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Bank Act (S.C. 1991, c. 46)

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Act current to 2021-11-17 and last amended on 2021-06-30. Previous Versions

PART IIIIncorporation and Continuance (continued)

Formalities of Incorporation (continued)

Marginal note:Letters patent of incorporation on application of certain companies

  •  (1) If the Minister issues letters patent, under section 22, incorporating a bank on the application of a company to which the Trust and Loan Companies Act or the Insurance Companies Act applies and the paid-in capital of the bank immediately following its incorporation will be not less than five million dollars or any greater amount that the Minister may specify under subsection 46(1), there may, on the request of the company and with the approval of the Minister, be included in the letters patent a provision deeming shares of the bank to be issued, on a share for share basis, to all shareholders of the company in exchange for all the issued and outstanding shares of the company.

  • Marginal note:Effect of provision

    (2) Shares of a bank deemed to be issued pursuant to subsection (1) are subject to the same designation, rights, privileges and restrictions or conditions and, subject to any agreement to the contrary, to the same charges, encumbrances and other restrictions as the shares of the company for which they are exchanged and the shares of the company, on the issuance of the letters patent, become the property of the bank free and clear of any charge, encumbrance or other restriction.

  • Marginal note:Idem

    (3) An exchange of shares of a company referred to in subsection (1) pursuant to a provision included in the letters patent incorporating a bank does not deprive a person who was a holder of shares of the company immediately prior to the exchange of any right or privilege with respect to the shares or relieve the person of any liability in respect thereof, but any such right or privilege shall be exercised in accordance with this Act.

  • Marginal note:Transfer and voting of bank shares

    (4) Notwithstanding subsection (3), no share of a bank that is deemed to be issued pursuant to a provision included in the letters patent incorporating a bank may subsequently be transferred or voted contrary to this Act, but any shareholder of a bank who acquired shares of the bank by means of an exchange of shares of a company referred to in subsection (1) pursuant to that provision may, for a period of ten years from the date of issuance of the letters patent, exercise the voting rights attached to the shares without regard to any provisions of this Act, other than subsection (7), that would otherwise prohibit the shareholder from voting the shares.

  • Marginal note:Shareholder approval

    (5) No provision described in subsection (1) may be included in letters patent issued pursuant to section 22 unless the application therefor is accompanied by evidence that the request for such a provision was approved by a vote of at least two thirds of those shareholders of the applicant company entitled to vote thereon, present or represented by proxy and voting at a shareholders’ meeting called to consider the application.

  • Marginal note:Exchange of share certificates

    (6) Where, pursuant to a provision included in the letters patent incorporating a bank, a share exchange is deemed to have taken place, the bank shall, within ninety days after the issuance of the letters patent, make provision for the issue of share certificates representing shares of the bank and for the exchange of those certificates for share certificates representing the shares of the company that were outstanding on the day the letters patent were issued.

  • Marginal note:Shares of bank may continue to be held

    (7) Notwithstanding any other provision of this Act, where letters patent incorporating a bank include a provision described in subsection (1) and, on the date of issuance of the letters patent, another bank and any entities controlled by that other bank held, in the aggregate, more than ten per cent of any class of shares of the applicant company, that other bank may have a significant interest in any class of shares of the bank deemed to be issued pursuant to subsection (1) in exchange for the shares of the company for a period of two years from the date of issuance of the letters patent.

  • Marginal note:Extension of period

    (8) On application of a bank authorized by subsection (7) to hold, directly or through a subsidiary, shares of another bank, the Minister may, by order, extend the period referred to in subsection (7), but the aggregate of such extensions from time to time granted to a bank and of the period referred to in subsection (7) may not, in any case, exceed ten years.

  • (9) [Repealed, 2001, c. 9, s. 48]

  • 1991, c. 46, ss. 29, 573, c. 47, s. 756
  • 2001, c. 9, s. 48

Marginal note:Notice of issue of letters patent

 The Superintendent shall cause to be published in the Canada Gazette a notice of the issuance of letters patent incorporating a bank.

Marginal note:First directors

 The first directors of a bank are the directors named in the application for letters patent to incorporate the bank.

Marginal note:First members of federal credit union

 The incorporators of a federal credit union are deemed to be its first members.

  • 2010, c. 12, s. 1907

Marginal note:Effect of letters patent

 A bank comes into existence on the date provided therefor in its letters patent.

Continuance

Marginal note:Federal corporations

  •  (1) A body corporate incorporated under the Canada Business Corporations Act or any other Act of Parliament, including a bank holding company, may apply to the Minister for letters patent continuing the body corporate as a bank under this Act.

  • Marginal note:Other corporations

    (2) A body corporate incorporated otherwise than by or under an Act of Parliament may, if so authorized by the laws of the jurisdiction where it is incorporated, apply to the Minister for letters patent continuing the body corporate as a bank under this Act.

