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

R.S.M. 1987, c. C225

The Corporations Act

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

PART I

INTERPRETATION AND APPLICATION

Definitions.

1(1)

In this Act,

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

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

"articles" means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution, articles of revival and any amendments thereto, and includes any Act, statute or ordinance by or under which a body corporate has been incorporated, and any letters patent, supplementary letters patent, certificate of incorporation, memorandum of association, and any other document evidencing corporate existence: ("statuts")

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

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

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

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

(d) a spouse or child of that person, or

(e) a relative of that person or of his spouse if that relative has the same residence as that person; ("liens")

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"redeemable share" means a share issued by a corporation

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

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

"resident of Canada" means an individual who is

(a) ordinarily resident in Canada, or

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

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

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

"send" includes deliver; ("envoyer" )

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

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

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

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

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

Affiliated corporations.

1(2)

For the purposes of this Act,

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

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

Control.

1(3)

For the purposes of this Act, a body corporate is controlled by a person if

(a) securities of the body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person; and

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

Holding body corporate.

1(4)

A body corporate is the holding body corporate of another if that other body corporate is its subsidiary.

Subsidiary body corporate.

1(5)

A body corporate is a subsidiary of another body corporate if it is controlled by that other body corporate.

Deemed distribution to the public.

1(6)

For the purposes of this Act, securities of a body corporate

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

(b) issued in exchange for other securities;

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

Distribution to the public.

1(7)

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

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

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

(c) is listed on a stock exchange.

Application of Act.

2(1)

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

Inconsistent provisions.

2(2)

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

Where Part applies to class of corporation.

2(3)

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

Exceptions.

3(1)

Except where it is otherwise expressly provided,

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

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

Exceptions.

3(2)

This Act does not apply

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

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

Objects of existing corporations.

4(1)

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

Powers of existing corporation.

4(2)

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

PART II

INCORPORATION

Incorporators.

5(1)

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

Exception.

5(2)

No person who

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

(b) has the status of a bankrupt;

may incorporate a corporation.

Articles of incorporation.

6(1)

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

(a) the name of the corporation;

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

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

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

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

(d) if the right to transfer shares of the corporation is to be restricted, a statement that the right to transfer shares is restricted and the nature of the restrictions;

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

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

Additional provisions in articles.

6(2)

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

Special majorities.

6(3)

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

Exception.

6(4)

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

Consent required.

6(5)

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

Filing of Articles.

7

An incorporator shall send to the Director articles of incorporation.

Certificate of incorporation.

8

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

Effect of certificate.

9

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

Name of corporation.

10(1)

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

Alternative name.

10(2)

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

Name in any language form.

10(3)

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

Publication of corporate name.

10(4)

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

Other name.

10(5)

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

Offence.

10(6)

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

Reservation of name.

11(1)

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

Designating number.

11(2)

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

Notation of name.

11(3)

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

Notice of use of name.

11(4)

The person, partnership or association may

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

(b) within three years of the date when the latest renewal date is noted pursuant to subsection (5); give the Director notice that he or it is still carrying on his or its business or undertaking under the name noted in his records.

Notice to be recorded.

11(5)

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

Cancellation of notice.

11(6)

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

"Business or association" defined.

12(1)

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

Prohibited names.

12(2)

A corporation shall not have a name

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

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

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

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

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

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

Corporation not to be given similar name.

12(3)

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

Corporation not to be given similar name of business or association.

12(4)

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

Reserved name.

12(5)

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

Undertaking not carried out.

12(6)

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

Directing change of name.

12(7)

Where, through inadvertence or otherwise, a corporation

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

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

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

Directing change of name.

12(8)

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

Revocation of name.

12(9)

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

Certificate of amendment

13(1)

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

Effect of certificate.

13(2)

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

Personal liability in pre-incorporation contracts.

14(1)

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

Adoption of pre-incorporation contracts.

14(2)

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

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

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

Application to court.

14(3)

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

Exemption from personal liability.

14(4)

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

PART III

CAPACITY AND POWERS

Capacity of a corporation.

15(1)

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

Extra-territorial capacity.

15(2)

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

Powers of a corporation.

16(1)

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

Restricted business or powers.

16(2)

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

Rights preserved.

16(3)

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

No constructive notice.

17

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

Authority of directors, officers and agents.

18

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

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

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

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

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

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

(f) the financial assistance referred to in section 42 or the sale, lease or exchange of property referred to in subsection 183(2) was not authorized;

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

PART IV

REGISTERED OFFICE AND RECORDS

Registered office.

19(1)

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

Change of location.

19(2)

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

Change of address.

19(3)

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

Notice of change.

19(4)

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

Annexation or amalgamation of municipalities.

19(5)

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

Exception.

19(6)

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

Consent discretionary.

19(7)

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

Corporate records.

20(1)

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

(a) the articles and the by-laws and all amendments thereto, and a copy of any unanimous shareholder agreement:

(b) minutes of meetings and resolutions of shareholders;

(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 corporation with the several dates on which each became or ceased to be a director; and

(d) a securities register complying with section 46.

Other records.

20(2)

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

Place kept.

20(3)

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

Records in Manitoba.

20(4)

Where accounting records of a corporation 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 corporation with reasonable accuracy on a quarterly basis or at any time upon reasonable notice.

Exception.

20(5)

Where a corporation

(a) shows, to the satisfaction of the Director, 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 corporation; and

(b) gives assurance, to the satisfaction of the Director, 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 corporation or some other place in Manitoba approved by the Director, to any person who is entitled to inspect them and applies to the corporation for an inspection thereof;

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

Rescind order.

20(6)

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

Duplicate register of securities.

20(7)

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

Notice of order.

20(8)

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

Offence.

20(9)

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

Access to corporate records.

21(1)

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

Copies of corporate record.

21(2)

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

Shareholder lists.

21(3)

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

Supplemental lists.

21(4)

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

When supplemental lists to be furnished.

21(5)

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

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

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

Holders of options.

21(6)

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

Contents of affidavit.

21(7)

The affidavit required under subsection (3) shall state

(a) the name and address of the applicant;

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

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

Where applicant a body corporate.

21(8)

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

Use of shareholder list.

21(9)

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

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

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

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

Offence.

21(10)

A person who, without reasonable cause, contravenes this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Form of records.

22(1)

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

Precautions.

22(2)

A corporation and its agents shall take reasonable precautions to

(a) prevent loss or destruction of;

(b) prevent falsification of entries in; and

(c) facilitate detection and correction of inaccuracies in;

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

Offence.

22(3)

A person who without reasonable cause contravenes this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Corporate seal.

23

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

PART V

CORPORATE FINANCE

Shares.

24(1)

Shares of a corporation shall be in registered form and shall be without par value.

Transitional.

24(2)

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

Class of shares.

24(3)

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

Class voting.

24(4)

Unless the articles otherwise provide, each share of a corporation entitles the holder thereof

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

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

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

Pre-existing corporations.

24(5)

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

Transitional.

24(6)

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

Issue of shares.

25(1)

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

Shares non-assessable.

25(2)

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

Consideration.

25(3)

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

Consideration other than money.

25(4)

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

Property.

25(5)

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

Stated capital account.

26(1)

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

Entries in stated capital account

26(2)

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

Exception for non-arm's length transactions.

26(3)

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

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

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

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

Limit on addition to a stated capital account.

26(4)

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

Constraint on addition to a stated capital account.

26(5)

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

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

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

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

Other additions to stated capital.

26(6)

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

Retained earnings added to stated capital.

26(7)

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

Transitional.

26(8)

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

Continuance.

26(9)

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

Transitional.

26(10)

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

Transitional.

26(11)

For the purposes of subsection 32(2), sections 36, 40 and 42 and clause 179(2)(a), where a corporation is incorporated before the commencement of this Act, its stated capital is deemed to include the amount that would have been included in the stated capital account if the corporation had been incorporated under this Act.

Restriction.

26(12)

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

Exception for an open-end mutual fund.

26(13)

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

"Open-end mutual fund" defined.

26(14)

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

Shares in series.

27(1)

The articles may authorize the issue of any class of shares in one or more series and may authorize the directors to fix the number of shares in and to determine the designation, rights, privileges, restrictions and conditions attaching to, the shares of each series, subject to the limitations set out in the articles.

Series participation.

27(2)

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

Restrictions on series.

27(3)

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

Amendment of articles.

27(4)

Before the issue of shares of a series authorized under this section, the directors shall send to the Director articles of amendment in prescribed form to designate a series of shares.

Certificate of amendment.

27(5)

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

Effect of certificate.

27(6)

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

Pre-emptive right.

28(1)

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

Exception.

28(2)

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

(a) for a consideration other than money; or

(b) as a share dividend; or

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

Options and rights.

29(1)

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

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

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

Transferable rights.

29(2)

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

Convertible shares.

29(3)

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

Convertible debt obligations.

29(4)

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

Corporation holding its own shares.

30(1)

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

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

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

Subsidiary holding shares of a corporation.

30(2)

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

Exception.

31(1)

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

Exception.

31(2)

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

Exception.

31(3)

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

Voting shares.

31(4)

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

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

(b) has complied with section 147.

Acquisition of corporation's own shares.

32(1)

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

Limitation.

32(2)

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

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

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

Alternative acquisition of corporation's own shares.

33(1)

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

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

(b) eliminate fractional shares; or

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

Alternative acquisition of corporation's own shares.

33(2)

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

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

(b) comply with an order under section 234.

Limitation.

33(3)

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

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

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

Redemption of shares.

34(1)

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

Limitation.

34(2)

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

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

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

(i) its liabilities, and

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

Donated shares.

35

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

Other reduction of stated capital.

36(1)

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

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

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

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

Contents of special resolution.

36(2)

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

Limitation.

36(3)

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

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

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

Recovery.

36(4)

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

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

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

Limitation.

36(5)

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

Remedy preserved.

36(6)

This section does not affect any liability that arises under section 113.

Adjustment of stated capital account.

37(1)

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

Adjustment of stated capital account.

37(2)

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

Adjustment of stated capital account.

37(3)

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

Adjustment of stated capital account.

37(4)

Upon a conversion of issued shares of a class into shares of another class or upon a change under section 167, 185 or 234 of issued shares of a corporation into shares of another class or series, a corporation shall

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

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

Stated capital of interconvertible shares.

37(5)

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

Cancellation or restoration of shares.

37(6)

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

Exception.

37(7)

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

Conversion or change of shares.

37(8)

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

Repayment.

37(9)

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

Acquisition and reissue of debt obligations.

37(10)

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

Enforceability of contract.

38(1)

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

Burden of proof.

38(2)

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

Status of contracting party.

38(3)

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

Commission for sale of shares.

39

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

Dividends.

40

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

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

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

Form of dividend.

41(1)

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

Adjustment of stated capital account.

41(2)

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

Dividends payable on transition.

41(3)

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

Prohibited loans and guarantees.

42(1)

Except as permitted under subsection (2), a corporation or any corporation with which it is affiliated shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise

(a) to any shareholder, director, officer or employee of the corporation or of an affiliated corporation or to an associate of any of those persons for any purpose; or

(b) to any person for the purpose of or in connection with a purchase of a share issued or to be issued by the corporation or affiliated corporation;

where there are reasonable grounds for believing that

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

(d) the realizable value of the corporation's assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, after giving the financial assistance, would be less than the aggregate of the corporation's liabilities and stated capital of all classes.

Permitted loans and guarantees.

42(2)

A corporation may give financial assistance by means of a loan, guarantee or otherwise

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

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

(c) to a holding body corporate if the corporation is a wholly-owned subsidiary of the holding body corporate;

(d) to a subsidiary body corporate of the corporation; and

(e) to employees of the corporation or any of its affiliates

(i) to enable or assist them to purchase or erect living accommodation for their own occupation, or

(ii) in accordance with a plan for the purchase of shares of the corporation or any of its affiliates to be held by a trustee.

Enforceability.

42(3)

A contract made by a corporation in contravention of this section may be enforced by the corporation or by a lender for value in good faith without notice of the contravention.

Shareholder immunity.

43(1)

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

Lien on shares.

43(2)

Subject to subsection 45(8), the articles may provide that the corporation has a lien on a share registered in the name of a shareholder or his legal representative for a debt of that shareholder to the corporation, including an amount unpaid in respect of a share issued by a body corporate on the date it was continued under this Act.

Enforcement of lien.

43(3)

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

Liability continues.

43(4)

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

PART VI

SECURITY CERTIFICATES, REGISTERS AND TRANSFERS

Application of Part.

44(1)

The transfer or transmission of a security shall be governed by this Part.

Definitions.

44(2)

In this Part,

"adverse claim" includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security; ("opposition")

"bearer" means the person in possession of a security payable to bearer or endorsed in blank; ("porteur")

"bona fide purchaser" means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or of a security in registered form issued to him or endorsed to him or endorsed in blank; ("acheteur de bonne foi")

"broker" means a person who is engaged for all or part of his time in the business of buying and selling securities and who, in the transaction concerned, acts for , or buys a security from, or sells a security to a customer; ("courtier")

"delivery" means voluntary transfer of possession; ("livraison")

"fiduciary" means a trustee, guardian, committee, curator, tutor, executor, administrator or representative of a deceased person, or any other person acting in a fiduciary capacity; ("représentant" )

"fungible" in relation to securities means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit; ("fongibles")

"genuine" means free of forgery or counterfeiting; ("authentique")

"good faith" means honesty in fact in the conduct of the transaction concerned; ("bonne foi")

"holder" means a person in possession of a security issued or endorsed to him or to bearer or in blank; ("détenteur")

"issuer" includes a corporation

(a) that is required by this Act to maintain a securities register, or

(b) that directly or indirectly creates fractional interests in its rights or property and that issues securities as evidence of such fractional interests; ("émetteur")

"overissue" means the issue of securities in excess of any maximum number of securities that the issuer is authorized by its articles or a trust indenture to issue; ("émission excédentaire")

"purchaser" means a person who takes by sale, mortgage, hypothec, pledge, issue, reissue, gift or any other voluntary transaction creating an interest in a security; ("acquéreur")

"security" or "security certificate" means an instrument issued by a corporation that is

(a) in bearer or registered or order form,

(b) of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment,

(c) one of a class or series or by its terms divisible into a class or series of instruments, and

(d) evidence of a share, participation or other interest in or obligation of a corporation; ("valeur mobilière" ou "certificat de valeur mobilière")

"transfer" includes transmission by operation of law; ("transfert")

"trust indenture" means a trust indenture as defined in section 77; ("acte de fiducie")

"unauthorized" in relation to a signature or an endorsement means made without actual, implied or apparent authority and includes a forgery; ("non autorisé")

"valid" means issued in accordance with the applicable law and the articles of the issuer or validated under section 48. ("valide")

Negotiable instruments.

44(3)

Except where its transfer is restricted and noted on a security in accordance with subsection 45(8), a security is a negotiable instrument.

Registered form.

44(4)

A security is in registered form if

(a) it specifies a person entitled to the security or to the rights it evidences, and its transfer is capable of being recorded in a securities register; or

(b) it bears a statement that is in registered form.

Order form.

44(5)

A debt obligation is in order form where, by its terms, it is payable to the order or assigns of any person therein specified with reasonable certainty or to him or his order.

Bearer form.

44(6)

A security is in bearer form if it is payable to bearer according to its terms and not by reason of any endorsement.

Guarantor for issuer.

44(7)

A guarantor for an issuer is deemed to be an issuer to the extent of his guarantee whether or not his obligation is noted on the security.

Rights of holder.

45(1)

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

Fee for certificate.

45(2)

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

Joint holders.

45(3)

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

Signatures.

45(4)

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

No manual signature required.

45(5)

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

(a) a security certificate representing

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

(ii) a fractional share, or

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

(b) a scrip certificate.

Continuation of signature.

45(6)

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

Contents of share certificate.

45(7)

There shall be stated upon the face of each share certificate issued by a corporation

(a) the name of the corporation;

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

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

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

Restrictions.

45(8)

If a security certificate issued by a corporation, or by a body corporate before the body corporate was continued under this Act, is or becomes subject to

(a) a restriction on its transfer other than a constraint under section 168; or

(b) a lien in favour of the corporation; or

(c) a unanimous shareholder agreement; or

(d) an endorsement under subsection 184(10);

the restriction, lien, agreement or endorsement is ineffective against a transferee of the security who has no actual knowledge of it, unless it or a reference to it is noted conspicuously on the security certificate.

Limit on restriction.

45(9)

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

Transitional.

45(10)

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

Particulars of class.

45(11)

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

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

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

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

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

Duty.

45(12)

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

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

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

Fractional share.

45(13)

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

Scrip certificates.

45(14)

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

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

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

Holder of fractional share.

45(15)

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

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

(b) the articles of the corporation otherwise provide.

Holder of scrip certificate.

45(16)

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

Securities records.

46(1)

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

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

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

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

Central and branch registers.

46(2)

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

Place of register.

46(3)

A central securities register shall be maintained by a corporation at its registered office or at any other place in Manitoba designated by the directors, and any branch securities registers may be kept at any place in or out of Manitoba designated by the directors.

Effect of registration.

46(4)

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

Branch register.

46(5)

A branch securities register shall only contain particulars of securities issued or transferred at that branch.

Central register.

46(6)

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

Destruction of certificates.

46(7)

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

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

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

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

Dealings with registered holder.

47(1)

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

Constructive registered holder.

47(2)

Notwithstanding subsection (1), a corporation whose articles restrict the right to transfer its securities shall, and any other corporation may, treat a person as a registered security holder entitled to exercise all the rights of the security holder he represents, if that person furnishes evidence as described in subsection 72(4) to the corporation that he is

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

(b) a guardian, committee, trustee, curator or tutor representing a registered security 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 security holder.

Permissible registered holder.

47(3)

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

Immunity of corporation.

47(4)

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

Infants.

47(5)

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

Joint holders.

47(6)

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

Transmission of securities.

47(7)

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

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

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

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

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

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

together with

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

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

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

(ii) in case of a transfer to any other person, endorsed in accordance with section 61, and accompanied by any assurance the corporation may require under section 72.

Excepted transmissions.

47(8)

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

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

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

Right of corporation.

47(9)

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

Overissue.

48(1)

The provisions of this Part that validate a security or compel its issue or reissue do not apply to the extent that validation, issue or reissue would result in overissue; but

(a) if a valid security, similar in all respects to the security involved in the overissue, is reasonably available for purchase, the person entitled to the validation or issue may compel the issuer to purchase and deliver such a security to him against surrender of the security that he holds; or

(b) if a valid security, similar in all respects to the security involved in the overissue, is not reasonably available for purchase, the person entitled to the validation or issue may recover from the issuer an amount equal to the price the last purchaser for value paid for the invalid security.

Retroactive validation.

48(2)

Where an issuer subsequently amends its articles or a trust indenture to which it is a party to increase its authorized securities to a number equal to or in excess of the number of securities previously authorized plus the amount of the securities overissued, the securities so overissued are valid from the date of their issue.

Payment not a purchase or redemption.

48(3)

A purchase or payment by an issuer under subsection (1) is not a purchase or payment to which section 32, 33, 34 or 37 applies.

Burden of proof.

49

In an action on a security,

(a) unless specifically denied in the pleadings, each signature on the security or in a necessary endorsement is admitted;

(b) a signature on the security is presumed to be genuine and authorized but, if the effectiveness of the signature is put in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature;

(c) if a signature is admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defence or a defect going to the validity of the security; and

(d) if the defendant establishes that a defence or a defect exists, the plaintiff has the burden of establishing that the defence or defect is ineffective against him or some person under whom he claims.

Securities fungible.

50

Unless otherwise agreed, and subject to any applicable law, regulation or stock exchange rule, a person required to deliver securities may deliver any security of the specified issue in bearer form or registered in the name of the transferee or endorsed to him or in blank.

Notice of defect.

51(1)

Even against a purchaser for value and without notice of a defect going to the validity of a security, the terms of the security include those stated on the security and those incorporated therein by reference to another instrument, statute, rule, regulation or order to the extent that the terms so referenced do not conflict with the stated terms, but the reference is not of itself notice to a purchaser for value of a defect going to the validity of the security, notwithstanding that the security expressly states that a person accepting it admits such notice.

Purchaser for value.

51(2)

A security is valid in the hands of a purchaser for value without notice of any defect going to its validity.

Lack of genuineness.

51(3)

Except as provided in section 53, the fact that a security is not genuine is a complete defence even against a purchaser for value and without notice.

Ineffective defences.

51(4)

All other defences of an issuer, including non-delivery and conditional delivery of a security, are ineffective against a purchaser for value without notice of the particular defence.

Staleness as notice of defect.

52

After an event that creates a right to immediate performance of the principal obligation evidenced by a security, or that sets a date on or after which a security is to be presented or surrendered for redemption or exchange, a purchaser is deemed to have notice of any defect in its issue or of any defence of the issuer,

(a) if the event requires the payment of money or the delivery of securities, or both, on presentation or surrender of the security, and those funds or securities are available on the date set for payment or exchange, and the purchaser takes the security more than one year after that date; or

(b) if the purchaser takes the security more than two years after the date set for surrender or presentation or the date on which the performance became due.

Unauthorized signature.

53

An unauthorized signature on a security before or in the course of issue is ineffective, except that the signature is effective in favour of a purchaser for value and without notice of the lack of authority, if the signing has been done by

(a) an authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security, or of similar securities, or their immediate preparation for signing; or

(b) an employee of the issuer or of a person referred to in clause (a) who in the ordinary course of his duties handles the security.

Completion or alteration.

54(1)

Where a security contains the signatures necessary to its issue or transfer but is incomplete in any other respect,

(a) any person may complete it by filling in the blanks in accordance with his authority; and

(b) notwithstanding that the blanks are incorrectly filled in, the security as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness.

Enforceability.

54(2)

A completed security that has been improperly altered, even if fraudulently altered, remains enforceable but only according to its original terms.

Warranties of agents.

55(1)

A person signing a security as authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security, warrants to a purchaser for value without notice that

(a) the security is genuine;

(b) his acts in connection with the issue of the security are within his authority; and

(c) he has reasonable grounds for believing that the security is in the form and within the amount the issuer is authorized to issue.

Limitation of liability.

55(2)

Unless otherwise agreed, the person referred to in subsection (1) does not assume any further liability for the validity of a security.

Title of purchaser.

56(1)

Upon delivery of a security the purchaser acquires the rights in the security that his transferor had or had authority to convey, except that a purchaser who has been a party to any fraud or illegality affecting the security or who as a prior holder had notice of an adverse claim does not improve his position by taking from a later bona fide purchaser.

Title of bona fide purchaser.

56(2)

A bona fide purchaser, in addition to acquiring the rights of a purchaser, also acquires the security free from any adverse claim.

Limited interest.

56(3)

A purchaser of a limited interest acquires rights only to the extent of the interest purchased.

Deemed notice of adverse claim.

57(1)

A purchaser of a security, or any broker for a seller or purchaser, is deemed to have notice of an adverse claim if

(a) the security, whether in bearer or registered form, has been endorsed "for collection" or "for surrender" or for some other purpose not involving transfer; or

(b) the security is in bearer form and has on it a statement that it is the property of a person other than the transferor, except that the mere writing of a name on a security is not such a statement.

Notice of fiduciary duty.

57(2)

Notwithstanding that a purchaser, or any broker for a seller or purchaser, has notice that a security is held for a third person or is registered in the name of or endorsed by a fiduciary, he has no duty to inquire into the rightfulness of the transfer and has no notice of an adverse claim, except that where a purchaser knows that the consideration is to be used for, or that the transaction is for, the personal benefit of the fiduciary or is otherwise in breach of the fiduciary's duty, the purchaser is deemed to have notice of an adverse claim.

Staleness as notice of adverse claim.

58

An event that creates a right to immediate performance of the principal obligation evidenced by a security or that sets a date on or after which the security is to be presented or surrendered for redemption or exchange is not of itself notice of an adverse claim, except in the case of a purchase

(a) after one year from any date set for the presentation or surrender for redemption or exchange; or

(b) after six months from any date set for payment of money against presentation or surrender of the security if funds are available for payment on that date.

Warranties to issuer.

59(1)

A person who presents a security for registration of transfer or for payment or exchange warrants to the issuer that he is entitled to the registration, payment or exchange, except that a purchaser for value without notice of an adverse claim who receives a new, reissued or re-registered security on registration of transfer warrants only that he has no knowledge of any unauthorized signature in a necessary endorsement.

Warranties to purchaser.

59(2)

A person by transferring a security to a purchaser for value warrants only that

(a) the transfer is effective and rightful;

(b) the security is genuine and has not been materially altered; and

(c) he knows of nothing that might impair the validity of the security.

Warranties of intermediary.

59(3)

Where a security is delivered by an intermediary known by the purchaser to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim to be collected against the delivery, the intermediary by the delivery warrants only his own good faith and authority even if he has purchased or made advances against the draft or other claim to be collected against the delivery.

Warranties of pledgee.

59(4)

A pledgee or other holder for purposes of security who re-delivers a security received, or after payment and on order of the debtor delivers that security to a third person, gives only the warranties of an intermediary under subsection (3).

Warranties of broker.

59(5)

A broker gives to his customer, to the issuer and to a purchaser, as the case may be, the warranties provided in this section and has the rights and privileges of a purchaser under this section; and those warranties of and in favour of the broker acting as an agent are in addition to warranties given by his customer and warranties given in favour of his customer.

Right to compel endorsement.

60

Where a security in registered form is delivered to a purchaser without a necessary endorsement, he may become a bona fide purchaser only as of the time the endorsement is supplied, but against the transferor the transfer is complete upon delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.

"Appropriate person" defined.

61(1)

In this section, "appropriate person" means

(a) the person specified by the security or by special endorsement to be entitled to the security; or

(b) if the person described in clause (a) is described as a fiduciary but is no longer serving in the described capacity, either that person or his successor; or

(c) if the security or endorsement mentioned in clause (a) specifies more than one person as fiduciaries and one or more are no longer serving in the described capacity, the remaining fiduciary or fiduciaries, whether or not a successor has been appointed or qualified; or

(d) if the person described in clause (a) is an individual and is without capacity to act by reason of death, incompetence, infancy, minority or otherwise, his fiduciary; or

(e) if the security or endorsement mentioned in clause (a) specifies more than one person with right of survivorship and by reason of death all cannot sign, the survivor or survivors; or

(f) a person having power to sign under applicable law or a power of attorney; or

(g) to the extent that the person described in any of clauses (a) to (f) may act through an agent, his authorized agent.

Determining "appropriate person".

61(2)

Whether the person signing is an appropriate person is determined as of the time of signing, and an endorsement by the person does not become unauthorized for the purposes of this Part by reason of any subsequent change of circumstances.

Endorsement.

61(3)

An endorsement of a security in registered form is made when an appropriate person signs, either on the security or on a separate document, an assignment or transfer of the security or a power to assign or transfer it, or when the signature of an appropriate person is written without more upon the back of the security.

Special or blank.

61(4)

An endorsement may be special or in blank.

Blank endorsement.

61(5)

An endorsement in blank includes an endorsement to bearer.

Special endorsement.

61(6)

A special endorsement specifies the person to whom the security is to be transferred, or who has power to transfer it.

Right of holder.

61(7)

A holder may convert an endorsement in blank into a special endorsement.

Immunity of endorser.

61(8)

Unless otherwise agreed, the endorser by his endorsement assumes no obligation that the security will be honoured by the issuer.

Partial endorsement

61(9)

An endorsement purporting to be only of part of a security representing units intended by the issuer to be separately transferable is effective to the extent of the endorsement.

Failure of fiduciary to comply.

61(10)

Failure of a fiduciary to comply with a controlling instrument or with the law of the jurisdiction governing the fiduciary relationship, including any law requiring the fiduciary to obtain court approval of a transfer, does not render his endorsement unauthorized for the purposes of this Part.

Effect of endorsement without delivery.

62

An endorsement of a security whether special or in blank does not constitute a transfer until delivery of the security on which it appears or, if the endorsement is on a separate document, until delivery of both the security and that document.

Endorsement in bearer form.

63

An endorsement of a security in bearer form may give notice of an adverse claim under section 57 but does not otherwise affect any right to registration that the holder has.

Effect of unauthorized endorsement.

64(1)

The owner of a security may assert the ineffectiveness of an endorsement against the issuer or any purchaser, other than a purchaser for value and without notice of an adverse claim who has in good faith received a new, reissued or reregistered security on registration of transfer, unless the owner

(a) has ratified an unauthorized endorsement of the security; or

(b) is otherwise precluded from impugning the effectiveness of an unauthorized endorsement.

Liability of issuer.

64(2)

An issuer who registers the transfer of a security upon an unauthorized endorsement is liable for improper registration.

Warranties of guarantor of signature.

65(1)

A person who guarantees a signature of an endorser of a security warrants that at the time of signing

(a) the signature was genuine;

(b) the signer was an appropriate person as defined in section 61 to endorse: and

(c) the signer had legal capacity to sign.

Limitation of liability.

65(2)

A person who guarantees a signature of an endorser does not otherwise warrant the rightfulness of the particular transfer

Warranties of guarantor of endorsement

65(3)

A person who guarantees an endorsement of a security warrants both the signature and the rightfulness of the transfer in all respects, but an issuer may not require a guarantee of endorsement as a condition to registration of transfer.

