shares issued by a cooperative are nonassessable and no member is liable to the cooperative or to its creditors beyond the sum remaining unpaid on his subscription for shares.

Consideration.

25(4)

A share shall not be issued until it is fully paid in money, or in property or past services that is the fair equivalent of the money that the cooperative would have received if the share had been issued for money.

Consideration other than money.

25(5)

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 reorganization and payments for property and past services reasonably expected to benefit the cooperative.

Property.

25(6)

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

Certificate of membership and right to vote.

26

Where a cooperative does not have share capital, it shall issue a certificate of membership to each member of the cooperative who has paid in full his membership fee; but a member has a right to vote immediately upon being accepted as a member in accordance with the charter by-laws of the cooperative, whether or not his certificate of membership has been issued.

"Surplus" defined.

27

The expression "surplus", as applied to the operations of a cooperative in any fiscal year, means the amount that remains after deducting from the operating revenue, charges to members and patrons, and other revenue in that fiscal year,

(a) the operating expenses and any losses in that fiscal year, including proper allowances for depreciation, for expenses incurred but not paid and for other proper charges against operations; and

(b) any refunds and interim and final payments to members and patrons in that fiscal year as required by contracts made with them or as required under the charter by-laws of the cooperative.

Requirements respecting distribution of surplus.

28

Every cooperative

(a) shall, by its charter by-laws, provide that, before any distribution of surplus is made, such part thereof as may be necessary for those purposes shall be appropriated for, and transferred to, reserve funds duly established by charter by-laws or by resolution passed by the members at a general meeting, and shall be used to retire all or a portion of deficits previously incurred; and

(b) may, by its charter by-laws, provide for payment out of surplus of interest or dividends on capital at rates not exceeding the prescribed rate.

Allocation of surplus.

29

Except as in this Act otherwise expressly provided, each cooperative shall allocate among, and credit to its members the surplus arising from the operations of the cooperative in each fiscal year of the cooperative, to each member a share thereof proportionate to the business done by him with or through the cooperative in that fiscal year as computed by the board of directors at a rate prescribed by the board and approved by the members of the cooperative at a general meeting thereof.

Computation of business done.

30

The board of directors shall compute the amount of the business done by a member with a cooperative in a fiscal year in relation to

(a) the quantity, quality, kind and value of the goods bought, sold, handled, marketed or dealt in by the cooperative; and

(b) the services rendered

(i) by the cooperative on behalf of or to the member, whether as principal or agent of the member or otherwise, or

(ii) by the member on behalf of or to the cooperative;

with appropriate differences for the different classes, grades or qualities of the goods and services.

Allocation of surplus to non-members.

31

The charter by-laws may provide that a cooperative may in each fiscal year allocate among, and credit to, patrons of the cooperative who are not members thereof a share of the surplus at a rate that is equal to, or less than, the rate at which it is distributable to members; and the business done by non-member patrons shall be computed in the manner in which business done by members is computed.

Use of dividend to non-members for purchase of shares.

32

Where its charter by-laws so provide, a cooperative may in each fiscal year credit to the account of a non-member patron the share of the surplus allocated to him, until such time as the amount to his credit is equal to or greater than the par value of a share where the cooperative has share capital, or a membership fee in other cases; and thereupon an amount equal to that par value or the membership fee, as the case may be, shall be charged to the account of the non-member patron and transferred to the credit of the cooperative: and, subject to compliance with the other provisions of this Act, the patron thereupon becomes a member of the cooperative and entitled to receive a certificate for a fully paid-up share or membership, as the case may be.

Non-payment of small dividends.

33

A cooperative may by charter by-law provide that, where the patronage dividend that would otherwise be payable to any person in respect of the operations of a fiscal year does not exceed $1. or such smaller amount as may be specified in the by-law, no patronage dividend shall be paid to that person in respect of the operations of that fiscal year, and that the amount otherwise payable shall be the property of the cooperative to be used as the board of directors may decide.

Use of patronage dividend for purchase of shares.

34

A cooperative that has share capital may in its charter by-laws provide that, in each fiscal year of the cooperative, the whole of any patronage dividend credited to a shareholder or such part thereof as may be prescribed in the charter by-laws shall be applied to purchase on behalf of the shareholder additional shares of the cooperative, up to such number, if any, as may be specified in the charter by-laws.

Repurchase of shares.

35

Where the charter by-laws of a cooperative provide as set out in section 34, the charter by-laws shall also provide for the repurchase of the shares by the cooperative in accordance with this Act, within such period and subject to such conditions as may be prescribed in the charter by-laws.

Compulsory loan of patronage dividends.

36

A cooperative may in its charter by-laws require its members to lend to it the whole, or such part as may be specified in the charter by-laws, of the patronage dividend to which the members may become entitled in respect of any fiscal year, upon such terms and at such rate of interest, or without interest, as the charter by-laws may provide: but, in that case, the charter by-laws shall provide for the repayment of any loan so made.

Use of patronage dividend to adjust rent.

37

A cooperative that provides housing may in its charter by-laws provide that the whole or any part of any patronage dividend shall be applied in reduction of the rent or price of the housing.

Effect of marketing plans.

38

Where members of a cooperative are required by a marketing plan established under an Act of the Legislature or of the Parliament of Canada to sell or deliver goods or render services to or through a producer board, marketing commission or agency, then for the purposes of allocating, crediting and paying patronage dividends among or to the members and for the purposes of making payments to the members as part of the price or proceeds of their goods or services the members shall be deemed to have sold, delivered or rendered those goods or services to the cooperative, but the charter by-laws of the cooperative may provide that this section does not apply to a member unless such conditions are fulfilled as to the delivery or rendering of the goods and services as are set out in the charter by-laws.

Community service cooperatives.

39

Where a cooperative is, in the opinion of the Registrar, operating entirely for purposes of community service, the charter by-laws of the cooperative may provide that no patronage dividend shall be paid unless and until the Registrar otherwise orders, and that the surplus of the cooperative in any fiscal year shall be used for the purposes of the cooperative or donated for community welfare.

Purchase of common shares by cooperative.

40(1)

A cooperative may purchase any of its common shares that are offered for sale or are available for compulsory purchase under section 108; and subject to subsection (3) it shall, within one year of the date of purchase, pay in cash for shares so purchased.

Purchase price.

40(2)

Subject to subsection (3), the price to be paid by a cooperative for a share purchased under this section shall be the par value of the share together with any dividends accrued but unpaid thereon.

Other terms and prices.

40(3)

If the regulations so prescribe, the charter by-laws of a cooperative may authorize the purchase of its own shares by the cooperative on terms and at prices other than as provided by subsections (1) and (2).

Limitations on redemptions.

41(1)

No cooperative shall exercise its powers to purchase its shares under section 40 or to repay patronage loans

(a) if it is unable to pay its liabilities as they become due; or

(b) if the result of so doing would be to render itself unable to pay its liabilities as they become due.

Further limitations.

41(2)

No cooperative shall exercise its powers to purchase its shares under section 40 if the result of so doing would be to reduce the number of its shareholders

(a) to fewer than three non-incorporated shareholders, in a case where it has fewer than two shareholders that are bodies corporate: or

(b) to fewer than two shareholders that are bodies corporate in a case where it has fewer than three non-incorporated shareholders.

Money owing a debt.

42

All moneys payable by any member to the cooperative under the articles or charter by-laws are a debt due from him to the cooperative.

Prohibited loans and guarantees.

43(1)

A cooperative shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise to any member, director, officer or employee of the cooperative or any subsidiary thereof for any purpose, or to any person for the purpose of or in connection with the purchase of a share of the cooperative, where there are reasonable grounds for believing that

(a) the cooperative is, or would after giving the financial assistance be, unable to pay its liabilities as they become due; or

(b) the realizable value of the assets of the cooperative, excluding the amount of the financial assistance, would after giving the financial assistance be less than the aggregate of the liabilities and capital of the cooperative.

Exceptions.

43(2)

Notwithstanding subsection (1), a cooperative may give the financial assistance prohibited under that subsection

(a) to any person in the ordinary course of business, if the lending of money is part of the ordinary business of the cooperative; or

(b) to any person on account of expenditures incurred or to be incurred on behalf of the cooperative; or

(c) to employees of the cooperative or of any of its subsidiaries, to enable or assist them to purchase or erect living accommodations for their own occupation.

Enforceability.

43(3)

A contract made by a cooperative in contravention of this section may nevertheless be enforced by the cooperative or by a bona fide lender for value without notice of the contravention, as the case may be.

Member immunity.

44(1)

The members of a cooperative are not, as members, liable for any liability, act or default of the cooperative except to the extent of any amount received by the member upon a distribution of the property of the cooperative where the cooperative is dissolved and in accordance with Part XVII of The Corporations Act.

Lien on member's interest.

44(2)

A cooperative has a lien on any share of the cooperative registered in the name of a member or his legal representative, and on any other interest of a member in the property of a cooperative and on any sum payable by the cooperative to the member, for a debt of that member to the cooperative.

Enforcement of lien.

44(3)

A cooperative may enforce a lien referred to in subsection (2) in accordance with its charter by-laws.

PART VI

SHARE CERTIFICATES, MEMBERSHIPS AND TRANSFERS

Personal estate.

45

Shares in the capital stock of a cooperative and memberships in a cooperative are personal estate and are transferable in such manner and subject to such conditions and restrictions as are contained in this Act and the regulations and in the articles and charter by-laws of the cooperative.

Allotment of shares.

46

Subject to this Act and in the absence of any provision to the contrary in the articles or charter by-laws of a cooperative, shares in the capital stock of the cooperative may be allotted at such times, in such manner and to such persons or class of persons as the directors may from time to time by resolution determine.

Share certificates.

47(1)

Subject to subsection (6), every shareholder of a cooperative is, upon request and without payment, entitled to a certificate, signed by the proper officer or officers of the cooperative, stating the number of shares held by him and the amount paid up thereon; but, in respect of a share or shares held jointly by two or more persons, the cooperative is not bound to issue more than one certificate, and delivery of a certificate for a share to one of two or more joint shareholders is sufficient delivery to all.

Signatures.

47(2)

A cooperative may by by-law provide that the signatures of the officer or officers designated to sign share certificates may be engraved, lithographed or otherwise mechanically reproduced on the certificates, and in that event, subject to the by-law, share certificates so signed are deemed to have been manually signed by that officer or officers and are as valid to all intents and purposes as if they had been manually signed.

Certificates as evidence of title.

47(3)

A share certificate is evidence of the title of the shareholder to the shares mentioned in it.

Particulars of issue on share certificate.

47(4)

Where a cooperative has more than one class of shares,

(a) the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to any class of shares shall be stated in legible characters

(i) on every share certificate representing that class of shares, or

(ii) by a writing permanently attached to the share certificate; or

(b) there shall be inscribed on each share certificate representing a particular class of shares, in legible characters, a statement that there are preferences, rights, conditions, restrictions, limitations or prohibitions attached to the class of shares and that the full text thereof is obtainable on request and without fee from the secretary of the cooperative.

Furnishing text of particulars.

47(5)

Where the statement referred to in clause (4)(b) is inscribed on share certificates of a cooperative, the secretary thereof shall furnish to any shareholder, on request and without fee, the full text of any preferences, rights, conditions, restrictions, limitations or prohibitions attached to the class of shares mentioned.

Waiver of share certificate.

47(6)

The charter by-laws may provide that a cooperative is not required to issue share certificates, and in that case

(a) the members register kept by the cooperative under section 20 is prima facie proof of the number of shares held by each member ; and

(b) the cooperative shall, if requested in writing by a member, provide a statement to the member showing the interest of the member in the cooperative.

Membership certificates.

48

Where there is no share capital, every member of a cooperative is, upon request and without payment, entitled to a certificate signed by the proper officer or officers of the cooperative stating that he is a member of the cooperative.

Transfers of shares or memberships.

49

No transfer of a share or membership in a cooperative is valid for any purpose

(a) unless a written application for membership by the transferee has been approved and the transfer has been authorized by a resolution of the directors of the cooperative or by a person authorized by a resolution of the directors to approve applications and transfers of that kind: and

(b) until notification of any approval given under clause (a) has been sent to the transferee and his name has been entered on the members register;

save only as exhibiting the rights of the parties thereto towards each other.

