• (b) review those procedures and their effectiveness in ensuring that the association is complying with Part XII; and

Marginal note:Reliance on statement

215. A director, an officer or an employee of an association is not liable under subsection 168(1) or (2) or section 211 or 214 or subsection 430(1) if the director, officer or employee relies in good faith on

Marginal note:Indemnisation

• 216. (1) L’association peut indemniser ses administrateurs ou ses dirigeants — ou leurs prédécesseurs —, ainsi que les personnes qui, à sa demande, agissent ou ont agi en cette qualité pour une entité dont elle est ou a été associée, actionnaire ou créancière, de tous leurs frais, y compris les montants versés en règlement d’une action ou pour satisfaire à un jugement, entraînés par des procédures civiles, pénales ou administratives auxquelles ils étaient parties en cette qualité, sauf à l’occasion d’actions intentées par l’association ou pour son compte en vue d’obtenir un jugement favorable, si :

Marginal note:Incorporating instrument

219. On the application of an association duly authorized by special resolution of the members, the Minister may approve a proposal to add, change or remove any provision that is permitted by this Act to be set out in the association’s incorporating instrument.

Marginal note:Letters patent to amend

• 220. (1) On receipt of an application referred to in section 219, the Minister may issue letters patent to effect the proposal.

Marginal note:Proposal to amend

• 224. (1) Subject to subsection (2), a member may, in accordance with sections 152 and 153, make a proposal to make an application referred to in section 219 or to make, amend or repeal the by-laws referred to in subsection 221(1) of the association.

Marginal note:Application to amalgamate

226. On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including associations, the Minister may issue letters patent amalgamating and continuing the applicants as one association if the proposed capital and corporate structure of the amalgamated association meets the requirements for an association to be incorporated under this Act.

• Marginal note:Horizontal short-form amalgamation

  (2) Two or more bodies corporate incorporated by or under an Act of Parliament may amalgamate and continue as an association without complying with sections 227 to 229 if

  • (a) at least one of the applicants is an association;

  • (b) the applicants are all wholly-owned subsidiaries of the same holding body corporate;

  • (c) the amalgamation is approved by a resolution of the directors of each of the applicants; and

  • (d) the resolutions provide that

    • (i) the shares of all applicants, except those of one of the applicants that is an association, will be cancelled without any repayment of capital in respect of those shares,

    • (ii) the letters patent of amalgamation and the by-laws of the amalgamated association will be the same as the incorporating instrument and the by-laws of the amalgamating association whose shares are not cancelled, and

    • (iii) the stated capital of the amalgamating association and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating association whose shares are not cancelled.

• Marginal note:Application of sections 24 to 26

  (3) If two or more bodies corporate, none of which is an association, apply for letters patent under subsection (1), sections 24 to 26 apply in respect of the application with any modifications that the circumstances require.

• Marginal note:Matters for consideration

  (4) Before issuing letters patent of amalgamation continuing the applicants as one association, the Minister shall take into account all matters that the Minister considers relevant to the application, including

  • (a) the sources of continuing financial support for the amalgamated association;

  • (b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of the amalgamated association;

  • (c) the business record and experience of the applicants;

  • (d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity;

  • (e) whether the amalgamated association will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

  • (f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses;

  • (g) whether the association is to be operated in accordance with cooperative principles; and

  • (h) the best interests of the financial system in Canada and, in particular, the cooperative financial system in Canada.

Marginal note:Court enforcement

• 232.1 (1) If an association or any director, officer, employee or agent of an association is contravening or has failed to comply with any term or condition made in respect of the issuance of letters patent of amalgamation, the Minister may, in addition to any other action that may be taken under this Act, apply to a court for an order directing the association or the director, officer, employee or agent to comply with the term or condition, cease the contravention or do any thing that is required to be done, and on the application the court may so order and make any other order it thinks fit.

• Marginal note:Appeal

  (2) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court.

Transfer of Business

Marginal note:Sale by association

• 233.1 (1) An association may sell all or substantially all of its assets to a financial institution incorporated by or under an Act of Parliament, a central cooperative credit society for which an order has been made under subsection 473(1), a bank holding company or an authorized foreign bank in respect of its business in Canada if the purchasing financial institution, central cooperative credit society, bank holding company or authorized foreign bank assumes all or substantially all of the liabilities of the association.

• Marginal note:Sale agreement

  (2) An agreement of purchase and sale (in subsection (3), section 233.2, subsections 233.3(1) and (4) and section 233.5 referred to as a “sale agreement”) must set out the terms of, and means of effecting, the sale of assets referred to in subsection (1).

• Marginal note:Consideration

  (3) Despite anything in this Act, the consideration for a sale referred to in subsection (1) may be cash or fully paid securities of the purchasing financial institution, central cooperative credit society for which an order has been made under subsection 473(1), bank holding company or authorized foreign bank or in part cash and in part fully paid securities of the purchasing financial institution, central cooperative credit society, bank holding company or authorized foreign bank or any other consideration that is provided for in the sale agreement.

• Meaning of “authorized foreign bank” and “bank holding company”

  (4) In this section, “authorized foreign bank” and “bank holding company” have the meaning assigned to those expressions by section 2 of the Bank Act.

Marginal note:Agreement to Minister

233.2 A sale agreement must be submitted to the Minister before the sending of the sale agreement to members and shareholders of the selling association under subsection 233.3(1).

Marginal note:Approval

• 233.3 (1) The directors of a selling association shall submit a sale agreement for approval to a meeting of the members, and to a meeting of shareholders, of the association and, subject to subsection (3), to the holders of each class or series of shares of the association.

• Marginal note:Right to vote

  (2) Each share of a selling association carries the right to vote in respect of a sale referred to in subsection 233.1(1) whether or not the share otherwise carries the right to vote.

• Marginal note:Class vote

  (3) The holders of shares of a class or series of shares of a selling association are entitled to vote separately as a class or series in respect of a sale referred to in subsection 233.1(1) only if the shares of the class or series are affected by the sale in a manner different from the shares of another class or series.

• Marginal note:Special resolution

  (4) A sale agreement is approved when the members and shareholders, and the holders of each class or series of shares entitled to vote separately as a class or series under subsection (3), of the selling association have approved the sale by special resolution.

Marginal note:Abandoning sale

233.4 If a special resolution approving a sale under subsection 233.3(4) so states, the directors of a selling association may, subject to the rights of third parties, abandon the sale without further approval of the members and shareholders.

Marginal note:Application to Minister

• 233.5 (1) Subject to subsection (2), unless a sale agreement is abandoned in accordance with section 233.4, the selling association shall, within three months after the approval of the sale agreement in accordance with subsection 233.3(4), apply to the Minister for approval of the sale agreement.

• Marginal note:Conditions precedent to application

  (2) No application for approval under subsection (1) may be made unless

  • (a) a notice of intention to make the application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the selling association is situated; and

  • (b) the application is supported by satisfactory evidence that the selling association has complied with the requirements of sections 233.1 to 233.4 and this section.

• Marginal note:Approval by Minister

  (3) A sale agreement has no force or effect until it has been approved by the Minister.

• Marginal note:Approval by Minister

  (4) If an application has been made to the Minister in accordance with subsections (1) and (2), the Minister may approve the sale agreement to which the application relates.