Extent of liability.

65(4)

The warranties referred to in this section are made to any person taking or dealing with the security relying on the guarantee, and the guarantor is liable to the person for any loss resulting from breach of warranty.

Constructive delivery of a security.

66(1)

Delivery to a purchaser occurs when

(a) he or a person designated by him acquires possession of a security ; or

(b) his broker acquires possession of a security endorsed to or issued in the name of the purchaser; or

(c) his broker sends him confirmation of the purchase and the broker in his records identifies a specific security as belonging to the purchaser; or

(d) with respect to an identified security to be delivered while still in the possession of a third person, that person acknowledges that he holds it for the purchaser.

Constructive ownership.

66(2)

A purchaser is the owner of a security held for him by his broker, but a purchaser is not a holder except in the cases referred to in clauses (l)(b) and(l)(c).

Ownership of part of fungible bulk.

66(3)

If a security is part of a fungible bulk, a purchaser of the security is the owner of a proportionate interest in the fungible bulk.

Notice to broker.

66(4)

Notice of an adverse claim received by a broker or by a purchaser after the broker takes delivery as a holder for value is not effective against the broker or the purchaser, except that, as between the broker and the purchaser, the purchaser may demand delivery of an equivalent security as to which no notice of an adverse claim has been received.

Delivery of security.

67(1)

Unless otherwise agreed, if a sale of a security is made on an exchange or otherwise through brokers,

(a) the selling customer fulfils his duty to deliver when he delivers the security to the selling broker or to a person designated by the selling broker or causes an acknowledgment to be made to the selling broker that it is held for him; and

(b) the selling broker, including a correspondent broker, acting for a selling customer fulfils his duty to deliver by delivering the security or a like security to the buying broker or to a person designated by the buying broker or by effecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place.

Duty to deliver.

67(2)

Except as otherwise provided in this section and unless otherwise agreed, a transferor's duty to deliver a security under a contract of purchase is not fulfilled until he delivers the security in negotiable form to a purchaser or to a person designated by the purchaser, or causes an acknowledgment to be made to the purchaser that the security is held for him.

Delivery to broker.

67(3)

A sale to a broker purchasing for his own account is subject to subsection (2) and not subsection (1), unless the sale is made on a stock exchange.

Right to reclaim possession.

68(1)

A person against whom the transfer of a security is wrongful for any reason, including his incapacity, may against anyone except a bona fide purchaser reclaim possession of the security or obtain possession of any new security evidencing all or part of the same rights or claim damages.

Recovery if unauthorized endorsement.

68(2)

If the transfer of a security is wrongful by reason of an unauthorized endorsement, the owner may reclaim possession of the security or a new security even from a bona fide purchaser if the ineffectiveness of the purported endorsement may be asserted against the purchaser under section 64.

Remedies.

68(3)

The right to reclaim possession of a security may be specifically enforced, its transfer may be restrained and the security may be impounded pending litigation.

Right to requisites for registration.

69(1)

Unless otherwise agreed, a transferor shall on demand supply a purchaser with proof of his authority to transfer or with any other requisite that is necessary to obtain registration of the transfer of a security, but if the transfer is not for value a transferor need not do so unless the purchaser pays the reasonable and necessary costs of the proof and transfer.

Rescission of transfer.

69(2)

If the transferor fails to comply with a demand under subsection (1) within a reasonable time, the purchaser may reject or rescind the transfer.

Seizure of security.

70(1)

No seizure of a security or other interest evidenced thereby is effective until the person making the seizure obtains possession of the security.

No conversion if good faith delivery by agent.

70(2)

An agent or bailee who in good faith, including observance of reasonable commercial standards if he is in the business of buying, selling or otherwise dealing with securities of a corporation, has received the securities and sold, pledged or delivered them according to the instructions of his principal is not liable for conversion or for participation in breach of fiduciary duty although the principal has no right to dispose of them.

Duty to register transfer.

71(1)

Where a security in registered form is presented for transfer, the issuer shall register the transfer if

(a) the security is endorsed by an appropriate person, as defined in section 61:

(b) reasonable assurance is given that the endorsement to which reference is made in clause (a) is genuine and effective;

(c) the issuer has no duty to inquire into adverse claims or has discharged that duty;

(d) any applicable law relating to the collection of taxes has been complied with;

(e) the transfer is rightful or is to a bona fide purchaser; and

(f) any fee referred to in subsection 45(2) has been paid.

Liability for delay.

71(2)

Where an issuer has a duty to register a transfer of a security, the issuer is liable to the person presenting it for registration for loss resulting from any unreasonable delay in registration or from failure or refusal to register the transfer.

Assurance that endorsement effective.

72(1)

An issuer may require an assurance that each necessary endorsement on a security is genuine and effective by requiring a guarantee of the signature of the person endorsing, and by requiring

(a) if the endorsement is by an agent, reasonable assurance of authority to sign;

(b) if the endorsement is by a fiduciary, evidence of appointment or incumbency;

(c) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and

(d) in any other case, assurance that corresponds as closely as practicable to the foregoing.

"Guarantee of the signature" defined.

72(2)

For the purposes of subsection (1), a "guarantee of the signature" means a guarantee signed by or on behalf of a person reasonably believed by the issuer to be responsible.

Standards.

72(3)

An issuer may adopt reasonable standards to determine responsible persons for the purpose of subsection (2).

"Evidence of appointment or incumbency" defined.

72(4)

"Evidence of appointment or incumbency" in clause (1)(b) means

(a) in the case of a fiduciary appointed by a court, a copy of the order certified in accordance with subsection 47(7), and dated not earlier than 60 days before the date a security is presented for transfer; and

(b) in any other case, a copy of a document showing the appointment or other evidence believed by the issuer to be appropriate.

Standards.

72(5)

An issuer may adopt reasonable standards with respect to evidence for the purposes of clause (4)(b).

No notice to issuer.

72(6)

An issuer is deemed not to have notice of the contents of any document obtained pursuant to subsection (4) except to the extent that the contents relate directly to appointment or incumbency.

Notice from excess documentation.

72(7)

If an issuer demands assurance additional to that specified in this section for a purpose other than that specified in subsection (4) and obtains a copy of a will, trust or partnership agreement, by-law or similar document, the issuer is deemed to have notice of all matters contained therein affecting the transfer.

Limited duty of inquiry.

73(1)

An issuer to whom a security is presented for registration has a duty to inquire into adverse claims if

(a) written notice of an adverse claim is received at a time and in a manner that affords the issuer a reasonable opportunity to act on it before the issue of a new, reissued or re-registered security and the notice discloses the name and address of the claimant, the registered owner and the issue of which the security is a part; or

(b) the issuer is deemed to have notice of an adverse claim from a document that is obtained under subsection 72(7).

Discharge of duty.

73(2)

An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address furnished by him or, if no such address has been furnished, to his residence or regular place of business, that a security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notice either

(a) the issuer is served with a restraining order or other order of a court; or

(b) the issuer is provided with an indemnity bond sufficient in the issuer's judgment to protect the issuer and any registrar, transfer agent or other agent of the issuer from any loss that may be incurred by any of them as a result of complying with the adverse claim.

Inquiry into adverse claims.

73(3)

Unless an insurer is deemed to have notice of an adverse claim from a document that it obtained under subsection 72(7) or has received notice of an adverse claim under subsection (1), if a security presented for registration is endorsed by the appropriate person as defined in section 61, the issuer has no duty to inquire into adverse claims, and in particular,

(a) an issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and thereafter the issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;

(b) an issuer registering a transfer on an endorsement by a fiduciary has no duty to inquire whether the transfer is made in compliance with the document or with the law of the jurisdiction governing the fiduciary relationship; and

(c) an issuer is deemed not to have notice of the contents of any court record or any registered document even if the record or document is in the issuer's possession and even if the transfer is made on the endorsement of a fiduciary to the fiduciary himself or to his nominee.

Duration of notice.

73(4)

A written notice of adverse claim received by an issuer is effective for 12 months from the date when it was received unless the notice is renewed in writing.

Limitation of issuer's liability.

74(1)

Except as otherwise provided in any applicable law relating to the collection of taxes, the issuer is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a security if

(a) the necessary endorsements were on or with the security; and

(b) the issuer had no duty to inquire into adverse claims or had discharged that duty.

Duty of issuer in default.

74(2)

If an issuer has registered a transfer of a security to a person not entitled to it, the issuer shall on demand deliver a like security to the owner unless

(a) subsection (1) applies; or

(b) the owner is precluded by subsection 75(1) from asserting any claim; or

(c) the delivery would result in overissue, in which case the issuer's liability is governed by section 48.

Notice of lost or stolen security.

75(1)

Where a security has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact by giving the issuer written notice of his adverse claim within a reasonable time after he knows of the loss, destruction or taking and if the issuer has registered a transfer of the security before receiving the notice, the owner is precluded from asserting against the issuer any claim to a new security.

Duty of issuer to issue a new security.

75(2)

Where the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer shall issue a new security in place of the original security if the owner

(a) so requests before the issuer has notice that the security has been acquired by a bona fide purchaser:

(b) furnishes the issuer with a sufficient indemnity bond; and

(c) satisfies any other reasonable requirements imposed by the issuer.

Duty to register transfer.

75(3)

If, after the issue of a new security under subsection (2), a bona fide purchaser of the original security presents the original security for registration of transfer, the issuer shall register the transfer unless registration would result in overissue, in which case the issuer's liability is governed by section 48.

Right of issuer to recover.

75(4)

In addition to any rights on an indemnity bond, the issuer may recover a new security issued under subsection (2) from the person to whom it was issued or any person taking under him other than a bona fide purchaser.

Agent's duties and rights.

76(1)

An authenticating trustee, registrar, transfer agent or other agent of an issuer has, in respect of the issue, registration of transfer and cancellation of a security of the issuer,

(a) a duty to the issuer to exercise good faith and reasonable diligence; and

(b) the same obligations to the holder or owner of a security and the same rights, privileges and immunities as the issuer.

Notice to agent.

76(2)

Notice to an authenticating trustee, registrar, transfer agent or other agent of an issuer is notice to the issuer with respect to the functions performed by the agent.

PART VII

TRUST INDENTURES

Definitions.

77(1)

In this Part,

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

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

(b) the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity, but the event is not an event of default until all conditions prescribed by the trust indenture in connection with the event for the giving of notice or the lapse of time or otherwise have been satisfied; ("cas de défaut")

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

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

Application.

77(2)

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

Conflict of interest.

78(1)

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

Eliminating conflict of interest.

78(2)

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

(a) eliminate the conflict of interest; or

(b) resign from office.

Validity.

78(3)

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

Removal of trustee.

78(4)

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

Qualification of trustee.

79

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

List of security holders.

80(1)

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

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

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

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

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

Duty of issuer.

80(2)

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

Corporate applicant.

80(3)

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

Contents of statutory declaration.

80(4)

The statutory declaration required under subsection (1) shall state

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

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

Use of list

80(5)

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

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

(b) an offer to acquire debt obligations; or

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

Offence.

80(6)

A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Evidence of compliance.

81(1)

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

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

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

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

Duty of issuer or guarantor.

81(2)

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

Contents of declarations.

82

Evidence of compliance as required by section 81 shall consist of

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

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

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

Further evidence of compliance.

83

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

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

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

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

Trustee may require evidence of compliance.

84(1)

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

Certificate of compliance.

84(2)

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

Notice of default

85

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

Duty of care.

86

A trustee in exercising his powers and discharging his duties shall

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

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

Reliance on statements.

87

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

No exculpation.

88

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

PART VIII

RECEIVERS AND RECEIVER-MANAGERS

Functions of receiver.

89

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

Functions of receiver-manager.

90

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

Directors' powers cease.

91

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

Duty to act.

92

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

Duty under instrument.

93

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

Duty of care.

94

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

(a) act honestly and in good faith; and

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

Directions given by court

95

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

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

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

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

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

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

Duties of receiver and receiver-manager.

96(1)

A receiver or receiver-manager shall

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

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

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

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

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

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

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

Liability of receiver for wages.

96(2)

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

Receiver subrogated.

96(3)

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

Rights of director who pays receiver.

96(4)

Where a receiver or receiver-manager or holder receives payment from a director of the body corporate under subsection (2), the director is entitled to any preference that the person to whose rights the receiver or receiver-manager or holder was subrogated would have, or, if a judgment has been recovered for the amount paid by the director, the director is entitled to an assignment of the judgment.

PART IX

DIRECTORS AND OFFICERS

Power to manage.

97(1)

Subject to any unanimous shareholder agreement, the directors of a corporation shall

(a) exercise the powers of the corporation directly or indirectly through the employees and agents of the corporation; and

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

Number of directors.

97(2)

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

By-laws.

98(1)

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

Shareholder approval.

98(2)

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

Effective date.

98(3)

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

Effective date.

98(4)

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

Shareholder proposal.

98(5)

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

Organization meeting.

99(1)

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

(a) make by-laws;

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

(c) authorize the issue of securities;

(d) appoint officers;

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

(f) make banking arrangements; and

(g) transact any other business.

Exception.

99(2)

Subsection (1) does not apply to a body corporate to which a certificate of amalgamation has been issued under subsection 179(4) or to which a certificate of continuance has been issued under subsection 181(3).

Calling meeting.

99(3)

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

Qualifications of directors.

100(1)

The following persons are disqualified from being a director of a corporation:

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

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

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

Further qualifications.

100(2)

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

Residency.

100(3)

A majority of the directors of a corporation must be residents of Canada.

Exception for holding corporation.

100(4)

Notwithstanding subsection (3), not more than one-third of the directors of a holding corporation need be residents of Canada if the holding corporation earns in Canada directly or through its subsidiaries less than five per cent of the gross revenues of the holding corporation and all of its subsidiary bodies corporate together as shown in

(a) the most recent consolidated financial statements of the holding corporation referred to in section 151; or

(b) the most recent financial statements of the holding corporation and its subsidiary bodies corporate as at the end of the last completed financial year of the holding corporation.

Term of office.

101(1)

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

Election of directors.

101(2)

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

Staggered terms.

101(3)

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

No stated terms.

101(4)

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

Incumbent directors.

101(5)

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

Vacancy among candidates.

101(6)

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

Cumulative voting.

102

Where the articles provide for cumulative voting,

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

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

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

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

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

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

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

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

Ceasing to hold office.

103(1)

A director of a corporation ceases to hold office when he

(a) dies or resigns; or

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

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

Effective date of resignation.

103(2)

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

Removal of directors.

104(1)

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

Exception.

104(2)

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

Vacancy.

104(3)

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

Attendance at meetings.

105(1)

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

Statement of director.

105(2)

A director who

(a) resigns; or

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

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill his office as director, whether because of his resignation or removal or because his term of office has expired or is about to expire, is entitled to submit to the corporation a written statement giving the reasons for his resignation or the reasons why he opposes any proposed action or resolution.

Circulating statement.

105(3)

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

Immunity.

105(4)

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

Filling vacancy.

106(1)

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

Calling meeting.

106(2)

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

Class director.

106(3)

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

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

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

Shareholders filling vacancy.

106(4)

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

Unexpired term.

106(5)

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

Number of directors.

107

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

Notice of change of directors.

108(1)

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

Application to court.

108(2)

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

Meeting of directors.

109(1)

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

Quorum.

109(2)

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

Resident majority.

109(3)

Directors, other than directors of a corporation referred to in subsection 100(4), shall not transact business at a meeting of directors unless a majority of directors present are residents of Canada.

Transaction of business.

109(4)

Notwithstanding subsection (3), directors may transact business at a meeting of directors where a majority of directors who are residents of Canada is not present if

(a) a director who is a resident of Canada and who is unable to be present approves in writing or by telephone or other communications facilities the business transacted at the meeting; and

(b) a majority of directors who are residents of Canada would have been present had that director been present at the meeting.

Notice of meeting.

109(5)

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

Waiver of notice.

109(6)

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

Adjournment.

109(7)

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

One director meeting.

109(8)

Where a corporation has only one director, that director may constitute a meeting.

Participation by telephone.

109(9)

Subject to the by-laws, a director may, if all the directors of the corporation consent, participate in a meeting of directors or of a committee of directors by means of such telephone or other communication 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.

110(1)

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

Resident majority.

110(2)

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

Limits on authority.

110(3)

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

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

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

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

(d) declare dividends; or

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

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

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

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

(i) adopt, amend or repeal by-laws.

Validity of acts of directors and officers.

111

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

Resolution in lieu of meeting.

112(1)

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

Filing resolution.

112(2)

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

Liability of directors.

113(1)

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

Further liability of directors.

113(2)

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

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

(b) a commission, contrary to section 39; or

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

(d) financial assistance contrary to section 42; or

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

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

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

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

Contribution.

113(3)

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

Recovery.

113(4)

A director liable under subsection (2) is entitled to apply to a court for an order compelling a shareholder or other recipient to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 32, 33, 34, 39, 40, 42,119, 184 or 234 or the provisions of Part XXIV.

Order of court.

113(5)

In connection with an application under subsection (4) a court may, if it is satisfied 1 that it is equitable to do so,

(a) order a shareholder or other recipient to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 32, 33, 34, 39, 40, 42, 119, 184 or 234 or the provisions of Part XXIV,

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

(c) make any further order it thinks fit.

No liability.

113(6)

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

Limitation.

113(7)

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

Liability of directors for wages.

114(1)

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

Conditions precedent to liability.

114(2)

A director is not liable under subsection (1) unless

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

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

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

Limitation.

114(3)

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

Amount due after execution.

114(4)

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

Subrogation of director.

114(5)

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

Contribution.

114(6)

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

Disclosure of interested director contract.

115(1)

A director or officer of a corporation who

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

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

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

Time of disclosure for director.

115(2)

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

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

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

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

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

Time of disclosure for officer.

115(3)

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

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

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

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

Time of disclosure for director or officer.

115(4)

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

Voting.

115(5)

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

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

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

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

(d) a contract with an affiliate; or

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

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

Continuing disclosure.

115(6)

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

Avoidance standards.

115(7)

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

Application to court.

115(8)

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

Officers.

116

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

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

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

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

Duty of care of directors and officers.

117(1)

Every director and officer of a corporation in exercising his powers and discharging his duties shall

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

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

Duty to comply.

117(2)

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

No exculpation.

117(3)

Subject to subsection 140(4), no provision in a contract, the articles, the by-laws or a resolution relieves a director or officer from the duty to act in accordance with this Act or the regulations or relieves him from liability for a breach thereof.

Interpretation.

117(4)

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

Dissent.

118(1)

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

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

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

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

Loss of right to dissent.

118(2)

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

Dissent of absent director.

118(3)

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

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

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

Reliance on statements.

118(4)

A director is not liable under section 113, 114 or 117 if he relies in good faith upon

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

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

Indemnification.

119(1)

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

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

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

Indemnification in derivative actions.

119(2)

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

Indemnity as of right.

119(3)

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

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

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

Directors' and officers' insurance.

119(4)

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

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

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

Application to court.

119(5)

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

Notice to director.

119(6)

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

Other notice.

119(7)

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

Remuneration.

120

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

PART X

RETURNS AND INSIDERS

DIVISION I

RETURNS

Annual return.

121(1)

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

Who shall sign.

121(2)

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

Special return.

122(1)

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

Contents of special return.

122(2)

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

Ownership of shares.

123

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

Offence.

124(1)

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

Relief by court.

124(2)

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

DIVISION II

INSIDERS

"Insider" defined.

125(1)

In this section "insider" means, with respect to a corporation,

(a) the corporation;

(b) an affiliate of the corporation;

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

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

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

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

Further interpretation.

125(2)

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

Deemed insiders.

125(3)

For the purposes of this section,

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

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

"Business combination" defined.

125(4)

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

Civil liability.

125(5)

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

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

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

Limitation.

125(6)

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

PART XI

SHAREHOLDERS

Place of meetings.

126(1)

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

Meetings outside Manitoba.

126(2)

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

Meetings outside Manitoba.

126(3)

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

Calling meetings.

127

The directors of a corporation

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

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

Fixing record date.

128(1)

For the purpose of determining the shareholders

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

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

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

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

Notice of meeting.

128(2)

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

No record date fixed.

128(3)

If no record date is fixed,

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

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

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

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

Where record date fixed.

128(4)

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

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

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

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

Notice of meeting.

129(1)

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

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

(b) to each director; and

(c) to the auditor of the corporation.

Exception.

129(2)

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

Adjournment.

129(3)

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

Notice of adjourned meeting.

129(4)

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

Business.

129(5)

All business transacted at a special meeting of shareholders and all business transacted at an annual meeting of shareholders, except consideration of the financial statements, auditor's report, election of directors and reappointment of the incumbent auditor, is deemed to be special business.

Notice of business.

129(6)

Notice of a meeting of shareholders at which special business is to be transacted shall state

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

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

Waiver of notice.

130

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

Shareholder proposal.

131(1)

A shareholder entitled to vote at an annual meeting of shareholders may

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

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

Information circular.

131(2)

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

Supporting statement.

131(3)

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

Nomination for director.

131(4)

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

Exemptions.

131(5)

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

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

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

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

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

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

Immunity.

131(6)

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

Notice of refusal.

131(7)

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

Shareholder application to court.

131(8)

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

Corporation's application to court.

131(9)

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

Director entitled to notice.

131(10)

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

Shareholder list.

132(1)

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

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

(b) if no record date is fixed,

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

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

Effect of list.

132(2)

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

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

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

(i) produces properly endorsed share certificates, or

(ii) otherwise establishes that he owns the shares, and demands, not later than 10 days before the meeting or such shorter period before the meeting as the by-laws of the corporation may provide, that his name be included in the list before the meeting;

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

Effect of list

132(3)

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

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

(b) the transferee of those shares

(i) produces properly endorsed share certificates, or

(ii) otherwise establishes that he owns the shares, and demands not later than 10 days before the meeting or such shorter period before the meeting as the by-laws of the corporation may provide that his name be included in the list before the meeting;

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

Examination of list.

132(4)

A shareholder may examine the list of shareholders

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

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

Quorum.

133(1)

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

Opening quorum sufficient.

133(2)

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

Adjournment.

133(3)

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

One shareholder meeting.

133(4)

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

Representative.

134(1)

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

Powers of representative.

134(2)

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

Joint shareholders.

134(3)

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

Voting.

135(1)

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

Ballot.

135(2)

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

Resolution in lieu of meeting.

136(1)

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

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

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

Filing resolution.

136(2)

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

Requisition of meeting.

137(1)

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

Form.

137(2)

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

Directors calling meeting.

137(3)

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

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

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

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

Shareholder calling meeting.

137(4)

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

Procedure.

137(5)

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

Reimbursement.

137(6)

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

Meeting called by court.

138(1)

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

Varying quorum.

138(2)

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

Valid meeting.

138(3)

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

Court review of election.

139(1)

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

Powers of court.

139(2)

Upon an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

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

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

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

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

Pooling agreement.

140(1)

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

Unanimous shareholder agreement.

140(2)

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

Declaration of single shareholder.

140(3)

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

Constructive party.

140(4)

Subject to subsection 45(8), a transferee of shares subject to a unanimous shareholder agreement is deemed to be a party to the agreement.

Rights of shareholder.

140(5)

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

Filing of notice of agreement.

140(6)

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

PART XII

PROXIES

Definitions.

141

In this Part,

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

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

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

"solicit" or "solicitation" includes

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

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

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

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

but does not include

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

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

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

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

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

Appointing proxyholder.

142(1)

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

Execution of proxy.

142(2)

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

Validity of proxy.

142(3)

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

Revocation of proxy.

142(4)

A shareholder may revoke a proxy

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

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

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

(b) in any other manner permitted by law.

Deposit of proxies.

142(5)

The directors may specify in a notice calling a meeting of shareholders a time not exceeding 48 hours, excluding Saturdays and holidays, preceding the meeting or an adjournment thereof before which time proxies to be used at the meeting must be deposited with the corporation or its agent.

Mandatory solicitation.

143(1)

Subject to subsection (2), the management of a corporation which has made a distribution to the public shall, concurrently with giving notice of a meeting of shareholders, send a form of proxy in prescribed form to each shareholder who is entitled to receive notice of the meeting.

Exception.

143(2)

Where a corporation has fewer than 15 shareholders, two or more joint holders being counted as one shareholder, the management of the corporation is not required to send a form of proxy under subsection (1).

Offence of corporation.

143(3)

If the management of a corporation fails to comply without reasonable cause with subsection (1), the corporation is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Offence of director or officer.

143(4)

Where a corporation is guilty of an offence under subsection (3), then, whether or not the corporation has been prosecuted or convicted, any director or officer of the corporation who knowingly authorizes, permits or acquiesces in the failure is also guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Soliciting proxies.

144(1)

A person shall not solicit proxies unless

(a) in the case of solicitation by or on behalf of the management of a corporation, a management proxy circular in prescribed form, either as an appendix to or as a separate document accompanying the notice of the meeting; or

(b) in the case of any other solicitation, a dissident's proxy circular in prescribed form stating the purposes of the solicitation;

is sent to the auditor of the corporation, to each shareholder whose proxy is solicited and, if clause (b) applies, to the corporation.

Copy to commission.

144(2)

A person required to send a management proxy circular or dissident's proxy circular shall send concurrently a copy thereof to the commission together with a copy of the notice of meeting, form of proxy and any other documents for use in connection with the meeting.

Offence.

144(3)

A person who fails to comply with subsections (1) and (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Offence of director or officer.

144(4)

If the person guilty of an offence under subsection (3) is a body corporate, then, whether or not the body corporate has been prosecuted or convicted, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the failure is also guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Exemption order.

145

Upon the application of an interested person, the commission may make an order on such terms as it thinks fit exempting the person from any of the requirements of section 143 or subsection 144(1), and the order may have retrospective effect.

Attendance at meeting.

146(1)

A person who solicits a proxy and is appointed proxyholder shall attend in person or cause an alternate proxyholder to attend the meeting in respect of which the proxy is given and shall comply with the directions of the shareholder who appointed him.

Right of a proxy holder.

146(2)

A proxyholder or an alternate proxyholder has the same rights as the shareholder who appointed him to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of any show of hands.

Voting by proxyholders.

146(3)

Notwithstanding subsections (1) and (2), where the chairman of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what to his knowledge will be the decision of the meeting in relation to any matter or group of matters, is less than 5% of all the votes that might be cast at the meeting on such ballot, unless a shareholder or proxyholder demands a ballot,

(a) the chairman may conduct the vote in respect of that matter or group of matters by a show of hands; and

(b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by a show of hands.

Offence.

146(4)

A proxyholder or alternate proxyholder who without reasonable cause fails to comply with the directions of a shareholder under this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Duty of registrant.

147(1)

Shares of a corporation that are registered in the name of à registrant or his nominee and not beneficially owned by the registrant shall not be voted unless the registrant, forthwith after receipt of the notice of the meeting, financial statements, management proxy circular, dissident's proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy thereof to the beneficial owner and, except where the registrant has received written voting instructions from the beneficial owner, a written request for such instructions.

Beneficial owner unknown.

147(2)

A registrant shall not vote or appoint a proxyholder to vote shares registered in his name or in the name of his nominee that he does not beneficially own unless he receives voting instructions from the beneficial owner.

Copies.

147(3)

A person by or on behalf of whom a solicitation is made shall, at the request of a registrant, forthwith furnish to the registrant at that person's expense the necessary number of copies of the documents referred to in subsection (1) other than copies of the document requesting voting instructions.

Instructions to registrant.

147(4)

A registrant shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.

Beneficial owner as proxyholder.

147(5)

If requested by a beneficial owner, a registrant shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

Validity.

147(6)

The failure of a registrant to comply with this section does not render void any meeting of shareholders or any action taken thereat.

Limitation.

147(7)

Nothing in this section gives a registrant the right to vote shares that he is otherwise prohibited from voting.

Offence.

147(8)

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

Offence of director or officer.

147(9)

If the registrant guilty of an offence under subsection (8) is a body corporate, then, whether or not the body corporate has been prosecuted or convicted, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the failure is also guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Restraining order.

148(1)

If a form of proxy, management proxy circular or dissident's proxy circular contains an untrue statement of a material fact or omits to state a material fact required therein or necessary to make a statement contained therein not misleading in the light of the circumstances in which it was made, an interested person or the commission may apply to a court and the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order restraining the solicitation, the holding of the meeting, or any person from implementing or acting upon any resolution passed at the meeting to which the form of proxy, management proxy circular or dissident's proxy circular relates;

(b) an order requiring correction of any form of proxy or proxy circular and a further solicitation;

(c) an order adjourning the meeting.

Notice to commission.

148(2)

An applicant under this section shall give to the commission notice of the application and the commission is entitled to be heard by counsel or otherwise.

PART XIII

FINANCIAL DISCLOSURE

Annual financial statements.

149(1)

The directors of a corporation shall place before the shareholders at every annual meeting

(a) comparative financial statements as prescribed relating separately to

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

(ii) the immediately preceding financial year;

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

(c) any further information respecting the financial position of the corporation and the results of its operations required by the articles, the by-laws or any unanimous shareholder agreement.

Exception.

