Canada Business Corporations Regulations, 2001 (SOR/2001-512)

84. For the purpose of subsection 47(1) of the Act, the proceeds of a sale by a constrained share corporation under subsection 46(1) of the Act shall be deposited in an interest-bearing account with a chartered bank in Canada to which the Bank Act applies or a trust company in Canada to which the Trust and Loan Companies Act applies.

85. Section 86 applies to a constrained share corporation that has provisions in its articles imposing a constraint referred to in paragraph (a) or (b) of the definition “constraint” in section 73.

• 86. (1) Subject to section 103 of the Act, the directors of a constrained share corporation may make, amend or repeal any by-laws required to administer the constrained share provisions set out in the articles of the corporation, including by-laws

  • (a) to require any person in whose name shares of the corporation are registered to provide a statutory declaration under the Canada Evidence Act concerning

    • (i) whether the shareholder is the beneficial owner of the shares of the corporation or holds them for a beneficial owner,

    • (ii) whether the shareholder is an associate of any other shareholder,

    • (iii) whether the shareholder or beneficial owner is a Canadian, and

    • (iv) any further relevant facts;

  • (b) to require any person seeking to have a transfer of a voting share registered in their name or to have a voting share issued to them to provide a statutory declaration as described in paragraph (a); and

  • (c) to determine the circumstances in which any declarations are required, their form and the times when they are to be provided.

• (2) If a person is required to provide a declaration under a by-law made under subsection (1), the directors may refuse to register a transfer of a voting share in their name or to issue a voting share to them until that person has provided the declaration.

• (3) In administering the constrained share provisions set out in the articles of a constrained share corporation, the directors of the corporation may rely on

  • (a) a statement made in a declaration referred to in subsection (1) or (2); and

  • (b) the knowledge of a director, officer, employee, agent or mandatary of the corporation.

• (4) If the directors are required to determine the total number of voting shares of a constrained share corporation held by or on behalf of persons other than Canadians, the directors may rely on the sum of the voting shares held by every shareholder whose latest address as shown in the securities register is

  • (a) outside Canada; and

  • (b) in Canada but who, to the knowledge of a director, officer, employee, agent or mandatary of the corporation, is not a Canadian.

• (5) For the purpose of subsection (4), the directors may rely on the securities register of the constrained share corporation as of any date after the day on which the corporation became a constrained share corporation, but that date shall not be more than four months before the day on which the determination is made.