Dealings with registered holder.

50(1)

Before the presentment for registration of the transfer of a share or other security in registered form, a cooperative or a trustee under a trust indenture may treat as the absolute owner of the security the registered holder in whose name the security is registered in a members or securities register, as if that person had full legal capacity and authority to exercise all rights of ownership irrespective of

(a) any knowledge or notice to the contrary, except that obtained by virtue of documents demanded by the cooperative or trustee; or

(b) any description in its records or on the security certificate indicating

(i) a pledge, a representative or a fiduciary relationship, or

(ii) a reference to any other instrument, or

(iii) the rights of any other person.

Constructive registered holder.

50(2)

Notwithstanding subsection (1), a cooperative shall treat a person as a registered holder entitled to exercise all the rights of the security holder he represents, if that person furnishes evidence satisfactory to the cooperative that he is

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

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

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

Permissible registered holder.

50(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 cooperative that is not registered in his name, the cooperative shall treat that person as entitled to exercise those rights or privileges.

Immunity of cooperative.

50(4)

A cooperative 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.

50(5)

If an infant exercises any rights of ownership in the securities of a cooperative, no subsequent repudiation or avoidance is effective against the cooperative.

Joint holders.

50(6)

A cooperative may treat as the owners of a security the survivors of the joint holders thereof if it receives proof satisfactory to it of the death of any of the joint holders.

Transmission of securities.

50(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 cooperative 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; 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, stating particulars of the transmission; and

(d) the security certificate that was owned by the deceased holder, endorsed by the person and accompanied by any assurance the cooperative may require that the endorsement is genuine and effective.

Excepted transmissions.

50(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, the 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 cooperative 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 interest of the deceased holder in the security and of the right of the legal representative or the person he designates to become the registered holder.

Right of cooperative.

50(9)

Deposit of the documents required by subsection (7) or (8) empowers a cooperative or its transfer agent to record in a members or other 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 that security.

PART VII

TRUST INDENTURES

Definitions.

51(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 cooperative 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 cooperative after its incorporation or continuance under this Act, under which the cooperative 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.

51(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.

Exemption.

51(3)

The Registrar may exempt a trust indenture from this section if the trust indenture, the debt obligations issued thereunder and the security interest effected thereby are subject to the law of a province other than Manitoba, or of Canada, or a country other than Canada that is substantially equivalent to this Part.

Conflict of interest.

52(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.

52(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.

52(3)

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

Removal of trustee.

52(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.

53

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.

54(1)

The holder of a debt obligation issued by a cooperative 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 all the outstanding debt obligations of the cooperative;

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

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

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

Duty of issuer.

54(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.

54(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.

54(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.

54(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.

Evidence of compliance.

55(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 of guarantor.

55(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 declaration, etc.

56

Evidence of compliance as required by section 55 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 those conditions 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 those conditions have been complied with.

Further evidence of compliance.

57

The evidence of compliance referred to in section 56 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 55;

(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.

58(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 thereof relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

Certificate of compliance.

58(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 the 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.

59

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.

60

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.

61

Notwithstanding section 60, 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.

62

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 60.

PART VIII

DIRECTORS AND BY-LAWS

Power to manage.

63(1)

The directors shall

(a) exercise the powers of the cooperative directly or indirectly through the employees and agents of the cooperative: and

(b) direct the management of the business and affairs of the cooperative.

Number of directors.

63(2)

The board of directors of a cooperative shall consist of such number of directors being not less than three, as may be fixed by the charter by-laws.

Power to enact by-laws.

64(1)

The members of a cooperative may, subject to this Act and the articles of the cooperative, at any annual meeting or any special general meeting called for the purpose, enact by-laws not contrary to law and amend, repeal or replace any of them.

Charter by-laws.

64(2)

Without limiting the generality of subsection (1), the members of a cooperative may enact, amend, repeal or replace charter by-laws to provide for

(a) the matters enumerated in subsection 6(4); and

(b) any other matters in respect of which the enactment of charter by-laws is authorized or required by any provision of this Act.

Ordinary by-laws.

64(3)

The directors of a cooperative, in order to regulate the business and affairs of the cooperative, may enact ordinary by-laws, not inconsistent with any by-law enacted by the members, and may amend, repeal or replace any of them.

Member approval.

64(4)

The directors shall submit any ordinary by-law enacted under subsection (3), and any amendment, repeal or replacement thereof, to the members at the next meeting of members, and the members may at the meeting confirm, reject or amend the by-law, amendment, repeal or replacement.

Enactment and confirmation.

64(5)

Subject to this Act, any by-law may be enacted, amended, repealed, replaced or confirmed by the members of a cooperative

(a) if approved by special resolution of the members; or

(b) if written notice of the proposed enactment, amendment, repeal, replacement or confirmation is forwarded to each member of the cooperative with the notice of the meeting at which the enactment, amendment, repeal, replacement or confirmation is to be considered, by a majority of the votes cast at the meeting.

Effective date of charter by-laws.

64(6)

A charter by-law or an amendment, repeal or replacement thereof is effective on, from and after the effective date stated therein or, in the absence of a stated effective date, upon approval of the Registrar under subsection 6(5).

Effective date of ordinary by-laws.

64(7)

An ordinary by-law,

(a) if enacted, amended, repealed or replaced by the members under subsection (1), is effective on, from and after the date of the members' resolution; and

(b) if enacted, amended, repealed or replaced by the directors under subsection (3), is effective on, from and after the date of the directors' resolution but, if the by-law, amendment, repeal or replacement is not submitted to or is rejected by the members under subsection (4), it ceases to be effective at the close of the members' meeting at which it ought to have been submitted or on the date of its rejection, as the case may be, and no subsequent resolution of the directors to enact, amend, repeal or replace an ordinary bylaw having substantially the same purpose or effect is effective until it is confirmed, or confirmed as amended, by the members.

Proposal to enact by-law.

64(8)

A member may, in accordance with section 97, make a proposal to enact, amend, repeal or replace any by-law.

Organization meeting.

65(1)

After the issue of the certificate of incorporation, a meeting of the directors of the cooperative shall be held and the directors may thereat

(a) make ordinary 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 the members;

(f) make banking or other like financial arrangements;

(g) transact any other business.

Calling meeting.

65(2)

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, and the notice shall state the time and place of the meeting.

Qualification of directors.

66(1)

Any person who

(a) is less than 18 years of age; or

(b) is not an individual; or

(c) has the status of a bankrupt;

is disqualified from being a director of a cooperative.

Further qualifications.

66(2)

No person shall be a director of a cooperative, unless he or a corporation of which he is an officer, director, member or shareholder is a member of the cooperative and unless he or that corporation complies with any other applicable requirements set out in the charter by-laws of the cooperative.

Terms of office.

67

Each director named in the articles holds office from the issue of the certificate of incorporation until the first meeting of members.

Election of directors.

68(1)

In the absence of other provisions in that behalf in the articles or charter by-laws, the members of a cooperative shall, by ordinary resolution at the first meeting of the members and at each succeeding annual meeting of the members 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 the members following the election.

Staggered terms.

68(2)

It is not necessary that all directors elected at a meeting of members hold office for the same term.

No stated term.

68(3)

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

Incumbent directors.

68(4)

Notwithstanding section 67 and subsections (1) and (3), if directors are not elected at a meeting of the members the incumbent directors continue in office until their successors are elected.

Vacancy among candidates.

68(5)

If a meeting of the members fails to elect the number of directors required by the articles or charter by-laws by reason of the disqualification, incapacity or death of any candidate, the directors elected at that meeting may exercise all the powers of directors if the number of directors so elected constitutes a quorum.

Ceasing to hold office.

69(1)

A director of a cooperative ceases to hold office when he

(a) dies or resigns; or

(b) is removed from office in accordance with section 70; or

(c) becomes disqualified under section 66.

Effective date of resignation.

69(2)

The resignation of a director becomes effective at the time a written resignation is received by the cooperative, or at the time specified in the resignation, whichever is later.

Removal of directors.

70(1)

The members of a cooperative may by ordinary resolution at a special meeting remove any director from office.

Vacancy.

70(2)

A vacancy created by the removal of a director from office may be filled at the meeting of the members at which the director is removed or, if not so filled, may be filled under section 72.

Attendance at meetings.

71(1)

A director of a cooperative is entitled to receive notice of and to attend and be heard at every meeting of members.

Statement of director.

71(2)

A director who

(a) resigns; or

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

(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed or elected to fill the office of director in his stead, 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 cooperative a written statement giving the reasons for his resignation or the reasons why he opposes any action or resolution proposed for the purposes described in clauses (b) and (c).

Circulating statement.

71(3)

A cooperative shall forthwith send a copy of the statement referred to in subsection (2) to every member entitled to receive notice of any meeting referred to in subsection (1) and to the Registrar.

Immunity.

71(4)

No cooperative or person acting on its behalf incurs any liability by reason only of circulating a statement in compliance with subsection (3).

Filling vacancy.

72(1)

Subject to subsection (3), a quorum of directors may fill any vacancy among the directors, except a vacancy resulting from an increase in the required number or minimum number of directors or from a failure to elect the number of directors required by the articles or charter by-laws.

Calling meeting.

72(2)

If there is not a quorum of directors, or if there is a failure to elect the number or minimum number of directors required by the articles or charter by-laws, the directors then in office shall forthwith call a special meeting of members 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 member.

Members filling vacancy.

72(3)

The articles or charter by-laws may provide that a vacancy among the directors shall be filled only by a vote of the members.

Number of directors.

73

The members of a cooperative may, subject to the approval of the Registrar, amend the charter by-laws to increase or decrease the required number of directors, but no decrease shall shorten the term of an incumbent director.

Notice of change of directors.

74(1)

Within 15 days after a change is made among its directors, a cooperative shall send to the Registrar a notice in the prescribed form setting out the change, and the Registrar shall file the notice.

Application to court.

74(2)

Any interested person, or the Registrar, may apply to the court for an order requiring a cooperative to comply with subsection (1), and upon the application the court may make the order and any further order it thinks fit.

Meeting of directors.

75(1)

Unless the articles or charter by-laws otherwise provide, the directors of a cooperative may meet at such place and upon such notice as the directors may determine.

Quorum.

75(2)

Unless the articles or charter by-laws otherwise provide, a majority of the directors 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.

Notice of meeting.

75(3)

A notice of a meeting of directors shall specify any matter referred to in subsection 76(2) that is to be dealt with at the meeting but, unless the by-laws otherwise provide, the notice need not specify any other matter that is to be dealt with at the meeting.

Waiver of notice.

75(4)

A director may in any manner waive 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 was not lawfully called.

Adjournment.

75(5)

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.

Participation by telephone.

75(6)

Subject to the charter by-laws, a director may, if all the directors of the cooperative consent, participate in a meeting of directors or of a committee of directors by means of such telephone or other communications facilities as permit all persons participating in the meeting to hear each other, and a director participating in the meeting by that means is deemed for the purposes of this Act to be present at that meeting.

Delegation.

76(1)

The directors of a cooperative may appoint from their number a managing director or a committee of directors and delegate to the managing director or committee any of the powers of the directors.

Limits on authority.

76(2)

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

(a) submit to the members any question or matter requiring the approval of the members; 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) purchase, redeem or otherwise acquire shares issued by the cooperative; or

(e) approve any financial statement of a kind referred to in section 114; or

(f) enact, amend or repeal by-laws.

Validity of acts of directors and officers.

77

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

Resolution in lieu of meeting.

78(1)

A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or a committee of directors, is as valid as if it had been passed at a meeting of directors or a 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.

78(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, as the case may be.

Liability of directors.

79(1)

Directors of a cooperative 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 cooperative to make good any amount by which the consideration received is less than the fair equivalent of the money that the cooperative would have received if the share had been issued for money on the date of the resolution.

Further liability of directors.

79(2)

Directors of a cooperative who vote for or consent to a resolution authorizing

(a) a purchase of shares or repayment of patronage loans contrary to section 41; or

(b) financial assistance contrary to section 43; or

(c) the payment of an indemnity contrary to section 85;

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

Contribution.

79(3)

A director who satisfies 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.