149(2)

Notwithstanding clause (l)(a), 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, or in a note thereto, to be placed before the shareholders at an annual meeting, but a corporation which has made a distribution to the public shall not omit those statements without the consent of the commission.

Interim financial statement.

149(3)

A corporation which has made a distribution to the public shall send to each shareholder a comparative interim financial statement as prescribed.

Exemption by commission.

150(1)

Subject to subsection (2), upon the application of any interested person, the commission may, if satisfied that in the circumstances of the particular case there is adequate justification for so doing, make an order upon such terms and conditions as seem to the commission just and expedient

(a) exempting in whole or in part a corporation from any requirement of section 149;

(b) permitting the comparative interim financial statement of a corporation to be for such period other than six months as is specified in the order;

(c) enlarging or abridging the time for publication, sending or filing of any financial statement.

Prohibited exemption.

150(2)

The commission shall not under subsection (1) grant any exemption that would have the effect of permitting a corporation that has made a distribution to the public to withhold or unreasonably delay publication of any information that is material to shareholders or potential investors, unless the commission is satisfied that in the circumstances the disclosure of that information would be unduly detrimental to the interests of the corporation.

Consolidated statements.

151(1)

A corporation shall keep at its registered office a copy of the financial statements of each of its subsidiary bodies corporate and of each body corporate the accounts of which are consolidated in the financial statements of the corporation.

Examination.

151(2)

Shareholders of a corporation and their agents and legal representatives may upon request therefor examine the statements referred to in subsection (1) during the usual business hours of the corporation, and may make extracts therefrom, free of charge.

Barring examination.

151(3)

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

Notice to Director.

151(4)

A corporation shall give the Director and the person asking to examine under subsection (2) notice of an application under subsection (3), and the Director and that person may appear and be heard in person or by counsel.

Approval of financial statements.

152(1)

The directors of a corporation shall approve the financial statements referred to in subsection 149(1) and the approval shall be evidenced by the signature of one or more directors.

Condition precedent.

152(2)

A corporation shall not issue, publish or circulate copies of the financial statements referred to in subsection 149(1) unless the financial statements are

(a) approved and signed in accordance with subsection (1); and

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

Copies to shareholders.

153(1)

A corporation which has made a distribution to the public shall not less than 21 days before each annual meeting of shareholders or before the signing of a resolution under clause 136(1)(b) in lieu of the annual meeting, send a copy of the documents referred to in subsection 149(1) to each shareholder, except to a shareholder who has informed the corporation in writing that he does not want a copy of those documents.

Copies supplied on demand.

153(2)

A corporation that has not made a distribution to the public shall, upon demand being made therefor by a shareholder, furnish the shareholder with a copy of the documents referred to in subsection 149(1).

Offence.

153(3)

A corporation that, without reasonable cause, fails to comply with subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Copies to Director.

154(1)

A corporation

(a) any of the securities of which are or were part of a distribution to the public, remain outstanding and are held by more than one person; or

(b) the gross revenues of which, as shown in the most recent financial statements referred to in subsection 149(1), exceed $10,000,000. or the assets of which as shown in those financial statements exceed $5,000,000.;

shall, not less than 21 days before each annual meeting of shareholders or forthwith after the signing of a resolution under clause 136(1)(b) in lieu of the annual meeting, and in any event not later than 15 months after the last date when the last preceding annual meeting should have been held or a resolution in lieu of the meeting should have been signed, send a copy of the documents referred to in subsection 149(1) to the Director.

Affiliates.

154(2)

For the purposes of clause (l)(b), the gross revenues and assets of the corporation include the gross revenues and assets of its affiliates.

Exemption.

154(3)

A corporation may apply to the Director for an order exempting the corporation from the application of subsection (2) in such circumstances as may be prescribed.

Further disclosure.

154(4)

If a corporation referred to in subsection (1)

(a) sends to its shareholders; or

(b) is required to file with or send to a public authority or a stock exchange;

interim financial statements or related documents, the corporation shall forthwith send copies thereof to the Director.

Subsidiary corporation exemption.

154(5)

A subsidiary corporation is not required to comply with subsections (1) and (4) if

(a) the financial statements of its holding corporation are in consolidated or combined form and include the accounts of the subsidiary; and

(b) the consolidated or combined financial statements of the holding corporation are included in the documents sent to the Director by the holding corporation in compliance with this section.

Filing with commission.

154(6)

A corporation referred to in clause (1)(a) shall file with the commission a copy of every document referred to in subsections (1) and (4) at the time specified in those subsections for sending a copy to the Director, accompanied by the certificate of an officer, director or transfer agent that copies have been mailed to its shareholders, and a subsidiary corporation is not exempted from this requirement by subsection (5).

Offence.

154(7)

A corporation that fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.

Qualification of auditor.

155(1)

Subject to subsection (5), a person is disqualified from being an auditor of a corporation if he is not independent of the corporation, all of its affiliates, and the directors or officers of the corporation and its affiliates.

Independence.

155(2)

For the purposes of this section, (a) independence is a question of fact; and

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

(i) is a business partner, a director, an officer or an employee of the corporation or any of its affiliates, or a business partner of any director, officer or employee of the corporation or any of its affiliates, or

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

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

Duty to resign.

155(3)

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

Disqualification order.

155(4)

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

Exemption order.

155(5)

An interested person may apply to a court for an order exempting an auditor from disqualification under this section and the court may, if it is satisfied that an exemption would not unfairly prejudice the shareholders, make an exemption order on such terms as it thinks fit, which order may have retrospective effect.

Exception.

155(6)

The shareholders of a corporation may resolve to appoint as auditor, a person otherwise disqualified under subsections (1) and (2) if the resolution is consented to by all the shareholders including shareholders not otherwise entitled to vote.

Validity of resolution.

155(7)

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

Auditor's relationship to be disclosed in report

155(8)

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

Appointment of auditor.

156(1)

Subject to section 157, the shareholders of a corporation shall by ordinary resolution, at the first annual meeting of shareholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

Eligibility.

156(2)

An auditor appointed under section 99 is eligible for appointment under subsection (1).

Incumbent auditor.

156(3)

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

Remuneration.

156(4)

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

Dispensing with auditor.

157(1)

The shareholders of a corporation that is not required to comply with section 154, may resolve not to appoint an auditor.

Limitation.

157(2)

A resolution under subsection (1) is valid only until the next succeeding annual meeting of shareholders.

Unanimous consent.

157(3)

A resolution under subsection (1) is not valid unless it is consented to by ail the shareholders, including shareholders not otherwise entitled to vote.

Ceasing to hold office.

158(1)

An auditor of a corporation ceases to hold office when he

(a) dies or resigns; or

(b) is removed from office pursuant to section 159.

Effective date of resignation.

158(2)

A resignation of an auditor becomes effective at the time a written resignation is sent to the corporation, or at the time specified in the resignation, whichever is later.

Removal of auditor.

159(1)

The shareholders of a corporation may by ordinary resolution at a special meeting remove from office the auditor other than an auditor appointed by a court under section 161.

Vacancy.

159(2)

A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 160.

Filling vacancy.

160(1)

Subject to subsection (3), the directors shall forthwith fill any vacancy in the office of auditor.

Calling meeting.

160(2)

If there is not a quorum of directors, the directors then in office shall, within 21 days after a vacancy in the office of auditor occurs, call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors, the meeting may be called by any shareholder.

Shareholders filling vacancy.

160(3)

The articles of a corporation may provide that a vacancy in the office of auditor shall only be filled by vote of the shareholders.

Unexpired term.

160(4)

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

Court appointed auditor.

161(1)

If a corporation does not have an auditor, the court may, upon the application of a shareholder or the Director, appoint and fix the remuneration of an auditor and the auditor so appointed holds office until an auditor is appointed by the shareholders.

Exception.

161(2)

Subsection (1) does not apply if the shareholders have resolved under section 157 not to appoint an auditor.

Right to attend meeting.

162(1)

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

Duty to attend.

162(2)

If a director or shareholder of a corporation, whether or not the shareholder is entitled to vote at the meeting, gives written notice, not less than 10 days before a meeting of shareholders, to the auditor or a former auditor of the corporation, the auditor or former auditor shall attend the meeting at the expense of the corporation and answer questions relating to his duties as auditor.

Notice to corporation.

162(3)

A director or shareholder who sends a notice referred to in subsection (2) shall send concurrently a copy of the notice to the corporation.

Offence.

162(4)

An auditor or former auditor of a corporation who fails without reasonable cause to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Statement of auditor.

162(5)

An auditor who

(a) resigns; or

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

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

(d) receives a notice or otherwise learns of a meeting of shareholders at which a resolution referred to in section 157 is to be proposed;

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

Circulating statement.

162(6)

The corporation shall forthwith send a copy of the statement referred to in subsection (5) to every shareholder entitled to receive notice of any meeting referred to in subsection (1) and to the Director unless the statement is included in or attached to a management proxy circular required by section 144.

Replacing auditor.

162(7)

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

Exception.

162(8)

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

Effect of non-compliance.

162(9)

Unless subsection (8) applies, the appointment as auditor of a corporation of a person who has not complied with subsection (7) is void.

Examination.

163(1)

An auditor of a corporation shall make the examination that is in his opinion necessary to enable him to report in the prescribed manner on the financial statements required by this Act to be placed before the shareholders, except such financial statements or part thereof as relate to the period referred to in sub-clause 149(1)(a)(ii).

Reliance on other auditor.

163(2)

Notwithstanding section 164, an auditor of a corporation may reasonably rely upon the report of an auditor of a body corporate or an unincorporated business the accounts of which are included in whole or in part in the financial statements of the corporation.

Reasonableness.

163(3)

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

Application.

163(4)

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

Right to information.

164(1)

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

(a) information and explanations; and

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

as are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 163 and that the directors, officers, employees or agents are reasonably able to furnish.

Information from subsidiary.

164(2)

Upon the demand of the auditor of a corporation, the directors of the corporation shall

(a) obtain from the present or former directors, officers, employees and agents of any subsidiary of the corporation the information and explanations that the present or former directors, officers, employees and agents are reasonably able to furnish and that are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 163; and

(b) furnish the information and explanations obtained under clause (a) to the auditor.

Audit committee.

165(1)

Subject to subsection (2), a corporation that has made a distribution to the public shall, and any other corporation may, have an audit committee composed of not less than three directors of the corporation, a majority of whom are not officers or employees of the corporation or any of its affiliates.

Exemption.

165(2)

A corporation may apply to the commission for an order authorizing the corporation to dispense with an audit committee, and the commission may, if it is satisfied that the shareholders will not be prejudiced by the order, permit the corporation to dispense with an audit committee on such reasonable conditions as it thinks fit.

Duty of committee.

165(3)

An audit committee shall review the financial statements of the corporation before they are approved under section 152.

Auditor's attendance.

165(4)

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

Calling meeting.

165(5)

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

Notice of errors.

165(6)

A director or an officer of a corporation shall forthwith notify the audit committee and the auditor of any error or misstatement of which he becomes aware in a financial statement that the auditor or a former auditor has reported upon.

Error in financial statements.

165(7)

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

Duty of directors.

165(8)

When under subsection (7) the auditor or former auditor informs the directors or when the directors otherwise have knowledge of an error or misstatement in a financial statement, the directors shall

(a) prepare and issue revised financial statements; or

(b) otherwise inform the shareholders and, if the corporation is one that is required to comply with section 154, it shall inform the Director of the error or misstatement in the same manner as it informs the shareholders.

Offence.

165(9)

Every director or officer of a corporation who knowingly fails to comply with subsection (6) or (8) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Qualified privilege (defamation).

166

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

PART XIV

FUNDAMENTAL CHANGES

Amendment of articles.

167(1)

Subject to sections 170 and 171, the articles of a corporation may by special resolution be amended to

(a) change its name; or

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

(c) change any maximum number of shares that the corporation is authorized to issue and change, if desired, the maximum consideration for which the shares may be issued; or

(d) create new classes of shares; or

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

(f) reduce or increase its stated capital which, for the purposes of the amendment, is deemed to be set out in the articles; or

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

(h) divide a class of shares, whether issued or unissued, into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions thereof; or

(i) authorize the directors to divide any class of unissued shares into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions thereof; or

(j) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series; or

(k) revoke, diminish or enlarge any authority conferred under clauses (i) and (j); or

(l) add, change or remove restrictions on the transfer of shares; or

(m) add, change or remove any other provision that is permitted by this Act to be set out in the articles.

Corporation with or without share capital.

167(2)

The articles of a corporation may, by resolution, be amended

(a) to convert a corporation with share capital into a corporation without share capital; or

(b) to convert a corporation without share capital into a corporation with share capital: or

(c) to vary or remove any provision contained in the articles of a corporation without share capital, which states that upon dissolution its remaining property may be distributed among all the members or among the members of a class or classes of members, to one which states that upon dissolution the remaining property shall be distributed to an organization the undertaking of which is charitable or of a beneficial nature to the community.

Resolution.

167(3)

The resolution required under subsection (2) shall be signed by all the shareholders or members of the corporation, or shall be passed by the votes of 95% of the issued shares or membership of the corporation.

Formula for conversion.

167(4)

The articles of amendment shall contain the formula, terms and conditions upon which the shareholders become members or the members become shareholders.

Clerical errors.

167(5)

Notwithstanding subsection (1), the articles of a corporation may by resolution of the directors or by ordinary resolution of the shareholders be amended

(a) to correct any clerical error; or

(b) to change the name of the corporation where it has a designating number as a name.

Article of amendment to be filed.

167(6)

Articles of amendment shall be filed with the Director within six months of the date of the resolution of the shareholders authorizing the amendment, failing which the Director shall refuse to file the articles.

Special Act corporation.

167(7)

A corporation incorporated by special Act shall not under this section amend its articles, except to change its name.

Revocation of amending resolution.

167(8)

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

Resolution of directors.

167(9)

Notwithstanding subsection (1), a corporation may by resolution of the directors change or delete the maximum consideration for which each share or each class of shares or all the shares may be issued, but the resolution is not effective until articles are filed with the Director.

Constraints on share transfers.

168(1)

Subject to sections 170 and 171, a corporation any of the issued shares of which are or were part of a distribution to the public may by special resolution amend its articles in accordance with the regulations to constrain the issue or transfer of its shares

(a) to persons who are not residents of Canada; or

(b) to enable the corporation or any of its affiliates to qualify under any law of Canada or of any province of Canada

(i) to obtain a licence to carry on any business,

(ii) to become a publisher of a Canadian newspaper or periodical, or

(iii) to acquire shares of a financial intermediary as defined in the regulations.

Removal of constraint.

168(2)

A corporation referred to in subsection (1) may by special resolution amend its articles to remove any constraint on the issue or transfer of its shares.

Termination.

168(3)

The directors of a corporation may, if authorized by the shareholders in the special resolution effecting an amendment under subsection (1), revoke the resolution before it is acted upon without further approval of the shareholders.

Regulations.

168(4)

Subject to subsection 254(3), the Lieutenant Governor in Council may make regulations with respect to a corporation that constrains the issue or transfer of its shares prescribing

(a) the disclosure required of the constraints in documents issued or published by the corporation;

(b) the duties and powers of the directors to refuse to issue or register transfers of shares in accordance with the articles of the corporation;

(c) the limitations on voting rights of any shares held contrary to the articles of the corporation;

(d) the powers of the directors to require disclosure of beneficial ownership of shares of the corporation and the right of the corporation and its directors, employees and agents to rely on that disclosure and the effects of that reliance; and

(e) the rights of any person owning shares of the corporation at the time of an amendment to its articles constraining share issues or transfers.

Validity of acts.

168(5)

An issue or a transfer of a share or an act of a corporation is valid notwithstanding any failure to comply with this section or the regulations.

Proposal to amend.

169(1)

Subject to subsection (2), a director or a shareholder who is entitled to vote at an annual meeting of shareholders may, in accordance with section 131, make a proposal to amend the articles.

Notice of amendment.

169(2)

Notice of a meeting of shareholders at which a proposal to amend the articles is to be considered shall set out the proposed amendment and, where applicable, shall state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184. but failure to make that statement does not invalidate the amendment.

Class vote.

170(1)

The holders of shares of a class or, subject to subsection (2), of a series are, unless the articles otherwise provide in the case of an amendment referred to in clauses (a), (b) and (e), entitled to vote separately as a class or series upon a proposal to amend the articles to

(a) increase or decrease any maximum number of authorized shares of the class, or increase any maximum number of authorized shares of any other class having rights or privileges equal or superior to the shares of that class; or

(b) effect an exchange, reclassification or cancellation of all or part of the shares of the class; or

(c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of the class and, without limiting the generality of the foregoing,

(i) remove or change prejudicially any rights to accrued dividends or rights to cumulative dividends, or

(ii) add, remove or change prejudicially any redemption rights, or

(iii) reduce or remove any dividend preference or liquidation preference, or

(iv) add, remove or change prejudicially any conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of a corporation, or sinking fund provisions; or

(d) increase the rights or privileges of any other class of shares having rights or privileges equal or superior to the shares of that class; or

(e) create a new class of shares equal or superior to the shares of that class; or

(f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class; or

(g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class; or

(h) constrain the issue or transfer of the shares of the class or extend or remove the constraint.

Limitation.

170(2)

The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) only if the series is affected by an amendment in a manner different from other shares of the same class.

Right to vote.

170(3)

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

Separate resolutions.

170(4)

A proposed amendment to the articles referred to in subsection (1) is adopted when the holders of the shares of each class or series entitled to vote separately thereon as a class or series have approved the amendment by a special resolution.

Delivery of articles.

171(1)

Subject to any revocation under subsection 167(8) or 168(4), after an amendment has been adopted under section 167, 168 or 170 articles of amendment in prescribed form shall be sent to the Director.

Reduction of stated capital.

171(2)

If an amendment effects or requires a reduction of stated capital, subsections 36(3) and 36(4) apply.

Certificate of amendment.

172

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

Effect of certificate.

173(1)

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

Rights preserved.

173(2)

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

Restated articles.

174(1)

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

Delivery of articles.

174(2)

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

Restated certificate.

174(3)

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

Effect of certificate.

174(4)

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

Amalgamation.

175(1)

Two or more corporations, including holding and subsidiary corporations, may amalgamate and continue as one corporation.

Special Act corporations excepted.

175(2)

A corporation incorporated by special Act, other than a corporation to which Part XXIV applies, may not under the provisions of this Act amalgamate with any other corporation.

Amalgamation agreement.

176(1)

Each corporation proposing to amalgamate shall enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out

(a) the provisions that are required to be included in articles of incorporation under section 6;

(b) the name and address of each proposed director of the amalgamated corporation:

(c) the manner in which the shares of each amalgamating corporation are to be converted into shares or other securities of the amalgamated corporation;

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

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

(f) whether the by-laws of the amalgamated corporation are to be those of one of the amalgamating corporations and, if not, a copy of the proposed by-laws; and

(g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated corporation.

Cancellation.

176(2)

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

Shareholder approval.

177(1)

The directors of each amalgamating corporation shall submit the amalgamation agreement for approval to a meeting of the holders of shares of the amalgamating corporation of which they are directors and, subject to subsection (4), to the holders of each class or series of those shares.

Notice of meeting.

177(2)

A notice of a meeting of shareholders complying with sections 129 shall be sent in accordance with that section to each shareholder of each amalgamating corporation, and shall

(a) include or be accompanied by a copy or summary of the amalgamation agreement; and

(b) state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184, but failure to make that statement does not invalidate an amalgamation.

Right to vote.

177(3)

Each share of an amalgamating corporation carries the right to vote in respect of an amalgamation whether or not it otherwise carries the right to vote.

Class vote.

177(4)

The holders of shares of a class or series of shares of an amalgamating corporation are entitled to vote separately as a class or series in respect of an amalgamation if the amalgamation agreement contains provision that, if contained in a proposed amendment to the articles, would entitle those holders to vote as a class or series under section 170.

Shareholder approval.

177(5)

An amalgamation agreement is adopted when the shareholders of each amalgamating corporation have approved of the amalgamation by special resolutions of each class or series of the shareholders entitled to vote thereon.

Termination.

177(6)

An amalgamation agreement may provide that at any time before the issue of a certificate of amalgamation the agreement may be terminated by the directors of an amalgamating corporation, notwithstanding approval of the agreement by the shareholders of all or any of the amalgamating corporations.

Vertical short-form amalgamation.

178(1)

A holding corporation and one or more of its wholly-owned subsidiary corporations may amalgamate and continue as one corporation without complying with sections 176 and 177 if

(a) the amalgamation is approved by a resolution of the directors of each amalgamating corporation; and

(b) the resolutions required under clause (a) provide that

(i) the shares of each amalgamating subsidiary corporation shall be cancelled without any repayment of capital in respect thereof,

(ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of incorporation of the amalgamating holding corporation, and

(iii) no securities shall be issued by the amalgamated corporation in connection with the amalgamation.

Horizontal short-form amalgamation.

178(2)

Two or more wholly-owned subsidiary corporations of the same holding body corporate may amalgamate and continue as one corporation without complying with sections 176 and 177 if

(a) the amalgamation is approved by a resolution of the directors of each amalgamating corporation; and

(b) the resolutions required under clause (a) provide that

(i) the shares of all but one of the amalgamating subsidiary corporations shall be cancelled without any repayment of capital in respect thereof,

(ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of incorporation of the amalgamating subsidiary corporation whose shares are not cancelled, and

(iii) the stated capital of the amalgamating subsidiary corporations whose shares are cancelled shall be added to the stated capital of the amalgamating subsidiary corporation whose shares are not cancelled.

Sending of articles.

179(1)

Subject to subsection 177(6), after an amalgamation has been adopted under section 177 or approved under section 178, articles of amalgamation in prescribed form and in compliance with the requirements of section 6 shall be sent to the Director.

Attached declarations.

179(2)

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

(a) there are reasonable grounds for believing that

(i) each amalgamating corporation is and the amalgamated corporation will be able to pay its liabilities as they become due, and (ii) the realizable value of the amalgamated corporation's assets will not be less than the aggregate of its liabilities and stated capital of all classes; and

(b) there are reasonable grounds for believing that

(i) no creditor will be prejudiced by the amalgamation, or

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

Adequate notice.

179(3)

For the purposes of subsection (2), adequate notice is given if

(a) a notice in writing is sent to each known creditor having a claim against the corporation that exceeds $1,000. ;

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

(c) each notice under clauses (a) and (b) states that the corporation intends to amalgamate with one or more specified corporations in accordance with this Act unless a creditor of the corporation objects to the amalgamation within 30 days from the date of the notice.

Certificate of amalgamation.

179(4)

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

Effect of certificate.

180

On the date shown in a certificate of amalgamation,

(a) the amalgamation of the amalgamating corporations and their continuance as one corporation become effective;

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

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

(d) an existing cause of action, claim or liability to prosecution is unaffected;

(e) a civil, criminal or administrative action or proceeding pending by or against an amalgamating corporation may continue to be prosecuted by or against the amalgamated corporation;

(f) a conviction against, or ruling, order or judgment in favour of or against an amalgamating corporation may be enforced by or against the amalgamated corporation; and

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

Continuance in Manitoba.

181(1)

A body corporate incorporated otherwise than under an Act of the Legislature may, if so authorized by the laws of the jurisdiction where it is incorporated, and upon compliance with the provisions of this Act, apply to the Director for a certificate of continuance.

Special Act corporation.

181(2)

A corporation incorporated by a special Act may, with the approval of the Director, apply for a certificate of continuance under this Act unless the special Act provides that The Corporations Act does not apply to the corporation.

Amendments in articles of continuance.

181(3)

A body corporate that applies for continuance under subsection (1) or (2) may, without so stating in its articles of continuance, effect by those articles any amendments to its articles if the amendment is an amendment a corporation incorporated under this Act may make to its articles.

Articles of continuance.

181(4)

Articles of continuance in prescribed form and in compliance with the requirements of section 6 shall be sent to the Director.

Certificate of continuance.

181(5)

Upon the receipt of articles of continuance, the Director may issue a certificate of continuance in accordance with section 255.

Refusal by Director.

181(6)

The Director may refuse to issue a certificate of continuance and in that case he shall advise the body corporate of his refusal, and the body corporate may appeal the Director's decision to the Lieutenant Governor in Council, whose decision is final.

Effect of certificate.

181(7)

On the date shown in the certificate of continuance,

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

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

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

Copy of certificate.

181(8)

The Director shall forthwith send a copy of the certificate of continuance to the appropriate official or public body in the jurisdiction in which continuance under this Act was authorized.

Rights preserved.

181(9)

When a body corporate is continued as a corporation under this Act,

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

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

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

(d) a civil, criminal or administrative action or proceeding pending by or against the body corporate may continue to be prosecuted by or against the corporation;

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

Issued shares.

181(10)

Subject to subsection 45(8), a share of a body corporate issued before the body corporate was continued under this Act is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance irrespective of whether the share is fully paid or irrespective of any designation, rights, privileges, restrictions or conditions set out on or referred to in the certificate representing the share; and continuance under this section does not deprive a holder of any right or privilege that he claims under, or relieve him of any liability in respect of, an issued share.

Exception in case of convertible shares.

181(11)

Where a corporation continued under this Act had, before it was so continued, issued a share certificate in registered form that is convertible to bearer form, the corporation may, if a holder of the share certificate exercises the conversion privilege attached thereto, issue a share certificate in bearer form for the same number of shares to the holder.

"Share" defined.

181(12)

For the purposes of subsections (9) and (10), "share" includes an instrument referred to in subsection 29(1), a share warrant or a like instrument.

Continuance outside Manitoba.

182(1)

Subject to subsections (2), (3) and (11), a corporation may, if it is authorized by the shareholders in accordance with this section, and if it establishes to the satisfaction of the Director that its proposed continuance in another jurisdiction will not adversely affect creditors or shareholders of the corporation, apply to the appropriate official or public body of another jurisdiction requesting that the corporation be continued as if it had been incorporated under the laws of that other jurisdiction.

Limitation period.

182(2)

The approval of the Director to a continuance in another jurisdiction expires 90 days after the date of the approval unless, within the 90 day period, the corporation is continued under the laws of the other jurisdiction.

Exception.

182(3)

A corporation to which Parts XXI, XXII, XXIII, and XXIV apply and that is incorporated under this Act or under any Act for which this Act is substituted shall not apply for continuance in another jurisdiction without the prior consent of the minister.

Notice of meeting.

182(4)

A notice of a meeting of shareholders complying with section 129 shall be sent in accordance with that section to each shareholder and shall state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184, but failure to make that statement does not invalidate a discontinuance under this Act.

Right to vote.

182(5)

Each share of the corporation carries the right to vote in respect of a continuance whether or not it otherwise carries the right to vote.

Shareholder approval.

182(6)

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

Termination.

182(7)

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

Notice of discontinuance.

182(8)

Upon receipt of notice satisfactory to him that the corporation has been continued under the laws of another jurisdiction, the Director shall issue a certificate of discontinuance in accordance with section 255.

Notice deemed to be articles.

182(9)

For the purposes of section 255, a notice referred to in subsection (8) is deemed to be articles in prescribed form.

Rights preserved.

182(10)

Subject to Part XVI, this Act ceases to apply to the corporation on the date that the corporation was continued under the laws of the other jurisdiction.

Prohibition.

182(11)

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

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

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

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

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

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

Continued corporation carrying on business in Manitoba.

182(12)

A corporation continued as a body corporate under the laws of another jurisdiction that has not ceased to carry on business in Manitoba shall comply with the provisions of subsection 192(3).

Special Act corporation prohibited.

182(13)

A corporation incorporated by a special Act of the Legislature, other than a corporation to which Part XXIV applies, shall not under this section apply for continuance in another jurisdiction.

Borrowing powers.

183(1)

Unless the articles or by-laws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the articles of a corporation are deemed to state that the directors of a corporation may, without authorization of the shareholders.

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

(b) issue, reissue, sell or pledge debt obligations of the corporation;

(c) subject to section 42, give a guarantee on behalf of the corporation to secure performance of an obligation of any person; and

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

Delegation of borrowing powers.

183(2)

Notwithstanding subsection 110(3) and clause 116(a), unless the articles or by-laws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the directors may, by resolution, delegate the powers referred to in subsection (1) to a director, a committee of directors or an officer.

Extraordinary sale, lease or exchange.

183(3)

A sale, lease or exchange of all or substantially all the property of a corporation other than in the ordinary course of business of the corporation requires the approval of the shareholders in accordance with subsections (4) to (8).

Notice of meeting.

183(4)

A notice of a meeting of shareholders complying with section 129 shall be sent in accordance with that section to each shareholder and shall

(a) include or be accompanied by a copy or summary of the agreement of sale, lease or exchange; and

(b) state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 184, but failure to make that statement does not invalidate a sale, lease or exchange referred to in subsection (2).

Shareholder approval.

183(5)

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

Right to vote.

183(6)

Each share of the corporation carries the right to vote in respect of a sale, lease or exchange referred to in subsection (2) whether or not it otherwise carries the right to vote.

Shareholder approval.

183(7)

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

Termination.

183(8)

The directors of a corporation may, if authorized by the shareholders approving a proposed sale, lease or exchange, and subject to the rights of third parties, abandon the sale, lease or exchange without further approval of the shareholders.

Right to dissent.

