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:Trustee may require evidence of compliance
  •  (1) On 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.

  • Marginal note:Certificate of compliance

    (2) At least once in each twelve month period beginning on the date of the trust indenture and at any other time on 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.

  • 1974-75-76, c. 33, s. 84;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Notice of default

 The trustee shall give to the holders of debt obligations issued under a trust indenture, within thirty 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 such notice and so informs the issuer and guarantor in writing.

  • 1974-75-76, c. 33, s. 85;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Duty of care

 A trustee in exercising their powers and discharging their 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.

  • R.S., 1985, c. C-44, s. 91;
  • 2001, c. 14, s. 135(E).
Marginal note:Reliance on statements

 Notwithstanding section 91, a trustee is not liable if they rely in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

  • R.S., 1985, c. C-44, s. 92;
  • 2001, c. 14, s. 135(E).
Marginal note:No exculpation

 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 on the trustee by section 91.

  • R.S., 1985, c. C-44, s. 93;
  • 2001, c. 14, s. 135(E).

PART IXReceivers, Receiver-managers and Sequestrators

Marginal note:Functions of receiver or sequestrator

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

  • R.S., 1985, c. C-44, s. 94;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 44(E).
Marginal note:Functions of receiver-manager

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

  • R.S., 1985, c. C-44, s. 95;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 45.
Marginal note:Directors’ powers cease

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

  • R.S., 1985, c. C-44, s. 96;
  • 2011, c. 21, s. 45.
Marginal note:Duty to act

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

  • R.S., 1985, c. C-44, s. 97;
  • 2011, c. 21, s. 46(E).
Marginal note:Duty under instrument or act

 A receiver, receiver-manager or sequestrator appointed under an instrument or act shall act in accordance with that instrument or act and any direction of a court made under section 100.

  • R.S., 1985, c. C-44, s. 98;
  • 2011, c. 21, s. 46(E).
Marginal note:Duty of care

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

  • (a) act honestly and in good faith; and

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

  • R.S., 1985, c. C-44, s. 99;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 47(E).
Marginal note:Directions given by court

 On an application by a receiver, receiver-manager or sequestrator, whether appointed by a court or under an instrument or act, or on 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, receiver-manager or sequestrator and approving their 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, receiver-manager or sequestrator;

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

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

  • R.S., 1985, c. C-44, s. 100;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 48(E).
Marginal note:Duties of receiver, receiver-manager or sequestrator

 A receiver, receiver-manager or sequestrator shall

  • (a) immediately notify the Director of their appointment and discharge;

  • (b) take into their custody and control the property of the corporation in accordance with the court order or instrument or act under which they are appointed;

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

  • (d) keep detailed accounts of all transactions carried out as receiver, receiver-manager or sequestrator;

  • (e) keep accounts of their administration that shall be 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 their appointment financial statements of their administration as far as is practicable in the form required by section 155; and

  • (g) on completion of their duties, render a final account of their administration in the form adopted for interim accounts under paragraph (f).

  • R.S., 1985, c. C-44, s. 101;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 49(E).

PART XDirectors and Officers

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

  • Marginal note:Number of directors

    (2) A corporation shall have one or more directors but a distributing corporation, any of the issued securities of which 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.

  • R.S., 1985, c. C-44, s. 102;
  • 2001, c. 14, s. 35.
Marginal note:By-laws
  •  (1) Unless the articles, 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.

  • Marginal note:Shareholder approval

    (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.

  • Marginal note:Effective date

    (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.

  • Marginal note:Idem

    (4) If a by-law, an amendment or a repeal is rejected by the shareholders, or if the directors do not submit a by-law, an amendment or a 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.

  • Marginal note:Shareholder proposal

    (5) A shareholder entitled to vote at an annual meeting of shareholders may, in accordance with section 137, make a proposal to make, amend or repeal a by-law.

  • R.S., 1985, c. C-44, s. 103;
  • 2001, c. 14, s. 36(F).
 
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