79(4)

A director who is liable under subsection (2) is entitled to apply to the court for an order compelling a member or other recipient to pay or deliver to the director any money or property that was paid or distributed to the member or other recipient contrary to section 41, 43 or 85.

Order of court.

79(5)

Upon an application under subsection (4) the court may, if it is satisfied that it is equitable to do so,

(a) order the member or other recipient to pay or deliver to the director any money or property that was paid or distributed to the member or other recipient contrary to section 41, 43 or 85;

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

(c) make any further order it thinks fit.

No liability.

79(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 cooperative would have received if the share had been issued for money.

Limitation.

79(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 thing complained of.

Liability of directors for wages.

80(1)

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

Conditions precedent to liability.

80(2)

A director is not liable under subsection (1) unless

(a) the cooperative 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 cooperative 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 cooperative 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.

80(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 ceases to be a director.

Amount due after execution.

80(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.

80(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 is obtained he is entitled to an assignment of the judgment.

Contribution.

80(6)

A director who satisfies a claim under this section is entitled to contribution from the other directors who were liable for the claim.

Disclosure of interested director contract

81(1)

A director or officer of a cooperative who

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

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

Time of disclosure for director.

81(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.

81(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.

81(4)

If a material contract or proposed material contract is one that, in the ordinary course of the cooperative's business, would not require approval by the directors or members, a director or officer shall disclose in writing to the cooperative 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.

81(5)

Subject to subsection (6), a director described in subsection (1) shall not vote on any resolution to approve the contract, unless the contract is

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

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

(c) a contract for indemnity or insurance under section 85.

Approval by members.

81(6)

Where a director described in subsection (1) votes on a resolution to approve a contract, and the contract is not a contract described in subsection (5), the resolution is not valid unless it is approved by not less than 2/3 of the votes of all the members of the cooperative 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.

81(7)

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.

81(8)

A material contract between a cooperative and one or more of its directors or officers, or between a cooperative and another person of which a director or officer of the cooperative 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 this section, and the contract was approved by the directors or the members and it was reasonable and fair to the cooperative at the time it was approved.

Application to court.

81(9)

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

Officers.

82

Subject to the articles and charter by-laws,

(a) the directors may designate the offices of the cooperative, appoint as officers persons of full capacity, specify their duties and delegate to them powers to manage the business and affairs of the cooperative, except powers to do anything referred to in subsection 76(2);

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

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

Duty of care of directors and officers.

83(1)

Every director and officer of a cooperative, 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 cooperative; and

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

Duty to comply.

83(2)

Every director and officer of a cooperative shall comply with this Act and the regulations, and the articles and charter by-laws of the cooperative.

No exculpation.

83(3)

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 and the regulations or relieves him from liability for a breach thereof.

Interpretation.

83(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 cooperative.

Dissent

84(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 cooperative immediately after the meeting is adjourned.

Loss of right to dissent.

84(2)

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

Dissent of absent director.

84(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 cooperative.

Reliance on statements.

84(4)

A director is not liable under section 79, 80 or 83 if he relies in good faith upon

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

(b) a report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by him.

Indemnification.

85(1)

Except in respect of an action by or on behalf of the cooperative or body corporate to procure a judgment in its favour, a cooperative may indemnify a director or officer of the cooperative, a former director or officer of the cooperative or a person who acts or acted at the cooperative's request as a director or officer of a body corporate of which the cooperative is or was a member 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 cooperative or body corporate, if

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

85(2)

A cooperative may with the approval of the court indemnify a person referred to in subsection (1) in respect of an action by or on behalf of the cooperative 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 cooperative 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 (l)(a) and(b).

Right to indemnify.

85(3)

Notwithstanding anything in this section, a cooperative shall indemnify any person referred to in subsection (1) who has been substantially successful in 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 cooperative or body corporate against all costs, charges and expenses reasonably incurred by him in respect of the action or proceeding.

Directors' and officers' insurance.

85(4)

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

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

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

Application to court

85(5)

A cooperative or a person referred to in subsection (1) may apply to the 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 Registrar.

85(6)

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

Other notice.

85(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.

86

Subject to the articles and the by-laws, the directors of a cooperative may fix the remuneration of the directors, officers and employees of the cooperative.

PART IX

RETURNS

Returns.

87(1)

Every cooperative shall, on or before March 31 in each year, make a return showing, as of December 31 of the previous year,

(a) the name of the cooperative;

(b) the jurisdiction in which incorporation was effected;

(c) the date of incorporation;

(d) the address of the registered office of the cooperative, giving the street and number on the street;

(e) the date when the latest annual meeting of the members of the cooperative was held;

(f) the main actual business, businesses or undertaking of the cooperative;

(g) the names, principal occupations and addresses of the directors of the cooperative, giving the street and number on the street;

(h) the names and addresses of the president, secretary, treasurer and manager, giving the street and number on the street;

(i) the particulars of the authorized capital, if any, stating the number and class of shares and the par value thereof;

(j) if there is share capital, the total number of shares of each class issued and outstanding and the amounts paid thereon;

(k) the total amount of bonds and debentures outstanding; and

(l) whether any of its securities are or were part of a distribution to the public and remain outstanding.

Financial statement.

87(2)

The cooperative shall also furnish the Registrar with a copy of its most recent financial statement placed before its members under section 114.

Filing with Registrar.

87(3)

The cooperative shall on or before March 31 of each year, complete and file with the Registrar the return and financial statement, and the return shall be signed and the contents thereof certified to be true by a director or officer of the cooperative.

Exception.

87(4)

A cooperative incorporated on or after January 1 in any year is not subject to subsections (1), (2) and (3) until March 31 of the next following year.

Filing fees.

87(5)

The regulations may prescribe a filing fee payable by a cooperative to the Registrar upon the filing of a return under this section, and additional fees for late filing.

Special return.

88(1)

The minister may, at any time by notice, require a cooperative or a director or an officer thereof to make a special return upon any subject connected with the business and affairs of the cooperative within the time specified in the notice.

Contents of special return.

88(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.

Offence.

89(1)

A person who fails, within the time specified in the notice sent by the minister, to file the special return under subsection 88(1) 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 both.

Relief by court.

89(2)

Where it appears to the court that a person is or may be liable in respect of a breach of 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.

PART X

MEMBERS

Incorporators become members.

90(1)

Each incorporator who has subscribed for one share in a cooperative or has paid a membership fee, if any, shall, on the effective date of the certificate of incorporation issued in respect of the cooperative, be entered on the members' register.

Application and approval.

90(2)

Unless the charter by-laws otherwise provide, no person other than an incorporator as described in subsection (1) or a member of a corporation mentioned in section 146 becomes a member of a cooperative, unless a written application for membership submitted by the person has been approved by resolution of the directors of the cooperative or by a person authorized by such a resolution to approve membership applications and notification of the approval has been sent to the applicant.

Effective date.

90(3)

The resolution of the directors approving an application for membership or the person authorized to approve the application may determine that the membership is effective on any date not prior to the date of application or deemed application under the charter by-laws; and, if no determination is so made, the membership is effective on the date of approval.

Age qualification.

90(4)

Unless otherwise provided by the charter by-laws, a person of the full age of 16 years may become a member, but no person under the full age of 18 years is eligible to act as a director or officer of a cooperative.

Members bound by articles and charter by-laws.

90(5)

The articles and charter by-laws of a cooperative bind the cooperative and the members.

Delegates.

91

Where the charter by-laws provide for the election of delegates to represent the members of a cooperative, the provisions of this Act referring to a member are, where applicable, deemed to refer to a delegate.

Place of meetings.

92(1)

Subject to subsections (2) and (3), meetings of the members of a cooperative shall be held at the place within Manitoba provided in the charter by-laws or, in the absence of that provision, at the place within Manitoba that the directors determine.

Meetings outside Manitoba.

92(2)

Notwithstanding subsection (1), a meeting of the members of a cooperative may be held outside Manitoba if all the members entitled to vote at that meeting so agree, and a member who attends a meeting of members 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.

92(3)

The charter by-laws of a cooperative may provide that meetings of the members may be held at one place or more outside of Manitoba.

Calling meetings.

93

The directors of a cooperative

(a) shall call an annual meeting of members not later than 18 months after the cooperative 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 members.

Fixing record date.

94(1)

For the purpose of determining the members

(a) entitled to receive payment of interest or 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 members, but that record date shall not precede by more than 50 days the particular action to be taken.

Notice of meeting.

94(2)

For the purpose of determining the members entitled to receive notice of a meeting of members, the directors may fix in advance a date as the record date for the determination of members, 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.

94(3)

If no record date is fixed,

(a) the record date for the determination of members entitled to receive notice of a meeting of members 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 members for any purpose other than that specified in clause (a) shall be at the close of business on the day on which the directors pass the resolution relating thereto.

Where record date fixed.

94(4)

If a record date is fixed, notice thereof shall, not less than 14 days before the date so fixed, be given in accordance with the provisions of the charter by-laws for giving notice of members' meetings or, in the absence of those provisions,

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

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

Notice of meeting.

95(1)

Notice of the time and place of a meeting of members shall be given in accordance with the provisions of the charter by-laws or, in the absence of those provisions, shall be given not less than 21 days nor more than 50 days before the meeting

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

(b) to each director; and

(c) to the auditor of the cooperative.

Exception.

95(2)

A notice of a meeting is not required to be given to members who were not registered on the records of the cooperative or its transfer agent on the record date determined under subsection 94(2) or 94(3), but failure to receive a notice does not deprive a member of the right to vote at the meeting.

Adjournment.

95(3)

If a meeting of members is adjourned for less than 30 days it is not necessary, unless the charter 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.

95(4)

If a meeting of members 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.

Business.

95(5)

All business

(a) transacted at a special meeting of members; and

(b) all business transacted at an annual meeting of members, except consideration of the annual report of the directors, the financial statements, the auditor's report, the election of directors, the re-appointment of the incumbent auditor and any other business authorized by the charter bylaws to be transacted at an annual meeting;

is deemed to be special business.

Notice of business.

95(6)

The notice of a meeting of members at which special business is to be transacted shall state

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

(b) the text of any special resolution to be submitted to the meeting or, if the full text is too lengthy for convenient inclusion in the notice, a summary thereof.

Waiver of notice.

96

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

Member proposal.

97(1)

A member entitled to vote at an annual meeting of members may

(a) submit to the cooperative 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.

Notice.

97(2)

A cooperative shall set out the proposal in the notice of the meeting to which the proposal is to be presented.

Supporting statement

97(3)

If so requested by the member, the cooperative shall include in the notice or attach thereto a statement by the member of not more than 200 words in support of the proposal, and the name and address of the member.

Nomination for director.

97(4)

A proposal may include nominations for the election of directors if the proposal is signed by members representing in the aggregate not less than 5% of the members of the cooperative entitled to vote at the meeting to which the proposal is to be presented, but this subsection does not preclude nominations made at a meeting of members.

Exemptions.

97(5)

A cooperative is not required to comply with subsections (2) and (3) if

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

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

(c) the cooperative, at the member's request, included a proposal in a notice of meeting of members held within two years preceding the receipt of the submission under subsection (1), and the member failed to present the proposal at the meeting; or

(d) substantially the same proposal was submitted to members in the notice of a meeting of members held within two years preceding the receipt of the member's request, and the proposal was defeated; or

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

Immunity.

97(6)

No cooperative 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.

97(7)

If a cooperative refuses to include a proposal in a notice of meeting, the cooperative shall within 10 days after receiving the proposal notify the member submitting the proposal of its intention to omit the proposal from the notice of meeting and send to him a statement of the reasons for the refusal.

Member application to court.

97(8)

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

Cooperative's application to court

97(9)

The cooperative or any person claiming to be aggrieved by a proposal may apply to the court for an order permitting the cooperative to omit the proposal from the notice of meeting, and the court, if it is satisfied that subsection (5) applies, may make the order.

Registrar entitled to notice.

97(10)

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

Member list.

98(1)

The charter by-laws may require a cooperative to prepare a list of members entitled to receive notice of meetings, arranged in alphabetical order,

(a) if a record date is fixed under subsection 94(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

98(2)

A person named in a list prepared under subsection (1) is entitled to vote at the meeting to which the list relates.

Examination of list.

98(3)

A member may examine the list of members

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

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

Quorum.