184(1)

Subject to sections 185 and 234, and any unanimous shareholder agreement, a holder of shares of any class of a corporation may dissent if the corporation is subject to an order under clause 185(10)(d) that affects the holder or if the corporation resolves

(a) to amend its articles under section 167 or 168 to add, change or remove any provisions restricting or constraining the issue or transfer of shares of that class; or

(b) to amend its articles under section 167 to add, change or remove any restriction upon the business or businesses that the corporation may carry on; or

(c) to amalgamate with another corporation, otherwise than under section 178; or

(d) to be continued under the laws of another jurisdiction under section 182; or

(e) to sell, lease or exchange all or substantially all its property under subsection 183(2); or

(f) to amend its articles under subsection 167(2) to convert the corporation from a corporation with share capital into a corporation without share capital; or

(g) to amend its articles under subsection 167(2) to convert the corporation from a corporation without share capital into a corporation with share capital, where the articles contain a provision that upon dissolution the remaining property is to be distributed among the members as provided in section 277; or

(h) if it is a corporation without share capital, to amend its articles under section 167 to prevent a distribution to the members on dissolution.

Further right to dissent.

184(2)

A holder of shares of any class or series of shares entitled to vote under section 170 may dissent if the corporation resolves to amend its articles in a manner described in that section.

Payment for shares.

184(3)

In addition to any other right he may have, but subject to subsection (26), a shareholder who complies with this section is entitled, when the action approved by the resolution from which he dissents or an order made under subsection 185(10) becomes effective, to be paid by the corporation the fair value of the shares held by him in respect to which he dissents, determined as of the close of business on the day before the resolution was adopted or the order was made.

No partial dissent.

184(4)

A dissenting shareholder may only claim under this section with respect to all the shares of a class held by him on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

Objection.

184(5)

A dissenting shareholder shall send to the corporation, at or before any meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the corporation did not give notice to the shareholder of the purpose of the meeting or of his right to dissent.

Notice of resolution.

184(6)

The corporation shall, within 10 days after the shareholders adopt the resolution, send to each shareholder who has filed the objection referred to in subsection (5) notice that the resolution has been adopted, but the notice is not required to be sent to any shareholder who voted for the resolution or who has withdrawn his objection.

Demand for payment.

184(7)

A dissenting shareholder shall, within 20 days after he receives a notice under subsection (6) or, if he does not receive the notice, within 20 days after he learns that the resolution has been adopted, send to the corporation a written notice containing

(a) his name and address;

(b) the number and class of shares in respect of which he dissents; and

(c) a demand for payment of the fair value of his shares.

Share certificate.

184(8)

A dissenting shareholder shall, within 30 days after sending a notice under subsection (7), send the certificates representing the shares in respect of which he dissents to the corporation or its transfer agent.

Forfeiture.

184(9)

A dissenting shareholder who fails to comply with subsection (8) has no right to make a claim under this section.

Endorsing certificate.

184(10)

A corporation or its transfer agent shall endorse on any share certificate received under subsection (8) a notice that the holder is a dissenting shareholder under this section and shall forthwith return the share certificates to the dissenting shareholder.

Suspension of rights.

184(11)

On sending a notice under subsection (7), a dissenting shareholder ceases to have any rights as a shareholder other than the right to be paid the fair value of his shares as determined under this section except where

(a) the dissenting shareholder withdraws his notice before the corporation makes an offer under subsection (12);

(b) the corporation fails to make an offer in accordance with subsection (12) and the dissenting shareholder withdraws his notice; or

(c) the directors revoke a resolution to amend the articles under subsection 167(8) or 168(4), terminate an amalgamation agreement under subsection 177(6) or an application for continuance under subsection 182(6), or abandon a sale, lease or exchange under subsection 183(7);

and in that case his rights as a shareholder are reinstated as of the date he sent the notice referred to in subsection (7).

Offer to pay.

184(12)

A corporation shall, not later than seven days after the later of the day on which the action approved by the resolution is effective or the day the corporation received the notice referred to in subsection (7), send to each dissenting shareholder who has sent the notice

(a) a written offer to pay for his shares in an amount considered by the directors of the corporation to be the fair value thereof, accompanied by a statement showing how the fair value was determined; or

(b) if subsection (26) applies, a notification that it is unable lawfully to pay dissenting shareholders for their shares.

Same terms.

184(13)

Every offer made under subsection (12) for shares of the same class or series shall be on the same terms.

Payment.

184(14)

Subject to subsection (26), a corporation shall pay for the shares of a dissenting shareholder within 10 days after an offer made under subsection (12) has been accepted, but that offer lapses if the corporation does not receive an acceptance thereof within 30 days after the offer has been made.

Corporation application to court.

184(15)

Where a corporation fails to make an offer under subsection (12), or if a dissenting shareholder fails to accept an offer, the corporation may, within 50 days after the action approved by the resolution is effective or within such further period as a court may allow, apply to a court to fix a fair value for the shares of any dissenting shareholder.

Shareholder application to court.

184(16)

If a corporation fails to apply to a court under subsection (15), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within such further period as a court may allow.

Venue.

184(17)

An application under subsection (15) or (16) shall be made to a court having jurisdiction in the place where the corporation has its registered office or in the province where the dissenting shareholder resides if the corporation carries on business in that province.

No security for costs.

184(18)

A dissenting shareholder is not required to give security for costs in an application made under subsection (15) or (16).

Parties.

184(19)

Upon an application under subsection (15) or (16),

(a) all dissenting shareholders whose shares have not been purchased by the corporation shall be joined as parties and are bound by the decision of the court; and

(b) the corporation shall notify each affected dissenting shareholder of the date, place and consequences of the application and of his right to appear and be heard in person or by counsel.

Powers of court.

184(20)

Upon an application to a court under subsection (15) or (16), the court may determine whether any other person is a dissenting shareholder who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting shareholders.

Appraisers.

184(21)

A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.

Final order.

184(22)

The final order of a court shall be rendered against the corporation in favour of each dissenting shareholder and for the amount of his shares as fixed by the court.

Interest.

184(23)

A court may in its discretion allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective until the date of payment.

Notice that subsection (26) applies.

184(24)

If subsection (26) applies, the corporation shall, within 10 days after the pronouncement of an order under subsection (22), notify each dissenting shareholder that it is unable lawfully to pay dissenting shareholders for their shares.

Effect where subsection (26) applies.

184(25)

If subsection (26) applies, a dissenting shareholder, by written notice delivered to the corporation within 30 days after receiving a notice under subsection (24) may

(a) withdraw his notice of dissent, in which case the corporation is deemed to consent to the withdrawal and the shareholder is reinstated to his full rights as a shareholder; or

(b) retain a status as a claimant against the corporation, to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of the corporation but in priority to its shareholders.

Limitation.

184(26)

A corporation shall not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that

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

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

Definitions.

185(1)

In this section,

"arrangement" includes

(a) an amendment to the articles of a corporation;

(b) an amalgamation of two or more corporations;

(c) a division of the business carried on by a corporation;

(d) a transfer of all or substantially all the property of a corporation to another body corporate in exchange for property, money or securities of the body corporate;

(e) an exchange of securities of a corporation held by security holders for property, money or other securities of the corporation or property, money or securities of another body corporate that is not a take-over bid to which The Securities Act applies;

(f) a liquidation and dissolution of a corporation; and

(g) any combination of the foregoing; ("arrangement")

"reorganization" means a court order made under

(a) section 234: or

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

(c) any other Act of the Legislature that affects the rights among the corporation, its shareholders and creditors. ("réorganisation")

Powers of court.

185(2)

If a corporation is subject to an order referred to in subsection (1), its articles may be amended by the order to effect any change that might lawfully be made by an amendment under section 167.

Further powers.

185(3)

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

(a) authorize the issue of debt obligations of the corporation, whether or not convertible into shares of any class or having attached any rights or options to acquire shares of any class, and fix the terms thereof; and

(b) appoint directors in place of or in addition to all or any of the directors then in office.

Articles of reorganization.

185(4)

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

Certificate of reorganization.

185(5)

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

Effect of certificate.

185(6)

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

No dissent.

185(7)

A shareholder is not entitled to dissent under section 184 if an amendment to the articles of incorporation is effected under this section.

Where corporation insolvent.

185(8)

For the purposes of this section, a corporation is insolvent

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

(b) where the realizable value of the assets of the corporation are less than the aggregate of its liabilities and stated capital of all classes.

Application to court for approval of arrangement.

185(9)

Where it is not practicable for a corporation that is not insolvent to effect a fundamental change in the nature of an arrangement under any other provision of this Act, the corporation may apply to a court for an order approving an arrangement proposed by the corporation.

Powers of court.

185(10)

In connection with an application under subsection (9), the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing,

(a) an order determining the notice to be given to an interested person or dispensing with notice to any person other than the Director:

(b) an order appointing counsel, at the expense of the corporation, to represent the interests of the shareholders;

(c) an order requiring a corporation to call, hold and conduct a meeting of holders of securities or options or rights to acquire securities in such manner as the court directs;

(d) an order permitting a shareholder to dissent under section 184;

(e) an order approving an arrangement as proposed by the corporation or as amended in any manner the court may direct.

Notice to Director

185(11)

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

Articles of arrangement.

185(12)

After an order referred to in clause (10)(e) has been made, articles of arrangement in prescribed form shall be sent to the Director together with the documents required by sections 19 and 108, if applicable.

Certificate of amendment.

185(13)

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

Effect of certificate.

185(14)

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

PART XV

POWER OF ATTORNEY

Attorney required.

186(1)

Every body corporate to which this Act applies

(a) that has no director or officer residing in the province; or

(b) that has its registered office outside of the province;

shall, by a duly executed power of attorney in the form prescribed, appoint a person residing in the province to act as its attorney for the purpose of accepting service of any process or being served therewith in any suit or proceeding against the body corporate within the province, and of receiving all lawful notices, and of declaring that service of process in respect of any suit or proceeding and of any lawful notice on the attorney are legal and binding on the body corporate, and the power of attorney shall be filed with the Director.

Invalidity of power of attorney.

186(2)

If the attorney for service ceases to reside in the province, or dies or resigns, or the power of attorney filed becomes invalid or ineffectual for any reason, the body corporate shall, within 10 days thereafter or within such further time as the Director may prescribe, file another power of attorney.

Failure to comply with subsec. (1) or (2).

186(3)

The Director may dissolve a corporation, or cancel the registration of a body corporate, for failure to comply with subsection (1) or (2).

Consent as attorney.

186(4)

Every person appointed as the attorney by a body corporate shall sign in the form prescribed, his consent to act as attorney.

Service of process.

186(5)

Upon compliance with this section, any process in any suit or proceedings in the province against the body corporate may be served upon the attorney unless he is so replaced, and thereafter upon his successor from time to time duly appointed, in the same manner as process may be served upon the proper officer of any body corporate incorporated under the law of the province: and all proceedings may be had thereupon to judgment and execution in the same manner as in any civil suit in the province.

Binds body corporate.

186(6)

Where any body corporate has heretofore empowered or hereafter empowers any person as its attorney, either generally or in respect of any specified matters, to execute deeds on its behalf, every deed signed by that attorney on behalf of the body corporate in respect of property or civil rights in the province, binds the body corporate.

PART XVI

REGISTRATION OF BODIES CORPORATE

Application.

187(1)

This Part, except where it is otherwise expressly provided, applies to every body corporate carrying on its business or undertaking in Manitoba, other than a body corporate licensed under the Insurance Act as an insurer, or a body corporate created solely for religious purposes.

Carrying on business.

187(2)

For the purposes of this Part, a body corporate is deemed to be carrying on its business or undertaking in Manitoba if

(a) it has a resident agent or representative, or a warehouse, office or place of business in Manitoba; or

(b) its name or any name under which it carries on business, together with an address for the body corporate in Manitoba, is listed in a Manitoba telephone directory; or

(c) its name or any name under which it carries on business, together with an address for the body corporate in Manitoba, is included in any advertisement advertising the business or any product of the body corporate; or

(d) it is the registered owner of real property situate in Manitoba; or

(e) it otherwise carries on its business or undertaking in Manitoba.

Registration of corporations.

187(3)

A corporation incorporated or continued under this Act is deemed to be registered concurrently with the issuance of its certificate of incorporation or continuance, an extra-provincial body corporate shall be registered before, and a body corporate incorporated under the laws of Canada shall be registered within 30 days after commencing its business or undertaking in the province; and any other class of bodies corporate carrying on their business or undertaking in the province, shall be registered before commencing to carry on the business or undertaking in the province; and no body corporate shall carry on its business or undertaking in Manitoba unless so registered.

Compliance.

187(4)

Upon an application for registration under this Part, the applicant shall establish, to the satisfaction of the Director, that the provisions of this Act and the regulations made thereunder have been complied with.

Penalty.

187(5)

Every body corporate that carries on its business or undertaking in the province without being registered, and every director and officer of the body corporate, and every representative or agent acting in any capacity for the body corporate so carrying on its business or undertaking, is respectively guilty of an offence and is liable to a penalty of $50. for every day the business or undertaking is so carried on.

Preliminary matters.

188

The provisions of this Part, or of any Act for which this Part is substituted, relating to matters preliminary to the issue of a certificate of registration, or supplementary certificate of registration, shall be deemed to be directory only; and no certificate, issued or given, or which has heretofore been issued or given, under this Part or any of those Acts, shall be held void or voidable on account of any irregularity or insufficiency of any matter preliminary to the issue of the certificate.

Transitional.

189(1)

A body corporate licensed or registered under any Act for which this Act is substituted, and the licence or registration of which has not been revoked, is deemed to be registered under this Act.

Restriction on capital employed abrogated.

189(2)

Any restriction on the amount of capital employed in Manitoba contained in a licence issued under any Act for which this Act is substituted, is abrogated.

Continuing restriction.

189(3)

A restriction, other than that referred to in subsection (2), contained in a licence issued under any Act for which this Act is substituted, continues as a restriction on its registration.

Amending restriction.

189(4)

A body corporate may apply to the Director to amend or delete a restriction contained in a certificate of registration.

Refusal to amend.

189(5)

The Director may refuse to amend or delete the restriction contained in the certificate of registration of a body corporate, but the body corporate may appeal his decision to the Lieutenant Governor in Council whose decision shall be final.

Supplementary certificate.

189(6)

Where the Director amends or deletes a restriction contained in the certificate of registration of a body corporate, he shall issue to the body corporate a supplementary certificate of registration in respect thereof.

Notice.

189(7)

The Director, at the expense of the body corporate so registered, shall forthwith give notice in the Manitoba Gazette of the issue of every certificate of registration, cancellation or restoration thereof.

Application for registration.

190(1)

A body corporate incorporated otherwise than under this Act shall file with the Director an application for registration in prescribed form, in duplicate, and shall in addition file with the Director or provide the Director with such other documents or information as he may require.

Approval of Registrar of Cooperatives.

190(2)

No certificate of registration shall be issued to an extra-provincial body corporate that is organized and operated on a cooperative basis within the meaning of The Cooperatives Act without the prior approval of the Registrar of Cooperatives.

Compliance.

190(3)

Upon compliance with the provisions of this Part, and where in any case this Act requires compliance with other provisions, upon compliance with them, and on payment of the fees prescribed, the Director shall issue to the body corporate a certificate of registration.

Issuance of certificate.

190(4)

Upon the issuance of a certificate of registration under this Part and during the period the registration remains in force, but not otherwise, a body corporate may, subject to the provisions of its articles and certificate of registration, carry on its business or undertaking in Manitoba.

Prohibited names.

191(1)

No body corporate to which this Part applies shall carry on its business or undertaking under a name

(a) that, except as prescribed, is identical with the name of an individual, association, partnership or body corporate carrying on any business or undertaking, or so nearly resembles the name that it is likely to confuse or mislead; or

(b) that is, as prescribed, prohibited or deceptively misdescriptive; or

(c) that the Director for any other reason disapproves.

Directing change of name.

191(2)

Where a body corporate to which this Part applies obtains a name which in the opinion of the Director is in contravention of subsection (1), the Director may, in writing giving his reasons, direct the body corporate to change its name to one that he approves.

Appeal.

191(3)

Within 20 days after receiving a directive made under subsection (2), the body corporate may appeal to the court.

New name.

191(4)

Upon receipt of a copy of the document evidencing the change of name to a name approved by him, the Director shall enter the new name on the register in place of the former name, and shall issue a supplementary certificate of registration showing the change of name.

Non-compliance.

191(5)

Unless the order made under subsection (2) is set aside on appeal, the Director may cancel the registration of the body corporate for failure to comply with the order.

Corporate name.

191(6)

Every body corporate to which this Part applies shall set out its corporate name in legible characters in all contracts, invoices, negotiable instruments and orders for goods and services issued or made by or on behalf of the body corporate in Manitoba.

Other name.

191(7)

Subject to subsections (1) and (6) and the provisions of The Business Names Registration Act, a body corporate may carry on business under or identify itself by a name other than its corporate name.

Rights not affected.

191(8)

A change of name does not affect any rights or obligations of the body corporate or render defective any legal proceedings by or against it; and proceedings that might have been continued or commenced by or against it under the former name may be continued or commenced by or against it under the new name.

Filing documents.

192(1)

A body corporate to which this Part applies shall file with the Director

(a) a notice of any change in location of its registered office, within 90 days of the making of the change;

(b) an application for a supplementary certificate of registration, in duplicate, upon an amalgamation or a continuance, or a change of or addition to its name, within 90 days of the issuance of the amendment to its articles; and

(c) in the case of an amalgamation, a new power of attorney in addition to the application required under clause (b).

Supplementary certificate.

192(2)

The Director may issue a supplementary certificate of registration to a body corporate previously registered under this Part that is granted articles of continuance continuing it as a body corporate in another jurisdiction.

Registration of former Man. corp.

192(3)

Where a corporation is continued in another jurisdiction, the Director shall not issue a supplementary certificate of registration under subsection (2) unless the body corporate files an application for a supplementary certificate of registration within 90 days of the date of continuance and, if the body corporate requires to be registered under this Part thereafter, it shall apply for registration as if it had never been registered under this Part.

Supplementary certificate.

192(4)

The Director may issue a supplementary certificate of registration to a body corporate registered under this Part that obtains articles of amalgamation, or of amendment adding to or changing its name.

Exception.

192(5)

Subsection (1) does not apply to a corporation that, pursuant to this Act, receives articles of continuance, articles of amalgamation or articles of amendment.

Restriction on certificate.

193(1)

Upon the filing of any document pursuant to section 192, the Director may restrict the terms of the supplementary certificate of registration issued in relation thereto; but the body corporate may appeal the Director's decision to the Lieutenant Governor in Council whose decision shall be final.

Refusal to register.

193(2)

The Director may refuse to register an extra-provincial body corporate, or may restrict the terms of the certificate of registration or supplementary certificate of registration, as the case may be, of a body corporate; and, where the terms of the certificate of registration or supplementary certificate of registration of a body corporate are so restricted, the body corporate shall not carry on its business or undertaking except subject to the restrictions.

Notice of refusal or restriction.

193(3)

Where the Director refuses to register an extra-provincial body corporate or restricts the terms of the certificate of registration or the supplementary certificate of registration, as the case may be, of a body corporate, he shall notify the body corporate of the refusal or restriction; and the body corporate may appeal the refusal or restriction to the Lieutenant Governor in Council, and the decision of the Lieutenant Governor in Council is final.

Cancellation of registration.

194(1)

The Director shall cancel the registration of any body corporate upon the forfeiture or revocation of its articles or upon its dissolution and may do so,

(a) upon notice from the body corporate, or proof to his satisfaction, that it has ceased to carry on its business or undertaking in the province; or

(b) upon the failure of the body corporate to file any annual return required to be filed with the Director pursuant to this Act, or any Act for which this Act is substituted, for two consecutive years after the annual return should have been so filed, or for the failure for a period of three months to make a proper return or pay a tax that it is liable to pay under The Corporation Capital Tax Act; or

(c) if the body corporate makes default in observing or complying with the limitations and conditions of its certificate of registration or supplementary certificate of registration; or

(d) if the body corporate fails to comply with any of the requirements of this Act in any particular as to which no other procedure is prescribed, and the failure is established to the satisfaction of the Director.

Liability continues.

194(2)

The cancellation of the registration of a body corporate does not affect the liability of the body corporate or its successors for debts or liabilities of the body corporate; and action to recover them, or any action to which the body corporate is a necessary party, or proceedings to realize upon its assets, may be commenced against the body corporate or its successors, notwithstanding any suspension or revocation heretofore or hereafter made.

Appeal.

194(3)

An interested person who feels aggrieved by the decision of the Director to cancel the registration of the body corporate, may apply to the court for an order requiring the Director to change his decision, and upon the application the court may so order and make any further order it thinks fit.

Filing of order.

194(4)

In that event the applicant shall file a certified copy of the order with the Director, and the Director shall forthwith amend his records to comply with the order.

Restoration of registration.

194(5)

The Director, subject to such terms and conditions as he sees fit to impose, may restore the registration of any body corporate; and thereupon the body corporate, subject to the terms of the restoration order and the rights of third parties acquired subsequent to the cancellation, shall be restored to its legal position including all its rights and privileges, actions, property, and assets, as at the time of the cancellation in the same manner and to the same extent as if there had been no cancellation.

Liability of directors continue.

194(6)

The liability of every director, officer, or agent of the body corporate continues and may be enforced as if the registration of the body corporate had not been cancelled.

Service of process.

195

Service of any process in any action shall be deemed to have been sufficiently made upon the body corporate, if made upon any director or officer or attorney as shown in the most recent notice on the records of the Director.

Estate of minor, mentally incompetent or deceased person.

196

No body corporate shall act as the executor or administrator of the estate of a deceased person, nor shall, in connection with the estate of a minor or a mentally incompetent person, act as a trustee, executor, guardian, administrator or committee unless

(a) it is incorporated or licensed as a trust corporation under Part XXIV; or

(b) in the case of an extra-provincial body corporate, it is authorized by its articles to carry on the business of a trust corporation and is registered under this Part.

Actions.

197(1)

An extra-provincial body corporate is not capable of commencing or maintaining any action or other proceeding in a court in respect of a contract made in whole or in part in the province, in the course of, or in connection with, the business or undertaking carried on by it, without being registered under the provisions of this Part.

Proof of registration.

197(2)

In any action or proceeding, the burden of showing that it is registered is upon the body corporate.

Registration authorizes all previous acts.

197(3)

The registration of a body corporate is deemed to authorize all previous acts of the body corporate, and is construed as if the certificate of registration or supplementary certificate of registration had been granted before the body corporate commenced to carry on its business or undertaking in the province, except for the purpose of a prosecution for an offence under this Part.

Real property.

198(1)

A body corporate to which this Part applies may, subject to this Act, its articles or certificate of registration acquire, hold, mortgage, alienate and otherwise dispose of land in Manitoba and any interest therein.

Execution of instrument affecting land.

198(2)

Every instrument affecting land, executed by a body corporate registered under this Part, or executed by a director, officer or any person duly authorized by the body corporate, is binding on the body corporate according to the tenor and effect of the instrument.

Investigation.

199

The Attorney-General may in accordance with Part XVIII apply, ex parte or upon such notice as the court may require, to the court for an order directing an investigation to be made of a body corporate or any of its affiliates registered under this Act.

PART XVII

LIQUIDATION, DISSOLUTION AND REVIVAL

Revival by the Director.

200

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

Revival by court.

201

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

Certificate of revival.

202(1)

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

Rights preserved.

202(2)

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

Dissolution before commencing business.

203(1)

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

Dissolution if no property.

203(2)

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

Dissolution where property disposed of.

203(3)

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

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

(b) the corporation has distributed any property and discharged any liabilities before it sends articles of dissolution to the Director pursuant to subsection (3).

Articles of dissolution.

203(4)

Articles of dissolution in prescribed form shall be sent to the Director.

Certificate of dissolution.

203(5)

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

Effect of certificate.

203(6)

The corporation ceases to exist on the date shown in the certificate of dissolution.

Proposing liquidation and dissolution.

204(1)

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

Notice of meeting.

204(2)

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

Shareholders resolution.

204(3)

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

Statement of intent to dissolve.

204(4)

A statement of intent to dissolve in prescribed form shall be sent to the Director.

Certificate of intent to dissolve.

204(5)

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

Effect of certificate.

204(6)

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

Liquidation.

204(7)

After issue of a certificate of intent to dissolve, the corporation shall

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

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

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

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

Supervision by court.

204(8)

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

Notice to Director.

204(9)

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

Revocation.

204(10)

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

Certificate of revocation of intent to dissolve.

204(11)

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

Effect of certificate.

204(12)

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

Right to dissolve.

204(13)

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

Articles of dissolution.

204(14)

Articles of dissolution in prescribed form shall be sent to the Director.

Certificate of dissolution.

204(15)

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

Effect of certificate.

204(16)

The corporation ceases to exist on the date shown in the certificate of dissolution.

Dissolution by Director.

205(1)

Subject to subsections (2) and (3),

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

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

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

the Director may dissolve the corporation by issuing a certificate of dissolution under this section or he may apply to the court for an order dissolving the corporation, and in that case section 210 applies.

Publication.

205(2)

The Director shall not dissolve a corporation under this section until he has

(a) given to the corporation notice of his decision to dissolve the corporation; and

(b) published a notice in the Manitoba Gazette of his decision to dissolve the corporation.

Length of Notice.

205(3)

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

Corporation not in operation.

205(4)

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

Certificate of dissolution.

205(5)

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

Effect of certificate.

205(6)

The corporation ceases to exist on the date shown in the certificate of dissolution.

Grounds for dissolution.

206(1)

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

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

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

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

Notice to Director.

206(2)

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

Dissolution order.

206(3)

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

Certificate.

206(4)

Upon receipt of an order under this section, section 205 or section 207, the Director shall

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

(b) if the order is to liquidate and dissolve the corporation under the supervision of the court, issue a certificate of intent to dissolve in prescribed form and publish notice of the order in the Manitoba Gazette.

Effect of certificate.

206(5)

The corporation ceases to exist on the date shown in the certificate of dissolution.

Further grounds.

207(1)

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

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

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

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

(iii) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner, that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer; or

(b) if the court is satisfied that

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

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

Alternative order.

207(2)

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

Application of section 235.

207(3)

Section 235 applies to an application under this section.

Application for supervision.

208(1)

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

Court supervision.

208(2)

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

Application to court.

209(1)

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

Show cause order.

209(2)

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

Powers of court

209(3)

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

(a) financial statements of the corporation;

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

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

Publication.

209(4)

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

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

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

Person responsible.

209(5)

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

Powers of court.

210

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

(a) an order to liquidate;

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

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

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

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

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

(i) exercising any of their powers, or

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

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

(i) to the corporation, or

(ii) for an obligation of the corporation;

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

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

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

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

(l) subject to section 216, an order approving any proposed interim or final distribution to shareholders in money or in property;

(m) an order disposing of any property belonging to creditors or shareholders who cannot be found;

(n) upon the application of any director, officer, security holder, creditor or the liquidator,

(i) an order staying the liquidation on such terms and conditions as the court thinks fit,

(ii) an order continuing or discontinuing the liquidation proceedings, or

(iii) an order to the liquidator to restore to the corporation all its remaining property; and

(o) after the liquidator has rendered his final account to the court, an order dissolving the corporation.

Effect of order.

211

The liquidation of a corporation commences when a court makes an order therefor.

Cessation of business and powers.

212(1)

If a court makes an order for liquidation of a corporation

(a) the corporation continues in existence but shall cease to carry on business, except the business that is in the opinion of the liquidator required for an orderly liquidation; and

(b) the powers of the directors and shareholders cease and vest in the liquidator, except as specifically authorized by the court.

Delegation by liquidator.

212(2)

The liquidator may delegate any of the powers vested in him by clause (l)(b) to the directors or shareholders.

Appointment of liquidator.

213(1)

When making an order for the liquidation of a corporation or at any time thereafter, the court may appoint any person, including a director, an officer or a shareholder of the corporation or any other body corporate, as liquidator of the corporation.

Vacancy.

213(2)

Where an order for the liquidation of a corporation is made and the office of liquidator is or becomes vacant, the property of the corporation is under the control of the court until the office of liquidator is filled.

Duties of liquidator.

214

A liquidator shall

(a) forthwith after his appointment, give notice thereof to the Director and to each claimant and creditor known to the liquidator;

(b) forthwith publish notice in the Manitoba Gazette and by insertion once a week for two consecutive weeks in a newspaper published or distributed in the place where the corporation has its registered office and take reasonable steps to give notice thereof in every jurisdiction where the corporation carries on business, requiring any person

(i) indebted to the corporation, to render an account and pay to the liquidator at the time and place specified any amount owing, or

(ii) possessing property of the corporation, to deliver it to the liquidator at the time and place specified, or

(iii) having a claim against the corporation, whether liquidated, unliquidated, future or contingent, to present particulars thereof in writing to the liquidator not later than two months after the first publication of the notice;

(c) take into his custody and control the property of the corporation;

(d) open and maintain a trust account for the moneys of the corporation;

(e) keep accounts of the moneys of the corporation received and paid out by him;(f) maintain separate lists of the shareholders, creditors and other persons having claims against the corporation;

(g) if at any time the liquidator determines that the corporation is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;

(h) deliver to the court and to the Director, at least once in every 12 month period after his appointment or more often as the court may require, financial statements of the corporation in the form required by section 149 or in such other form as the liquidator may think proper or as the court may require; and

(i) after his final accounts are approved by the court, distribute any remaining property of the corporation among the shareholders according to their respective rights.

