An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence (S.C. 2001, c. 14)
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Assented to 2001-06-14
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence
S.C. 2001, c. 14
Assented to 2001-06-14
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence
SUMMARY
This enactment amends the Canada Business Corporations Act. It is the first major revision of the Act since it came into force in 1975.
Among other things, the enactment amends the provisions concerning liability of directors. It allows for a defence based on due diligence and amends the indemnification provisions allowing for the advancement of defence costs, and allowing indemnification in relation to investigations. It also implements a new regime regarding the apportionment of damage awards applicable to persons involved in the preparation of financial information required under the Act or the regulations, including directors and officers.
The residency requirements for directors and the requirements specifying the location of corporate records have been relaxed. Residency requirements for committees of directors have been eliminated.
The enactment also includes measures to facilitate communications among shareholders and between corporations and their shareholders. To this end, it permits a greater utilization of electronic communications, including holding meetings and voting by electronic means. The enactment also relaxes the rules for proxy solicitation and for certain aspects of the requirements for the submission of proposals and sets conditions for the latter.
The enactment also amends the provisions relating to the civil remedies available in situations of insider trading and eliminates insider reporting.
A series of amendments are included that remove the requirements relating to financial assistance and take-over bids. The enactment expressly authorizes, under certain conditions, going-private and squeeze-out transactions. It also addresses the rights, powers, duties and liabilities of directors and shareholders under a unanimous shareholder agreement and defences available to them.
The enactment provides a number of limited exceptions to the general rule prohibiting subsidiaries from acquiring shares of the parent corporation.
The enactment also includes technical amendments to the Act to clarify certain provisions, to correct errors, to modernize it and to render the language in the English version gender neutral.
It also amends the Canada Cooperatives Act in order to generally harmonize its provisions with the amendments mentioned above, repeals the definition of “associate” in certain Acts and makes consequential amendments to other Acts.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., c. C-44; 1994, c. 24, s. 1(F)CANADA BUSINESS CORPORATIONS ACT
1. (1) The definitions “auditor”, “person” and “unanimous shareholder agreement” in subsection 2(1) of the Canada Business Corporations Act are replaced by the following:
“auditor”
« vérificateur »
“auditor” includes a partnership of auditors or an auditor that is incorporated;
“person”
« personne »
“person” means an individual, partnership, association, body corporate, or personal representative;
“unanimous shareholder agreement”
« convention unanime des actionnaires »
“unanimous shareholder agreement” means an agreement described in subsection 146(1) or a declaration of a shareholder described in subsection 146(2).
(2) The definition “mandataire” in subsection 2(1) of the French version of the Act is replaced by the following:
« mandataire »
Marginal note:French version only
mandataire S’entend notamment de l’ayant cause.
(3) Paragraph (c) of the definition “associate” in subsection 2(1) of the Act is replaced by the following:
(c) a trust or estate in which that person has a substantial beneficial interest or in respect of which that person serves as a trustee or liquidator of the succession or in a similar capacity,
(4) The portion of the definition “associate” in subsection 2(1) of the English version of the Act before paragraph (a) is replaced by the following:
“associate”
« liens »
“associate”, in respect of a relationship with a person, means
(5) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:
“distributing corporation”
« société ayant fait appel au public »
“distributing corporation” means, subject to subsections (6) and (7), a distributing corporation as defined in the regulations;
“entity”
« entité »
“entity” means a body corporate, a partnership, a trust, a joint venture or an unincorporated association or organization;
“going-private transaction”
« opération de fermeture »
“going-private transaction” means a going-private transaction as defined in the regulations;
“officer”
« dirigeant »
“officer” means an individual appointed as an officer under section 121, the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of a corporation, or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any of those offices;
“personal representative”
« représentant personnel »
“personal representative” means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a receiver, an agent, a liquidator of a succession, a guardian, a tutor, a curator, a mandatary or an attorney;
“squeeze-out transaction”
« opération d’éviction »
“squeeze-out transaction” means a transaction by a corporation that is not a distributing corporation that would require an amendment to its articles and would, directly or indirectly, result in the interest of a holder of shares of a class of the corporation being terminated without the consent of the holder, and without substituting an interest of equivalent value in shares issued by the corporation, which shares have equal or greater rights and privileges than the shares of the affected class;
(6) Subsection 2(4) of the French version of the Act is replaced by the following:
Marginal note:Personne morale mère
(4) Est la personne morale mère d’une personne morale celle qui la contrôle.
(7) Subsections 2(6) to (8) of the Act are replaced by the following:
Marginal note:Exemptions — on application by corporation
(6) On the application of a corporation, the Director may determine that the corporation is not or was not a distributing corporation if the Director is satisfied that the determination would not be prejudicial to the public interest.
Marginal note:Exemptions — classes of corporations
(7) The Director may determine that a class of corporations are not or were not distributing corporations if the Director is satisfied that the determination would not be prejudicial to the public interest.
Marginal note:Infants
(8) For the purposes of this Act, the word “infant” has the same meaning as in the applicable provincial law and, in the absence of any such law, has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child, adopted in the United Nations General Assembly on November 20, 1989.
Marginal note:1996, c. 10, s. 212; 1999, c. 31, s. 63
2. Subsection 3(3) of the French version of the Act is replaced by the following:
Marginal note:Non-application de certaines lois
(3) Les lois suivantes ne s’appliquent pas à une société :
a) la Loi sur les corporations canadiennes, chapitre C-32 des Statuts revisés du Canada de 1970;
c) les dispositions de toute loi spéciale au sens de l’article 87 de la Loi sur les transports au Canada qui sont incompatibles avec la présente loi.
3. (1) The portion of subsection 6(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Articles of incorporation
6. (1) Articles of incorporation shall follow the form that the Director fixes and shall set out, in respect of the proposed corporation,
(2) Paragraph 6(1)(b) of the Act is replaced by the following:
(b) the province in Canada where the registered office is to be situated;
4. Section 8 of the Act is replaced by the following:
Marginal note:Certificate of incorporation
8. (1) Subject to subsection (2), on receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 262.
Marginal note:Exception — failure to comply with Act
(2) The Director may refuse to issue the certificate if a notice that is required to be sent under subsection 19(2) or 106(1) indicates that the corporation, if it came into existence, would not be in compliance with this Act.
5. Subsection 10(3) of the Act is replaced by the following:
Marginal note:Alternate name
(3) Subject to subsection 12(1), the name of a corporation may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The corporation may use and may be legally designated by any such form.
6. Subsection 13(1) of the Act is replaced by the following:
Marginal note:Certificate of amendment
13. (1) When a corporation has had its name revoked and a name assigned to it under subsection 12(5), the Director shall issue a certificate of amendment showing the new name of the corporation and shall give notice of the change of name as soon as practicable in a publication generally available to the public.
7. (1) Subsection 14(1) of the Act is replaced by the following:
Marginal note:Personal liability
14. (1) Subject to this section, a person who enters into, or purports to enter into, a written contract in the name of or on behalf of a corporation before it comes into existence is personally bound by the contract and is entitled to its benefits.
(2) Subsection 14(3) of the Act is replaced by the following:
Marginal note:Application to court
(3) Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order respecting the nature and extent of the obligations and liability under the contract of the corporation and the person who entered into, or purported to enter into, the contract in the name of or on behalf of the corporation. On the application, the court may make any order it thinks fit.
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