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

Regulations are current to 2017-11-20 and last amended on 2016-05-13. Previous Versions

  •  (1) If a constrained share corporation has sent a notice referred to in subsection 80(3) and has not sold, under subsection 46(1) of the Act, any share in respect of which the notice was sent, and if the corporation changes its conclusion referred to in paragraph 80(3)(a) or its directors change their determination referred to in paragraph 80(3)(b) or if there is a change in the reason for the conclusion or determination, the corporation shall immediately send by registered mail to the recipient of that notice a notice of the change to the conclusion, to the determination or to the reason for the conclusion or determination, including the reason for the change.

  • (2) When a corporation sends a notice under subsection (1), the corporation shall, at the time the notice is sent, enter or cause to be entered in the securities register of the corporation the particulars of the notice, including the date on which it was sent.

  •  (1) No share shall be sold by a constrained share corporation under subsection 46(1) of the Act unless

    • (a) the corporation has sent the notices referred to in subsections 80(1) and (3) to the person shown in the securities register of the corporation as the holder of the share;

    • (b) not less than 150 days but not more than 300 days have elapsed from the day on which the notice referred to in subsection 80(1) was sent to the holder of the share;

    • (c) not less than 60 days but not more than 150 days have elapsed from the day on which the notice referred to in subsection 80(3) was sent to the holder of the share;

    • (d) the corporation has concluded that the share is owned, or the directors of the corporation have determined in accordance with subsection 80(2) that the share may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73 and, at the time of sale, the corporation has no reasonable grounds on which to change its conclusion or the directors of the corporation have no reasonable grounds on which to change their determination, as the case may be;

    • (e) the sale takes place

      • (i) on a stock exchange where shares of the corporation are listed and posted for trading, or

      • (ii) if shares of the corporation are not listed and posted for trading on a stock exchange, in any other manner that the directors of the corporation determine to be appropriate; and

    • (f) the corporation sells the share with a view to obtaining the best sale price available in the circumstances at the time of sale.

  • (2) No share in respect of which a notice is sent in accordance with subsection 80(1) shall be sold by a constrained share corporation under subsection 46(1) of the Act if a transfer of the share is registered in the securities register of the corporation after the notice was sent, unless the corporation again complies with the requirements set out in this Part respecting the sale of the share.

  •  (1) Immediately after a sale of shares by a constrained share corporation under subsection 46(1) of the Act, the corporation shall

    • (a) register the transfer or a notice of the sale of the shares or cause the transfer or a notice of the sale of the shares to be registered in the securities register of the corporation; and

    • (b) send a notice of the sale to the person shown in the securities register of the corporation as the holder of the shares at the time of the sale.

  • (2) The notice referred to in paragraph (1)(b) shall

    • (a) state the number of shares sold;

    • (b) identify the certificate that represents the shares sold, by certificate number or otherwise;

    • (c) state the date and manner of sale;

    • (d) state the manner in which the person entitled to receive the net proceeds of the sale under subsection 46(3) of the Act may obtain them;

    • (e) state that the corporation concluded that the shares were owned, or that the directors determined in accordance with subsection 80(2) that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73 and state the reason why the corporation so concluded or the directors so determined, as the case may be; and

    • (f) contain a statement, if not all of the shares of the holder represented by a certificate were sold, that not all of the shares were sold and that a certificate that represents the shares that were not sold will be issued on surrender for cancellation of the certificate that represents the shares sold.

 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.

Disclosure of Beneficial Ownership

 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.

  •  (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.

  • SOR/2010-128, s. 18.

References and Definitions for the Purpose of Certain Provisions of the Act

  • SOR/2010-128, s. 19;
  • SOR/2016-98, s. 4(E).
 
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