Powers of liquidator.

215(1)

A liquidator may

(a) retain lawyers, accountants, engineers, appraisers and other professional advisers:

(b) bring, defend or take part in any civil, criminal or administrative action or proceeding in the name and on behalf of the corporation:

(c) carry on the business of the corporation as required for an orderly liquidation:

(d) sell by public auction or private sale any property of the corporation;

(e) do all acts and execute any documents in the name and on behalf of the corporation;

(f) borrow money on the security of the property of the corporation;

(g) settle or compromise any claims by or against the corporation; and

(h) do all other things necessary for the liquidation of the corporation and distribution of its property.

Reliance on statements.

215(2)

A liquidator is not liable if he relies in good faith upon

(a) financial statements of the corporation represented to him by an officer of the corporation or in a written report of the auditor of the corporation to reflect fairly the financial condition of the corporation; or

(b) an opinion, a report or a statement of a lawyer, an accountant, an engineer, an appraiser or other professional adviser retained by the liquidator.

Application for examination.

215(3)

If a liquidator has reason to believe that any person has in his possession or under his control, or has concealed, withheld or misappropriated any property of the corporation, he may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

Power of court.

215(4)

If the examination referred to in subsection (3) discloses that a person has concealed, withheld or misappropriated property of the corporation, the court may order that person to restore it or pay compensation to the liquidator.

Costs of liquidation.

216(1)

A liquidator shall pay the costs of liquidation out of the property of the corporation and shall pay or make adequate provision for all claims against the corporation.

Final account.

216(2)

Within one year after his appointment and after paying or making adequate provision for all claims against the corporation, the liquidator shall apply to the court

(a) for approval of his final accounts and for an order permitting him to distribute in money or in kind the remaining property of the corporation to its shareholders according to their respective rights; or

(b) for an extension of time, setting out the reasons therefor.

Shareholder application.

216(3)

If a liquidator fails to make the application required by subsection (2), a shareholder of the corporation may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

Publication.

216(4)

A liquidator shall give notice of his intention to make an application under subsection (2) to the Director, each inspector appointed under section 210, each shareholder and any person who provided a security or fidelity bond for the liquidator, and he shall publish the notice in a newspaper published or distributed in the place where the corporation has its registered office or as otherwise directed by the court.

Final order.

216(5)

If the court approves the final accounts rendered by a liquidator, the court shall make an order

(a) directing the Director to issue a certificate of dissolution;

(b) directing the custody or disposal of the documents and records of the corporation; and

(c) subject to subsection (6), discharging the liquidator.

Delivery of order.

216(6)

The liquidator shall forthwith send or deliver a certified copy of the order referred to in subsection (5) to the Director.

Certificate of dissolution.

216(7)

Upon receipt of the order referred to in subsection (5), the Director shall issue a certificate of dissolution in accordance with section 255.

Effect of certificate.

216(8)

The corporation ceases to exist on the date shown in the certificate of dissolution.

Right to distribution in money.

217(1)

If in the course of liquidation of a corporation, the shareholders resolve or the liquidator proposes to

(a) exchange all or substantially all the property of the corporation for securities of another body corporate that are to be distributed to the shareholders; or

(b) distribute all or part of the property of the corporation to the shareholders in kind;

a shareholder may apply to the court for an order requiring the distribution of the property of the corporation to be in money.

Powers of court.

217(2)

Upon an application under subsection (1), the court may order

(a) all the property of the corporation to be converted into and distributed in money; or

(b) the claims of any shareholder applying under this section to be satisfied by a distribution in money, and in that case subsections 184(20) to (22) apply.

Custody of records.

218(1)

A person who is granted custody of the documents and records of a dissolved corporation remains liable to produce the documents and records for six years following the date of its dissolution or until the expiry of such other shorter period as may be ordered under subsection 216(5).

Offence.

218(2)

A person who, without reasonable cause, contravenes subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding $5, 000. or to imprisonment for a term not exceeding six months or to both.

"Shareholder" defined.

219(1)

In this section, " shareholder" includes the heirs and legal representatives of a shareholder.

Continuation of actions.

219(2)

Notwithstanding the dissolution of a corporation under this Act,

(a) a civil, criminal or administrative action or proceeding commenced by or against the corporation before its dissolution may be continued as if the corporation had not been dissolved;

(b) a civil, criminal or administrative action or proceeding may be brought against the corporation within two years after its dissolution as if the corporation had not been dissolved; and

(c) any property that would have been available to satisfy any judgment or order if the corporation had not been dissolved remains available for that purpose.

Service.

219(3)

Service of a document on a corporation after its dissolution may be effected by serving the document upon a person shown in the most recent notice on the records of the Director.

Reimbursement

219(4)

Notwithstanding the dissolution of a corporation, a shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount received by that shareholder upon the distribution, and an action to enforce that liability may be brought within two years after the date of the dissolution of the corporation.

Representative action.

219(5)

A court may order an action referred to in subsection (4) to be brought against the persons who were shareholders as a class, subject to such conditions as the court thinks fit and, if the plaintiff establishes his claims, the court may refer the proceedings to a referee or other officer of the court who may

(a) add as a party to the proceedings before him each person who was a shareholder found by the plaintiff;

(b) determine, subject to subsection (4). the amount that each person who was a shareholder shall contribute towards satisfaction of the plaintiff's claim: and

(c) direct payment of the amounts so determined.

Unknown claimants.

220(1)

Upon the dissolution of a corporation, the portion of the property distributable to a creditor or shareholder who cannot be found shall be converted into money and paid to the Minister of Finance.

Constructive satisfaction.

220(2)

A payment under subsection (1) is deemed to be in satisfaction of the debt or claim of the creditor or shareholder.

Recovery.

220(3)

If at any time a person establishes that he is entitled to any moneys paid to the Minister of Finance under this Act, the Minister of Finance shall pay an equivalent amount to him out of the Consolidated Revenue Fund.

Vesting in Crown.

221(1)

Subject to subsection 219(2) and section 220, property of a corporation that has not been disposed of at the date of its dissolution vests in Her Majesty in right of the Province.

Return of property on revival.

221(2)

If a corporation is revived under section 202, any property other than money that vested in Her Majesty pursuant to subsection (1) and that has not been disposed of shall be returned to the corporation and there shall be paid to the corporation out of the Consolidated Revenue Fund

(a) an amount equal to any money received by Her Majesty pursuant to subsection (1): and (b) where property other than money vested in Her Majesty pursuant to subsection (1) and that property has been disposed of, an amount equal to the lesser of

(i) the value of the property at the date it vested in Her Majesty, and

(ii) the amount realized by Her Majesty from the disposition of the property.

Registration.

221(3)

Any certificate of dissolution or revival under this Part has, ipso facto, the effect of cancelling or reviving the registration of the corporation under Part XVI as the case may be.

PART XVIII

INVESTIGATION

Investigation.

222(1)

A security holder or the Attorney-General may apply to the court, ex parte or upon such notice as the court may require, for an order directing an investigation to be made of a corporation or any of its affiliated corporations.

Grounds.

222(2)

If, upon an application under subsection (1), it appears to the court that

(a) the business of the corporation or any of its affiliates is or has been carried on with intent to defraud any person; or

(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of a security holder; or

(c) the corporation or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose; or

(d) persons concerned with the formation, business or affairs of the corporation or any of its affiliates have in connection therewith acted fraudulently or dishonestly;

the court may order an investigation to be made of the corporation or affiliated corporation.

Notice to Attorney-General.

222(3)

Where a security holder makes an application under subsection (1), he shall give the Attorney-General reasonable notice thereof, and the Attorney-General is entitled to appear and be heard in person or by counsel.

No security for costs.

222(4)

An applicant under this section is not required to give security for costs.

Ex parte application.

222(5)

An ex parte application under this section shall be heard in camera.

No publication.

222(6)

No person may publish anything relating to ex parte proceedings under this section except with the authorization of the court or the written consent of the corporation being investigated.

Powers of court.

223(1)

In connection with an investigation under this Part, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order to investigate;

(b) an order appointing an inspector and fixing his remuneration or replacing an inspector;

(c) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

(d) an order authorizing an inspector to enter any premises in which the court is satisfied there might be relevant information, and to examine any thing and make copies of any document or record found on the premises;

(e) an order requiring any person to produce documents or records to an inspector;

(f) an order authorizing an inspector to conduct a hearing, administer oaths and examine any person upon oath, and prescribing rules for the conduct of the hearing;

(g) an order requiring any person to attend a hearing conducted by an inspector and to give evidence upon oath;

(h) an order giving directions to an inspector or any interested person on any matter arising in the investigation;

(i) an order requiring an inspector to make an interim or final report to the court;

(j) an order determining whether a report of an inspector should be published and. if so, ordering the Attorney-General to publish the report in whole or in part or to send copies to any person the court designates;

(k) an order requiring an inspector to discontinue an investigation; and

(l) an order requiring the corporation to pay the costs of the investigation.

Copy of report

223(2)

An inspector shall send to the Attorney-General a copy of every report made by the inspector under this Part.

Powers of inspector.

224(1)

An inspector under this Part has the powers set out in the order appointing him.

Exchange of information.

224(2)

In addition to the powers set out in the order appointing him, an inspector appointed to investigate a corporation may furnish to, or exchange information and otherwise co-operate with, any public official in Canada or elsewhere who is authorized to exercise investigatory powers and who is investigating, in respect of the corporation, any allegation of improper conduct that is the same as or similar to the conduct described in subsection 222(2).

Court order.

224(3)

An inspector shall upon request produce to any interested person a copy of any order made under subsection 223(1).

Hearing in camera.

225(1)

Any interested person may apply to the court for an order that a hearing conducted by an inspector under this Part be heard in camera and for directions on any matter arising in the investigation.

Right to counsel.

225(2)

A person whose conduct is being investigated or who is being examined at a hearing conducted by an inspector under this Part has a right to be represented by counsel.

Criminating statements.

226

No person is excused from attending and giving evidence and producing documents and records to an inspector under this Part by reason only that the evidence tends to criminate him or subject him to any proceeding or penalty, but that evidence shall not be used and is not receivable against him in any proceeding thereafter instituted against him under an Act of the Legislature, other than a prosecution for perjury in giving the evidence or a prosecution under section 122 or 124 of the Criminal Code in respect of the evidence.

Absolute privilege (defamation).

227

Any oral or written statement or report made by an inspector or any other person in an investigation under this Part has absolute privilege.

Information respecting ownership and control.

228(1)

If the Attorney-General is satisfied that, for the purposes of Part X or XII, or for the purposes of enforcing any regulation made under section 168, there is reason to inquire into the ownership or control of a security of a corporation or any of its affiliates, the Attorney-General may require any person that he reasonably believes has or has had an interest in the security or acts or has acted on behalf of a person with that interest, to report to him or to any person he designates

(a) information that the person has or can reasonably be expected to obtain as to present and past interests in the security; and

(b) the names and addresses of the persons so interested and of any person who acts or has acted in relation to the security on behalf of the persons so interested.

Constructive interest in securities.

228(2)

For the purposes of subsection (1), a person is deemed to have an interest in a security if (a) he has a right to vote or to acquire or dispose of the security or any interest therein;

(b) his consent is necessary for the exercise of the rights or privileges of any other person interested in the security; or

(c) any other person interested in the security can be required or is accustomed to exercise rights or privileges attached to the security in accordance with his instructions.

Offence.

228(3)

A person who fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding $5, 000. or to imprisonment for a term not exceeding six months or to both.

Liability of directors, etc.

228(4)

If the person guilty of an offence under subsection (3) is a body corporate, then, whether or not the body corporate is prosecuted or convicted, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the failure is also guilty of the offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Solicitor-client privilege.

229

Nothing in this Part shall be construed to affect the privilege that exists in respect of a solicitor and his client.

Inquiries.

230

The Director or the Attorney-General may make inquiries of any person relating to compliance with this Act.

PART XIX

REMEDIES, OFFENCES AND PENALTIES

Definitions.

231

In this Part,

"action" means an action under this Act; ("action")

"complainant" means

(a) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of a corporation or any of its affiliates, or

(b) a director or an officer or a former director or officer of a corporation or of any of its affiliates, or

(c) the Director, or

(d) any other person who, in the discretion of a court, is a proper person to make an application under this Part. ("plaignant")

Commencing derivative action.

232(1)

Subject to subsection (2), a complainant may apply to a court for leave to bring an action in the name and on behalf of a corporation or any of its subsidiaries, or intervene in an action to which any such body corporate is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the body corporate.

Conditions precedent.

232(2)

No action may be brought and no intervention in an action may be made under subsection (1) unless the court is satisfied that

(a) the complainant has given reasonable notice to the directors of the corporation or its subsidiary of his intention to apply to the court under subsection (1) if the directors of the corporation or its subsidiary do not bring, diligently prosecute or defend or discontinue the action;

(b) the complainant is acting in good faith; and

(c) it appears to be in the interests of the corporation or its subsidiary that the action be brought, prosecuted, defended or discontinued.

Powers of court.

233

In connection with an action brought or intervened in under section 232, the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order authorizing the complainant or any other person to control the conduct of the action;

(b) an order giving directions for the conduct of the action;

(c) an order directing that any amount adjudged payable by a defendant in the action shall be paid, in whole or in part, directly to former and present security holders of the corporation or its subsidiary instead of to the corporation or its subsidiary; and

(d) an order requiring the corporation or its subsidiary to pay reasonable legal fees incurred by the complainant in connection with the action.

Application to court re oppression.

234(1)

A complainant may apply to a court for an order under this section.

Grounds.

234(2)

If, upon an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates

(a) any act of omission of the corporation or any of its affiliates effects a result; or

(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner; or

(c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner;

that is oppressive or unfairly prejudicial or that unfairly disregards the interests of any security holder, creditor, director or officer, the court may make an order to rectify the matters complained of.

Powers of court.

234(3)

In connection with an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing,

(a) an order restraining the conduct complained of;

(b) an order appointing a receiver or receivermanager;

(c) an order to regulate a corporation's affairs by amending the articles or by-laws or creating or amending a unanimous shareholder agreement;

(d) an order directing an issue or exchange of securities;

(e) an order appointing directors in place of or in addition to all or any of the directors then in office;

(f) an order directing a corporation, subject to subsection (6), or any other person, to purchase securities of a security holder :

(g) an order directing a corporation, subject to subsection (6), or any other person, to pay to a security holder any part of the moneys paid by him for securities;

(h) an order varying or setting aside a transaction or contract to which a corporation is a party and compensating the corporation or any other party to the transaction or contract;

(i) an order requiring a corporation, within a time specified by the court, to produce to the court or an interested person financial statements in the form required by section 149 or an accounting in such other form as the court may determine;

(j) an order compensating an aggrieved person;

(k) an order directing rectification of the registers or other records of a corporation under section 236;

(l) an order liquidating and dissolving the corporation;

(m) an order directing an investigation under Part XVIII to be made; and

(n) an order requiring the trial of any issue.

Duty of directors.

234(4)

If an order made under this section directs amendment of the articles or by-laws of a corporation,

(a) the directors shall forthwith comply with subsection 185(4); and

(b) no other amendment to the articles or bylaws shall be made without the consent of the court, until a court otherwise orders.

Exclusion.

234(5)

A shareholder is not entitled to dissent under section 184 if an amendment to the articles is effected under this section.

Limitation.

234(6)

A corporation shall not make a payment to a shareholder under clause (3)(f) or (3)(g) if there are reasonable grounds for believing that

(a) the corporation is or would after that payment be unable to pay its liabilities as they become due; or

(b) the realizable value of the corporation's assets would thereby be less than the aggregate of its liabilities.

Alternative order.

234(7)

An applicant under this section may apply in the alternative for an order under section 207.

Evidence of shareholder approval not decisive.

235(1)

An application made or an action brought or intervened in under this Part shall not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the corporation or its subsidiary has been or may be approved by the shareholders of such body corporate, but evidence of approval by the shareholders may be taken into account by the court in making an order under section 207, 233 or 234.

Court approval to discontinue.

235(2)

An application made or an action brought or intervened in under this Part shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given upon such terms as the court thinks fit and, if the court determines that the interests of any complainant may be substantially affected by the stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice to the complainant.

No security for costs.

235(3)

A complainant is not required to give security for costs in any application made or action brought or intervened in under this Part.

Interim costs.

235(4)

In an application made or an action brought or intervened in under this Part, the court may at any time order the corporation or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable for the interim costs upon final disposition of the application or action.

Application to court to rectify records.

236(1)

If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the registers or other records of a corporation, the corporation, a security holder of the corporation or any aggrieved person may apply to a court for an order that the registers or records be rectified.

Notice to Director.

236(2)

An applicant under this section shall give the Director notice of the application, and the Director is entitled to appear and be heard in person or by counsel.

Powers of court.

236(3)

In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order requiring the registers or other records of the corporation to be rectified;

(b) an order restraining the corporation from calling or holding a meeting of shareholders or paying a dividend before rectification;

(c) an order determining the right of a party to the proceedings to have his name entered or retained in, or deleted or omitted from, the registers or records of the corporation, whether the issue arises between two or more security holders or alleged security holders, or between the corporation and any security holders or alleged security holders; and

(d) an order compensating a party who has incurred a loss.

Application for directions.

237

The Director may apply to a court for directions in respect of any matter concerning his duties under this Act, and on the application the court may give such directions and make such further orders as it thinks fit.

Notice of refusal by Director.

238(1)

If the Director refuses to file any articles or other document required by this Act to be filed by him before the articles or other document become effective, he shall, within 60 days after receipt thereof by him or 60 days after he receives any approval that may be required under any other Act, whichever is the later, and after giving the person who sent the articles or document an opportunity to be heard, give written notice of his refusal to the person together with reasons therefor.

Deemed refusal.

238(2)

If the Director does not file or give written notice of his refusal to file any articles or document within the time limited therefor in subsection (1), he is deemed for the purposes of section 239 to have refused to file the articles or document.

Appeal from Director's decision.

239

A person who feels aggrieved by a decision of the Director

(a) to refuse to file in the form submitted to him any articles or other document required by this Act to be filed by him; or

(b) to give a name, to change or revoke a name, or to refuse to reserve, accept, change or revoke a name under section 12; or

(c) to refuse to grant an exemption under subsection 154(3) and any regulations thereunder; or

(d) to refuse to issue a certificate of discontinuance under section 182; or

(e) to refuse to revive a corporation under section 202; or

(f) to dissolve a corporation under section 205; may apply to a court for an order requiring the Director to change his decision, and upon the application the court may so order and make any further order it thinks fit.

Restraining or compliance order.

240

If a corporation or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator of a corporation does not comply with this Act, the regulations, articles, by-laws, or a unanimous shareholder agreement, a complainant or a creditor of the corporation may, in addition to any other right he has, apply to a court for an order directing any such person to comply with, or restraining any such person from acting in breach of, any provisions thereof, and upon such application the court may so order and make any further order it thinks fit.

Summary application to court.

241

Where this Act states that a person may apply to a court, the application may be made in a summary manner by petition, originating notice of motion, or otherwise as the rules of the court provide, and subject to any order respecting notice to interested parties or costs, or any other order the court thinks fit.

Offences with respect to reports.

242(1)

A person who makes or assists in making a report, return, notice or other document required by this Act or the regulations to be sent to the Director or to any other person that

(a) contains an untrue statement of a material fact; or

(b) omits to state a material fact required therein or necessary to make a statement contained therein not misleading in the light of the circumstances in which it was made;

is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Liability of directors, etc.

242(2)

Where the person guilty of an offence under subsection (1) is a body corporate, and a director or officer of the body corporate knowingly authorized, permitted or acquiesced in the commission of the offence, whether or not the body corporate is prosecuted or convicted, the director or officer is also guilty of the offence and liable on summary conviction to a fine not exceeding $5,000. or to imprisonment for a term not exceeding six months or to both.

Immunity.

242(3)

No person is guilty of an offence under subsection (1) or (2) if the untrue statement or omission was unknown to him and in the exercise of reasonable diligence could not have been known to him.

Offence.

243

Every person who, without reasonable cause, contravenes a provision of this Act or the regulations for which no punishment is provided is guilty of an offence and is liable on summary conviction to a fine not exceeding $500.

Order to comply.

244

Where a person is guilty of an offence under this Act or the regulations, any court in which proceedings in respect of the offence are taken may, in addition to any punishment it may impose, order that person to comply with the provisions of the Act or the regulations for the contravention of which he has been convicted.

Time limited for proceedings.

245(1)

A prosecution for an offence under this Act may be instituted at any time within two years from the time when the subject-matter of the complaint arose.

Civil remedy not affected.

245(2)

No civil remedy for an act or omission is suspended or affected by reason that the act or omission is an offence under this Act.

PART XX

GENERAL

Notice to directors and shareholders.

246(1)

A notice or document required by this Act, the regulations, the articles or the by-laws to be sent to a shareholder or director of a corporation may be sent by prepaid mail addressed to, or may be delivered personally to,

(a) the shareholder at his latest address as shown in the records of the corporation or its transfer agent; and

(b) the director at his latest address as shown in the records of the corporation or in the last notice filed under section 108.

Effect of notice.

246(2)

A director named in the articles or in a notice sent by the corporation to the Director under section 108 and filed by the Director is presumed for the purposes of this Act to be a director of the corporation referred to in the notice.

Deemed receipt.

246(3)

A notice or document sent in accordance with subsection (1) to a shareholder or director of a corporation is deemed to be received by him at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the shareholder or director did not receive the notice or document at that time or at all.

Undelivered notices.

246(4)

If a corporation sends a notice or document to a shareholder in accordance with subsection (1) and the notice or document is returned on three consecutive occasions because the shareholder cannot be found, the corporation is not required to send any further notices or documents to the shareholder until he informs the corporation in writing of his new address.

Notice to and service upon a corporation.

247

A notice or document required to be sent to or served upon a corporation may be sent by registered mail to the registered office of the corporation shown in the articles or in the last notice filed under section 19 and, if so sent, is deemed to be received or served at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the corporation did not receive the notice or document at that time or at all.

Waiver of notice.

248

Where a notice or document is required by this Act or the regulations to be sent, the sending of the notice or document may be waived or the time for the notice or document may be waived or abridged at any time with the consent in writing of the person entitled thereto.

Certificate of Director.

249(1)

When this Act requires or authorizes the Director to issue a certificate or to certify any fact, the certificate shall be signed by the Director or by a Deputy Director authorized under section 253.

Evidence.

249(2)

Except in a proceeding under section 206 to dissolve a corporation, a certificate referred to in subsection (1) or a certified copy thereof, when introduced as evidence in any civil, criminal or administrative action or proceeding, is conclusive proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

Certificate of corporation.

250(1)

A certificate issued on behalf of a corporation stating any fact that is set out in the articles, the by-laws, a unanimous shareholder agreement, the minutes of the meetings of the directors, a committee of directors or the shareholders, or in a trust indenture or other contract to which the corporation is a party may be signed by a director, an officer or a transfer agent of the corporation.

Proof.

250(2)

When introduced as evidence in any civil, criminal or administrative action or proceeding,

(a) a fact stated in a certificate referred to in subsection (1); or

(b) a certified extract from a securities register of a corporation; or

(c) a certified copy of minutes or extract from minutes of a meeting of shareholders, directors or a committee of directors of a corporation;

is, in the absence of evidence to the contrary, proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

Security certificate.

250(3)

An entry in a securities register of, or a security certificate issued by, a corporation is, in the absence of evidence to the contrary, proof that the person in whose name the security is registered is owner of the securities described in the register or in the certificate.

Copies.

251

Where a notice or document is required to be sent to the Director under this Act, the Director may accept a photostatic or photographic copy thereof.

Proof required by Director.

252(1)

The Director may require that a document or a fact stated in a document required by this Act or the regulations to be sent to him shall be verified in accordance with subsection (2).

Form of proof.

252(2)

A document or fact required by this Act or by the Director to be verified may be verified by affidavit or affirmation.

Authentication of document

252(3)

The Director may require of a body corporate the authentication of a document, and the authentication may be signed by the secretary, or any director or authorized person or by the solicitor for the body corporate.

Appointment of Director.

253

The Minister may appoint a Director and one or more Deputy Directors to carry out the duties and exercise the powers of the Director under this Act.

Regulations.

254(1)

For the purpose of carrying out the provisions of this Act according to their intent, the Lieutenant Governor in Council may make such regulations and orders as are ancillary thereto and are not inconsistent therewith; and every regulation and order made under, and in accordance with the authority granted by, this section has the force of law; and, without restricting the generality of the foregoing, the Lieutenant Governor in Council may make regulations and orders

(a) prescribing any matter required or authorized by this Act to be prescribed;

(b) requiring the payment of a fee in respect of the filing, examination or copying of any document, or in respect of any action that the Director is required or authorized to take under this Act, and prescribing the amount thereof;

(c) prescribing the format and contents of returns, notices and other documents required to be sent to the Director or to be issued by him;

(d) prescribing rules with respect to exemptions permitted by this Act;

(e) respecting the names of corporations or classes thereof;

(f) respecting the authorized capital of corporations;

(g) respecting the preferences, rights, conditions, restrictions, limitations, or prohibitions attaching to shares or classes of shares of corporations;

(h) respecting the designation of classes of shares;

(i) respecting any matter required for the efficient administration of this Act.

Forms.

254(2)

Regulations made under subsection (1) may prescribe certain forms, statements or circulars that are from time to time prescribed under The Securities Act.

Fees not fixed in regulations.

254(3)

Where no fee is fixed in the regulations made under this Act for any services performed under this Act, the minister may fix the fee therefor.

"Statement" defined.

255(1)

In this section, "statement" means a statement of intent to dissolve and a statement of revocation of intent to dissolve referred to in section 204.

Execution and filing.

255(2)

Where this Act requires that articles or a statement relating to a corporation shall be sent to the Director, unless otherwise specifically provided,

(a) two copies (in this section called "duplicate originals") of the articles or the statement shall be signed by a director or an officer of the corporation or, in the case of articles of incorporation, by an incorporator; and

(b) upon receiving duplicate originals of any articles or statement in prescribed form, any other documents that may be required under this Act and the prescribed fees, the Director shall

(i) endorse on each of the duplicate originals the prescribed certificate and the date of endorsement,

(ii) file one of the duplicate originals, endorsed in accordance with sub-clause (i), (iii) send to the corporation or its representative the remaining duplicate original, endorsed in accordance with subclause (i), and

(iv) publish in the Manitoba Gazette notice of the issue of the certificate and the date thereof.

Date of certificate.

255(3)

A certificate referred to in subsection (2) issued by the Director may be dated as of the day he receives the articles, statement or court order pursuant to which the certificate is issued or as of any later day specified by the court or person who signed the articles or statement.

Date of certificate of discontinuance.

255(4)

Notwithstanding subsection (3), a certificate of discontinuance may be dated as of the day a corporation is continued under the laws of another jurisdiction.

Endorsement of certificate.

255(5)

A certificate endorsed in accordance with subsection (2) constitutes a certificate issued under this Act, and the articles or a statement so endorsed are effective on the date set out in the certificate, notwithstanding that any action required to be taken by the Director under this Act with respect to the articles or statement is taken at a later date.

Mechanically reproduced signature.

255(6)

A signature required on a certificate referred to in this section or section 256 may be printed or otherwise mechanically reproduced thereon.

French language.

255(7)

The articles or a statement sent to the Director under subsection (2) may be in the French language and, where that is the case, the Director shall endorse thereon the prescribed certificate in the French language.

Certificate of search or compliance.

256

The Director may furnish any person with a certificate of search or with a certificate that a corporation or other person has filed with the Director a document required to be filed with him under this Act or any predecessor thereof, or with a certified copy of any document.

Alteration.

257

The Director may alter a notice or document, other than an affidavit or statutory declaration, if so authorized by the person who sent the document or by his representative.

Corrections.

258(1)

Where a certificate or order containing an error is issued by the Director, he shall issue a corrected order or certificate and he may

(a) demand the surrender of the certificate or order containing the error;

(b) request the directors or shareholders of the corporation

(i) to pass the resolutions,

(ii) to send or deliver to him the documents required to comply with this Act, and

(iii) to take such steps as he reasonably requires.

Date of corrected certificate.

258(2)

A certificate or order corrected under subsection (1) shall have effect from the date of the certificate or order it replaces.

Notice.

258(3)

Where a corrected certificate or order issued under subsection (1) materially amends the terms of the original certificate or order, the Director shall forthwith give notice of the correction in the Manitoba Gazette.

Inspection.

259(1)

A person who pays the prescribed fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, and to make copies of or extracts therefrom.

Copies.

259(2)

The Director shall furnish any person with a copy or a certified copy of a document required by this Act or the regulations to be sent to the Director.

Records of Director.

260(1)

Records required by this Act to be prepared and maintained by the Director may be in bound or loose-leaf form or in photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or by any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

Obligation to furnish.