  • Marginal note:Continuance for purpose of amalgamation

    (3) A local cooperative credit society may, if so authorized by the laws of the jurisdiction in which it is incorporated, apply to the Minister for letters patent continuing it as a federal credit union if it proposes to be continued under this Act for the purpose of immediately amalgamating with another federal credit union in accordance with this Act.

  • Marginal note:Continuance for purpose of amalgamation

    (4) Two or more local cooperative credit societies may, if so authorized by the laws of the jurisdiction in which they are incorporated, apply to the Minister for letters patent continuing each of them as a federal credit union if they propose to be continued under this Act for the purpose of immediately amalgamating with each other in accordance with this Act.

  • Marginal note:Application for amalgamation required

    (5) An application referred to in subsection (3) or (4) must be made at the same time as an application referred to in subsection 223(1.2) or (1.3) in respect of the amalgamation.

  • 1991, c. 46, s. 33
  • 1994, c. 24, s. 34(F)
  • 2001, c. 9, s. 49
  • 2010, c. 12, s. 1908
  • 2014, c. 39, s. 270

Marginal note:Application for continuance

  •  (1) If a body corporate applies for letters patent under section 33, sections 23 to 27 apply in respect of the application, with any modifications that the circumstances require.

  • Marginal note:Joint notice of continuance and amalgamation

    (1.1) In the case of an application made under subsection 33(3) or (4), the applicants referred to in subsection 223(1.2) or (1.3) may, in accordance with subsection 25(2) and paragraph 228(2)(a), jointly publish the notices referred to in those provisions in the form of a single notice.

  • Marginal note:Special resolution approval

    (2) If a body corporate applies for letters patent under section 33, the application must be duly authorized by a special resolution.

  • Marginal note:Copy of special resolution

    (3) A copy of the special resolution referred to in subsection (2) shall be filed with the application.

  • Marginal note:Continuance and amalgamation — special resolutions

    (4) In the case of an application made under subsection 33(3) or (4), the vote on the special resolution must be held at the same time as the vote on the special resolutions referred to in subsection 226(4).

  • 1991, c. 46, s. 34
  • 2010, c. 12, s. 1909
  • 2014, c. 39, s. 271

Marginal note:Power to issue letters patent

  •  (1) On the application of a body corporate under section 33, the Minister may, subject to this Part, issue letters patent continuing the body corporate as a bank under this Act.

  • Marginal note:Issue of letters patent

    (2) Where letters patent are issued to a body corporate under subsection (1), section 28 applies in respect of the issue of letters patent, with such modifications as the circumstances require.

  • 1991, c. 46, s. 35
  • 2010, c. 12, s. 1910(E)

Marginal note:Power to issue letters patent

  •  (1) On the application of a local cooperative credit society under subsection 33(2), the Minister may, subject to this Part, issue letters patent continuing the local cooperative credit society as a federal credit union only if the Minister is of the opinion that the local cooperative credit society has complied with the regulations respecting notice and disclosure requirements.

  • Marginal note:Power to issue letters patent

    (2) On the application of a local cooperative credit society under subsection 33(3) or (4), the Minister may, subject to this Part, issue letters patent continuing the local cooperative credit society as a federal credit union only if

    • (a) the Minister is of the opinion that the local cooperative credit society has complied with the regulations respecting notice and disclosure requirements;

    • (b) the Minister is of the opinion that the federal credit union that results from the amalgamation will satisfy the requirements for incorporation as a federal credit union; and

    • (c) the Minister will, immediately after issuing letters patent for the continuance, issue letters patent for the amalgamation under subsection 229(1).

  • Marginal note:Regulations

    (3) The Governor in Council may make regulations respecting notice and disclosure requirements for the purpose of subsections (1) and (2).

  • Marginal note:Exemption

    (4) For the purpose of facilitating the continuance as a federal credit union of a local cooperative credit society, the Minister may, on application and by order, subject to any terms and conditions that he or she considers appropriate, exempt the local cooperative credit society from any requirement of this Part or of the regulations made under this Part, if he or she is of the opinion that it has acted in a manner that substantially complies with the requirement.

  • 2010, c. 12, s. 1911
  • 2014, c. 39, s. 272
  • 2016, c. 7, s. 123

Marginal note:Effect of letters patent

 On the day set out in the letters patent continuing a body corporate as a bank,

  • (a) the body corporate becomes a bank as if it had been incorporated under this Act; and

  • (b) the letters patent are deemed to be the incorporating instrument of the continued bank.

  • 1991, c. 46, s. 36
  • 2010, c. 12, s. 1912(E)

Marginal note:Copy of letters patent

  •  (1) Where a body corporate is continued as a bank under this Part, the Superintendent shall forthwith send a copy of the letters patent to the appropriate official or public body in the jurisdiction in which the body corporate was authorized to apply to be continued under this Act.

