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

Act current to 2017-11-20 and last amended on 2015-02-26. Previous Versions

Marginal note:Assurance that endorsement effective
  •  (1) An issuer may require an assurance that each necessary endorsement on a security is genuine and effective by requiring a guarantee of the signature of the person endorsing, and by requiring

    • (a) if the endorsement is by an agent or mandatary, reasonable assurance of authority to sign;

    • (b) if the endorsement is by a fiduciary, evidence of appointment or incumbency;

    • (c) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and

    • (d) in any other case, assurance that corresponds as closely as practicable to the foregoing.

  • Definition of guarantee of the signature

    (2) For the purposes of subsection (1), a guarantee of the signature means a guarantee signed by or on behalf of a person reasonably believed by the issuer to be responsible.

  • Marginal note:Standards

    (3) An issuer may adopt reasonable standards to determine responsible persons for the purpose of subsection (2).

  • Definition of evidence of appointment or incumbency

    (4) In paragraph (1)(b), evidence of appointment or incumbency means

    • (a) in the case of a fiduciary appointed by a court, a copy of the order certified in accordance with subsection 51(7), and dated not earlier than sixty days before the date a security is presented for transfer; or

    • (b) in any other case, a copy of a document showing the appointment or other evidence believed by the issuer to be appropriate.

  • Marginal note:Standards

    (5) An issuer may adopt reasonable standards with respect to evidence for the purposes of paragraph (4)(b).

  • Marginal note:No notice to issuer

    (6) An issuer is deemed not to have notice of the contents of any document referred to in subsection (4) except to the extent that the contents relate directly to appointment or incumbency.

  • Marginal note:Notice from excess documentation

    (7) If an issuer demands assurance additional to that specified in this section for a purpose other than that specified in subsection (4) and obtains a copy of a will, trust or partnership agreement, by-law or similar document, the issuer is deemed to have notice of all matters contained therein affecting the transfer.

  • R.S., 1985, c. C-44, s. 77;
  • 2011, c. 21, s. 39(E).
Marginal note:Limited duty of inquiry
  •  (1) An issuer to whom a security is presented for registration has a duty to inquire into adverse claims if

    • (a) written notice of an adverse claim has been received at a time and in a manner that affords the issuer a reasonable opportunity to act on it before the issue of a new, reissued or re-registered security and the notice discloses the name and address of the claimant, the registered owner and the issue of which the security is a part; or

    • (b) the issuer is deemed to have notice of an adverse claim from a document that it obtained under subsection 77(7).

  • Marginal note:Discharge of duty

    (2) An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address furnished by the claimant or, if no such address has been furnished, to the claimant’s residence or regular place of business, that a security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notice either

    • (a) the issuer is served with a restraining order or other order of a court; or

    • (b) the issuer is provided with an indemnity bond sufficient in the issuer’s judgment to protect the issuer and any registrar, transfer agent or other agent or mandatary of the issuer from any loss that may be incurred by any of them as a result of complying with the adverse claim.

  • Marginal note:Inquiry into adverse claims

    (3) Unless an issuer is deemed to have notice of an adverse claim from a document that it obtained under subsection 77(7) or has received notice of an adverse claim under subsection (1), if a security presented for registration is endorsed by the appropriate person as defined in section 65, the issuer has no duty to inquire into adverse claims, and in particular,

    • (a) an issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and thereafter the issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;

    • (b) an issuer registering transfer on an endorsement by a fiduciary has no duty to inquire whether the transfer is made in compliance with the document or with the law of the jurisdiction governing the fiduciary relationship; and

    • (c) an issuer is deemed not to have notice of the contents of any court record or any registered document even if the record or document is in the issuer’s possession and even if the transfer is made on the endorsement of a fiduciary to the fiduciary or the fiduciary’s nominee.

  • Marginal note:Duration of notice

    (4) A written notice of adverse claim received by an issuer is effective for twelve months from the date when it was received unless the notice is renewed in writing.

  • R.S., 1985, c. C-44, s. 78;
  • 2001, c. 14, s. 135(E);
  • 2011, c. 21, s. 40(E).
Marginal note:Limitation of issuer’s liability
  •  (1) Subject to any applicable law relating to the collection of taxes, the issuer is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a security if

    • (a) the necessary endorsements were on or with the security; and

    • (b) the issuer had no duty to inquire into adverse claims or had discharged any such duty.

  • Marginal note:Duty of issuer in default

    (2) If an issuer has registered a transfer of a security to a person not entitled to it, the issuer shall on demand deliver a like security to the owner unless

    • (a) subsection (1) applies;

    • (b) the owner is precluded by subsection 80(1) from asserting any claim; or

    • (c) the delivery would result in overissue, in which case the issuer’s liability is governed by section 52.

  • 1974-75-76, c. 33, s. 74;
  • 1978-79, c. 9, s. 1(F).
Marginal note:Notice of lost or stolen security
  •  (1) Where a security has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact by giving the issuer written notice of an adverse claim within a reasonable time after discovering the loss, destruction or taking and if the issuer has registered a transfer of the security before receiving such notice, the owner is precluded from asserting against the issuer any claim to a new security.

  • Marginal note:Duty of issuer to issue a new security

    (2) Where the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer shall issue a new security in place of the original security if the owner

    • (a) so requests before the issuer has notice that the security has been acquired by a bona fide purchaser;

    • (b) furnishes the issuer with a sufficient indemnity bond; and

    • (c) satisfies any other reasonable requirements imposed by the issuer.

  • Marginal note:Duty to register transfer

    (3) If, after the issue of a new security under subsection (2), a bona fide purchaser of the original security presents the original security for registration of transfer, the issuer shall register the transfer unless registration would result in overissue, in which case the issuer’s liability is governed by section 52.

  • Marginal note:Right of issuer to recover

    (4) In addition to any rights on an indemnity bond, the issuer may recover a new security issued under subsection (2) from the person to whom it was issued or anyone taking under the person other than a bona fide purchaser.

  • R.S., 1985, c. C-44, s. 80;
  • 2001, c. 14, s. 135(E).
Marginal note:Rights and obligations
  •  (1) An authenticating trustee, registrar, transfer agent or other agent or mandatary of an issuer has, in respect of the issue, registration of transfer and cancellation of a security of the issuer,

    • (a) a duty to the issuer to exercise good faith and reasonable diligence; and

    • (b) the same obligations to the holder or owner of a security and the same rights, privileges and immunities as the issuer.

  • Marginal note:Notice to agent or mandatary

    (2) Notice to an authenticating trustee, registrar, transfer agent or other agent or mandatary of an issuer is notice to the issuer with respect to the functions performed by the agent or mandatary.

  • R.S., 1985, c. C-44, s. 81;
  • 2011, c. 21, s. 41.
 
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