260(2)

Where records maintained by the Director are prepared and maintained other than in written form,

(a) the Director shall furnish any copy required to be furnished under subsection 259(2) in intelligible written form; and

(b) a report reproduced from those records, if it is certified by the Director, is admissible in evidence to the same extent as the original written records would have been.

No requirement to produce original.

260(3)

The Director is not required to produce any document where a copy of the document is furnished in compliance with clause (2)(a).

Changes in letters patent

261(1)

Any additions or amendments to or deletions from any provision in the letters patent, supplementary letters patent or by-laws of a corporation shall be made in accordance with this Act.

References to former Act.

261(2)

Any reference in an Act, letters patent, supplementary letters patent, by-laws or resolutions to The Companies Act as it existed before the coming into force of this Act or to any procedure under The Companies Act, shall be deemed to be a reference to the equivalent procedure in accordance with this Act.

PART XXI

COMMUNITY DEVELOPMENT CORPORATIONS

Application.

262(1)

Except where it is otherwise expressly provided this Part applies to every corporation with share capital heretofore or hereafter incorporated as a community development corporation.

Consent of minister required.

262(2)

No articles shall be accepted for filing without the prior approval of the minister.

Additional requirements in articles.

262(3)

The articles shall be in the prescribed form and in addition shall

(a) state that the business of the corporation is restricted to fostering the social and economic development of a municipality or other local area in the province; and

(b) state the name of the municipality, or clearly describe the area, in respect of which the corporation is incorporated.

One corporation in any area.

263

Where a corporation is incorporated in respect of any municipality or area, the Director shall not issue any articles to any other corporation in respect of the same municipality or area or in respect of an area that includes the whole or any part of the same municipality or area.

Limitation on the distribution of protits or assets.

264

A corporation to which this part applies shall not

(a) make any distribution of profits; or

(b) make any distribution of capital or assets on a liquidation, dissolution or otherwise;

unless the distribution is approved by order of the Lieutenant Governor in Council; but this section does not apply to the winding-up of an insolvent corporation.

PART XXII

CORPORATIONS WITHOUT SHARE CAPITAL

Application.

265

Except where it is otherwise expressly provided this Part applies to every corporation without share capital.

Interpretation.

266

Where used in relation to a corporation without share capital,

"member" means a member having rights through a membership interest in the corporation in accordance with the provisions of this Act and the articles and by-laws of the corporation; and

"security" means a debt obligation of a body corporate including a certificate evidencing the debt obligation.

Consent of minister required.

267(1)

No articles shall be accepted for filing without the prior approval of the minister, and the corporation shall restrict its undertaking to one that is only of a patriotic, religious, philanthropic, charitable, educational, agricultural, scientific, literary, historical, artistic, social, professional, fraternal, sporting or athletic nature or the like.

Other consents required.

267(2)

Notwithstanding subsection (1), no corporation that is restricted by its articles to the carrying on of any undertaking that is designed, with respect to a region in the province,

(a) to promote, encourage, and assist the economic development of the region, or programs that will assist that development;

(b) to assess the economic potential of the region: (c) to investigate circumstances and situations that may inhibit or retard economic development in the region, and make recommendations for the improvement or removal of those circumstances and situations; and

(d) to co-operate with other persons in achieving the purposes set out in clauses (a) to (c):

shall be incorporated without the prior approval of the Minister of Industry and Commerce, and the approval shall limit the undertaking of the corporation to a specific region.

Additional requirements in articles.

268

The articles shall be in the prescribed form and in addition shall state

(a) the restrictions on the Undertaking that the corporation may carry on;

(b) that the corporation has no authorized share capital and shall be carried on without pecuniary gain to its members, and that any profits or other accretions to the corporation shall be used in furthering its undertaking;

(c) where the undertaking of the corporation is of a social nature, the address in full of the clubhouse or similar premises that the corporation is maintaining; and

(d) that each first director becomes a member of the corporation upon its incorporation.

Three directors required.

269(1)

A corporation shall have not fewer than three directors.

Directors ex officio.

269(2)

The articles or by-laws of a corporation may provide for persons becoming directors ex officio.

Use of word "Incorporated".

270(1)

Notwithstanding subsection 10(1), the word "Incorporated", " Incorporée" or "Corporation", or the abbreviation "Inc." or "Corp.", shall be the last word of the name of each corporation without share capital, but a corporation may use and may be legally designated by either the full or the abbreviated form.

Application of sec.

270(2)

This section does not apply to a corporation incorporated before November 16, 1964; but this section applies to any corporation so incorporated that changes its name by amended articles.

Number of members.

271(1)

Unless the articles or by-laws of a corporation otherwise provide, there is no limit on the number of members of the corporation.

Classes of membership.

271(2)

The articles or by-laws of a corporation may provide for more than one class of membership and, in that case, shall set forth the designation of and the terms and conditions attaching to each class.

Admission to membership.

272

Subject to its articles or by-laws, persons may be admitted to membership in a corporation by resolution of the directors, but the articles or by-laws may provide

(a) that the resolution is not effective until confirmed by the members in general meeting; and

(b) that members may be admitted ex officio.

Voting powers of members.

273(1)

Subject to subsection (2), each member of each class of members has one vote.

Voting powers of members.

273(2)

The articles or by-laws of a corporation may provide that each member of a specified class has more than one vote or has no vote.

Memberships not transferable.

274(1)

Unless the articles otherwise provide, the interest of a member in a corporation is not transferable and lapses and ceases to exist upon his death or when he ceases to be a member by resignation or otherwise in accordance with the bylaws of the corporation.

Exception.

274(2)

Where the articles provide that the interest of a member in the corporation is transferable, the by-laws shall not restrict the transfer of that interest.

By-laws.

275

The directors of a corporation may pass by-laws, not contrary to this Act or to the articles of the corporation, regulating

(a) the admission of persons and unincorporated associations as members and as ex officio members, and the qualifications of and the conditions of membership;

(b) the fees and dues of members;

(c) the issue of membership cards and certificates;

(d) the suspension and termination of membership by the corporation and by a member;

(e) where the articles provide that the interest of a member is transferable, the method of transfer of membership;

(f) the qualifications of, and the remuneration of, the directors and the ex officio directors, if any;

(g) the time for and the manner of election of directors;

(h) the appointment, remuneration, functions, duties, and removal of agents, officers and employees of the corporation, and the security, if any, to be given by them to the corporation;

(i) the time and place, and the notice to be given, for the holding of meetings of the members and of the board of directors, the quorum at meetings of members, the requirement as to proxies, and the procedure in all things at meetings of the members and at meetings of the board of directors;

(j) the conduct in all other particulars of the affairs of the corporation.

By-laws re groups and delegates.

276(1)

The directors of a corporation may pass by-laws providing for

(a) the division of its members into groups, either territorially or on the basis of common interest;

(b) the election of some or all of the directors

(i) by the groups on the basis of the number of members in each group, or

(ii) for the groups in a defined geographical area, by the delegates of the groups meeting together, or

(iii) by the groups on the basis of common interest,

(c) the election of delegates and alternate delegates to represent each group on the basis of the number of members in each group;

(d) the number and qualification of delegates and the method of their election;

(e) the holding of meetings of members or delegates;

(f) the powers and authority of delegates at meetings;

(g) the holding of meetings of members or delegates territorially or on the basis of common interest.

Delegates.

276(2)

A by-law passed under clause (1)(f) may provide that a meeting of delegates shall be deemed for all purposes to be and have all the powers of a meeting of the members.

Confirmation.

276(3)

A by-law passed under subsection (1) is not effective until it is confirmed by at least 2/3 of the votes cast at a general meeting of the members duly called for that purpose.

Voting.

276(4)

A delegate has only one vote and shall not vote by proxy.

Saving.

276(5)

A by-law passed under subsection (1) shall not prohibit members from attending meetings of delegates and participating in the discussions at the meetings.

Disposition of property on dissolution.

277(1)

The articles of incorporation may provide that upon dissolution, the remaining property may be distributed among all the members or among the members of a class or classes of members or to one designated organization or more, or any combination thereof.

No provision in articles for distribution.

277(2)

Where the articles of incorporation do not provide for a distribution of its remaining property under subsection (1), the corporation shall, by special resolution, after payment of all debts and liabilities, distribute or dispose of the remaining property to any organization in Canada the undertaking of which is charitable or beneficial to the community.

Consent of Lieutenant Governor in Council required.

277(3)

Notwithstanding subsection (2), the remaining property of a corporation to which subsection 267(2) applies, shall not be distributed or disposed of without the consent of the Lieutenant Governor in Council.

Compliance.

277(4)

A distribution or disposition in accordance with subsections (1) and (2) is sufficient compliance with clauses 204(7)(d) and 214(i).

Amendment prohibited.

277(5)

Where the articles of incorporation do not contain a provision for the distribution of remaining property to the members, the articles shall not be amended so to provide.

PART XXIII

INSURANCE CORPORATIONS

Interpretation.

278(1)

Unless the context otherwise requires, any word or expression defined in The Insurance Act and used in this Part has the meaning given to it in that Act.

"Superintendent of Insurance" defined.

278(2)

In this Part, "Superintendent of Insurance" means the Superintendent of Insurance appointed under The Insurance Act.

Application.

279

This Part, except where it is otherwise expressly provided, applies to all insurers heretofore or hereafter incorporated by or under an

Approval of Superintendent of Insurance.

280(1)

No articles shall be accepted for filing by the Director without the prior approval of the Superintendent of Insurance.

Exception.

280(2)

This section does not apply to a friendly society, an employees' mutual benevolent society, or a trade union benefit society.

By-laws to be filed with Superintendent of Insurance.

281

A copy of every by-law of an insurer required to be licensed under The Insurance Act, certified by an officer to be a true copy, shall be filed with the Superintendent of Insurance within seven days of the passing thereof, and may be disallowed by the Superintendent of Insurance within one month after the filing thereof, by notice to that effect.

Restrictions on incorporation, etc.

282(1)

Except as provided in subsection (3), no corporation shall

(a) be incorporated; or

(b) be revived; or

(c) file articles of amendment;

under this Act, if it is empowered

(d) to pay to its members or their beneficiaries, as a benefit payable by the corporation, the proceeds of a contingency levy; or

(e) to pay sickness, accident, disability, unemployment, funeral, hospital, medical, or dental benefits, or benefits payable on death or on any contingency dependent on human life, in an amount that is fixed at the discretion of the directors or an executive or management committee of the corporation.

Contingency levy.

282(2)

For the purposes of this section, "contingency levy" means an assessment or levy made on members of a corporation on the occasion of the happening to any member of the corporation of any one or more of certain contingencies upon the happening of which that member or his beneficiaries become entitled to receive the proceeds of that assessment or levy.

Exception.

282(3)

Subsection (1) does not apply to an insurer that

(a) is a mutual benefit society; or

(b) was licensed under The Insurance Act before March 17,1943;

and the application of which for any one or more of the things mentioned in clauses (l)(a), (l)(b) and (l)(c) has been approved in writing by the Superintendent of Insurance.

Revocation of charter.

283

The Lieutenant Governor in Council may dissolve an insurer if

(a) the insurer does not obtain a licence under The Insurance Act within one year of incorporation; or

(b) the insurer fails to renew its licence under The Insurance Act for a period of one year; or

(c) the licence of the insurer under The Insurance Act is cancelled and not revived within one year.

DIVISION I

SHARE CAPITAL INSURANCE CORPORATIONS

Application.

284

This Division applies to every insurer with share capital except mutual insurance corporations.

Incorporation.

285(1)

Except as provided in Division II, a corporation with share capital may be incorporated by filing articles of incorporation in the prescribed form and, in addition, the articles shall set out that the business of the corporation is restricted to the transaction of a particular class or classes of insurance for which the corporation may be licensed under The Insurance Act.

Contents of articles.

285(2)

The articles of a corporation to which this Part applies shall set out the authorized capital of the corporation, expressed as one class of shares or more, the number of shares in each class and the maximum consideration for which each share or each class of shares or all the shares may be issued.

Applicants to give notice.

286

Applicants for incorporation shall, immediately prior to the application, publish in at least four consecutive issues of The Manitoba Gazette notice of their intention so to apply, and shall, if so required by the Director, publish elsewhere notice of their intention, and shall also give at least one month's notice of their intention so to apply to the Superintendent of Insurance.

Capital.

287(1)

If the corporation undertakes life insurance, the maximum consideration placed on the issue of shares of the corporation shall be not less than $1,000,000.

Capital.

287(2)

If the corporation undertakes any one or more classes of insurance other than life, the maximum consideration placed on the issue of shares of the corporation shall be not less than $600,000.

Money on shares paid to bank or trust company.

287(3)

All money received on account of shares shall be paid into a branch or agency in the province of a chartered bank or into a registered trust corporation, in trust for the proposed corporation; and no money paid on account of shares, before the first general meeting of the company is organized, shall be withdrawn or paid over to the corporation until after that meeting and an election of directors thereat.

Money to be returned.

287(4)

Every subscription for shares made prior to the granting of a licence under The Insurance Act shall contain the stipulation that all moneys received on account of shares will be returned to the subscribers without any deduction for promotion, organization, or other expenses, in case the insurer fails to procure a licence.

Promotion expenses.

287(5)

Every subscription for shares shall contain the stipulation that no sum will be used or paid before or after incorporation, for commission, promotion or organization expenses in excess of a percentage, not exceeding 15, of the amount of money received on account of shares.

DIVISION II

MUTUAL INSURANCE CORPORATIONS

Application.

288(1)

This Division applies to every corporation incorporated as a mutual insurance corporation.

Incorporation.

288(2)

A corporation without share capital may be incorporated by filing articles of incorporation in the prescribed form and, in addition, the articles shall state that the undertaking of the corporation is restricted to the sole purpose of undertaking contracts of insurance including mutual insurance but the articles shall also provide that the corporation shall not issue contracts of life insurance or accident or sickness insurance.

Name.

289

The name of a mutual insurance corporation shall include the word "Mutual" or "Mutuelle" and the word "Insurance" or "Assurance".

Subscription book.

290

If 25 or more persons, each having an insurable interest in property of a kind to be insured in a proposed corporation, are present at a meeting, and a majority of them determine that it is expedient to establish a mutual insurance corporation, they may elect from among themselves three persons to open and keep a subscription book in which owners of that property within the province may sign their names and addresses and enter the sum for which they respectively bind themselves to effect insurance with the corporation, giving the description and location of the property to be insured.

Calling meeting of subscribers.

291(1)

When the subscription has been completed and the aggregate amount subscribed is not less than $50,000., any 10 of the subscribers may call the first meeting of the proposed corporation, at such time and place as they determine, by advertisement and by sending a printed notice by mail, addressed to every subscriber at his post office address, at least 10 days before the day of the meeting.

Notice.

291(2)

The notice and advertisement shall state the object of the meeting and the time and place at which it is to be held.

Election of board of directors, etc.

292

At the meeting, or at any adjournment thereof, the name and style of the corporation shall be adopted, a secretary ad interim shall be appointed, a board of directors elected, and a central and generally accessible place within the province named at which the registered office of the company is to be located.

Documents filed with application.

293(1)

With the articles of incorporation, the applicants shall produce to the Director, certified as correct under the hands of the chairman and secretary,

(a) a copy of the minutes of the meeting, including all resolutions respecting the business of the proposed corporation, its name or style, and the location of its registered office:

(b) a copy of the subscription book:

(c) a list showing the names and addresses of the directors elected and of the officers appointed; and

(d) such further information as the Director requires.

Originals.

293(2)

The applicants shall produce for verification to the Director, if requested, the originals of the documents required under subsection (1).

Members.

294(1)

Every person who is insured under a policy issued by a corporation for $1,000. or more of insurance shall, while the insurance is in effect, be deemed to be a member of the corporation.

Liability of member.

294(2)

No member is liable in respect of any loss or claim or demand against the corporation beyond the amount unpaid upon a premium note signed by him in favour of the corporation.

Withdrawal of member.

294(3)

Any member may, with the consent of the directors, withdraw from the corporation upon such terms as the directors lawfully prescribe and upon the withdrawal his policy shall be cancelled but, if he has signed a premium note in favour of the corporation that is still in effect he is nevertheless liable to be assessed for, and to pay, his proportion of the losses, expense and reserve, to the time of cancellation of the policy and, on payment of the amount then payable, he is entitled to a return of his premium note.

Cash premium.

295

No contract of insurance issued by a corporation wholly on the cash plan makes the insured under the contract liable to contribute or pay any sum to the corporation, or to its funds, or to any member of the corporation, beyond the cash premium agreed upon under the contract.

Voting.

296(1)

Each member of the corporation is entitled at all meetings of the corporation to a number of votes in proportion to the amount by him insured, as follows:

(a) For $15,000. or less, one vote.

(b) For more than $15,000. but less than $30,000., two votes.

(c) For more than $30,000., two votes plus one additional vote for every $30,000. over $30,000.

One vote restriction.

296(2)

Notwithstanding subsection (1), the corporation may provide by its articles or by-laws that each member is entitled to one vote only at its meetings.

Member in arrears.

296(3)

No member is entitled to vote while he is in arrears for any assessment or premium due from him to the corporation.

Vote where two or more persons.

297

Where a policy on the mutual plan is issued to two or more persons, one only is entitled to vote, and the right of voting belongs to the one first named on the register of policy holders if he is present, and if not present, to the one who stands second, and so on.

Vote of trustee member.

298

Where property is insured by a trustee board or a corporation, any person duly appointed in writing pursuant to its resolution may vote on its behalf.

Quorum.

299

At all meetings of the corporation 12 members actually present in person form a quorum.

Persons eligible as directors.

300

No person is eligible to be, or shall act as, a director unless he is a member of the corporation and insured therein, for the time he holds office, to the amount of not less than $2.000.

Member corporation.

301(1)

The president or director of a member corporation that has the qualifications that would qualify an individual to be a director is eligible to be a director of the corporation.

Partnership.

301(2)

Where a partnership has the qualifications that would qualify an individual to be a director, one member of the partnership is eligible to be a director of the corporation.

Treasurer.

302

The treasurer or other officer having charge of the money of the corporation shall give security to the satisfaction of the board of directors, in a sum of not less than $2,000., for the faithful discharge of his duties.

Meeting of directors.

303

The board of directors shall hold a meeting at least every three months for transacting the business of the corporation.

Establishment of branches.

304

Any corporation may separate its business into branches or departments, with reference to the nature or classification of risks or of the localities in which insurance is or is to be effected.

Rates.

305

The directors of every corporation separating its business as described in section 304 shall make a scale of risks and tariffs of rates for each branch or department, and direct that the amounts of each be kept separate and distinct the one from the other.

Liability of branch members.

306

Members insuring in one branch are not liable, and may not be assessed, for claims in any other branch or department, but this section shall not be construed to apply to any reserve fund of the corporation.

Expenses divided.

307

All necessary expenses incurred in the conduct and management of a corporation shall be assessed upon and divided among the several branches or departments in such proportion as the directors determine.

DIVISION III

BENEVOLENT CORPORATIONS

Application.

308

This Division applies to every corporation without share capital the undertaking of which is restricted by its articles to that of a fraternal society, a mutual benefit society, a friendly society, a trade union benefit society, or an employee's mutual benefit society.

Incorporation.

309

A corporation without share capital may be incorporated by filing articles of incorporation in the prescribed form and in addition the articles shall state that the undertaking of the corporation is restricted to the sole purpose of carrying on the business of a fraternal society, a mutual benefit society, a friendly society, a trade union benefit society, or an employees' mutual benefit society pursuant to the provisions of The Insurance Act.

Investments.

310

The corporation shall not invest its funds otherwise than in securities authorized for investment by insurers under The Insurance Act.

Limit benefits.

311

The corporation may limit any insurance or benefits to such class or classes of persons as its rules determine, notwithstanding the provisions of any other statute or law to the contrary, unless the other statute is declared specifically to apply to corporations to which this Division applies.

Borrowing power.

312

For the purposes of carrying out its undertaking a corporation may borrow or raise or secure the payment of money in such manner as it thinks fit, and in particular by the issue of bills of exchange or debt obligations: but that power shall be exercised only under the authority of its rules, and in no case shall debt obligations be issued without the sanction of a special resolution and in the case of a corporation required to be licensed under The Insurance Act undertaking an insurance business, the approval of the Superintendent of Insurance.

Treasurer.

313

The treasurer or other officer having charge of the money of the corporation shall give security to the satisfaction of the board of directors, in a sum that in the opinion of the board of directors is adequate, but in no case less than $2,000., for the faithful discharge of his duties.

Disputes.

314

Unless the rules of the corporation otherwise provide, any dispute arising out of the affairs of the corporation between any members thereof or between a member or any person aggrieved who has not more than six months prior thereto ceased to be a member or any person claiming through that member or person aggrieved or claiming under the rules, and the corporation or a director or officer thereof, shall be decided by arbitration under The Arbitration Act; and the decision so made is binding on all parties, and may be enforced on application to the court, and unless the rules otherwise provide there is no appeal from the decision.

PART XXIV

TRUST AND LOAN CORPORATIONS

Definitions.

315

In this Part,

"corporation" means a trust corporation or a loan corporation; ("corporation")

"licence" means a licence issued under Division XI; ("permis")

"loan corporation" means a corporation incorporated in Manitoba that carries on the business or exercises the powers set forth in section 327 and that accepts deposits from the public within the meaning of The Canada Deposit Insurance Corporation Act (Canada); ("corporation de prêt")

"subordinated note" means an instrument evidencing an indebtedness of a corporation that by its terms provides that the indebtedness evidenced by it shall, in the event of the insolvency, liquidation or dissolution of the cornoration, rank equally with the indebtedness evidenced by the other subordinated notes of the corporation but be subordinate in right of payment to all other indebtedness of the corporation except indebtedness in respect of subordinated shareholder loans; ("billet subalterne")

"subordinated shareholder loan" means a loan made to a corporation by

(a) a shareholder of the corporation, or

(b) a person who controls a shareholder of the corporation,

for a fixed term and under the condition that the indebtedness arising therefrom shall, in the event of the insolvency or winding-up of the corporation, rank equally with the indebtedness in respect of other subordinated shareholder loans but be subordinate in right of payment to all other indebtedness of the corporation; ("prêt subalterne consenti par un actionnaire")

"superintendent" means

(a) the person appointed under subsection 360(1), or

(b) if an agreement is made under subsection 360(2), the Superintendent of Insurance for Canada; ("surintendant")

"trust corporation" means a corporation incorporated in Manitoba that carries on any of the businesses or exercises any of the powers set forth in subsection 322(1). ("corporation de fiducie")

DIVISION I

GENERAL

Application.

316(1)

Notwithstanding any other Act of the Legislature, this Part applies to every loan corporation and to every trust corporation incorporated by or under any Act for which this Act is substituted or by a special Act of the Legislature.

Limitations on loan operations.

316(2)

No corporation shall carry on the business of a loan corporation as set forth in section 327 unless it is incorporated and licensed under this Part if it accepts deposits from the public in Manitoba as the word is defined for the purposes of The Canada Deposit Insurance Corporation Act (Canada).

Deposit insurance required.

317(1)

Every corporation is authorized to apply for deposit insurance under the Canada Deposit Insurance Corporation Act (Canada) and no body corporate shall accept deposits as the word is defined for the purposes of that Act, from the public in Manitoba unless it is insured under a policy of deposit insurance by the Canada Deposit Insurance Corporation.

Insurance required for licensing, etc.

317(2)

No extra-provincial body corporate authorized to accept deposits, as the word is defined for the Canada Deposit Insurance Corporation Act (Canada), from the public shall be registered under this Act unless it is insured under a policy of deposit insurance issued by the Canada Deposit Insurance Corporation.

Restricted registration.

317(3)

Notwithstanding subsection (2), the Director may restrict the terms of the registration of a body corporate in such a way that the body corporate shall not under its registration accept deposits, as the word is defined for the purposes of the Canada Deposit Insurance Corporation Act (Canada), from the public in Manitoba.

Capital requirements on insurance.

317(4)

No corporation that is not a member of the Canada Deposit Insurance Corporation shall apply for deposit insurance until it has an unimpaired capital account and reserve of at least $1,000,000.

Purchases of business by corporation.

318(1)

A corporation may acquire the whole or any part of the business, rights and property of any other body corporate carrying on the business that the corporation is authorized to carry on, exercise and hold, conditional upon the assumption by that corporation of the duties, obligation and liabilities of that other body corporate with respect to the business, rights and property so acquired as are not performed or discharged by that other body corporate, but no agreement therefor shall take effect until it has been submitted to and approved by the Director.

Sale of business and property.

318(2)

A corporation may sell or dispose of the whole or any part of its business, rights, and property for such consideration as it may think fit.

Approval of shareholders.

318(3)

A sale or disposal under subsection (2) shall not be made unless it is approved by a vote of at least three-quarters of the shares

(a) represented in person or by proxy at a meeting of the shareholders duly called for that purpose; and

(b) representing at least 50% of the issued capital of the corporation.

Approval by Director.

318(4)

A sale or disposal under subsection (2) does not take effect until it has been submitted to and approved by the Director.

Consideration for sale.

318(5)

Where a sale under subsection (2) is a sale of the whole of the business, rights and property of a corporation to any other body corporate, the consideration for the sale may, notwithstanding anything in this Act contained, be (a) fully paid-up shares of the purchasing company; or

(b) part cash and part shares of the purchasing company; or

(c) in such other forms as may be agreed upon.

Amalgamation.

319(1)

Any two or more trust corporations or any two or more loan corporations may amalgamate and continue as one trust corporation or one loan corporation, as the case may be, except that the Director shall not issue a certificate of amalgamation

(a) unless the superintendent recommends the amalgamation in writing; and

(b) if any of the corporations being amalgamated are required to be insured under section 317, unless the Canada Deposit Insurance Corporation confirms in writing that either any policy of deposit insurance will continue in force or a new policy of deposit insurance will be issued to the amalgamated corporation.

Incorporating Acts lapse.

319(2)

Upon the issue of articles of amalgamation, any special Act of the Legislature incorporating a corporation being amalgamated ceases to be in force, and the amalgamated corporation is deemed to be a corporation incorporated under this Act with all the powers and privileges, and subject to the limitations, liabilities, and provisions, of this Act and the articles of amalgamation.

DIVISION II

INCORPORATION

Minister's approval required.

320(1)

No articles shall be issued without the prior approval of the Minister.

Contents of articles.

320(2)

The articles of incorporation shall be in the prescribed form and in addition shall set out that the business of the corporation is restricted to that of a trust corporation or a loan corporation, as the case may be, and that the corporation is subject to the specific provisions of Part XXIV of this Act.

Contents of articles.

320(3)

The articles of a corporation to which this Part applies shall set out the authorized capital of the corporation, expressed as one class of shares or more, the number of shares in each class and the maximum consideration for which each share or each class of shares or all the shares may be issued.

Capital requirements.

321(1)

The authorized capital of a corporation that intends to accept deposits from the public within the meaning of the Canada Deposit Insurance Corporation Act (Canada) shall not be less than $1,250,000.

No redeemable cumulative shares.

321(2)

Notwithstanding section 34, a corporation shall not redeem any redeemable shares issued by it, unless the approval of the superintendent is first obtained.

Application of subsec. 10(1).

321(3)

Subsection 10(1) does not apply to a corporation to which this Part applies.

Minimum number of directors.

321(4)

The number of directors of a corporation shall be not less than five, a majority of whom constitute a quorum for the transaction of business at a meeting thereof.

Qualification of directors.

321(5)

No person shall be elected a director of a corporation unless he beneficially owns shares of the corporation representing at least $2, 500. in the stated capital account of the corporation.

Resident Canadian directors.

321(6)

A majority of the directors of a corporation shall at all times be residents of Canada.

DIVISION III

POWERS

Trust corporation powers.

322(1)

A trust corporation may

(a) take, receive, hold and administer estates and property that are granted, committed, transferred or conveyed to the corporation with its consent, upon any trust whatsoever not contrary to law, at any time, by any person, or by any court;

(b) take and receive as trustees or as bailee, upon such terms and for such remuneration as is agreed upon, deeds, wills, policies of insurance, securities or other valuable papers or securities for money, jewellery, plate or other chattel property of any kind, and guarantee the safekeeping thereof;

(c) accept and execute the offices of executor, administrator, trustee, receiver, liquidator, guardian, assignee for the benefit of creditors, custodian or trustee in cases relating to insolvency or under the Bankruptcy Act (Canada), guardian of the person or estate of any minor, or committee of the person or estate of any mentally incompetent person, and accept the duty of, and act generally in, the winding-up of estates, partnerships, and bodies corporate; and

(d) subject to subsections (2) to (7), receive deposits of money payable upon demand or after notice, and receive money for the purpose of its being invested by the corporation.

Deposits.

322(2)

A trust corporation may receive deposits of money repayable upon demand or after notice and may pay interest thereon at such rates and on such terms as the corporation from time to time establishes, and the corporation is entitled to retain the interest and profit resulting from the investment or loaning of the deposit money in excess of the amount of interest payable to depositors.

Deposits deemed trust moneys and guaranteed.

322(3)

Every trust corporation receiving deposits in the manner authorized under subsection (2) is deemed to hold the deposits as trustee for the depositors and to guarantee repayment thereof; and there shall be earmarked and definitely set aside in respect thereof securities, or cash and securities, equal to the full aggregate amount thereof; and for the purposes of this subsection "cash" includes moneys on deposit and "securities" includes loans made upon securities.