99(1)

Unless the charter by-laws otherwise provide, a number of members equal to 50% of the number of members entitled to vote at meetings of members, or equal to the number of directors plus five, whichever is the lesser, constitutes a quorum.

Opening quorum sufficient

99(2)

If a quorum is present at the opening of a meeting of members, the members present may, unless the charter by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

Adjournment.

99(3)

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

One member one vote.

100(1)

Subject to subsection (2) and unless otherwise provided by the charter by-laws in respect of the election of delegates, no member is entitled to more than one vote.

Class voting.

100(2)

Where a member holds shares of two or more classes and where, under this Act, the regulations, the articles or the charter by-laws, the holders of shares of any class are entitled to vote separately, the member shall have an additional vote in each class.

Proxy.

100(3)

No member, other than a member that is a body corporate, shall vote at any meeting of a cooperative by proxy, unless the charter by-laws otherwise provide.

Limitations on proxies.

100(4)

Where the charter by-laws provide for voting by proxy, no person other than a member of a cooperative may be appointed proxy, and no member may vote more than one proxy.

Appointing proxyholder.

101(1)

If permitted by this Act or the charter by-laws to vote by proxy, a member may by means of a proxy appoint a proxyholder and one or more alternative proxyholders, who are required to be members, 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.

101(2)

A proxy shall be executed by the member or by his attorney authorized in writing.

Validity of proxy.

101(3)

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

Revocation of proxy.

101(4)

A member may revoke a proxy

(a) by depositing an instrument in writing, executed by the member or his attorney authorized in writing,

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

(b) in any other manner permitted by law.

Deposit of proxies.

101(5)

A notice calling a meeting of members may specify a period of time, not exceeding 48 hours and excluding Saturdays and holidays, preceding the meeting or any adjournment thereof, before which period proxies to be used at the meeting must be deposited with the cooperative or its agent.

Representative.

102(1)

Where a body corporate or association is a member of a cooperative, the cooperative 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 members of the cooperative.

Powers of representative.

102(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 member.

Joint members.

102(3)

Unless the charter by-laws otherwise provide, where two or more persons hold a share or membership jointly, any one of those persons present at a meeting of members may vote in the absence of the others, but if two or more of those persons are present and vote, they shall vote as one.

Voting.

103(1)

Unless the charter by-laws otherwise provide, voting at a meeting of members shall be by show of hands except where a ballot is demanded by a member or proxyholder entitled to vote at the meeting.

Ballot.

103(2)

A member or proxyholder may demand a ballot either before or after any vote by show of hands.

Resolution in lieu of meeting.

104(1)

Except where a written statement is submitted by a director under subsection 71(2) or by an auditor under subsection 125(5),

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

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

Filing resolution.

104(2)

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

Requisition of meeting.

105(1)

Five per cent of the members who have the right to vote at a meeting sought to be held, or such other percentage or number of members as the charter by-laws may provide, may by written requisition require the directors to call a meeting of members for the purposes stated in the requisition.

Form of requisition.

105(2)

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

Directors calling meeting.

105(3)

Upon receiving the requisition referred to in subsection (1), the directors shall call a meeting of members to transact the business stated in the requisition, unless the business of the meeting as stated in the requisition includes a matter described in clauses 97(5)(b) to (e).

Member calling meeting.

105(4)

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

Procedure.

105(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 this Part and to the charter by-laws.

Reimbursement.

105(6)

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

Meeting called by the Registrar.

106(1)

If for any reason it is impracticable to call a meeting of members of a cooperative in the manner in which meetings of members may be called, or to conduct the meeting in the manner prescribed by the charter by-laws and this Act, or if for any other reason the Registrar thinks fit, the Registrar upon the application of a director or a member entitled to vote at the meeting or upon his own initiative may order a meeting to be called held and conducted in such manner as he directs.

Varying quorum.

106(2)

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

Valid meeting.

106(3)

A meeting called, held and conducted pursuant to this section is for all purposes a meeting of members of the cooperative duly called, held and conducted.

Court review of election.

107(1)

A cooperative or a member or director thereof may apply to the court to determine any controversy with respect to the election or appointment of a director or auditor of the cooperative.

Powers of court.

107(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 cooperative until a new election is held or appointment made;

(d) an order determining the voting rights of members and of persons claiming entitlement to vote.

Compulsory sale of shares by shareholder.

108

Where

(a) winding-up proceedings have commenced in respect of a body corporate that is a shareholder of a cooperative; or

(b) a shareholder of a cooperative has, during a period of two years, failed to transact any business with the cooperative;

the cooperative may, by written notice to the shareholder, require him to sell his common shares to the cooperative in accordance with section 40, and the shareholder shall sell the shares as so required.

Termination of membership.

109(1)

Unless the charter by-laws otherwise provide, the directors by a resolution passed by a majority of not less than 3/4 of the directors, at a meeting called to consider the resolution may terminate the membership of a member.

Notice to member.

109(2)

The member whose membership is proposed to be terminated by a resolution of the directors is entitled to at least seven days' notice of the meeting at which the resolution is to be considered, together with a statement of the grounds upon which his membership is proposed to be terminated, and is entitled to appear, either personally or by or with an agent or counsel, to make submissions at the meeting.

Notice of termination.

109(3)

Within seven days after the date on which the resolution referred to in subsection (1) is passed by the requisite majority, the cooperative shall, in the same manner as that provided for the giving of notice of a meeting of members, notify the person whose membership was terminated of the resolution.

Appeal to meeting of members.

109(4)

A person whose membership is terminated under subsection (1) may appeal the decision of the directors at the next meeting of members by sending a notice of appeal to the cooperative within 14 days after the date when notice was given to him under subsection (3).

Decision of meeting.

109(5)

The meeting of members to which an appeal under subsection (4) is brought shall, by a majority vote, either confirm or set aside the resolution of the directors terminating the membership of the member.

Termination by meeting of members.

109(6)

A meeting of members may, by special resolution, terminate the membership of a member.

Appeal to Registrar.

109(7)

Subject to subsection (8), a person the termination of whose membership is confirmed by a meeting of members under subsection (5) or whose membership has been terminated by a meeting of members under subsection (6), may appeal the termination to the Registrar in accordance with the regulations, and the Registrar may confirm or set aside the resolution terminating the membership.

Exception.

109(8)

No person whose membership is terminated for failure to pay fees, assessments, rent or occupancy charges, or to fulfil other financial obligations to the cooperative, may appeal the termination to the Registrar under subsection (7).

Membership continues.

109(9)

A person who in accordance with subsection (4) or (7) appeals the termination of his membership shall, notwithstanding the resolution terminating his membership, continue to be a member of the cooperative until the termination of his membership is confirmed by the meeting of members under subsection (5) or by the Registrar under subsection (7), as the case may be.

Re-admittance.

109(10)

A person whose membership is terminated upon an appeal to, or by special resolution of, a general meeting in accordance with this section shall not again be admitted to membership in the cooperative except by special resolution of a general meeting.

Withdrawal.

110

A member may withdraw from a cooperative on such conditions as the charter by-laws may provide.

Shares and loans upon termination of membership.

111

Subject to section 40, the regulations may prescribe and the charter by-laws shall in any event contain the conditions upon which a cooperative shall purchase a member's shares and repay a member's patronage loans when

(a) membership is terminated under section 109; or

(b) a member withdraws under section 110; or

(c) membership otherwise ceases.

Right to possession terminated.

112(1)

Any right of a member to possession or occupancy of residential premises acquired by virtue of membership in a cooperative is terminated upon the termination or other cessation of the membership.

Order of possession.

112(2)

The provisions of The Landlord and Tenant Act providing for an order of possession where a tenant of residential premises, after his tenancy has expired or has been terminated, does not go out of possession of the premises, shall apply, with such modifications as the circumstances require to a cooperative and to a member of the cooperative where the member's right to possession and occupancy has been terminated by virtue of subsection (1).

Contracts.

113(1)

A cooperative may, subject to its articles, enter into any contract or arrangement with its members or patrons for or incidental to dealing with commodities of the kinds the cooperative may lawfully deal in, and may advance money to its members or patrons as part payment for commodities delivered or agreed to be delivered to it.

Performance.

113(2)

In the event of a breach by a member of any material provision of a contract described in subsection (1), particularly as to the delivery or marketing of any products other than through the cooperative, the cooperative, in a proper action, is entitled to an injunction to prevent any further breach thereof, and to other equitable relief according to the terms of the contract; and the contract shall in addition be a proper subject for the remedy of specific performance in the event of a breach thereof.

PART XI

FINANCIAL DISCLOSURE

Annual financial statements.

114(1)

The directors of a cooperative shall place before the members at every annual meeting

(a) comparative financial statements, as prescribed, relating separately to

(i) the period that began on the date the cooperative came into existence and ended not more than six months before the annual meeting or, if the cooperative has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and

(ii) subject to subsection (2), the immediately preceding financial year;

(b) the report of the auditor, if any; and

(c) any further information respecting the financial position of the cooperative and the results of its operations required by the articles or the by-laws.

Exception.

114(2)

The financial statements referred to in sub-clause (l)(a)(ii) may be omitted if the reason for the omission is set out in the financial statements referred to in sub-clause (l)(a)(i), or in a note thereto.

Exemption.

115

A cooperative may apply to the Registrar for an order authorizing the cooperative to omit from its financial statements any item prescribed or to dispense with the publication of any particular financial statement prescribed, and the Registrar, if he reasonably believes that disclosure of the information therein contained would be detrimental to the cooperative, may make the order on such reasonable conditions as he thinks fit.

Consolidated statements.

116(1)

A cooperative holding a subsidiary may prepare the financial statements referred to in section 114 in consolidated or combined form, as prescribed, and in any case the cooperative shall keep at its registered office copies of the last financial statements of each subsidiary.

Examination.

116(2)

Members of a cooperative and their agents and legal representatives may, upon request therefor and without charge, examine the statements referred to in subsection (1) during the usual business hours of the cooperative, and may make extracts therefrom.

Barring examination.

116(3)

A cooperative may, within 15 days of a request to examine under subsection (2), apply to the court for an order barring the right of any person to so examine, and the court may, if satisfied that the examination would be detrimental to the cooperative or subsidiary, make the order and any further order it thinks fit.

Notice to Registrar.

116(4)

A cooperative shall give the Registrar and the person requesting to examine under subsection (2) notice of any application under subsection (3), and the Registrar and that person may appear and be heard in person or by counsel.

Condition precedent to issue.

117

A cooperative shall not issue, publish or circulate copies of the financial statements referred to in section 114, unless the financial statements are

(a) approved by the directors, and the approval is evidenced by the signatures of one or more of the directors on the statements; and

(b) accompanied by the report of the auditor of the cooperative, if any.

Qualification of auditor.

118(1)

Subject to subsection (5), a person is disqualified from being an auditor of a cooperative if he is not independent of the cooperative or any of its subsidiaries, or the directors or officers of the cooperative or subsidiary.

Independence.

118(2)

For the purposes of this section,

(a) independence is a question of fact; and

(b) a person is deemed not to be independent of a cooperative if he or his business partner

(i) is a business partner, director, officer or employee of the cooperative or any of its subsidiaries, or of any director, officer or employee of the cooperative or subsidiary, or

(ii) beneficially owns or controls, directly or indirectly, a material interest in the securities of the cooperative or any of its subsidiaries, or

(iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the cooperative or any of its subsidiaries within two years of his proposed appointment as auditor of the cooperative.

Duty to resign.

118(3)

An auditor who becomes disqualified under this section shall, subject to subsection (5), resign forthwith after becoming aware of his disqualification.

Disqualification order.

118(4)

Any interested person may apply to the court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

Exemption order.

118(5)

Any interested person may apply to the Registrar for an order exempting an auditor from disqualification under this section, and the Registrar may, if satisfied that an exemption would not unfairly prejudice the members, make an exemption order on such terms as he thinks fit, and may make the order with retrospective effect.

Exception.

118(6)

The members of a cooperative may resolve to appoint as auditor a person otherwise disqualified under subsection (1) or (2), if the resolution is consented to by all the members.

Validity of resolution.

118(7)

A resolution under subsection (6) is valid only until the next succeeding annual meeting of members.

Auditor's relationship to be disclosed in report.