  • Marginal note:Notice of issuance of letters patent

    (2) The Superintendent shall cause to be published in the Canada Gazette a notice of the issuance of letters patent continuing a body corporate as a bank under this Act.

  • Marginal note:Notice of continuance and amalgamation

    (3) In the case of a continuance that results from an application made under subsection 33(3) or (4), the Superintendent may publish, in the form of a single notice, the notice referred to subsection (2), the notice required under subsection 229(3) in respect of the amalgamation and any notice required under subsection (2) in respect of other applicants for the amalgamation.

  • 1991, c. 46, s. 37
  • 2014, c. 39, s. 273

Marginal note:Effects of continuance

  •  (1) Where a body corporate is continued as a bank under this Part,

    • (a) the property of the body corporate continues to be the property of the bank;

    • (b) the bank continues to be liable for the obligations of the body corporate;

    • (c) an existing cause of action or claim by or against the body corporate or any liability of the body corporate to prosecution is unaffected;

    • (d) a civil, criminal or administrative action or proceeding pending by or against the body corporate may continue to be prosecuted by or against the bank;

    • (e) a conviction against, or any ruling, order or judgment in favour of or against the body corporate may be enforced by or against the bank;

    • (f) a person who, on the day the body corporate becomes a bank, was the holder of a security issued by the body corporate is not deprived of any right or privilege available to the person at that time in respect of the security or relieved of any liability in respect thereof, but any such right or privilege may be exercised only in accordance with this Act; and

    • (g) the by-laws of the body corporate, except those that are in conflict with this Act, continue as the by-laws of the bank.

  • Marginal note:Membership shares

    (2) In addition, if the body corporate is continued as a federal credit union,

    • (a) in the case of a body corporate with common shares,

      • (i) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act,

      • (ii) the holders of those common shares are deemed to be the members of the federal credit union, and

      • (iii) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect; and

    • (b) in the case of a body corporate that has members,

      • (i) the membership shares, however designated, of the body corporate are deemed to be membership shares of the federal credit union to which are attached the rights, privileges and restrictions set out in this Act,

      • (ii) the members of the body corporate are deemed to be the members of the federal credit union, and

      • (iii) any agreement made before continuance under which the members of the body corporate have agreed to vote in a manner provided in the agreement is of no effect.

  • 1991, c. 46, s. 38
  • 2010, c. 12, s. 1913

Marginal note:Transitional

  •  (1) Notwithstanding any other provision of this Act or the regulations, the Minister may, on the recommendation of the Superintendent, by order, grant to a bank in respect of which letters patent were issued under subsection 35(1) permission to

    • (a) engage in a business activity specified in the order that a bank is not otherwise permitted by this Act to engage in and that the body corporate continued as the bank was engaging in at the time the application for the letters patent was made;

    • (b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made;

    • (c) [Repealed, 1994, c. 47, s. 14]

    • (d) hold assets that a bank is not otherwise permitted by this Act to hold if the assets were held by the body corporate continued as the bank at the time the application for the letters patent was made;

    • (e) acquire and hold assets that a bank is not otherwise permitted by this Act to acquire or hold if the body corporate continued as the bank was obliged, at the time the application for the letters patent was made, to acquire those assets; and

    • (f) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

  • Marginal note:Duration

    (2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding

    • (a) with respect to any activity described in paragraph (1)(a), 30 days after the date of issue of the letters patent or

      • (i) if the activity is conducted under an agreement existing on the date of issue of the letters patent, the expiry of the agreement, or

      • (ii) if the bank is a federal credit union and an undertaking to cease engaging in the activity has been given under subsection 973.02(1), the cessation date set out in the undertaking in respect of the activity;

    • (b) with respect to any matter described in paragraph (1)(b), ten years; and

    • (c) with respect to any matter described in any of paragraphs (1)(d) to (f), two years.

  • Marginal note:Renewal

    (3) Subject to subsection (4), the Minister may, on the recommendation of the Superintendent, by order, renew a permission granted by order under subsection (1) with respect to any matter described in paragraphs (1)(b) to (e) for such further period or periods as the Minister considers necessary.

  • Marginal note:Limitation

    (4) The Minister shall not grant to a bank any permission

    • (a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the date of the approval for the bank to commence and carry on business, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the bank that the bank will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and

    • (b) with respect to matters described in paragraphs (1)(d) and (e), that purports to be effective more than ten years after the date of the approval for the bank to commence and carry on business.

  • 1991, c. 46, s. 39
  • 1994, c. 47, s. 14
  • 1997, c. 15, s. 3
  • 2007, c. 6, s. 5
  • 2010, c. 12, s. 1914
 
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