Marginal note:Audit committee

• 194. (1) A corporation may have an audit committee and, if it does, the committee shall be composed of not less than three directors, a majority of whom are not officers or employees of the corporation or any of its affiliates.

• Marginal note:Duty of committee

  (2) The audit committee shall review the financial statements of the corporation before they are approved under section 178.

• Marginal note:Public accountant’s attendance

  (3) The corporation shall send the public accountant notice of the time and place of any meeting of the audit committee. The public accountant is entitled to attend the meeting at the expense of the corporation and be heard, and shall attend every meeting of the committee if requested to do so by one of its members.

• Marginal note:Calling meeting

  (4) The public accountant or a member of the audit committee may call a meeting of the committee.

Marginal note:Notice of errors

• 195. (1) A director or an officer of a corporation shall immediately notify any audit committee and the public accountant of any error or misstatement of which the director or officer becomes aware in a financial statement that the public accountant or a former public accountant has reported on.

• Marginal note:Directors to be informed

  (2) A public accountant or former public accountant of a corporation who is notified or becomes aware of an error or misstatement in a financial statement on which they have reported shall, if in their opinion the error or misstatement is material, inform each director accordingly.

• Marginal note:Duty of directors

  (3) When the public accountant or former public accountant informs the directors of an error or misstatement in a financial statement,

  • (a) the directors shall prepare and issue revised financial statements or otherwise inform the members; and

  • (b) the corporation shall send the Director a copy of the revised financial statements or a notice of the error or misstatement, if the corporation is one that is required to comply with section 176.

Marginal note:Qualified privilege — defamation

196. Any oral or written statement or report made under this Act by the public accountant or former public accountant of a corporation has qualified privilege.

PART 13FUNDAMENTAL CHANGES

Marginal note:Amendment of articles or by-laws

• 197. (1) A special resolution of the members — or, if section 199 applies, of each applicable class or group of members — is required to make any amendment to the articles or the by-laws of a corporation to

  • (a) change the corporation’s name;

  • (b) change the province in which the corporation’s registered office is situated;

  • (c) add, change or remove any restriction on the activities that the corporation may carry on;

  • (d) create a new class or group of members;

  • (e) change a condition required for being a member;

  • (f) change the designation of any class or group of members or add, change or remove any rights and conditions of any such class or group;

  • (g) divide any class or group of members into two or more classes or groups and fix the rights and conditions of each class or group;

  • (h) add, change or remove a provision respecting the transfer of a membership;

  • (i) subject to section 133, increase or decrease the number of — or the minimum or maximum number of — directors fixed by the articles;

  • (j) change the statement of the purpose of the corporation;

  • (k) change the statement concerning the distribution of property remaining on liquidation after the discharge of any liabilities of the corporation;

  • (l) change the manner of giving notice to members entitled to vote at a meeting of members;

  • (m) change the method of voting by members not in attendance at a meeting of members; or

  • (n) add, change or remove any other provision that is permitted by this Act to be set out in the articles.

• Marginal note:Revocation

  (2) The directors of a corporation may, if authorized by the members in the special resolution effecting an amendment under this section, revoke the resolution before it is acted on without further approval of the members.

• Marginal note:Amendment of number name

  (3) Despite subsection (1), if a corporation has a designating number as a name, the directors may amend its articles to change that name to a verbal name.

Marginal note:Proposal to amend

• 198. (1) Subject to subsection (2), a director, or a member who is entitled to vote at an annual meeting of members, may, in accordance with section 163, propose to make an amendment referred to in subsection 197(1).

• Marginal note:Notice of amendment

  (2) Notice of a meeting of members at which a proposal to make an amendment referred to in subsection 197(1) is to be considered shall set out the proposed amendment.

Marginal note:Class vote

• 199. (1) The members of a class or group of members are, unless the articles otherwise provide in the case of an amendment referred to in paragraphs (a) and (e), entitled to vote separately as a class or group on a proposal to make an amendment referred to in subsection 197(1) to

  • (a) effect an exchange, reclassification or cancellation of all or part of the memberships of the class or group;

  • (b) add, change or remove the rights or conditions attached to the memberships of the class or group, including

    • (i) to reduce or remove a liquidation preference, or

    • (ii) to add, remove or change prejudicially voting or transfer rights of the class or group;

  • (c) increase the rights of any other class or group of members having rights equal or superior to those of the class or group;

  • (d) increase the rights of a class or group of members having rights inferior to those of the class or group to make them equal or superior to those of the class or group;

  • (e) create a new class or group of members having rights equal or superior to those of the class or group; or

  • (f) effect an exchange or create a right of exchange of all or part of the memberships of another class or group into the memberships of the class or group.