Record of Deposits

322(4)

Every trust corporation receiving deposits in the manner authorized under subsection (2) shall keep a record in the form approved by the superintendent in which shall be entered all sums so received and the names and addresses, so far as known, of the persons from whom they are received.

Investment certificates.

322(5)

A trust corporation may receive money for the purpose of its being invested by the corporation and may issue investment certificates or receipts and may guarantee the repayment of money so received and the payment of the interest thereon at such rates as is agreed upon on fixed days.

Nature of guarantee.

322(6)

A guarantee by a trust corporation made under subsection (5) is not a security and the money is not money borrowed by the corporation by issuing securities but is money received in trust: but the corporation is entitled to retain the interest and profits resulting from the investment or loaning of the moneys in excess of the amount of interest payable thereon.

Securities allocated to guaranteed investment. 322(7) Where it is provided by the agreement under which moneys are received by the corporation for guaranteed investment under subsection (5) that specific securities shall be allocated in respect thereof, those securities shall be earmarked and definitely set aside in respect thereof, and in respect of all other moneys received for guaranteed investment as mentioned in subsection (5) there shall be earmarked and definitely set aside in respect thereof securities, or cash and securities, equal to the full aggregate amount thereof; and for the purposes of this subsection " cash" includes moneys on deposit and " securities" includes loans made upon securities.

Combined trust accounts.

322(8)

A corporation may combine in one trust account, securities that are required to be earmarked and definitely set aside under subsections (3) and (7).

Security not necessary if approved by L. G. in C.

323(1)

Where, being authorized a trust corporation is appointed to execute the office of executor, administrator, trustee, receiver, liquidator, assignee, guardian or committee, if the Lieutenant Governor in Council approves of the trust corporation being accepted by the Court of Queen's Bench as a trust corporation for the purposes of the court, it is not necessary for the trust corporation, whether incorporated under the laws of the province or elsewhere, to give security for the due performance of the duty of that office.

Appointment of corporation by court.

323(2)

The court may, with the consent of the trust corporation, appoint it to exercise any of the offices mentioned in subsection (1) in respect of any estate or person under the authority of the court or judge and may grant to the trust corporation probate of any will in which the trust corporation is named as an executor.

Revocation of authority.

323(3)

The Lieutenant Governor in Council may revoke an approval given under subsection (1), and after notice of revocation no court shall appoint the trust corporation affected thereby to any office mentioned in that subsection unless the trust corporation gives the like security for the due performance of its duty as is required from a private person.

Account of administration.

324

Where a trust corporation is appointed to any trust or office by any court, or any judge, officer, or person having lawful authority in that behalf, the court, judge, officer or person may require the trust corporation to render an account of its administration of the trust or office to which it is appointed, and may appoint a suitable person to investigate the management of the trust by the corporation and as to the security afforded to those by or for whom its engagements are held, and the person shall report thereon to the court, judge, officer, or person, and the expenses of the investigation shall be borne as ordered by the court, judge or officer.

Trust funds separate.

325

The moneys and securities given, acquired or held in trust by a trust corporation shall always be kept distinct from those of the trust corporation, and in separate accounts, and so marked for each particular trust as always to be distinguished from any other in the books of account of the corporation, so that at no time shall trust moneys form part of or be mixed with the general assets of the trust corporation, and the trust company shall, in the administration of a trust, keep distinct records and accounts of all operations connected therewith.

Additional trust corporation powers.

326

A trust corporation may also

(a) act generally as attorney or agent for the transaction of business, the management of estates, and the collection of loans, rents, interest, dividends, debts and securities for money;

(b) act as agent for the purpose of issuing or countersigning certificates of shares, bonds or other obligations of any association or municipal or other corporation, and receive, invest and manage any sinking fund therefor on such terms as are agreed upon;

(c) guarantee repayment of the principal or payment of the interest, or both, of any moneys entrusted to the company for investment, on such terms and conditions as are agreed upon:

(d) sell, exchange, pledge, or mortgage any mortgage or other security, or any property held by the corporation, and make and execute all requisite conveyances and assurances in respect thereof:

(e) make, enter into, deliver, accept and receive, all deeds, conveyances, assurances, transfers, assignments, grants and contracts, necessary to carry out the purposes of the corporation and to promote its objects;

(f) hold real estate which, having been mortgaged or hypothecated to it, is acquired by it for the protection of its investments, and from time to time sell, mortgage, lease or otherwise dispose thereof; and

(g) for all the services, duties and trusts set out in this section, charge, collect and receive all proper remuneration and all legal and other usual and customary costs, charges and expenses.

Loan corporation powers.

327

A loan corporation may lend money on the security of, or purchase or invest in, mortgages, charges or hypothecs upon improved real property in Manitoba or elsewhere where the corporation is carrying on business.

DIVISION IV

AUTHORIZED LOANS, PURCHASES AND INVESTMENTS

Reasonableness of investment or loan.

328(1)

An investment or loan authorized by this Part may be made by a corporation only if the investment or loan is, in all respects, reasonable and proper.

Authorized investments.

328(2)

A corporation may lend money on the security of or purchase or invest in

(a) mortgages, charges or hypothecs upon improved real estate or leaseholds in Manitoba or elsewhere where the corporation is carrying on business, but the amount paid for the mortgage, charge or hypothec, together with the amount of indebtedness under any other mortgage, charge or hypothec on the real estate ranking equally with or superior to the mortgage, charge or hypothec in which the purchase or investment is made, shall not exceed 3/4 of the value of the real estate or leasehold;

(b) mortgages, charges or hypothecs upon improved real estate or leaseholds in Manitoba or elsewhere where the corporation is carrying on business, notwithstanding that the amount paid for the mortgage, charge or hypothec exceeds three-quarters of the value of the real estate or leasehold, if the loan for which the mortgage, charge or hypothec is the security is an approved loan or an insured loan under the National Housing Act, 1954 (Canada) or any amendments thereto or if repayment of the excess over 3/4 of the value of the real estate or leasehold is guaranteed or insured by or through an agency of the government of the country in which the real estate or leasehold is situated or of a province or state of that country or is insured by a policy of mortgage insurance issued by an insurance company registered under the Canadian and British Insurance Companies Act (Canada) or the Foreign Insurance Companies Act (Canada);

(c) an assignment by the borrower of a life insurance policy owned by him, if the loan is at all times fully secured thereby and the policy has, on the date the loan is made, a cash surrender value admitted by the insurer;

(d) debentures, bonds or other securities of or guaranteed by the Government of Canada, or of or guaranteed by the government of any province of Canada, or of or guaranteed by the Government of the United States of America, or of any state of that country, or of or guaranteed by the Government of the United Kingdom, or of the government of any country where the corporation is carrying on business or of any municipality or school corporation in Canada or elsewhere where the corporation is carrying on business, or guaranteed by any municipal corporation in Canada or secured by rates or taxes levied under the authority of the government of any province of Canada on property situated in that province and collectable by the municipalities in which the property is situated;

(e) the bonds, debentures or other securities issued or guaranteed by

(i) the International Bank for Reconstruction and Development, or

(ii) the government of any country in which the corporation is carrying on business or a province or state thereof;

(f) bonds, debentures, debenture stock or other securities of a body corporate or bank incorporated by Canada, or by any province of Canada, or by any former province now forming part of Canada that are secured by a mortgage or hypothec to a trust company either singly or jointly with another trustee upon improved real estate of that body corporate or bank or other assets of that body corporate of the classes mentioned in clauses (a), (b), (c) and (d);

(g) bonds or debentures of a body corporate or institution incorporated in Canada that are secured by the assignment to a trust corporation in Canada of payments that the Government of Canada has agreed to make, if the payments are sufficient to meet the interest as it falls due on the bonds or debentures outstanding and to meet the principal amount of the bonds or debentures upon maturity;

(h) bonds or debentures of a body corporate or institution incorporated in Canada that are secured by the assignment to a trust corporation in Canada of payments that are payable, by virtue of an Act of a province of Canada by or under the authority of the province, if the payments are sufficient to meet the interest as it falls due on the bonds or debentures outstanding and to meet the principal amount of the bonds or debentures upon maturity;

(i) obligations or certificates issued by a trustee to finance, for a body corporate incorporated in Canada or for a corporation owned or controlled by a corporation so incorporated, the purchase of transportation equipment to be used on railways or public highways, if the obligations or certificates are fully secured by

(i) an assignment of the transportation equipment to, or the ownership thereof by, the trustee, and

(ii) a lease or conditional sale thereof by trustee to the corporation;

(j) bonds, debentures or other evidences of indebtedness of any body corporate or bank that has paid regular dividends on its preferred or on its common shares for not less than five years immediately preceding the date of the purchase or investment, or the bonds, debentures or other evidences of indebtedness of any body corporate or bank that are guaranteed by a body corporate or bank that has paid regular dividends on its preferred or on its common shares for not less than five years immediately preceding the date of the purchase or investment, if, at the date of the purchase or investment, the amount of the bonds, debentures and other evidences of indebtedness so guaranteed is not in excess of 50% of the amount at which those preferred or common shares, as the case may be, are carried in the capital account of the guaranteeing corporation or bank;

(k) preferred shares of a body corporate that has paid

(i) a dividend in each of the five years immediately preceding the date of investment at least equal to the specified annual rate upon all of its preferred shares, or

(ii) a dividend in each year of a period of five years ended less than one year before the date of investment upon its common shares of at least 4% of the average value at which the shares were carried in the share capital account of the company during the year in which the dividend was paid;

(l) fully paid common shares of a body corporate incorporated in Canada that, during a period of five years that ended less than one year before the date of investment, has

(i) paid a dividend in each of those years upon its common shares, or

(ii) had earnings in each of those years available for the payment of a dividend upon its common shares, of at least 4% of the average value at which the shares were carried in the share capital account of the body corporate during the year in which the dividend was paid or in which the body corporate had earnings available for the payment of dividends, as the case may be;

(m) securities of a mortgage investment body corporate designated as such pursuant to the provisions of the Residential Mortgage Financing Act (Canada):

(n) real estate or leaseholds for the production of income in Canada or in any country in which the corporation is carrying on business, either alone or jointly with any other corporation incorporated in Canada or with any insurance company transacting the business of insurance in Canada, if

(i) a lease of the real estate or leasehold is made to, or guaranteed by

(A) the government or an agency of the government of the country in which the real estate or leasehold is situated, or of a province, state or municipality of that country, or

(B) a company the preferred shares or common shares of which are, at the date of investment, authorized as investments by clause (k) or (1),

(ii) the lease provides for a net revenue sufficient to yield a reasonable interest return during the period of the lease and to repay at least 85% of the amount invested by the corporation in the real estate or leasehold within the period of the lease, but not exceeding 30 years from the date of investment,

(iii) the total investment of the corporation in any one parcel of real estate or in any one leasehold does not exceed 2% of the book value of the total assets of the corporation, and

(iv) the book value of the investments of the corporation in real estate or leaseholds for the production of income under this clause and clause (o) do not exceed 10% of the book value of the total assets of the corporation, and the corporation may hold, maintain, improve, lease, sell or otherwise deal with or dispose of the real estate or leasehold;

(o) real estate or leaseholds for the production of income in Canada or in any country in which the corporation is carrying on business, either alone or jointly with any other corporation incorporated in Canada or with any insurance company transacting the business of insurance in Canada, if

(i) the real estate or leasehold has produced, in each of the three years immediately preceding the date of investment, net revenue in an amount that, if continued in future years, would be sufficient to yield a reasonable interest return on the amount invested in the real estate or leasehold and to repay at least 85% of that amount within the remaining economic lifetime of the improvements to the real estate or leasehold but not exceeding 40 years from the date of investment, and

(ii) the total investment of a corporation in any one parcel of real estate or in any one leasehold does not exceed 2% of the book value of the total assets of the corporation, and the corporation may hold, maintain, improve, lease, sell or otherwise deal with or dispose of the real estate or leasehold; but the book value of the investments of the corporation in real estate or leaseholds for the production of income and subject to sub-clause (n)(iv) shall not exceed 5% of the book value of the total assets of the corporation;

(p) guaranteed investment certificates of a trust company incorporated in Canada, if, at the date of investment, the preferred shares or the common shares of the trust company are authorized as investments by clause (k) or (1).

Designated bank or lender.

328(3)

If a corporation is designated a bank or lender, as the case may be, under the Canada Student Loans Act (Canada), the Farm Improvement Loans Act (Canada), the Fisheries Improvement Loans Act (Canada) or the Small Businesses Loans Act (Canada), the corporation may make guaranteed loans under and in accordance with the provisions of any of those Acts for which it has been designated a bank or lender.

Loan corporation investments under National Housing Act.

328(4)

In addition to investments it may make by lending on the security of or by purchasing mortgages, charges or hypothecs upon real estate pursuant to the National Housing Act (Canada), or the National Housing Act, 1954 (Canada), a loan corporation may invest its funds to an aggregate amount not exceeding 5% of its total assets in Canada in any other classes or types of investments pursuant to those Acts, or any amendments thereto, including the purchase of land, the improvement thereof, the construction of buildings thereon, and the management and disposal of the lands and buildings.

Trust Corporation investments under National Housing Act.

328(5)

In addition to investments it may make by lending on the security of or by purchasing mortgages, charges or hypothecs upon real estate under the National Housing Act, 1954 (Canada), a trust corporation may invest its own funds to an aggregate amount not exceeding 5% of its unimpaired capital and reserve and may, notwithstanding subsection (1), invest moneys received for guaranteed investment or as deposits to an aggregate amount not exceeding 5% of those moneys in any other classes or types of investments pursuant to that Act, including the purchase of land, the improvement thereof, the construction of buildings thereon, and the management and disposal of the lands and buildings.

Power to invest in shares of certain corporations.

328(6)

Notwithstanding anything in subsection (2), sub-clause 330(l)(b) and section 332, a trust corporation may invest its own funds in the fully paid shares of

(a) any body corporate incorporated outside Canada that in the opinion of the Superintendent is exercising powers substantially similar to those exercised by the trust corporation;

(b) any body corporate incorporated to acquire, hold, maintain, improve, lease or manage real estate or leaseholds or act as agent in the sale or purchase of real estate or leaseholds;

(c) any body corporate incorporated to offer participation in an investment portfolio;

(d) any body corporate incorporated to provide a body corporate mentioned in paragraph (c) with advisory, management or sales distribution services;

(e) with the prior approval of the Superintendent, any corporation incorporated to carry on any other business activity reasonably ancillary to the business of a trust corporation;

subject to such terms and conditions as may be prescribed.

Trust corporation - other investments (basket clause).

329(1)

A trust corporation may make investments and loans not hereinbefore authorized by section 328, including investments in real estate or leaseholds, subject to the following provisions:

(a) investments in real estate or leaseholds pursuant to this subsection shall be made only for the production of income, and may be made by the trust corporation in Canada or in any country in which the trust corporation is qualified to carry on business, either alone or jointly with any trust body corporate or loan body corporate incorporated in Canada or with any insurance body corporate transacting the business of insurance in Canada, and the trust corporation may hold, maintain, improve, develop, repair, lease, sell or otherwise deal with or dispose of such real estate or leaseholds, but the total investment of a trust corporation in any one parcel of real estate or in any one leasehold shall not exceed one per cent of the aggregate of the book value of the trust corporation's own funds and the guaranteed trust money held by the trust corporation;

(b) the total book value of the investments and loans made under the authority of this subsection and held by the trust corporation excluding those that are or at any time since acquisition have been authorized as investments apart from this subsection shall not exceed the greater of

(i) 15% of the book value of the trust corporation's own funds, and

(ii) such percentage as the Superintendent may approve, not in excess of 7% of the aggregate of the book value of the trust corporation's own funds and the total amount of guaranteed trust money held by the trust corporation; and

(c) this subsection shall be deemed not to

(i) enlarge the authority conferred by section 328 to invest in mortgages or hypothecs on real estate or leaseholds and to lend on the security of real estate or leaseholds,

(ii) affect the operation of Division V of Part XXIV of the Act.

Loan corporations.

329(2)

A loan corporation may make investments and loans not hereinbefore authorized by this section, including investments in real estate or leaseholds, subject to the following provisions:

(a) investments in real estate or leaseholds pursuant to this subsection shall be made only for the production of income, and may be made by the loan corporation in Canada or in any country in which the loan corporation is carrying on business, either alone or jointly with any loan body corporate or trust body corporate incorporated in Canada or with any insurance body corporate transacting the business of insurance in Canada, and the loan corporation may hold, maintain, improve, develop, repair, lease, sell or otherwise deal with or dispose of such real estate or leaseholds, but the total investment of a loan corporation pursuant to this subsection in any one parcel of real estate or in any one leasehold shall not exceed 1% of the book value of the total assets of the loan corporation;

(b) this subsection shall be deemed not to

(i) enlarge the authority conferred by section 328 to invest in mortgages or hypothecs and to lend on the security of real estate or leaseholds,

(ii) affect the operation of Division V of Part XXIV of the Act;

(c) the total book value of the investments and loans made under the authority of this subsection and held by the loan corporation excluding those that are or at any time since acquisition have been authorized as investments apart from this subsection, shall not exceed the greater of

(i) 15% of the loan corporation's unimpaired paid-up capital and surplus, and

(ii) such percentage as the Superintendent may approve, not in excess of 7%, the book value of the total assets of the loan corporation.

Personal property security.

329(3)

Where a corporation makes or has made a loan, it may take personal property as security for the loan if

(a) the loan is made pursuant to subsection (1) or (2); or

(b) the personal property is in addition to the other security required by this Part in respect of the loan.

DIVISION V

RESTRICTIONS ON INVESTMENTS AND LOANS

Restrictions on amount of investments.

330(1)

No corporation shall

(a) except as to securities issued or guaranteed by the Government of Canada or the government of any province of Canada or by any municipal corporation in Manitoba,

(i) subject to sub-clause (iii), invest in any one security an amount exceeding 15% of its own unimpaired paid-in capital and reserve funds, or

(ii) make a total investment in any one body corporate, or in bodies corporate that to the knowledge of the corporation are associates, maturing in more than one year, including the purchase of its shares or other securities and the lending to it on the security of its debentures, mortgages or other assets or any part thereof, of an amount exceeding 15% of its own unimpaired paid-in capital and reserve funds, or

(iii) make an investment referred to in subclause (ii) maturing in one year or less in an amount that together with the amount invested to which sub-clause (ii) applies exceeds in the case of a loan corporation the aggregate of 20% of its own unimpaired paid-in capital and reserve funds and 2 1/2% of moneys borrowed on debentures and, in the case of a trust corporation, the aggregate of 20% of its own unimpaired paid in capital account and reserve funds and 2 1/2% of moneys received as deposits and for guaranteed investment; or

(b) make any investment the effect of which will be that the corporation will hold more than 20% of the shares or more than 20% of the debentures of any one body corporate; or

(c) make any investment in common shares the effect of which will be that the corporation will hold in the aggregate common shares carried on its books at more than 25% of the book value of the total assets of the corporation if a loan corporation, or more than 25% of the aggregate of the unimpaired capital and reserve of the corporation and the moneys held by it for guaranteed investment or as deposits if a trust corporation.

Regulations.

330(2)

The holding of securities of a corporation and securities under its administration, wherever situated, is subject to such regulations respecting their safekeeping, including registration and the bonding of directors, officers and employees of the corporation, as the Lieutenant Governor in Council may prescribe.

Limitation on real estate for business.

331

A corporation may acquire and hold real property for its actual use and occupation and the management of its business and may sell or dispose of it, but not more than 35% of the corporation's unimpaired paid-up capital and reserve may be laid out or expended for the purpose.

Security on trust corporation shares.

332

A trust corporation shall not make investments or loans in or upon the security of shares of another trust body corporate and shall not make loans on the security of its own shares.

Security on loan corporation's shares.

333

A loan corporation shall not lend or advance money upon the security of its own shares or invest in, or lend money upon the security of the shares of any other loan body corporate.

Market value on loans.

334

No corporation may make a loan on the security of shares or debt obligations of a body corporate as permitted by Division IV unless the market value of the securities on which the loan is made is at all times not less than the amount of the loan.

Trust corporation investment limitations.

335(1)

A trust corporation may invest its funds and moneys received for guaranteed investment, or as deposits, in any of the securities mentioned in Division IV if, at all times, at least 50% of the moneys received for guaranteed investment or as deposits are invested in or loaned upon securities that are authorized under The Trustee Act.

Trust corporation real estate income.

335(2)

The total book value of the investments of a trust corporation in real estate or leaseholds for the production of income under clause 328(2)(n) shall not exceed in the case of its own funds 10% of those moneys and under clause 328(2)(o) shall not exceed in the case of its own funds 5% of the book value of the total assets of those funds and, in the case of moneys received for guaranteed investment or as deposits, 5% of those moneys or 25% of the unimpaired capital and reserve of the corporation, whichever is the greater, but the total amount invested under those clauses shall not exceed the maximum amount provided in clause 328(2)(n); and the amount so invested in any one parcel of real estate or leaseholds for the production of income shall not exceed 2% of the aggregate of the total assets of the corporation and the moneys received by it for guaranteed investment or as deposits.

DIVISION VI BORROWING POWERS AND STATUTORY LIMITS

Specific borrowing.

336(1)

Notwithstanding any other provision of this Act,

(a) a trust corporation may hypothecate, mortgage or pledge assets of its guaranteed trust fund to the Canada Deposit Insurance Corporation as security for a loan from that Corporation; and

(b) a loan corporation shall not hypothecate, mortgage or pledge its real or personal property, or both, except to secure money to enable it to meet short term requirements for liquid funds arising from its operations.

Loan corporation securities.

336(2)

A loan corporation may borrow money and may issue securities for money borrowed, and the securities may be made payable to order or to bearer or to the registered holder or otherwise as the corporation deems advisable, and the corporation may borrow money by the issue of subordinated notes, subject to subsection (4).

Restriction.

336(3)

A trust corporation shall not borrow money by the issue of bonds or debentures but may, for the purpose of investment, borrow money by the issue of subordinated notes, subject to subsection (4).

Rules for issue of subordinated notes.

336(4)

A corporation shall not issue a subordinated note otherwise than in accordance with subsection (5).

Features of subordinated notes.

336(5)

A subordinated note

(a) shall be issued only on application to the registered office of the corporation;

(b) shall have a denomination of $25,000. or more;

(c) shall be clearly designated on its face as a subordinated note;

(d) shall clearly indicate in its terms that the indebtedness evidenced by it shall, in the event of the insolvency or winding-up of the corporation, rank equally with the indebtedness evidenced by other subordinated notes of the corporation but be subordinate in right of payment to all other indebtedness of the corporation except indebtedness in respect of subordinated shareholder loans: and

(e) shall have a fixed term to maturity, but may include a provision making it subject to earlier redemption at the option of the corporation and with the approval of the Superintendent.

References to subordinated notes.

336(6)

A corporation, or any person acting on its behalf, shall not, in any prospectus, advertisement, correspondence or literature relating to a subordinated note issued or to be issued by the corporation, refer to the note otherwise than as a subordinated note.

Limitation on amount borrowed.

336(7)

Except as authorized by subsection (12), the aggregate of the amounts of money borrowed by a corporation and in addition, the guaranteed trust money held by a trust corporation shall not at any time exceed

(a) 12 1/2 times the unimpaired capital and reserve funds of the corporation; or

(b) such higher limit as is approved or prescribed by the Director under this section.

Increasing limit.

336(8)

A corporation may, by resolution sanctioned by at least three-fourths of the votes cast at a general meeting of the corporation duly called for the purpose of considering the resolution, (a) increase the limit mentioned in clause (7)(a) to such limit as the resolution provides; or

(b) authorize the directors to increase the limit mentioned in clause (7)(a) to such limit as they may provide from time to time by resolution, subject to the maximum limit specified in the resolution;

but no limit greater than that mentioned in clause (7)(a) shall be effective unless it is approved or prescribed by the Director under this section.

Director's powers.

336(9)

The Director may, on the recommendation in writing of the Superintendent and subject to subsection (10),

(a) approve the limit provided by the resolution; or

(b) prescribe a limit lower than the limit provided by the resolution;

and may, on the written recommendation of the Superintendent, revoke any approval or prescription of a limit and prescribe a lower limit in lieu thereof, but in no case shall the Director prescribe a limit lower than that mentioned in clause (7)(a).

Limit exceeding 20 times.

336(10)

The Director shall not approve or prescribe a limit greater than 20 times the corporation's unimpaired capital and reserve funds unless he is satisfied that the financial condition of the corporation complies with the standards established pursuant to the regulations.

Limit exceeding 20 times.

336(11)

Where the Director approves or prescribes a limit greater than twenty times the corporation's unimpaired capital and reserve funds, the corporation shall maintain outstanding subordinated notes issued by the corporation and having more than one year to run to maturity, in an amount not less than such proportion, if any, as the Director may from time to time specify, of the amount by which

(a) the aggregate of the amounts of money borrowed by a corporation and in addition, the guaranteed trust money held by the trust corporation;

exceeds

(b) 20 times the corporation's unimpaired capital and reserve funds.

Trust corporation limit exceeded.

336(12)

The aggregate of the amounts of money borrowed and the guaranteed trust money held by a trust corporation may at any time exceed the limit otherwise imposed by or under this section

(a) by an amount not greater than the amount by which the aggregate of

(i) the cash

(A) owned by the trust corporation, or

(B) held by the trust corporation in respect of guaranteed trust money, that is on hand or on deposit in a chartered bank or other depository approved by the Superintendent, and

(ii) the market value of the unencumbered debentures, bonds, stocks or other securities of or guaranteed by the Government of Canada or the government of a province, owned by the trust corporation or held by the trust corporation in respect of guaranteed trust money, exceeds 20% of the aggregate of

(iii) the guaranteed trust money held by the trust corporation that is repayable on demand or on notice of less than 100 days, (iv) the guaranteed trust money held by the trust corporation that will become repayable within 100 days,

(v) the unsecured debts of the trust corporation that are payable on demand or on notice of less than 100 days, and

(vi) the unsecured debts of the trust corporation that will become payable within 100 days; or

(b) subject to such terms and conditions as the Director deems appropriate, by an amount not greater than the sum of

(i) the amount calculated under clause (a), and

(ii) the product obtained by multiplying the outstanding amount of subordinated shareholder loans by the limit approved or prescribed by the Director under this section or, if no limit has been approved or prescribed, by 12 1/2.

Loan corporation limit exceeded.

336(13)

The aggregate of the amounts of money borrowed by a loan corporation may at any time exceed the limit otherwise imposed by or under this section

(a) by an amount not greater than the amount by which the aggregate of

(i) the cash owned by the loan corporation and held on hand or on deposit in a chartered bank or other depository approved by the Superintendent, and

(ii) the market value of the unencumbered debentures, bonds, stocks or other securities of or guaranteed by the Government of Canada or the government of a province, owned by the loan corporation, exceeds 20% of the aggregate of

(iii) the unsecured debts of the loan corporation that are payable on demand or on notice of less than 100 days, and

(iv) the unsecured debts of the loan corporation that will become payable within 100 days; or

(b) subject to such terms and conditions as the Director deems appropriate, by an amount not greater than the sum of

(i) the amount calculated under clause (a), and

(ii) the product obtained by multiplying the outstanding amount of subordinated shareholder loans by the limit approved or prescribed by the Director under this section or, if no limit has been so approved or prescribed, by 12 1/2.

Regulations.

337

The Lieutenant Governor in Council may make regulations respecting the establishment of standards for the purposes of subsection 336(10).

Canada Deposit Insurance Corporation Act.

338

Notwithstanding the Canada Deposit Insurance Corporation Act (Canada) or any by-law made thereunder, money received by a corporation from the issue of a subordinated note or by way of a subordinated shareholder loan is deemed not to be a deposit for purposes of that Act.

DIVISION VII

LIQUIDITY REQUIREMENTS

Reserves for deposits.

339(1)

A corporation shall at all times maintain

(a) cash on hand or on deposit in a chartered bank or other depository approved by the superintendent;

(b) unencumbered debentures, bonds, shares or other securities of or guaranteed by the Government of Canada or of or guaranteed by the government of any province of Canada;

(c) loans payable on demand and fully secured by a class of security referred to in clause (b); and

(d) with the approval of the superintendent and subject to such conditions as the superintendent imposes, a credit from chartered banks in Canada;

to an aggregate of at least 20% of the total amount of all securities, deposits and obligations of the corporation payable in less than 100 days.

Composition of reserves.

339(2)

Of the amount maintained under clauses (l)(a), (l)(b) and (l)(d),

(a) at least 25% shall be maintained in cash on hand or on deposit in a chartered bank or other depository approved by the superintendent and in unencumbered debentures, bonds, shares or other securities of or guaranteed by the Government of Canada maturing in three years or less: and

(b) at least 50% shall be maintained in cash on hand or on deposit in a chartered bank or other depository approved by the superintendent and in unencumbered debentures, bonds, stocks or other securities of or guaranteed by the Government of Canada, maturing in 10 years or less.

Quarterly reports.