118(8)

An auditor appointed under subsection (6) shall indicate in his report to the members particulars of the relationship that would ordinarily disqualify him under subsection (1) or (2).

Appointment of auditor.

119(1)

Subject to section 120, the members of a cooperative shall, by ordinary resolution at the first meeting of members and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next following annual meeting.

Eligibility.

119(2)

An auditor appointed under section 65 is eligible for appointment under subsection (1).

Incumbent auditor.

119(3)

Notwithstanding subsection (1), where an auditor is not appointed at a meeting of members, the incumbent auditor continues in office until his successor is appointed.

Remuneration.

119(4)

The remuneration of an auditor may be fixed by an ordinary resolution of the members or, if not so fixed, by the directors.

Dispensing with auditor.

120(1)

The members of a cooperative may resolve not to appoint an auditor.

Limitation.

120(2)

A resolution under subsection (1) is not effective unless and until approved in writing by the Registrar, and where so approved is valid only until the next succeeding annual meeting of members.

Registrar may appoint.

120(3)

Where the Registrar does not approve a resolution under this section, he may himself appoint an auditor.

Ceasing to hold office.

121(1)

An auditor of a cooperative ceases to hold office when he

(a) dies or resigns: or

(b) is removed from office under section 122.

Effective date of resignation.

121(2)

The resignation of an auditor becomes effective at the time a written resignation is received by the cooperative, or at the time specified in the resignation, whichever is later.

Removal of auditor.

122(1)

The members of a cooperative may by ordinary resolution at a special meeting remove from office any auditor other than an auditor appointed by the Registrar.

Vacancy.

122(2)

A vacancy created by the removal of an auditor under subsection (1) may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 123.

Filling vacancy.

123(1)

Subject to subsection 122(2) and subsection (3) of this section, the directors shall forthwith, in the manner provided by subsection (2) of this section, cause to be filled any vacancy in the office of auditor.

Calling meeting.

123(2)

For the purposes of subsection (1), where there is not a quorum of directors in office, the directors then in office shall, within 21 days after a vacancy in the office of auditor occurs, call a special meeting of members to fill the vacancy and, if they fail to call the meeting or if there are no directors then in office, the meeting may be called by any member or by the Registrar.

Members filling vacancy.

123(3)

The charter by-laws of a cooperative may provide that a vacancy in the office of auditor shall be filled only by vote of the members.

Unexpired term.

123(4)

An auditor appointed to fill a vacancy holds office for the unexpired term of his predecessor.

Auditor appointed by Registrar.

124(1)

Where a cooperative does not have an auditor, the Registrar may appoint and fix the remuneration of an auditor, and the auditor so appointed holds office until an auditor is appointed by the members.

Exception.

124(2)

Subsection (1) does not apply where the members have resolved under section 120 not to appoint an auditor and the Registrar has approved the resolution.

Right to attend meeting.

125(1)

The auditor of a cooperative is entitled to receive notice of every meeting of members and, at the expense of the cooperative, to attend and be heard thereat on matters relating to his duties as auditor.

Duty to attend.

125(2)

Where a director or member of a cooperative, whether or not he is entitled to vote at the meeting, gives written notice, not less than 10 days before a meeting of members, to the auditor or a former auditor of the cooperative, the auditor or former auditor shall attend the meeting at the expense of the cooperative and answer questions relating to his duties as auditor.

Notice to cooperative.

125(3)

A director or member who gives a notice under subsection (2) shall concurrently give a copy of the notice to the cooperative.

Offence.

125(4)

An auditor or former auditor of a cooperative 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.

125(5)

An auditor who

(a) resigns; or

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

(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed to fill the office of auditor in his stead, whether because of his resignation or removal from office 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 members at which a resolution as described in section 120 is to be proposed;

is entitled to submit to the cooperative a written statement giving the reasons for his resignation or the reasons why he opposes the proposed action or resolution, as the case may be.

Circulating statement.

125(6)

The cooperative shall forthwith send a copy of the statement referred to in subsection (5) to every member entitled to receive notice of the meeting referred to in subsection (1) and to the Registrar.

Replacing auditor.

125(7)

No person shall accept an appointment or consent to be appointed as auditor of a cooperative if he is replacing an auditor who has resigned, has been removed from office or whose term of office has expired or is about to expire, unless and until he has requested and received from that auditor a written statement of the circumstances and the reasons why, in the opinion of that auditor he is being replaced.

Exception.

125(8)

Notwithstanding subsection (7), a person otherwise qualified may accept an appointment or consent to be appointed as auditor of a cooperative if, within 15 days after making the request referred to in that subsection, he does not receive a reply.

Effect of non-compliance.

125(9)

Unless subsection (8) applies, the appointment as auditor of a cooperative of a person who fails to comply with subsection (7) is void.

Examination.

126(1)

An auditor of a cooperative 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 members, except such financial statements or parts thereof as relate to the period referred to in sub-clause 114(1)(a)(ii).

Reliance on other auditor.

126(2)

Notwithstanding section 127, an auditor of a cooperative may reasonably rely upon the report of the auditor of a body corporate that is a subsidiary of the cooperative if the fact of his reliance is disclosed in his report as auditor of the cooperative.

Reasonableness.

126(3)

For the purposes of subsection (2), reasonableness is a question of fact.

Application.

126(4)

Subsection (2) applies whether or not the financial statements of the cooperative reported upon by the auditor are in consolidated form.

Right to information.

127(1)

Upon the demand of an auditor of a cooperative, the present or former directors, officers, employees or agents of the cooperative shall furnish such

(a) information and explanations; and

(b) access to records, documents, books, accounts and vouchers of the cooperative or any of its subsidiaries;

as are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 126 and as the directors, officers, employees or agents are reasonably able to furnish.

Information from subsidiaries.

127(2)

Upon the demand of an auditor of a cooperative, the directors of the cooperative shall obtain and furnish to the auditor such information and explanations from the present or former directors, officers, employees or agents of any subsidiary of the cooperative as are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 126 and as the directors, officers, employees or agents are reasonably able to furnish.

Audit committee.

128(1)

A cooperative may and, if so prescribed or if the charter by-laws so require, shall have an audit committee composed of not less than three directors of the cooperative, a majority of whom are not officers or employees of the cooperative or any of its subsidiaries.

Duty of committee.

128(2)

An audit committee shall review the financial statements of the cooperative before they are approved under section 117.

Auditor's attendance.

128(3)

The auditor of a cooperative is entitled to receive notice of every meeting of the audit committee and, at the expense of the cooperative, to attend thereat and be heard; and if so requested by a member of the audit committee, the auditor shall attend every meeting of the committee held during his term of office as auditor.

Calling meeting.

128(4)

The auditor of a cooperative or a member of the audit committee may call a meeting of the committee.

Notice of errors.

128(5)

A director or an officer of a cooperative 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.

128(6)

Where the auditor or former auditor of a cooperative is notified or becomes aware of an error or misstatement in a financial statement upon which he has reported, and if in his opinion the error or misstatement is material, he shall inform each director accordingly.

Duty of directors.

128(7)

Where under subsection (6) the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall

(a) prepare and issue revised financial statements; or

(b) otherwise inform the members.

Offence.

128(8)

Every director and every officer of a cooperative who knowingly fails to comply with subsection (5) or (7) 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).

129

Any oral or written statement or report made under this Act by the auditor or former auditor of a cooperative has qualified privilege.

PART XII

FUNDAMENTAL CHANGES

Amendment of articles.

130(1)

Subject to section 132 and to the approval of the Registrar under section 134, the articles of a cooperative may be amended by special resolution to

(a) change its name; or

(b) change its statement of purpose; or

(c) add, change or remove any restriction upon the business or businesses that the cooperative may carry on; or

(d) change the par value of the shares, or of the shares of any class; or

(e) create new classes of shares; or

(f) change the designation of all or any of its shares, and add, change or remove any rights, privileges, restrictions or conditions, including rights to accrued dividends, in respect of all or any of its shares, whether issued or unissued; or

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

(h) convert the cooperative, as the case may be,

(i) from a cooperative with share capital into a cooperative without share capital, or

(ii) a cooperative without share capital into a cooperative with share capital, stating the formula, terms and conditions upon which the shareholders become members or the members become shareholders; or

(i) add, change or remove any other provision of the articles.

Clerical errors.

130(2)

The articles of a cooperative containing a clerical error may be amended by resolution of the directors or by ordinary resolution of the members to correct the error.

Filing articles of amendment.

130(3)

Where the articles of a cooperative are amended under this section, articles of amendment shall within six months of the date of the resolution of the members authorizing the amendment be delivered to the Registrar for filing, and the Registrar shall refuse to file the articles if not so delivered.

Revocation of amending resolution.

130(4)

The directors of a cooperative may, if authorized by the members in any resolution effecting an amendment under this section, revoke the resolution before it is acted upon without further approval of the members.

Proposal to amend.

131(1)

Subject to subsection (2), the directors or any member of a cooperative may in accordance with section 97 make a proposal to amend the articles.

Notice of amendment.

131(2)

Notice of a meeting of members 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 member is entitled to dissent under section 149, but failure to make that statement does not invalidate the amendment.

Vote when changing class conditions.

132(1)

Where a cooperative has two or more classes of shares, the holders of shares of each class are entitled to vote separately as a class upon any proposal to amend the articles to

(a) change the par value of the shares of that class; or

(b) add to, change or remove any rights, privileges, restrictions or conditions attached to the shares of that class; or

(c) change the rights or privileges of any other class of shares to the prejudice of the holders of shares of that class.

Right to vote.

132(2)

Subsection (1) applies to each class of shares whether or not shares of that class otherwise carry the right to vote.

Separate resolution.

132(3)

A proposed amendment to the articles under subsection (1) is adopted when the members, or the holders of the shares of each class entitled to vote separately thereon as a class, as the case may be, have approved the amendment by a special resolution.

Delivery of articles.

133

Subject to any revocation under subsection 130(4), after an amendment is adopted under section 130 or 132 articles of amendment in prescribed form shall be sent to the Registrar.

Certificate of amendment.

134

Upon receiving articles of amendment, the Registrar may, if satisfied that the amendment is advisable and subject to section 149, file the articles and issue a certificate of amendment in accordance with section 179.

Effect of certificate.

135(1)

An amendment becomes effective on the date shown in the certificate of amendment, and the articles are amended accordingly.

Existing rights preserved.

135(2)

No amendment to the articles of a cooperative affects any existing cause of action, claim or liability to prosecution, in favour of or against the cooperative or any of its directors or officers, or any civil, criminal or administrative action or proceeding to which the cooperative or any of its directors or officers is a party.

Restated articles.

136(1)

The directors may at any time, and shall when reasonably so directed by the Registrar, restate the articles of incorporation as amended.

Delivery of articles.

136(2)

Restated articles of incorporation, in prescribed form, shall be sent to the Registrar.

Restated certificate.

136(3)

Upon receipt of restated articles of incorporation, the Registrar shall issue a restated certificate of incorporation in accordance with section 179.

Effect of certificate.

136(4)

Restated articles of incorporation are effective on, from and after the date shown in the restated certificate of incorporation and supersede the original articles of incorporation and all amendments thereto.

Amalgamation.

137

Two or more cooperatives may amalgamate and continue as one cooperative.

Amalgamation agreement

138(1)

Cooperatives proposing to amalgamate shall enter into an agreement with each other 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 cooperative;

(c) the manner in which the shares or memberships, as the case may be, of each amalgamating cooperative are to be converted into shares or other securities, or into memberships of the amalgamated cooperative;

(d) if any shares of an amalgamating cooperative are not to be converted into securities or memberships of the amalgamated cooperative, the amount of money or securities of any body corporate that the holders of those shares are to receive;

(e) the manner of payment of money instead of the issue of fractional shares of the amalgamated cooperative or of any other body corporate the securities of which are to be received in the amalgamation;

(f) whether the charter by-laws of the amalgamated cooperative are to be those of one of the amalgamating cooperatives and, if not, containing a copy of the proposed charter 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 cooperative.

Cancellation of certain shares.

138(2)

Where shares of one of the amalgamating cooperatives are held by or on behalf of another of the amalgamating cooperatives, the amalgamation agreement shall provide for the cancellation of those shares when the amalgamation becomes effective, without any repayment of capital in respect of the cancelled shares, and no provision shall be made in the agreement for the conversion of those shares into shares of the amalgamated cooperative.

