Marginal note:Corporate seal
Marginal note:Validity of unsealed documents
(2) A document executed or, in Quebec, signed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.
- R.S., 1985, c. C-44, s. 23;
- 2001, c. 14, s. 12;
- 2011, c. 21, s. 18(E).
PART VCorporate Finance
(2) When a body corporate is continued under this Act, a share with nominal or par value issued by the body corporate before it was so continued is, for the purpose of subsection (1), deemed to be a share without nominal or par value.
Marginal note:Rights attached to shares
(3) Where a corporation has only one class of shares, the rights of the holders thereof are equal in all respects and include the rights
Marginal note:Rights to classes of shares
(4) The articles may provide for more than one class of shares and, if they so provide,
- R.S., 1985, c. C-44, s. 24;
- R.S., 1985, c. 1 (4th Supp.), s. 45(F).
Marginal note: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.
Marginal note:Shares non-assessable
(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.
(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 are 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.
Marginal note:Consideration other than money
(4) In determining whether property or past services are the fair equivalent of a money consideration, the directors may take into account reasonable charges and expenses of organization and reorganization and payments for property and past services reasonably expected to benefit the corporation.
Definition of property
(5) For the purposes of this section, property does not include a promissory note, or a promise to pay, that is made by a person to whom a share is issued, or a person who does not deal at arm’s length, within the meaning of that expression in the Income Tax Act, with a person to whom a share is issued.
- R.S., 1985, c. C-44, s. 25;
- 2001, c. 14, s. 13.
Marginal note:Stated capital account
Marginal note:Entries in stated capital account
(2) A corporation shall add to the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.
Marginal note:Exception for non-arm’s length transactions
(3) Despite subsection (2), a corporation may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the consideration that it receives in an exchange if the corporation issues shares
(a) in exchange for
(ii) shares of, or another interest or right in, a body corporate that immediately before the exchange, or that because of the exchange, did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who, immediately before the exchange, dealt with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, if the person, the corporation and all the holders of shares in the class or series of shares so issued consent to the exchange; or
(b) pursuant to an agreement referred to in subsection 182(1) or an arrangement referred to in paragraph 192(1)(b) or (c) or to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate.
Marginal note:Limit on addition to a stated capital account
(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.
Marginal note:Constraint on addition to a stated capital account
(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 issued any outstanding shares of more than one class or series,
the addition to the stated capital account must be approved by special resolution unless all the issued and outstanding shares are shares of not more than two classes of convertible shares referred to in subsection 39(5).
Marginal note:Other additions to stated capital
(6) When a body corporate is continued under this Act, it may add to a stated capital account any consideration received by it for a share it issued and 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.
(7) When 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.
(8) When a body corporate is continued under this Act, any amount unpaid in respect of a share issued by the body corporate before it was so continued and paid after it was so continued shall be added to the stated capital account maintained for the shares of that class or series.
(9) For the purposes of subsection 34(2), sections 38 and 42, and paragraph 185(2)(a), when a body corporate is continued under this Act its stated capital is deemed to include the amount that would have been included in stated capital if the body corporate had been incorporated under this Act.
(10) A corporation shall not reduce its stated capital or any stated capital account except in the manner provided in this Act.
Marginal note:Exception for an open-end mutual fund
(11) Subsections (1) to (10) and any other provisions of this Act relating to stated capital do not apply to an open-end mutual fund.
Definition of open-end mutual fund
(12) For the purposes of this section, open-end mutual fund means a distributing corporation 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 on the demand of a shareholder.
- R.S., 1985, c. C-44, s. 26;
- 2001, c. 14, s. 14;
- 2011, c. 21, s. 19(E).
Marginal note:Shares in series
(a) fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series; or
(b) authorize the directors to fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series.
Marginal note:Series participation
(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.
Marginal note:Restrictions on series
(3) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section shall confer on 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.
Marginal note:Amendment of articles
(4) If the directors exercise their authority under paragraph (1)(b), they shall, before the issue of shares of the series, send, in the form that the Director fixes, articles of amendment to the Director to designate a series of shares.
Marginal note:Certificate of amendment
(5) On receipt of articles of amendment designating a series of shares, the Director shall issue a certificate of amendment in accordance with section 262.
Marginal note:Effect of certificate
(6) The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.
- R.S., 1985, c. C-44, s. 27;
- 2001, c. 14, s. 15.
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