339(3)

A corporation shall make a quarterly return to the superintendent in the form and for the periods prescribed by him, showing the amount of cash and securities required to be maintained under subsections (1) and (2) and the amount of deposits and of funds received for guaranteed investments and of obligations of the corporation coming due in less than 100 days: and the return shall be filed with the superintendent not later than one month after the expiration of the quarter to which it relates.

DIVISION VIII

LIMITATION OF TRANSACTIONS

Prohibited investments.

340(1)

Notwithstanding anything in this Act, a corporation shall not knowingly make an investment of its own funds or of guaranteed trust money

(a) by way of a loan to

(i) a director or officer of the corporation, or a spouse or child of the director or officer, or

(ii) an individual, his spouse or any of his children under the age of 18 years if either the individual or a group consisting of the individual, spouse and child is a substantial shareholder of the corporation; or

(b) in a body corporate that is a substantial shareholder of the corporation; or

(c) in a body corporate in which

(i) an individual mentioned in sub-clause (a)(i), or

(ii) an individual who is a substantial shareholder of the corporation or his spouse or a child of the individual under the age of 18 years, or

(iii) any body corporate that is a substantial shareholder of the corporation, or

(iv) a group consisting exclusively of the individuals mentioned in sub-clause (a)(i), has a significant interest.

Disposition.

340(2)

The corporation shall not knowingly hold an investment made after the coming into force of this Act that, at the time it was made, was an investment described in subsection (1).

Interpretation.

340(3)

For the purposes of this section,

(a) a person has a significant interest in a body corporate or a group of persons has a significant interest in a body corporate if,

(i) in the case of the person, he owns beneficially, either directly or indirectly, more than 10%. or

(ii) in the case of the group of persons, they own beneficially, either individually or together and either directly or indirectly, more than 50%, of the capital of the body corporate for the time being outstanding; and

(b) a person is a substantial shareholder of a body corporate, or a group of persons is a substantial shareholder of a body corporate, if that person or group of persons owns beneficially, either individually or together and either directly or indirectly, equity shares to which are attached more than 10% of the voting rights attached to all of the equity shares of the body corporate for the time being outstanding; and in computing the percentage of voting rights attached to equity shares owned by an underwriter, there shall be excluded the voting rights attached to equity shares acquired by him as an underwriter during the course of distribution to the public by him of those shares.

Definitions.

340(4)

In this section,

"equity share" means a share of any class of shares of a body corporate to which are attached voting rights exercisable under all circumstances, and a share of any class of shares to which are attached voting rights by reason of the occurrence of any contingency that has occurred and is continuing; ("action donnant droit de vote")

"investment" means

(a) an investment in a body corporate by way of purchase of bonds, debentures, notes or other evidences of indebtedness thereof or shares thereof, or

(b) a loan to a person or persons, but not including an advance or loan, whether secured or unsecured, that is made by a corporation to a body corporate and that is merely ancillary to the main business of the corporation; ("placement")

"officer" means the president, vice-president, secretary, assistant secretary, comptroller, treasurer or assistant treasurer of a corporation or any other person designated as an officer of the corporation by by-law or by resolution of the directors thereof. ("dirigeant")

"Downstream" investment.

340(5)

For the purposes of this section, where a person or group of persons owns beneficially, directly or indirectly, or pursuant to this subsection is deemed to own beneficially, equity shares of a body corporate, that person or group of persons is deemed to own beneficially a proportion of the equity shares of any other body corporate that are owned beneficially, directly or indirectly, by the first mentioned body corporate, and that proportion shall equal the proportion of the equity shares of the first mentioned body corporate that are owned beneficially, directly or indirectly, or that pursuant to this subsection are deemed to be owned beneficially by that person or group of persons.

Exception.

340(6)

Notwithstanding subsection (5), a corporation is not prohibited from making an investment in a body corporate only because a person or a group of persons that owns beneficially, directly or indirectly, or is deemed to own beneficially, equity shares of the corporation, is by reason thereof deemed to own beneficially equity shares of the body corporate.

Order of exemption.

340(7)

Where any person or group of persons is a substantial shareholder of a corporation and, as a consequence thereof and of the application of this section, certain investments are prohibited for the corporation, the Director may. on the recommendation of the superintendent, by order.

on application by the corporation, exempt from the prohibition any particular investment or investments of any particular class if he is satisfied that

(a) the decision of the corporation to make or hold any investment so exempted has not been and is not likely to be influenced in any significant way by that person or group, and does not involve in any significant way the interests of that person or group, apart from their interests as a shareholder of the corporation; or

(b) the investment is to be made pursuant to the power granted to the corporation by section 318.

Conditions of exemption.

340(8)

Any order of exemption made by the Director under subsection (7) may contain any condition or limitations considered by the Director to be appropriate and may be revoked by the Director at any time, but subsection (2) does not apply to any investment made by the company to which the order applied, that was made while the order was in effect and that was an investment to which the order applied.

Reduction of assets on violation of section 340.

341

Where any investment or loan is made or held by a corporation in violation of section 340, the superintendent may reduce the assets of the corporation as shown in its annual statement by the whole or any part of the amount of the investment or loan, and the superintendent shall prepare his annual report to the Director in respect of that corporation on the basis of the assets of the corporation as so reduced by him.

Corporation acting as trustee or agent.

342(1)

A corporation may act as trustee or agent for or on behalf of any person who is otherwise prohibited from dealing with the corporation under this Division if the sale or purchase on behalf of that person is made to or from third parties not in any way associated with the corporation.

Corporation may accept deposits.

342(2)

Nothing in this Division prohibits a corporation from accepting deposits or issuing certificates or securities to a person who is otherwise prohibited from dealing with the corporation by this Division if the interest to be paid by the corporation on the moneys is at the same rate or rates as those offered to the public in the ordinary course of the business of the corporation.

DIVISION IX

SHAREHOLDER RESIDENCE REQUIREMENTS AND RESTRICTIONS

Report of transfer of shares.

343(1)

Where a transfer is proposed of

(a) 10% or more of the total outstanding shares of a corporation; or

(b) any number of shares of a corporation being less than 10% of the total outstanding shares of the corporation if the corporation has reason to believe that the transfer of those shares would result, directly or indirectly, in the acquisition of majority control of the voting shares of the corporation by any person;

the corporation shall deposit with the superintendent notice of the proposed transfer of shares, including with the notice information concerning the beneficial ownership of the shares after the transfer is effected; and the transfer shall not be entered in the register maintained pursuant to section 44 before the expiration of 30 days after the notice has been deposited with the superintendent.

Aggregate transfers.

343(2)

A series of transfers of shares within any period of three months to any one person that in the aggregate totals 10% or more of the issued shares of a corporation is a transfer of those shares within the meaning of subsection (1).

Report of allotment and issue.

343(3)

The restrictions imposed by subsections (1) and (2) apply similarly to the allotment and issue of shares.

Definitions.

344(1)

In this section, and in section 345 to 349,

"company" includes an association, partnership, body corporate or other organization; ("compagnie")

"entered" or "entry" means entered or entry, as the case may be, in the registers required to be maintained under sections 20 and 44; ("inscrit" ou "inscription")

"non-resident" means

(a) an individual who is not ordinarily resident in Canada, or

(b) a company incorporated, formed or otherwise organized elsewhere than in Canada, or

(c) a company that is controlled directly or indirectly by non-residents as defined in sub-clause (a) or (b), or

(d) a trust established by a non-resident as defined in sub-clause (a), (b) or (c), or a trust in which non-residents as defined in those sub-clauses have more than 50% of the beneficial interest, or

(e) a company that is controlled, directly or indirectly, by a trust as defined in subclause (d); ("non-résidents")

"resident" means an individual, company or trust that is not a non-resident. ("résident")

Associated shareholders.

344(2)

For the purposes of sections 345 to 349, a shareholder is deemed to be associated with another shareholder if

(a) one shareholder is a company of which the other shareholder is an officer or director; or

(b) one shareholder is a partnership of which the other shareholder is a partner: or

(c) one shareholder is a company that is controlled, directly or indirectly, by the other shareholder; or

(d) both shareholders are companies and one shareholder is controlled, directly or indirectly, by the same individual or company that controls, directly or indirectly, the other shareholder; or

(e) both shareholders are members of a voting trust where the trust relates to shares of a corporation; or

(f) both shareholders are associated within the meaning of clauses (a) to (e) with the same shareholder.

Shares held jointly.

344(3)

For the purposes of sections 345 to 349, where a share of the capital of a corporation is held jointly and one or more of the joint holders is a nonresident, the share is deemed to be held by a nonresident.

Limit on shares held by non-residents.

345(1)

The directors of a corporation shall refuse to permit the entry of a transfer of any share of the capital of the corporation to a non-resident

(a) if, when the total number of shares of the capital of the corporation held by non-residents exceeds 25% of the total number of issued and outstanding shares of the corporation, that entry would increase the percentage of shares held by non-residents; or

(b) if, when the total number of shares of the capital of the corporation held by non-residents is 25% or less of the total number of issued and outstanding shares of the corporation, that entry would cause the total number of shares held by non-residents to exceed 25% of the total number of issued and outstanding shares of the corporation; or

(c) if, when the total number of shares of the capital of the corporation held by the nonresident and by other shareholders associated with him, if any, exceeds 10% of the total number of issued and outstanding shares of the corporation, that entry would increase the percentage of shares held by the non-resident and by the other shareholders associated with him, if any; or

(d) if, when the total number of shares of the capital of the corporation held by the nonresident and by other shareholders associated with him, if any, is 10% or less of the total number of issued and outstanding shares of the corporation, that entry would cause the number of shares held by the non-resident and by the other shareholders associated with him, if any, to exceed 10% of the issued and outstanding shares of the corporation.

Exception.

345(2)

Notwithstanding subsection (1), the directors of a corporation may permit the entry of a transfer of any share of the capital of the corporation to a non-resident when it is shown to the directors on evidence satisfactory to them that the share was, prior to June 18, 1971, held in the right of or for the use or benefit of the non-resident.

Allotment to non-resident.

345(3)

The directors of a corporation shall not allot, or permit the allotment of, any shares of the capital of the corporation to a non-resident in circumstances where, if the allotment were a transfer, the entry thereof would be required, under subsection (1), to be refused by the directors.

Penalty.

345(4)

Default in complying with this section does not affect the validity of a transfer or allotment of a share of the capital of the corporation that has been entered, but every director or officer who knowingly authorizes or permits the default is guilty of an offence and is liable, on summary conviction, to a fine of not more than $5,000. or to imprisonment for a term of not more than one year, or both.

Voting by non-residents.

346(1)

A non-resident shall not exercise the voting rights attached to shares of a corporation unless he is entered as a shareholder in respect of the shares.

Voting rights of nominees suspended.

346(2)

Where a resident holds shares of the capital of a corporation in the right of or for the use or benefit of a non-resident and in respect of which the non-resident is not entered as the holder, the resident shall not, either in person or by proxy or by a voting trust, exercise the voting rights pertaining to those shares.

Change of status while entered.

346(3)

Where a resident becomes a nonresident while entered as a shareholder, and the number of shares entered as owned by that shareholder, together with those entered as owned by other non-residents, exceed the limit set out in section 345, the shareholder shall not exercise, directly, by proxy or by a voting trust, any voting rights in respect of the shares that exceed that limit.

Voting rights where associated shareholders.

346(4)

Notwithstanding subsections (1), (2) and (3), where any shares of the capital of a corporation are held in the name of or for the use or benefit of a non-resident, other than shares in respect of which the non-resident was entered before this section comes into force or is entered under subsection 345(2), no person shall, either directly or as proxy or by a voting trust, exercise the voting rights pertaining to those shares, if the total thereof together with any shares held in the name or right of or for the use or benefit of,

(a) any shareholders associated with the nonresident; or

(b) any person who would, under subsection 344(2), be deemed to be associated with the nonresident were such person and the non-resident themselves shareholders;

exceed in number 10% of the issued and outstanding shares of the corporation.

Penalty.

346(5)

Every person who knowingly contravenes this section is guilty of an offence and is liable, on summary conviction, to a fine of not more than $5,000. or to imprisonment for a term of not more than one year, or both.

Effect of contravention.

346(6)

If any provision of this section is contravened at a general meeting of the corporation, no proceeding, matter or thing at that meeting is void by reason only of the contravention, but is voidable at the option of the shareholders by a resolution passed at a special general meeting of the corporation at any time within one year from the day of commencement of the general meeting at which the contravention occurred.

By-laws and resolutions.

347(1)

The directors of a corporation may pass such resolutions or by-laws as they consider necessary to carry out the intent of sections 345 and 346 and, in particular but without restricting the generality of the foregoing, may pass resolutions or by-laws

(a) requiring any person holding a share of the capital of the corporation to submit a written declaration as to

(i) the ownership of the share,

(ii) the place in which the shareholder and any person for whose use or benefit the share is held are ordinarily resident,

(iii) whether the shareholder is associated with any other shareholder, and

(iv) such other matters as the directors consider relevant for the purposes of those sections;

(b) prescribing the time and manner of submission of the declaration described in clause (a); and

(c) requiring any person desiring to have a transfer of a share to him entered, to submit the same declaration as may be required under this section in the case of a shareholder.

Where declaration required.

347(2)

Where, by or under any by-law or resolution made under subsection (1), a declaration is required to be submitted in respect of the transfer of a share, the directors may refuse to permit the entry of the transfer until the required declaration is completed and submitted.

Penalty.

347(3)

Any person who makes a wilfully false or deceptive statement in a declaration required by a by-law or resolution made under subsection (1) is guilty of an offence and is liable, on summary conviction, to a fine of not more than $5,000. or to imprisonment for a term of not more than one year, or both.

Liability of directors.

348

In determining, for the purposes of sections 344 to 347, whether a person is a resident or non-resident, by whom a corporation is controlled or any other circumstances relevant to the performance of their duties under those sections, the directors of the corporation may rely upon any statement made in a declaration submitted under section 347, or upon their own knowledge of the circumstances; and the directors are not liable in any action for anything done or omitted by them in good faith on the basis of that statement or knowledge.

DIVISION X

SUPERINTENDENT

Examination and report by superintendent.

349(1)

The superintendent shall visit personally or cause a duly qualified member of his staff to visit, at least once in each year, the registered office in Manitoba of each corporation to which this Part applies, and examine carefully the statements of the condition and affairs of the corporation, and report thereon to the Director as to all matters requiring his attention and decision.

Inspection of books.

349(2)

In addition to the statement and return required under section 121 for the purpose of an examination under subsection (1), the corporation shall within 60 days of its fiscal year end prepare and submit to the superintendent statements with respect to the business, finances or other affairs of the corporation required by the superintendent, and the officers, agents, and servants of the corporation shall cause their books to be open for inspection and shall otherwise facilitate the examination so far as it is within their power.

Semi-annual report changes.

349(3)

A corporation shall also prepare under oath for each six month period that begins immediately after the end of the last completed financial year and for each succeeding six month period, a statement in such form as the superintendent may determine from time to time, showing the changes in investments and loans of the corporation during the preceding half year, and those statements shall be filed with the superintendent within one month of the end of each period.

Examination under oath.

349(4)

The superintendent, or some person appointed by him for the purpose, may examine under oath the officers, agents, or servants of the corporation for the purpose of obtaining any information that he deems necessary for the purpose of the examination.

Annual report.

349(5)

The superintendent shall also prepare for the Director from the statement, an annual report showing the full particulars of the business of each corporation.

Power of superintendent to freeze assets.

350

Where it comes to the attention of the superintendent, through any means, that any assets appearing on the books or records of a corporation, or any assets held in trust by the corporation, or any other assets under its administration, may not be satisfactorily accounted for and upon investigation the superintendent believes that that is the case and that that circumstance or other circumstances so warrant, he may immediately take control of the assets of the corporation, the assets held in trust by the corporation, and all other assets under its administration and may maintain that control on his own decision for a period of seven days and with the concurrence of the Director for any longer period that the Director deems necessary in the circumstances.

Action on violations.

351(1)

Where the superintendent is of the opinion that

(a) a corporation is in violation of subsections 336(7) to 336(13); or

(b) the assets of a corporation are not sufficient, having regard for all the circumstances, to give adequate protection to persons who have been issued securities of the corporation, or who have entrusted money to the corporation for investment the repayment of which is guaranteed by the corporation, or to creditors of the corporation; or

(c) there exists any other state of affairs within a corporation of a serious nature that is or may be prejudicial to persons who have been issued securities of the corporation or who have entrusted money to the corporation for investment the repayment of which is guaranteed by the corporation, or to creditors of the corporation, he shall so report to the Director.

Action of Director after hearing.

351(2)

Where the Director, after full consideration of the matter and after reasonable time has been given to the corporation to be heard, believes that any condition specified in subsection (1) exists, he may do any or all of the following:

(a) make the licence of the corporation subject to such limitations or conditions as he deems proper;

(b) prescribe a time within which the corporation shall correct the violation described in clause (1)(a) or make good the deficiency or inadequacy of assets described in clause (1)(b). as the case may require; and

(c) direct the superintendent to take control of the assets of the corporation, the assets held in trust by the corporation, and all other assets under its administration.

Direction to superintendent to take control.

351(3)

Upon the failure of a corporation to correct a violation described in clause (l)(a) or to make good any deficiency or inadequacy of assets described in clause (l)(b) within the time prescribed in accordance with clause (2)(b) or any extension thereof subsequently granted by the Director, the Director shall direct the superintendent to take control of the assets of the corporation, the assets held in trust by the corporation and all other assets under its administration.

Special report.

351(4)

For the purpose of carrying out this section, the Director may appoint such persons as he deems proper to appraise and report on the condition of the corporation and its ability to meet its obligations and guarantees, and the remuneration of any person so appointed shall be fixed by the superintendent and included in the expenditure assessed against the corporation under subsection 359(3).

Effect of superintendent's control.

352(1)

Where the superintendent is in control of the assets of a corporation under section 350 or 351,

(a) the corporation shall not make a loan or any purchase, sale or exchange of securities, or any disbursement or transfer of cash of any kind whatsoever, without the prior approval of the superintendent or a representative designated by him;

(b) no director, officer or employee of the corporation shall have access to any cash or securities held by or in respect of the corporation unless

(i) he has with him a representative of the superintendent, or

(ii) the access has been previously authorized by the superintendent or his representative; and

(c) expenses incurred by the superintendent in having control of the assets shall be included in the expenditure assessed against corporations under subsection 359(3).

Application to court.

352(2)

Where the superintendent is in control of the assets of a corporation under section 350 or 351, the Director may direct that an application be made to the court for an order directing the superintendent forthwith to take possession of the corporation and to conduct the business thereof for the purpose of its rehabilitation, or for an order for the liquidation of the corporation.

Order of the court.

352(3)

Where the court issues an order for the purpose of rehabilitation of a corporation under subsection (2),

(a) the superintendent may appoint any persons he considers necessary to manage the corporation, and those persons shall have sole and complete authority in the conduct of the business of the corporation; and

(b) the remuneration of any persons appointed under clause (a) shall be fixed by the Director and, together with any other expenses incurred by the superintendent in the management of the corporation, shall be included in the expenditure assessed against corporations under subsection 359(3).

Appointment of committee.

353(1)

The corporations subject to share in expenses resulting from the control of assets of a corporation under subsection 352(1) or from the management of a corporation under subsection 352(3) may appoint a committee of not more than six members to advise the superintendent in respect of the assets or management of the corporation or any other matter pertinent thereto.

Hearing.

353(2)

A committee appointed under subsection (1), or the superintendent, may apply to the Director for a hearing on any matter that cannot be resolved by the committee and the superintendent, and the Director may make an order that is binding on all parties.

Revesting control in corporation.

354(1)

Where the Director believes that a corporation in respect of which the superintendent has control of assets or management meets all the requirements of this Act and that it is otherwise proper for the corporation to resume control of its property and the conduct of its business, he may direct the superintendent to relinquish control of the assets or, where the court has issued an order under subsection 352(2), direct that application be made to the court for an order directing the superintendent to relinquish possession of the property and control of the management of the corporation, and the Director or the court, as the case may be, may make the direction or order subject to compliance with such terms and conditions, if any, as the Director or the court thinks fit.

Application for order to liquidate.

354(2)

Where the Director, on the report of the superintendent, deems that further efforts to rehabilitate a corporation of which the superintendent is in possession pursuant to subsection 352(2) would be futile, he shall direct that application be made to the court for an order directing the liquidation of the corporation.

Payment of expenses.

354(3)

Where the superintendent relinquishes control of the assets or management of a corporation under subsection (1), the corporation is liable for repayment of all expenses assessed against and paid by corporations in accordance with section 352 and interest in respect thereof on such terms and conditions as may be approved by the superintendent, but those corporations may, if there is unanimous consent, relieve the corporation of the liability, or any part thereof, or any of those corporations may relieve the corporation of the liability, or any part thereof, that pertains to that corporation.

Expenses on liquidation.

354(4)

Where a corporation is liquidated under subsection 352(2) or subsection (2), expenses assessed against and paid by corporations in accordance with section 352, and interest in respect thereof as approved by the superintendent, constitute a claim against the assets of the corporation prior to any claim in respect of the shares of the corporation.

Sales prior to liquidation.

354(5)

Notwithstanding this section or section 352 or 353, the directors of a corporation against whom a seizure, direction or order is made under section 350, 351, 352, 353 or this section, may, at any time before a liquidation order is issued by the court, negotiate for the sale of the assets of the corporation and for the transfer of its liabilities to some other corporation under section 318.

Annual report of superintendent.

355

In the annual report prepared by the superintendent for the Director under section 349, the superintendent

(a) shall allow as investment assets only those investments of the several corporations that are authorized by this Act, or by their respective Acts of incorporation, or by the general Acts applicable to the investments;

(b) shall make all necessary corrections in the annual statements made by the corporations as herein provided; and

(c) may increase or diminish the assets or liabilities of the corporations to the true and correct amounts thereof as ascertained by him in the examination of their affairs at the registered office thereof or otherwise.

Requirements respecting unauthorized investments.

356

The superintendent may require a corporation to dispose of and realize any loan or investment not authorized by law at the time that it was acquired, and the corporation shall, within 60 days after receiving notice of the requirement, absolutely dispose of and realize that loan or investment.

Appeal from ruling of superintendent.

357(1)

An appeal lies to the court from a ruling of the superintendent as to the admissibility of any asset not allowed by him, or as to any item or amount added to liabilities or as to any corrections or alterations made in any statement, or as to any other matter arising in the carrying out of the provisions of this Part; and the court may make rules for the conduct of appeals under this section.

Certificate of ruling for appeal.

357(2)

For the purpose of an appeal, the superintendent shall, at the request of a corporation interested, give a certificate in writing setting forth the ruling appealed under subsection (1) and the reasons therefor; and the ruling is binding upon the corporation, unless the corporation, within 15 days of notice of the ruling, serves upon the superintendent notice of its intention to appeal therefrom, setting forth the grounds of the appeal, and within 15 days thereafter files its appeal with the Registrar of the court and with due diligence prosecutes the appeal, and in that case the ruling is suspended until the court renders judgment thereon.

Appraisal of real estate.

358(1)

If, upon an examination of the assets of a corporation, it appears to the superintendent, or if he has reason to suppose, that the value placed by the corporation upon real estate owned by it, or any parcel thereof, is too great, he may

(a) require the corporation to procure an appraisal of the real estate by one or more competent valuators; or

(b) procure the appraisal himself at the expense of the corporation;

and the appraised value, if it varies materially from the return made by the corporation, may be substituted in the annual report prepared for the Director by the superintendent.

Appraisal of security for loan or mortgage.

358(2)

If, upon an examination of the assets of a corporation, it appears to the superintendent, or if he has any reason to suppose, that the amount secured by a mortgage or other charge upon any parcel of real estate, together with the interest due and accrued thereon, is greater than the value of the parcel, or that the parcel is not sufficient security for the loan and interest, he may

(a) require the corporation to procure an appraisal of the parcel by one or more competent valuators; or

(b) procure the appraisal himself at the expense of the corporation;

and, if from the appraised value it appears that the parcel of real estate is not adequate security for the loan and interest, he may exclude from his estimate of the loan and interest a sum sufficient to reduce the amount thereof to an amount that may fairly be realized from the security, in no case to exceed the appraised value, and may insert the reduced amount in his annual report.

Auditor's report.

358(3)

For the purpose of ascertaining the unimpaired capital of a corporation, the Director may require the auditors of the corporation to furnish him, at the expense of the corporation, with such statements and certificates as he may require, or he may employ, at the expense of the corporation, other independent auditors for the purpose.

Valuation of assets.

358(4)

In arriving at the value of any assets, the provisions of the Trust Companies Act (Canada) apply.

Ascertaining expenditure during preceding year.

359(1)

The superintendent shall annually, as soon as possible after the close of each fiscal year, by such inquiry or investigation as he may deem necessary, ascertain and certify the total amount of the expenditure incurred for or in connection with the administration of sections 349 to 358 during the last preceding fiscal year; and the amount of the expenditure so ascertained and certified by the superintendent is final and conclusive for all purposes of this section.

Income received by corporations.

359(2)

The superintendent shall, before December 31 in each year, ascertain from the statements filed under this Act, and from such other information as may be necessary or available, the total amount of income received during the last preceding calendar year by each corporation to which this Part applies, and the findings of the superintendent as to the amounts of income of those corporations when certified under his hand are final and conclusive.

Basis of assessments against corporations.

359(3)

After ascertaining the amounts mentioned in subsections (1) and (2), the superintendent shall ascertain the rates or percentage which the total amount of the expenditure incurred by him for or in connection with the inspection or investigation of all corporations under his supervision bears to the income of each corporation, and he shall cause an assessment to be prepared against each of the corporations of an amount equivalent to such percentage of the income of each corporation to the total cost of exercising the supervision; and the assessment, when certified by the superintendent, is binding upon the corporations and each of them and is final and conclusive.

Assessment a debt payable to government.

359(4)

The amount assessed against each corporation under subsection (3) constitutes a debt payable to the government, and shall be payable to the superintendent upon a demand by him, and may be recovered as a debt in the court.

Appointment of superintendent.

360(1)

For the purposes of this Part, the minister may appoint a person employed by the government under the minister as the superintendent.

Agreement with Canada re superintendent.

360(2)

Notwithstanding anything in this or any other Act of the Legislature, with the approval of the Lieutenant Governor in Council, the minister, for and on behalf of the government, may, from time to time, enter into agreements with the Government of Canada under which, upon the terms and conditions therein contained, the Superintendent of Insurance for Canada shall perform the duties imposed on the superintendent under this Part.

Provision as to remuneration.

360(3)

Without restricting the generality of subsection (2), an agreement made under that subsection may provide that the remuneration of the Government of Canada shall consist of the assessments collected by the Superintendent of Insurance for Canada under section 359 and the provisions of the agreement in respect of that matter prevail over any statute inconsistent therewith.

Regulations respecting agreement.

360(4)

The Lieutenant Governor in Council may make regulations respecting the carrying into effect of any agreement made under subsection (2), and may authorize the Superintendent of Insurance for Canada to exercise and perform any powers granted to, and the duties imposed upon, the superintendent under this Part.

DIVISION XI

ANNUAL LICENSING

Licence required.

361(1)

No corporation or person acting on its behalf shall transact the business of a trust corporation or loan corporation unless the corporation has obtained from the Director a licence authorizing it to do so.

Conditions for granting.

361(2)

The Director may issue to any corporation that has complied with this Act and is, in the opinion of the Director, in such a financial position as to justify its transaction of the business of a trust corporation or a loan corporation, a licence authorizing the transaction of the business.

Form.

361(3)

The licence shall be in such form as may be from time to time determined by the Director and may contain any limitations or conditions that the Director may consistently with the provisions of this Part deem proper.

Duration and renewal.

361(4)

The licence expires on March 31 in each year, but may be renewed from year to year subject, however, to any qualification or limitation that is considered expedient, and the licence may be from time to time renewed for any term less than a year.

Right of appeal.

361(5)

Where any corporation makes application to the Director for the issue of a licence under this section and the application is refused by the Director, the corporation has the right of appeal to the Lieutenant Governor in Council against the decision of the Director, and the decision of the Lieutenant Governor in Council on the appeal is final.

Application to court.

361(6)

Where any corporation makes application for a renewal of its licence and the application is refused or any limitation or condition is placed thereon, the corporation may apply to a court for an order requiring the Director to change his decision and upon the application the court may so order and make any further order it thinks fit.

Issuing of licence.

361(7)

No corporation shall be issued a licence under this section unless the initial licence is granted within three years after the date of the certificate of incorporation of the corporation or within such further period not exceeding one year as the Director, before the expiration of the three years, allows.

Rights cease.

361(8)

If a corporation has not been granted a licence within the time mentioned in subsection (6), the corporation shall cease to exist except for the purpose of winding-up its affairs and returning to the subscribers the amounts paid by them upon the subscribed capital or so much thereof as they are entitled to have returned.

Corporation under former Act.

361(9)

A corporation duly registered to carry on business under any Act for which this Act is substituted, shall be deemed for all purposes to have been granted a licence under this section but that licence, unless renewed, shall expire on the March 31 following the date this Act comes into force.

Commencement

362

Clause 154(l)(b) and subsections 154(2), (3) and (5) come into force on a day fixed by proclamation.