Member approval of amalgamation agreement.

139(1)

The directors of each amalgamating cooperative shall submit the amalgamation agreement for approval to a meeting of the members thereof and, subject to subsection (3), to the holders of each class of shares thereof.

Notice of meeting.

139(2)

A notice of a meeting of members shall be sent in accordance with section 95 to every member of each amalgamating cooperative, and shall

(a) include or be accompanied by a copy or summary of the amalgamation agreement: and (b) state that a member is entitled to dissent in accordance with section 149;

but failure to make the statement required under clause (b) does not invalidate the amalgamation.

Class vote.

139(3)

The holders of a class of shares of an amalgamating cooperative are entitled to vote separately as a class in respect of the amalgamation if the amalgamation agreement contains a provision that, if contained in a proposed amendment to the articles, would entitle those holders to vote as a class under section 132.

Adoption of agreement.

139(4)

An amalgamation agreement is adopted when the members of each amalgamating cooperative, or the holders of each class of shares of the amalgamating cooperatives entitled to vote separately thereon, as the case may be, have approved of the amalgamation by a special resolution.

Termination of agreement.

139(5)

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 any of the amalgamating cooperatives, notwithstanding the approval of the agreement by the members of all or any of the amalgamating cooperatives.

Articles of amalgamation.

140(1)

Subject to subsection 139(5), after an amalgamation has been adopted under section 139, articles of amalgamation in prescribed form shall be sent to the Registrar.

Attached declarations.

140(2)

The articles of amalgamation shall have attached thereto a statutory declaration of a director or an officer of each amalgamating cooperative that establishes to the satisfaction of the Registrar that

(a) there are reasonable grounds for believing that

(i) each amalgamating cooperative is and the amalgamated cooperative will be able to pay its liabilities as they become due, and

(ii) the realizable value of the assets of the amalgamated cooperative, upon completion of the amalgamation, will not be less than the aggregate of its liabilities and 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 cooperative and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

Adequate notice to creditors.

140(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 cooperative that exceeds $1,000.;

(b) a notice is published once in a newspaper published or distributed in the place where the cooperative has its registered office, and reasonable notice is given in each province in Canada where the cooperative carries on business; and

(c) each notice states that the cooperative proposes to amalgamate with one or more specified cooperatives in accordance with this Act unless a creditor of the cooperative objects to the amalgamation within 30 days from the date of the notice.

Certificate of amalgamation.

140(4)

Upon receiving articles of amalgamation, the Registrar may, if satisfied that the amalgamation is advisable and subject to section 149, file the articles and issue a certificate of amalgamation in accordance with section 179.

Effect of certificate of amalgamation.

141

On the date shown in a certificate of amalgamation,

(a) the amalgamation of the amalgamating cooperatives and their continuance as one cooperative become effective;

(b) the property of each amalgamating cooperative continues to be the property of the amalgamated cooperative;

(c) the amalgamated cooperative continues to be liable for the obligations of each amalgamating cooperative;

(d) any existing cause of action, claim or liability to prosecute remains unaffected;

(e) any civil, criminal or administrative action or proceeding pending by or against any of the amalgamating cooperatives may be continued by or against the amalgamated cooperative;

(f) any conviction against, or any ruling, order or judgment in favour of or against, any of the amalgamating cooperatives may be enforced by or against the amalgamated cooperative; and

(g) the articles of amalgamation are deemed to be the articles of incorporation of the amalgamated cooperative, and the certificate of amalgamation is deemed to be the certificate of incorporation of the amalgamated cooperative.

Arrangement.

142(1)

A cooperative may make an arrangement

(a) that affects the rights of all its members; or

(b) that affects only the rights of holders of a part or all of a particular class of its shares.

Joint arrangement.

142(2)

Where a cooperative proposing an arrangement has one or more subsidiaries, it may join in the arrangement with the subsidiary or subsidiaries.

Scheme of arrangement.

142(3)

A cooperative proposing an arrangement shall prepare a scheme for the purpose, prescribing in detail what is to be done and the manner in which it is to be effected.

Member approval.

143(1)

The directors of the cooperative shall submit the scheme of arrangement for approval to a meeting of the members and of the holders of each class of shares, if any.

Notice of meeting.

143(2)

A notice of the meeting of members complying with section 95 shall be sent in accordance with that section to each member of the cooperative, and shall

(a) include or be accompanied by a copy or summary of the scheme of arrangement; and

(b) state that a member is entitled to dissent in accordance with section 149;

but failure to make the statement required under clause (b) does not invalidate the arrangement.

Adoption of arrangement.

143(3)

A scheme of arrangement is adopted when the members or the holders of the shares of each class entitled to vote separately thereon, as the case may be, have approved of the scheme of arrangement by a special resolution.

Termination of proposed arrangement.

143(4)

A scheme of arrangement may provide that at any time before the issue of a certificate of arrangement the scheme of arrangement may be terminated by the directors of the cooperative, notwithstanding the approval thereof by the members of the cooperative.

Articles of arrangement.

144(1)

After a scheme of arrangement has been adopted under section 143, but subject to subsection 143(4), articles of arrangement in prescribed form shall be sent to the Registrar.

Attached declarations.

144(2)

The articles of arrangement shall have attached thereto a statutory declaration of a director or an officer of the cooperative proposing the scheme of arrangement that establishes to the satisfaction of the Registrar that

(a) there are reasonable grounds for believing that

(i) the body corporate to which the whole or part of the undertaking of the cooperative is to be sold or transferred will, if required to do so under the scheme of arrangement, be able to pay the liabilities of the cooperative as they become due, and

(ii) the realizable value of the assets of the body corporate, upon completion of the arrangement, will not be less than the aggregate of its liabilities and capital of all classes; and

(b) there are reasonable grounds for believing that

(i) no creditor of the cooperative will be prejudiced by the arrangement, or

(ii) adequate notice has been given to all known creditors of the cooperative and no creditor objects to the arrangement otherwise than on grounds that are frivolous or vexatious.

Adequate notice to creditors.

144(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 cooperative that exceeds $1,000.;

(b) a notice is published once in a newspaper published or distributed in the place where the cooperative has its registered office, and reasonable notice is given in each province in Canada where the cooperative carries on business; and

(c) each notice states that the cooperative proposes to complete an arrangement in accordance with this Act unless a creditor of the cooperative objects to the arrangement within 30 days from the date of the notice.

Bulk Sales Act.

144(4)

The provisions of The Bulk Sales Act do not apply to an arrangement.

Certificate of arrangement

144(5)

Upon receiving articles of arrangement, the Registrar may, if satisfied that the arrangement is advisable and subject to section 149, file the articles and issue a certificate of arrangement in accordance with section 179.

Effective date.

145(1)

An arrangement becomes effective on the date shown in the certificate of arrangement.

Effect of certificate.

145(2)

Where the scheme of arrangement provides for the transfer or sale of the whole of the undertaking of a cooperative to another body corporate, then, upon the effective date,

(a) the whole of the undertaking of the cooperative is vested in the body corporate;

(b) the body corporate becomes liable for the obligations of the cooperative;

(c) an existing cause of action, claim or liability to prosecution against the cooperative continues against the body corporate;

(d) a civil, criminal or administrative action or proceeding pending by or against the cooperative may be continued 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 cooperative may be enforced by or against the body corporate.

Dissolution.

145(3)

If the scheme of arrangement so provides, the cooperative may send to the Registrar articles of dissolution in the prescribed form, and if he is satisfied that the cooperative has no property and no liabilities the Registrar may file the articles and issue a certificate of dissolution under section 179.

Continuance of foreign body corporate.

146(1)

A body corporate incorporated outside of Manitoba may, if so authorized by the laws of the jurisdiction in which it was incorporated and upon compliance with the provisions of this Act, apply to the Registrar for a certificate of continuance.

Articles of continuance.

146(2)

A body corporate applying for a certificate of continuance shall send to the Registrar articles of continuance, in the prescribed form, together with such additional documents as may be prescribed.

Certificate of continuance.

146(3)

The Registrar may file any articles of continuance received by him under subsection (2), and may issue a certificate of continuance in accordance with section 179.

Refusal by Registrar.

146(4)

The Registrar may refuse to file the articles and 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 refusal to the Lieutenant Governor in Council whose decision is final.

Effect of certificate of continuance.

146(5)

On the date shown in the certificate of continuance,

(a) the body corporate becomes a cooperative to which this Act applies as if it had been incorporated under this Act;

(b) the articles of continuance are deemed to be the articles of incorporation of the continued cooperative; and

(c) the certificate of continuance is deemed to be the certificate of incorporation of the continued cooperative.

Copy of certificate.

146(6)

Where the Registrar issues a certificate of continuance, he shall forthwith send a copy thereof to the appropriate official or public body in the jurisdiction in which the continuance under this Act was authorized.

Existing rights preserved.

146(7)

Where a body corporate is continued as a cooperative under this Act,

(a) the property of the body corporate continues to be the property of the cooperative;

(b) the cooperative continues to be liable for the obligations of the body corporate;

(c) any existing cause of action, claim or liability to prosecution is unaffected;

(d) any civil, criminal or administrative action or proceeding pending by or against the body corporate may be continued to be prosecuted by or against the cooperative; and

(e) any conviction against, or ruling, order or judgment in favour of or against the body corporate may be enforced by or against cooperative.

Issued shares.

146(8)

A share of or membership in a body corporate continued under this Act that was issued or granted before the body corporate was so continued is deemed to have been issued or granted in compliance with this Act and with the provisions of the articles of continuance.

Continuance of cooperative.

147(1)

Subject to subsection (7), a cooperative, if it is authorized by the members in accordance with this section and if it establishes to the satisfaction of the Registrar that its proposed continuance in another jurisdiction will not adversely affect creditors or members of the cooperative, may apply to the appropriate official body of that other jurisdiction to be continued in that jurisdiction as if it had been incorporated under the laws thereof.

Notice of meeting.

147(2)

A notice of a meeting of members in compliance with section 95 shall be sent in accordance with that section to each member, and the notice shall state that a dissenting member is entitled to dissent in accordance with section 149, but failure to include that statement in the notice does not invalidate an application for continuance under this section.

Member approval.

147(3)

An application for continuance becomes authorized when the members voting thereon have approved of the continuance by a special resolution.

Abandonment of application.

147(4)

The directors of a cooperative may, if so authorized by the members at the time of approving an application for continuance under this section, abandon the application without further approval of the members.

Notice of discontinuance.

147(5)

Upon receipt of notice satisfactory to him that the cooperative has been continued under the laws of another jurisdiction, the Registrar shall file the notice and issue a certificate of discontinuance in accordance with section 179.

Act ceases to apply.

147(6)

This Act ceases to apply to the cooperative on the date shown in the certificate of discontinuance.

Prohibition.

147(7)

A cooperative shall not be continued as a body corporate under the laws of another jurisdiction, unless those laws provide in effect that

(a) the property of the cooperative becomes and continues to be the property of the body corporate;

(b) the body corporate becomes and continues to be liable for the obligations of the cooperative;

(c) any existing cause of action, claim or liability to prosecution is unaffected;

(d) any civil, criminal or administrative action or proceeding pending by or against the cooperative may be continued to be prosecuted by or against the body corporate; and

(e) any conviction against, or ruling, order or judgment in favour of or against the cooperative may be enforced by or against the body corporate.

Borrowing powers.

148(1)

Subject to the articles and the charter by-laws, the directors of a cooperative may without authorization of the members

(a) borrow money upon the credit of the cooperative;

(b) issue, reissue, sell or pledge debt obligations of the cooperative: and

(c) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the cooperative, owned or subsequently acquired, to secure any debt obligation of the cooperative.

Extraordinary sale, lease or exchange.

148(2)

A sale, lease or exchange of all or substantially all the property of a cooperative other than in the ordinary course of business of the cooperative requires the approval of the members in accordance with subsections (3) to (6).

Notice of meeting.

148(3)

A notice of a meeting of members complying with section 95 shall be sent in accordance with that section to each member 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 member is entitled to dissent in accordance with section 149;

but failure to make the statement required under clause (b) does not invalidate the sale, lease or exchange.

