Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Act current to 2017-11-06 and last amended on 2015-02-26. Previous Versions

Marginal note:Effect of endorsement without delivery

 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.

  • 1974-75-76, c. 33, s. 62;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Endorsement in bearer form

 An endorsement of a security in bearer form may give notice of an adverse claim under section 61 but does not otherwise affect any right to registration that the holder has.

  • 1974-75-76, c. 33, s. 63;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Effect of unauthorized endorsement
  •  (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 without notice of an adverse claim who has in good faith received a new, reissued or re-registered 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.

  • Marginal note:Liability of issuer

    (2) An issuer who registers the transfer of a security on an unauthorized endorsement is liable for improper registration.

  • 1974-75-76, c. 33, s. 64;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Warranties of guarantor of signature
  •  (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 65 to endorse; and

    • (c) the signer had legal capacity to sign.

  • Marginal note:Limitation of liability

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

  • Marginal note:Warranties of guarantor of endorsement

    (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.

  • Marginal note:Extent of liability

    (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 such person for any loss resulting from breach of warranty.

  • 1974-75-76, c. 33, s. 65;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Constructive delivery of a security
  •  (1) Delivery to a purchaser occurs when

    • (a) the purchaser or a person designated by the purchaser acquires possession of a security;

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

    • (c) the broker of the purchaser sends the purchaser confirmation of the purchase and identifies in a record 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 holding it for the purchaser.

  • Marginal note:Constructive ownership

    (2) A purchaser is the owner of a security that a broker holds for the purchaser, but is not a holder except in the cases referred to in paragraphs (1)(b) and (c).

  • Marginal note:Ownership of part of fungible bulk

    (3) If a security is part of a fungible bulk, a purchaser of the security is the owner of a proportionate share in the fungible bulk.

  • Marginal note:Notice to broker

    (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.

  • R.S., 1985, c. C-44, s. 70;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 36(E).
Marginal note:Delivery of security
  •  (1) Unless otherwise agreed, if a sale of a security is made on an exchange or otherwise through brokers,

    • (a) the selling customer fulfils their duty to deliver by delivering the security to the selling broker or to a person designated by the selling broker or by causing an acknowledgment to be made to the selling broker that it is held for the selling broker; and

    • (b) the selling broker, including a correspondent broker, acting for a selling customer fulfils their 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.

  • Marginal note:Duty to deliver

    (2) Subject to this section and unless otherwise agreed, a transferor’s duty to deliver a security under a contract of purchase is not fulfilled until the transferor delivers the security in negotiable form to the 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 the purchaser.

  • Marginal note:Delivery to broker

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

  • R.S., 1985, c. C-44, s. 71;
  • 2001, c. 14, s. 135(E).
Marginal note:Right to reclaim possession
  •  (1) A person against whom the transfer of a security is wrongful for any reason, including 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.

  • Marginal note:Recovery if unauthorized endorsement

    (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 such purchaser under section 68.

  • Marginal note:Remedies

    (3) The right to reclaim possession of a security may be specifically enforced, its transfer may be restrained and the security may be impounded or, in Quebec, sequestrated pending litigation.

  • R.S., 1985, c. C-44, s. 72;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 37(E).
Marginal note:Right to requisites for registration
  •  (1) Unless otherwise agreed, a transferor shall on demand supply a purchaser with proof of 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.

  • Marginal note:Rescission of transfer

    (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.

  • R.S., 1985, c. C-44, s. 73;
  • 2001, c. 14, s. 135(E).
Marginal note:Seizure of security

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

  • R.S., 1985, c. C-44, s. 74;
  • 2011, c. 21, s. 38.
Marginal note:No liability for acts in good faith

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

  • R.S., 1985, c. C-44, s. 75;
  • 2001, c. 14, ss. 33(F), 135(E);
  • 2011, c. 21, s. 38.

Registration

Marginal note:Duty to register transfer
  •  (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 65;

    • (b) reasonable assurance is given that that endorsement is genuine and effective;

    • (c) the issuer has no duty to inquire into adverse claims or has discharged any such 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 49(2) has been paid.

  • Marginal note:Liability for delay

    (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.

  • 1974-75-76, c. 33, s. 71;
  • 1978-79, c. 9, s. 1(F).
 
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