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

Act current to 2017-09-14 and last amended on 2015-02-26. Previous Versions

 [Repealed, 2001, c. 14, s. 53]

Marginal note:Prohibition of short sale
  •  (1) An insider shall not knowingly sell, directly or indirectly, a security of a distributing corporation or any of its affiliates if the insider selling the security does not own or has not fully paid for the security to be sold.

  • Marginal note:Calls and puts

    (2) An insider shall not knowingly, directly or indirectly, sell a call or buy a put in respect of a security of the corporation or any of its affiliates.

  • Marginal note:Exception

    (3) Despite subsection (1), an insider may sell a security they do not own if they own another security convertible into the security sold or an option or right to acquire the security sold and, within ten days after the sale, they

    • (a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or

    • (b) transfer the convertible security, option or right to the purchaser.

  • Marginal note:Offence

    (4) An insider who contravenes subsection (1) or (2) is guilty of an offence and liable on summary conviction to a fine not exceeding the greater of one million dollars and three times the profit made, or to imprisonment for a term not exceeding six months or to both.

  • R.S., 1985, c. C-44, s. 130;
  • 2001, c. 14, s. 54.
Marginal note:Definitions
  •  (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 or of any person described in paragraph (b), (d) or (f);

    • (d) a person who beneficially owns, directly or indirectly, shares of the corporation or who exercises control or direction over shares of the corporation, or who has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the corporation not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;

    • (e) a person, other than a person described in paragraph (f), employed or retained by the corporation or by a person described in paragraph (f);

    • (f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the corporation;

    • (g) a person who received, while they were a person described in any of paragraphs (a) to (f), material confidential information concerning the corporation;

    • (h) a person who receives material confidential information from a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph; and

    • (i) a prescribed person.

  • Expanded definition of security

    (2) For the purposes of this section, the following are deemed to be a security of the corporation:

    • (a) a put, call, option or other right or obligation to purchase or sell a security of the corporation; and

    • (b) a security of another entity, the market price of which varies materially with the market price of the securities of the corporation.

  • Marginal note:Deemed insiders

    (3) For the purposes of this section, a person who proposes to make a take-over bid (as defined in the regulations) for securities of a corporation, or to enter into a business combination with a corporation, is an insider of the corporation with respect to material confidential information obtained from the corporation and is an insider of the corporation for the purposes of subsection (6).

  • Marginal note:Deemed insiders

    (3.1) An insider of a person referred to in subsection (3), and an affiliate or associate of such a person, is an insider of the corporation referred to in that subsection. Paragraphs (1)(b) to (i) apply in determining whether a person is such an insider except that references to “corporation” in those paragraphs are to be read as references to “person described in subsection (3)”.

  • Marginal note:Insider trading — compensation to persons

    (4) An insider who purchases or sells a security of the corporation with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the corporation is liable to compensate the seller of the security or the purchaser of the security, as the case may be, for any damages suffered by the seller or purchaser as a result of the purchase or sale, unless the insider establishes that

    • (a) the insider reasonably believed that the information had been generally disclosed;

    • (b) the information was known, or ought reasonably to have been known, by the seller or purchaser; or

    • (c) the purchase or sale of the security took place in the prescribed circumstances.

  • Marginal note:Insider trading — compensation to corporation

    (5) The insider is accountable to the corporation for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances described in paragraph (4)(a).

  • Marginal note:Tipping — compensation to persons

    (6) An insider of the corporation who discloses to another person confidential information with respect to the corporation that has not been generally disclosed and that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the corporation is liable to compensate for damages any person who subsequently sells securities of the corporation to, or purchases securities of the corporation from, any person that received the information, unless the insider establishes

    • (a) that the insider reasonably believed that the information had been generally disclosed;

    • (b) that the information was known, or ought reasonably to have been known, by the person who alleges to have suffered the damages;

    • (c) that the disclosure of the information was necessary in the course of the business of the insider, except if the insider is a person described in subsection (3) or (3.1); or

    • (d) if the insider is a person described in subsection (3) or (3.1), that the disclosure of the information was necessary to effect the take-over bid or the business combination, as the case may be.

  • Marginal note:Tipping — compensation to corporation

    (7) The insider is accountable to the corporation for any benefit or advantage received or receivable by the insider as a result of a disclosure of the information as described in subsection (6) unless the insider establishes the circumstances described in paragraph (6)(a), (c) or (d).

  • Marginal note:Measure of damages

    (8) The court may assess damages under subsection (4) or (6) in accordance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in a situation involving a security of a distributing corporation, the court must consider the following:

    • (a) if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security over the twenty trading days immediately following general disclosure of the information; and

    • (b) if the plaintiff is a seller, the average market price of the security over the twenty trading days immediately following general disclosure of the information, less the price that the plaintiff received for the security.

  • Marginal note:Liability

    (9) If more than one insider is liable under subsection (4) or (6) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

  • Marginal note:Limitation

    (10) An action to enforce a right created by subsections (4) to (7) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

  • R.S., 1985, c. C-44, s. 131;
  • 2001, c. 14, s. 54.

PART XIIShareholders

Marginal note:Place of meetings
  •  (1) Meetings of shareholders of a corporation shall be held at the place within Canada provided in the by-laws or, in the absence of such provision, at the place within Canada that the directors determine.

  • Marginal note:Meeting outside Canada

    (2) Despite subsection (1), a meeting of shareholders of a corporation may be held at a place outside Canada if the place is specified in the articles or all the shareholders entitled to vote at the meeting agree that the meeting is to be held at that place.

  • Marginal note:Exception

    (3) A shareholder who attends a meeting of shareholders held outside Canada is deemed to have agreed to it being held outside Canada except when the shareholder 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.

  • Marginal note:Participation in meeting by electronic means

    (4) Unless the by-laws otherwise provide, any person entitled to attend a meeting of shareholders may participate in the meeting, in accordance with the regulations, if any, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the corporation makes available such a communication facility. A person participating in a meeting by such means is deemed for the purposes of this Act to be present at the meeting.

  • Marginal note:Meeting held by electronic means

    (5) If the directors or the shareholders of a corporation call a meeting of shareholders pursuant to this Act, those directors or shareholders, as the case may be, may determine that the meeting shall be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the by-laws so provide.

  • R.S., 1985, c. C-44, s. 132;
  • 2001, c. 14, s. 55.
 
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