Terms and conditions of sale etc.

148(4)

At the meeting referred to in subsection (3), the members may authorize the sale, lease or exchange and may fix or authorize the directors to fix any of the terms and conditions thereof.

Approval of sale etc.

148(5)

A sale, lease or exchange referred to in subsection (2) is adopted when the members, or the holders of each class of shares entitled to vote thereon, have approved of the sale, lease or exchange by a special resolution.

Termination.

148(6)

The directors of a cooperative may, if so authorized by the members 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 members.

Right to dissent.

149(1)

Subject to sections 150 and 159, a member of a cooperative may dissent if the cooperative resolves to

(a) amend its articles under section 130 to change its statement of purpose or to add, change or remove any restriction upon the business or businesses that the cooperative may carry on; or

(b) amalgamate with another cooperative; or

(c) make an arrangement; or

(d) be continued under the laws of another jurisdiction under section 147; or

(e) sell, lease or exchange all or substantially all its property under subsection 148(2); or

(f) amend its articles under section 130 in order to be converted from a cooperative with share capital into a cooperative without share capital or from a cooperative without share capital into a cooperative with share capital, as the case may be.

Objection in writing.

149(2)

A dissenting member shall send to the cooperative, at or before any meeting of members at which a resolution referred to in subsection (1) is to be voted on, a written objection to the resolution unless the cooperative did not give notice to the member of the purpose of the meeting or of his right to dissent.

Notice to members and Registrar.

149(3)

The cooperative shall, within 10 days after the members adopt the resolution,

(a) send to each member who has filed the objection referred to in subsection (2) notice that the resolution has been adopted, but the notice is not required to be sent to any member who voted for the resolution or who has withdrawn his objection; and

(b) send to the Registrar a copy of the resolution and copies of any written objections received by the cooperative under subsection (2).

Approval of Registrar.

149(4)

No resolution in respect of which written objection has been sent to the cooperative under subsection (2) shall be effective until approved by the Registrar.

Conditions.

149(5)

The Registrar may and, if prescribed, the Registrar shall require as a condition of approval under subsection (4) that

(a) a part or all of any shares held by the dissenting member be purchased by the cooperative;

(b) a part or all of any membership fees paid by the dissenting member be reimbursed to the member; and

(c) a part or all of any indebtedness or other liability of the cooperative to the dissenting member be paid or satisfied;

on such terms as the Registrar may stipulate.

"Reorganization" defined.

150(1)

In this section, "reorganization" means the reorganization of a cooperative pursuant to a court order made under

(a) section 159; or

(b) the Bankruptcy Act (Canada), approving a proposal; or

(c) any other Act of the Legislature that affects the rights among the cooperative, its members and creditors.

Powers of court.

150(2)

Where a cooperative 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 have been made by an amendment under section 130.

Further powers.

150(3)

Where a court makes an order referred to in subsection (1), the court may also

(a) authorize the issue of debt obligations of the cooperative, 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 pf reorganization.

150(4)

After an order referred to in subsection (1) has been made, articles of reorganization in prescribed form shall be sent to the Registrar.

Certificate of amendment

150(5)

Upon the receipt of articles of reorganization, the Registrar shall file the articles and issue a certificate of amendment in accordance with section 179.

Effect of certificate of amendment

150(6)

A reorganization becomes effective on the date shown in the certificate of amendment and the articles of incorporation are amended accordingly.

No dissent

150(7)

A member is not entitled to dissent under section 149 where an amendment to the articles of incorporation is effected under this section.

PART XIII

INVESTIGATION, RECEIVERS AND DISSOLUTION

Special audit

151(1)

The Registrar may, on his own motion, or upon the application of 10% ,of the members each of whom has been a member for not less than 12 months immediately preceding the date of the application, appoint an auditor to audit the books of the cooperative and to report thereon.

Expenses of audit

151(2)

The expenses incidental to the special audit shall be defrayed, as the Registrar may direct, by the members applying therefor, or by the cooperative or its officers or former members or officers, or all or any combination of the foregoing, in such proportion as the registrar may direct.

Production of books.

151(3)

The auditor may require the production of all or any of the books, accounts, securities and documents of the cooperative, and may require its officers, members, agents and servants to furnish such evidence as the Registrar deems requisite in relation to its business.

Information to be furnished to registrar.

152(1)

Every cooperative shall furnish to the Registrar on his request such information as he may require for the purposes of

(a) compiling statistical records and information; or

(b) facilitating the carrying on of research projects; or

(c) satisfying himself that compliance is being made with this Act by all persons to whom or to which its provisions apply.

Disclosure of information.

152(2)

The Registrar shall not disclose to any person information received pursuant to subsection (1), except on the written instructions of the minister signed by him, or in a return made to an order of the Legislature.

Investigation.

153(1)

Subject to this section, Part XVIII of The Corporations Act applies with the necessary changes to a cooperative.

References to Director.

153(2)

A reference in Part XVIII of The Corporations Act to the Director is, for the purposes of subsection (1), deemed to be a reference to the Registrar.

Added grounds.

153(3)

The court may order an investigation on any ground set out in section 222 of The Corporations Act or if it appears to the court that the cooperative

(a) is not fulfilling the purpose stated in its articles;

(b) is not carrying on business in accordance with the restrictions contained in its articles; or

(c) is not organized and operated on a cooperative basis.

Receivers and receiver-managers.

154(1)

Part VIII of The Corporations Act applies, with such modifications as the circumstances require, to a cooperative.

References to Director.

154(2)

A reference in Part VIII of The Corporations Act to the Director is, for the purposes of subsection (1) deemed to be a reference to the Registrar.

Liquidation, dissolution and revival.

155(1)

Subject to this section, Part XVII of The Corporations Act applies, with the necessary changes, to a cooperative.

References to Director.

155(2)

A reference in Part XVII of The Corporations Act to the Director is, for the purposes of subsection (1), deemed to be a reference to the Registrar.

Application by Registrar.

155(3)

The Registrar has the same right as a member to make an application to the court under section 207 of The Corporations Act for the liquidation and dissolution of a cooperative, and the court may order the liquidation and dissolution on any ground set out in that section or on the ground that the cooperative

(a) is not fulfilling the purpose stated in its articles;

(b) is not carrying on business in accordance with the restrictions contained in its articles; or

(c) is not organized and operated on a cooperative basis.

Distribution of property.

155(4)

Upon the liquidation and dissolution of a cooperative and after payment of all debts and liabilities thereof, including any declared and unpaid dividends and any amounts paid upon outstanding shares, the remaining property of the cooperative shall be distributed or disposed of

(a) to another cooperative; or

(b) to an organization or association that is a registered Canadian charity or a registered Canadian amateur athletic association for the purposes of The Income Tax Act (Canada); or

(c) to The Co-operative Promotion Board; or

(d) equally among the persons, who were members of the cooperative during the fiscal year in which it was resolved to liquidate and dissolve the cooperative, or who were members of the cooperative during the fiscal year in which the cooperative ceased to carry on active business; or

(e) among the persons who were members of the cooperative during the fiscal year of the cooperative in which the cooperative ceased to carry on active business and the five fiscal years of the cooperative immediately preceding that fiscal year, on the basis of the patronage dividends allocated to those persons during those fiscal years; or

(f) among the persons, who were members of the cooperative during the fiscal year in which it was resolved to liquidate and dissolve the cooperative, or who were members of the cooperative during the fiscal year in which the cooperative ceased to carry on active business, on the basis of patronage dividends allocated to those members during a period of not less than three years as shall be prescribed in the articles or charter by-laws of the cooperative; or

(g) in accordance with any combination of clauses (a), (b), (c), (d), (e) and (f) or any number thereof; or

(h) to such persons as the regulations may prescribe.

Distribution of property of community service cooperatives.

155(5)

Notwithstanding subsection (4), a cooperative that in the opinion of the Registrar was operated entirely for purposes of community service shall, upon the liquidation and dissolution thereof and after payment of all its debts and liabilities, distribute or dispose of its remaining property

(a) to another cooperative that in the opinion of the Registrar is operating entirely for purposes of community service; or

(b) to an organization or association that is a registered Canadian charity or a registered Canadian amateur athletic association for the purposes of the Income Tax Act (Canada); or

(c) to The Co-operative Promotion Board; or

(d) in accordance with any combination of clauses (a), (b) and (c) or any two thereof; or

(e) to such persons as the regulations may prescribe.

"Co-operative Promotion Board" defined.

155(6)

In subsections (4) and (5), "The Co-operative Promotion Board" means The Co-operative Promotion Board established under The Wheat Board Money Trust Act.

PART XIV

REMEDIES OFFENCES AND PENALTIES

Definitions.

156

In this Part,

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

"complainant" means

(a) a member of a cooperative, or

(b) a registered holder or beneficial owner, or a former registered holder or beneficial owner, of a security of a cooperative,

(c) a director or an officer, or a former director or officer, of a cooperative or of any of its subsidiaries, or

(d) the Registrar, or

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

Commencing derivative action.

157(1)

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

Conditions precedent.

157(2)

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

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

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

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

Powers of court.

158

In an action brought or intervened in under section 157, the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing,

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

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

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

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

Application to court re oppression.

159(1)

A complainant may apply to a court for an order under this section.

Grounds.

159(2)

Where, upon an application under subsection (1) with respect to any cooperative, the court is satisfied that

(a) any act or omission of the cooperative effects a result; or

(b) the business or affairs of the cooperative are or have been carried on or conducted in a manner: or

(c) the powers of the directors of the cooperative are or have been exercised in a manner;

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

Powers of court.

159(3)

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

(a) an order restraining the conduct complained of;

(b) an order appointing a receiver or receivermanager;

(c) an order to regulate the affairs of a cooperative by amending its articles or by-laws;

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

(e) an order directing changes in the directors as permitted by subsection 150(3);

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

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

(h) an order directing a cooperative to repay patronage loans;

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

(j) an order compensating an aggrieved person;

(k) an order directing rectification of the registers or other records of a corporation under section 162;

(l) an order liquidating and dissolving the cooperative;

(m) an order directing an investigation under Part XVIII of The Corporations Act to be made;

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

Duty of directors.

159(4)

Where an order made under this section directs amendment of the articles or by laws of a cooperative,

(a) the directors shall forthwith comply with subsection 150(4); and

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

Exclusion.

159(5)

A member is not entitled to dissent under section 149 if an amendment to the articles is effected under this section.

Limitation.

159(6)

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

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

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

Alternative order.

159(7)

An applicant under this section may apply in the alternative for an order under section 207 of The Corporations Act.

Evidence of member approval not decisive.

160(1)

An application made or an action brought or intervened in under this Part shall not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the cooperative or its subsidiary has been or may be approved by the members thereof, but evidence of approval by the members may be taken into account by the court in making an order under this Part.

Court approval to discontinue.

160(2)

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

No security for costs.

160(3)

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

Interim costs.

160(4)

In an application made or an action brought or intervened in under this Part, the court may at any time order the cooperative or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant is accountable for any interim costs so paid upon final disposition of the application or action.

Insiders.

161(1)

In this section, "insider" means

(a) a director or an officer of a cooperative or its subsidiary; or

(b) a person employed or retained by a cooperative or its subsidiary; or

(c) a person who receives specific confidential information within the meaning of subsection (2) from a person described in clause (a) or (b) or this clause, and who has knowledge that the person giving the information is a person as so described.

Civil liability.

161(2)

An insider who, in connection with a transaction in a security of a cooperative or any of its subsidiaries, 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 could have been known to that person at the time of the transaction; and

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

Limitation.

161(3)

An action to enforce a right created by subsection (2) may be commenced only within two years after the date of completion of the transaction referred to in that subsection.

Application to court to rectify records.

162(1)

Where the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the registers or other records of a cooperative, the cooperative or a member or other security holder thereof or any aggrieved person may apply to the court for an order that the registers or records be rectified.

Notice to Registrar.

162(2)

An applicant under this section shall give the Registrar notice of the application and the Registrar is entitled to appear and be heard in person or by counsel.

Powers of court.

