Canada Corporations Act

Marginal note:Different classes of shares

• 13 (1) The letters patent or supplementary letters patent of a company may provide for shares of more than one class and for any preferred, deferred or other special rights, restrictions, conditions or limitations attaching to any class of shares.

• Marginal note:Issuance of shares preferred as to dividends

  (2) The letters patent or supplementary letters patent may provide for the issuing of preferred shares with par value subject to redemption or purchase for cancellation out of capital if the price at which such redemption or purchase for cancellation takes place is not more than the par value of the shares plus a premium of not more than twenty per cent of such par value; but no such redemption or purchase for cancellation shall take place where the company is insolvent or when such redemption or purchase for cancellation would render the company insolvent.

• Marginal note:Issuance in series

  (3) If any class of shares has attached thereto preferred rights as to dividends, the letters patent or supplementary letters patent may authorize the issuance, from time to time, in one or more series, of the shares of any such class, and may authorize the directors to fix, from time to time before issuance, the designation, rights, restrictions, conditions and limitations attaching to the shares of each series of such class.

• Marginal note:Voting rights and dividends

  (4) The shares of all series of the same class carrying voting rights shall not carry the right to more than one vote for each share, and when any fixed cumulative dividends or amounts payable on a return of capital are not paid in full, the shares of all series of the same class shall participate rateably in respect of such dividends including accumulations, if any, in accordance with the sums that would be payable on the said shares if all such dividends were declared and paid in full, and on any return of capital in accordance with the sums that would be payable on such return of capital if all sums so payable were paid in full.

• Marginal note:When series to be issued

  (5) No shares of any series of such class shall be issued until supplementary letters patent have been issued setting forth the designation, rights, restrictions, conditions and limitations attaching to the shares of such series except in the case of any such series in respect of which such designation, rights, restrictions, conditions and limitations have been set forth in the letters patent or previous supplementary letters patent.

• Marginal note:Issue of supplementary letters patent

  (6) The Minister may cause such supplementary letters patent to be issued on the application of the company and the filing with the Minister of a certified copy of a resolution of the directors of the company fixing the designation, rights, restrictions, conditions and limitations attaching to the shares of such series and evidence of due compliance with the conditions (if any) contained in the letters patent or any previous supplementary letters patent precedent to the creation and issuance of the shares of such series; notice of the issuance of such supplementary letters patent shall be given in the Canada Gazette.

• Marginal note:Capital to be total nominal amount

  (7) The authorized capital of a company having shares with a nominal or par value shall, with respect to those shares, be the total nominal amount of those shares.

• Marginal note:Shares without par value

  (8) All or any part of the authorized capital of a company, except shares having priority as to capital or being subject to redemption or purchase for cancellation, may consist of shares without nominal or par value.

• Marginal note:Capital where shares have no par value

  (9) Where the authorized capital of a company consists, in whole or in part, of shares without nominal or par value, the paid up capital of the company shall, with respect to those shares, be an amount equal to the aggregate amount of the consideration received by the company for such of the shares as are issued, exclusive of such part of such consideration as may have been lawfully set aside as distributable surplus before the 1st day of July 1965.

• Marginal note:Equality of shares

  (10) Each share of the capital stock without nominal or par value shall be equal to every other such share of the capital stock subject to the preferred, deferred or other special rights or restrictions, conditions or limitations attached to any class of shares.

• Marginal note:Particulars to be endorsed on certificate

  (11) Every certificate of shares without nominal or par value shall have plainly written or printed upon its face the number of such shares that it represents and the number of such shares that the company is authorized to issue, and no such certificate shall express any nominal or par value of such shares.

• Marginal note:Shares to be allotted for consideration fixed by directors

  (12) In the absence of other provisions in that behalf in the letters patent, supplementary letters patent or by-laws of the company, shares without nominal or par value may be allotted, and issued for such consideration as may be fixed by the directors acting in good faith and in the best interests of the company.

• Marginal note:Consideration for shares without nominal or par value

  (13) Shares without nominal or par value shall not be allotted as fully paid except for

  • (a) the consideration fixed by the directors as provided in this section payable in cash to the total amount of the consideration; or

  • (b) a consideration payable directly or indirectly in property or past services that the directors in good faith determine by express resolution to be in all the circumstances of the transaction the fair equivalent of the cash consideration mentioned in paragraph (a).

• Marginal note:Shares to be deemed fully paid

  (14) Any and all shares issued as permitted by this section shall be deemed fully paid and non-assessable on receipt by the company of the consideration for the issue and allotment thereof, and the holder of such shares is not liable to the company or to its creditors in respect thereof.

• Marginal note:Consideration for shares with nominal or par value

  (15) Shares having a nominal or par value shall not be issued as fully paid except for

  • (a) a consideration payable in cash at least equal to the product of the number of shares allotted and issued multiplied by the nominal or par value thereof; or

  • (b) a consideration payable directly or indirectly in property or past services that the directors in good faith determine by express resolution to be in all the circumstances of the transaction the fair equivalent of the cash consideration mentioned in paragraph (a).

• Marginal note:Determination of consideration

  (16) The directors may applyex parte by summary petition to a judge to determine by declaratory order that the consideration so payable in property or services is the fair equivalent as required under paragraph (15)(b), and the judge may so determine and for that purpose he may require the production of such proofs, oral and documentary, under oath or otherwise, as he may think fit; and his order is final and conclusive proof in all courts that the consideration so payable was the fair equivalent as required under that paragraph.

• Marginal note:Shares with exclusive right of control

  (17) In no case shall shares of a company of any class, whether with or without par value, be issued or allotted with voting rights limited in such a way as to attach to any other class or classes of shares the exclusive right to control the management of the company by the election or removal of the board of directors or otherwise.

• Marginal note:Preferred shares with preferential voting rights

  (18) Nothing in subsection (17) prevents the issue, under authority of provision therefor by letters patent or supplementary letters patent, of any preferred shares to which are attached preferential voting rights, exercisable in a stated event only, although, in the stated event, an exclusive right to control or manage is attached to or is incident to such preferred shares.