• Marginal note:Right to vote

  (2) Subsection (1) applies whether or not memberships of a class or group otherwise carry the right to vote.

• Marginal note:Separate resolutions

  (3) A proposal to make an amendment referred to in subsection (1) is adopted when the members of each class or group entitled to vote separately on the amendment as a class or group have approved the amendment by a special resolution.

Marginal note:Delivery of articles

200. Subject to any revocation under subsection 197(2), after an amendment to the articles has been adopted under section 197 or 199, articles of amendment in the form that the Director fixes shall be sent to the Director.

Marginal note:Certificate of amendment

201. On receipt of articles of amendment, the Director shall issue a certificate of amendment in accordance with section 276.

Marginal note:Effect of certificate

• 202. (1) An amendment to the articles becomes effective on the date shown in the certificate of amendment and the articles are amended accordingly.

• Marginal note:Rights preserved

  (2) No amendment to the articles affects an existing cause of action or claim or liability to prosecution in favour of or against the corporation or its directors or officers, or any civil, criminal or administrative action or proceeding to which a corporation or its directors or officers is a party.

Marginal note:Restated articles

• 203. (1) The directors may at any time, and shall when so directed by the Director, restate the articles of incorporation.

• Marginal note:Delivery of articles

  (2) Restated articles of incorporation in the form that the Director fixes shall be sent to the Director.

• Marginal note:Restated certificate

  (3) On receipt of restated articles of incorporation, the Director shall issue a restated certificate of incorporation in accordance with section 276.

• Marginal note:Effect of certificate

  (4) Restated articles of incorporation are effective on the date shown in the restated certificate of incorporation and supersede the original articles of incorporation and all amendments to those articles.

Marginal note:Amalgamation

204. Two or more corporations may amalgamate and continue as one corporation.

Marginal note:Amalgamation agreement

• 205. (1) Each corporation proposing to amalgamate shall enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out

  • (a) the provisions that are required to be included in articles of incorporation under section 7 or in the by-laws under section 154;

  • (b) the name and address of each proposed director of the amalgamated corporation;

  • (c) the manner in which the memberships of each amalgamating corporation are to be converted into memberships of the amalgamated corporation;

  • (d) whether the by-laws of the amalgamated corporation are to be those of one of the amalgamating corporations and, if not, a copy of the proposed by-laws; and

  • (e) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated corporation.

• Marginal note:Cancellation

  (2) If a membership in an amalgamating corporation is held by or on behalf of another amalgamating corporation, the amalgamation agreement shall provide for the cancellation, without any repayment of capital, of the membership when the amalgamation becomes effective. No provision shall be made in the agreement for the conversion of the membership into membership of the amalgamated corporation.

Marginal note:Member approval

• 206. (1) The directors of each amalgamating corporation shall submit the amalgamation agreement for approval to a meeting of the members of the amalgamating corporation of which they are directors and, subject to subsection (4), to the members of each class or group of members.

• Marginal note:Notice of meeting

  (2) Each amalgamating corporation shall give notice of a meeting of members in accordance with section 162 to its members and shall include in the notice a copy or summary of the amalgamation agreement.

• Marginal note:Right to vote

  (3) Each membership in an amalgamating corporation carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.

• Marginal note:Class vote

  (4) The members of a class or group of members of each amalgamating corporation are entitled to vote separately as a class or group in respect of an amalgamation agreement if the amalgamation agreement contains a provision that, if contained in a proposed amendment to the articles, would entitle the members to vote as a class or group under section 199.

• Marginal note:Member approval

  (5) Subject to subsection (4), an amalgamation agreement is adopted when the members of each amalgamating corporation have approved the amalgamation by special resolutions.

• Marginal note:Termination

  (6) An amalgamation agreement may provide that at any time before the issue of a certificate of amalgamation the agreement may be terminated by the directors of an amalgamating corporation, despite approval of the agreement by the members of all or any of the amalgamating corporations.