162(3)

Upon an application under this section, the court may make any order it thinks fit including

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

(b) an order restraining the cooperative from calling or holding a meeting of members or allocating or paying a dividend before rectification of the registers or records;

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

(d) an order compensating a party who has incurred a loss by reason of the wrongful entry, retention, deletion or omission.

Application for directions.

163

The Registrar may apply to the court for directions in respect of any matter concerning his duties under this Act, and upon the application the court may give such directions and make such order as it thinks fit.

Compliance or restraining order.

164

Where a cooperative or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator thereof does not comply with or is acting in breach of a provision of this Act or the regulations, or the articles or by-laws of the cooperative, any complainant or creditor of the cooperative may, in addition to any other remedy he has, apply to the court for an order directing compliance with or restraining the action in breach of the provision, and upon the application the court may make the order and any further order it thinks fit.

Summary application to court.

165

Where this Act provides for an application to the court, the application may be made in a summary manner by petition or originating notice of motion or otherwise, as the rules of the court may provide, and subject to any order of the court respecting notice to interested parties or costs or any other matter the court thinks fit.

Offences with respect to reports.

166(1)

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

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

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

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

Liability of director or officer.

166(2)

Where the person guilty of an offence under subsection (1) 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 offence 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 both.

Exception.

166(3)

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

Offence.

167

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

Order to comply.

168

Where a person is convicted of an offence under this Act or the regulations, the convicting court may, in addition to any punishment imposed, order the person to comply with the provisions of the Act or the regulations for the contravention of which he has been convicted.

Time limited for proceedings.

169(1)

A prosecution for an offence under this Act may be instituted at any time within two years from the time when the subject-matter of the complaint arose, and no later.

Civil remedy not affected.

169(2)

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

PART XV

GENERAL

Notice to directors and members.

170(1)

A notice or document required by this Act or the regulations, or the by-laws of a cooperative, to be sent to a member or director of the cooperative may be given in accordance with the charter by-laws or in the absence of a provision in the charter by-laws may be sent by prepaid mail addressed to, or may be delivered personally to,

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

(b) the director at his latest address as shown in the records of the cooperative or in the last notice filed under section 74.

Effect of notice.

170(2)

A director named in the articles or in a notice sent by the cooperative to the Registrar under section 74 and filed by the Registrar is deemed for the purposes of this Act to be a director of the cooperative referred to in the notice.

Deemed receipt.

170(3)

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

Undelivered notices.

170(4)

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

Published notices.

170(5)

Where the charter by-laws of a cooperative provide for the giving of a notice to members under subsection (1) by insertion of the notice in a newspaper or other publication, the notice is deemed to be received by the members at the time the publication containing the notice is distributed in the ordinary course.

Posted notices.

170(6)

Where the charter by-laws of a cooperative provide for the giving of a notice to members under subsection (1) by posting up the notice in a specified place or places, the notice is deemed to be received by the members at the time the notice is posted up.

Notice to and service upon a cooperative.

171

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

Waiver of notice.

172

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

Certificate of Registrar.

173(1)

Where this Act requires or authorizes the Registrar to issue a certificate or to certify any fact, the certificate shall be signed by the Registrar or by a Deputy Registrar appointed under section 177.

Evidence.

173(2)

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

Certificate of cooperative.

174(1)

A certificate issued on behalf of a cooperative, stating any fact that is set out in the articles, the by-laws, the minutes of the meetings of the directors or a committee of directors or the members, or in a trust indenture or other contract to which the cooperative is a party may be signed by a director, an officer or a transfer agent of the cooperative.

Proof.

174(2)

When introduced as evidence in any civil, criminal or administrative action or proceeding,

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

(b) a certified extract from a list of members or a members or securities register of a cooperative; or

(c) a certified copy of minutes or extract from minutes of a meeting of members or directors or a committee of directors of a cooperative;

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

Security certificate.

174(3)

An entry in a securities register of, or a security certificate issued by, a cooperative is. in the absence of evidence to the contrary, proof that the registered holder is the owner of the securities described in the register or in the certificate.

Copies.

175

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

Proof required by Registrar.

176(1)

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

Form of proof.

176(2)

A document or fact required by this Act or by the Registrar to be verified may be verified by affidavit made under oath or by statutory declaration under The Manitoba Evidence Act before any commissioner for oaths or for taking affidavits.

Authentication.

176(3)

The Registrar may require a body corporate to authenticate a document, and the authentication may be signed by the secretary, or any director or authorized person, or by the solicitor for the body corporate.

Appointment of Registrar.

177(1)

The minister may appoint a Registrar and one or more Deputy Registrars to carry out the duties and exercise the powers of the Registrar under this Act.

Duties.

177(2)

The Registrar shall assist persons desirous of applying for incorporation under this Act, shall prepare and have available model forms of articles and charter by-laws for the use of cooperatives, shall generally be an adviser and supervisor of cooperatives, and shall perform such other duties as this Act requires or as may be prescribed.

Regulations.

178(1)

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

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

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

(c) respecting the form and content of annual returns, notices and other documents required to be sent to or issued by the Registrar;

(d) prescribing rules for any exemptions permitted by this Act;

(e) respecting the names of cooperatives;

(f) respecting the par value of and the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to shares or classes of shares of cooperatives;

(g) respecting the purposes that cooperatives are to fulfil;

(h) respecting restrictions on the business or businesses that cooperatives may carry on;

(i) respecting the form and content of the charter by-laws of cooperatives.

Fixing fees.

178(2)

Where no fee is fixed in the regulations for any service performed under this Act, the minister may fix a fee therefor.

Statement defined.

179(1)

In this section, "statement" means a statement of intent to dissolve or a statement of revocation of intent to dissolve referred to in section 204 of The Corporations Act.

Filings.

179(2)

Where this Act requires articles or a statement relating to a cooperative to be sent to the registrar, unless otherwise specifically provided herein

(a) two copies of the articles or statement shall be signed by a director or an officer of the cooperative or, in the case of articles of incorporation, by the incorporators; and

(b) if the articles or statement conform to the law and are accompanied by all the required by-laws or other documents, and the prescribed fees in respect thereof have been paid, the registrar shall, subject, where required by this Act, to his being satisfied that it is advisable,

(i) endorse on each of the two copies of the articles or statement the prescribed certificate indicating the date on which the articles or statement become effective,

(ii) file one copy of the articles or statement endorsed in accordance with sub-clause (i),

(iii) send the remaining copy of the articles or statement, endorsed in accordance with sub-clause (i), to the cooperative or its representative, and

(iv) publish in the Manitoba Gazette a notice of the issue of the certificate and the date the articles or statement to which it relates become effective.

Effective date.

179(3)

The date indicated on a certificate issued under subsection (2) as the date the articles or statement become effective shall not be earlier than the date on which the registrar received the articles or statement or the court order pursuant to which the certificate is issued.

Date of certificate of discontinuance.

179(4)

Notwithstanding subsection (3), a certificate of discontinuance issued for the purposes of section 147 shall indicate that the discontinuance becomes effective on the date the cooperative is continued under the laws of another jurisdiction.

Endorsement constitutes issue.

179(5)

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

Certificate of compliance.

180

The Registrar may furnish any person with a certificate that a cooperative has sent to the Registrar a document required to be sent to him under this Act.

Alteration.

181

The Registrar may alter any notice or document, other than an affidavit or statutory declaration, if so authorized by or on behalf of the person who sent the notice or document to him.

Corrections.

182(1)

Where a certificate or order containing an error is issued by the Registrar, he shall issue a corrected order or certificate and may

(a) demand the surrender of the certificate or order containing the error; and

(b) request the directors or members of the cooperative

(i) to pass resolutions,

(ii) to send or deliver to him the documents required to comply with this Act,

(iii) to take such other steps as he reasonably requires.

Date of corrected certificate.

182(2)

A certificate or order corrected under subsection (1) shall have effect from the date of the certificate or order it replaces.

Notices.

182(3)

Where a corrected certificate or order issued under subsection (1) materially amends the terms of the original certificate or order, the Registrar shall forthwith give notice of the correction in The Manitoba Gazette.

Inspection.

183(1)

A person who has paid the prescribed fee is entitled during usual business hours to examine any document required by this Act or the regulations to be sent to the Registrar, and to make copies thereof or take extracts therefrom.

Copies.

183(2)

The Registrar shall furnish any person upon request with a copy or a certified copy of any document required by this Act or the regulations to be sent to the Registrar.

Form of records of Registrar.

184(1)

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

Obligation to furnish.

184(2)

Where records maintained by the Registrar are prepared and maintained in other than written form,

(a) the Registrar shall furnish any copy required to be furnished under subsection 183(2) in intelligible written form; and

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

Production of records limitation.

184(3)

The Registrar is not required to produce any document, other than a certificate and attached articles or statement filed under section 179, after six years from the date he received it.

Continuation of former incorporations, etc.

185(1)

All letters patent, supplementary letters patent and licences, all cancellations, suspensions, proceedings, acts, registrations and things, and all affidavits, declarations, by-laws, resolutions, regulations and documents, lawfully granted, issued, imposed, made, taken, done, commenced, filed or passed under any provision of any Act in force prior to the coming into force of this Act, shall insofar as they affect cooperatives be conclusively deemed to have been granted, issued, imposed, made, taken, done, commenced, filed or passed under this Act and shall, if in force on the coming into force of this Act, be continued under this Act as though they had in fact been granted, issued, imposed, made, taken, done, commenced, filed or passed under this Act.

Amendments.

185(2)

Any addition or amendment to or deletion from any provision in the letters patent, supplementary letters patent or by-laws of a cooperative shall be made in accordance with this Act.

Reference to Act.

185(3)

Any reference in an Act, letters patent, supplementary letters patent, by-law or resolution to Part X of The Companies Act as it existed before June 1, 1977 or to any procedure under Part X of The Companies Act, shall be deemed to be a reference to this Act and to the equivalent procedure under this Act.

PART XVI

SECURITY ISSUES

Offering statement.

186(1)

Prior to the issue of any shares or other securities by a cooperative, the cooperative shall send to the Registrar an offering statement in accordance with this Act and the regulations, and obtain a receipt therefor.

Exception.

186(2)

Subsection (1) does not apply to any issue exempted by the regulations or by order of the Registrar.

Application of Securities Act.

186(3)

The Securities Act does not apply to any issue of shares or other securities by a cooperative after this Act comes into force, unless the issue is made subject thereto by order of the Registrar.

Standard of disclosure.

187(1)

An offering statement shall provide full, true and plain disclosure of all material facts relating to the shares or other securities proposed to be issued.

Form and content.

187(2)

An offering statement shall comply as to form and content with the requirements of this Act and the regulations.

Supporting documents.

187(3)

There shall be sent to the Registrar with an offering statement such documents, reports and other material as are required by this

Act and the regulations.

Material changes.

187(4)

Where there is a material change in the facts set forth in an offering statement, whether before or after the issuance of a receipt thereof, the cooperative shall, withtin 30 days of that change, send to the Registrar a statement of the change.

Further statements.

187(5)

A cooperative may, and shall if required by the Registrar, send to the Registrar a further offering statement revised to give effect to all previous material changes in place of the statement of material change mentioned in subsection (4).

Receipt.

188(1)

The Registrar may in his discretion file and issue a receipt for any statement sent to him under section 186 or subsection 187(4) or (5), unless it appears to him that

(a) the statement or any document required to be sent therewith,

(i) fails to comply in any substantial respect with any of the requirements of this Act or the regulations, or

(ii) contains any statement, promise, estimate or forecast that is misleading, false or deceptive, or

(iii) conceals or omits to state any material fact necessary in order to make any statement contained therein not misleading in the light of the circumstances in which it was made; or

(b) the proceeds from the sale of the shares or other securities to which the statement relates that are to be paid into the treasury of the cooperative, together with other resources of the cooperative, are insufficient to accomplish the purpose of the issue stated in the statement.

Ruling.

188(2)

The Registrar shall not make any determination under subsection (1) without making an order or ruling in writing and without giving the cooperative that filed the statement a prior opportunity to be heard.

Inspection of statement.

189(1)

A copy of a statement for which the Registrar has issued a receipt under section 188 shall be open to inspection by any person

(a) at the offices of the Registrar; and

(b) during normal business hours, at the head office of the cooperative.

Extracts.

189(2)

Any person may take extracts from any statement open to inspection under subsection (1).