PART 17Liquidation and Dissolution (continued)
Marginal note:Dissolution by Director
311 (1) Subject to subsections (2) and (3), the Director may dissolve a cooperative by issuing a certificate of dissolution under this section if the cooperative
(a) has not commenced business within three years after the date shown in its certificate of incorporation;
(b) has not carried on its business for three consecutive years;
(c) is in default for a period of one year in sending the Director any fee, notice or document required by this Act; or
(d) does not have any directors or is in the situation described in subsection 85(6).
(2) The Director may not dissolve a cooperative under this section until
(a) one hundred and twenty days have elapsed since notice of intent to dissolve has been given to the cooperative and to each of its directors; and
(b) notice of intent to dissolve the cooperative has been published in a publication generally available to the public.
Marginal note:Certificate of dissolution
(3) Unless cause to the contrary has been shown or an order has been made by a court under section 315, the Director may, after the end of the one hundred and twenty days referred to in subsection (2), issue a certificate of dissolution.
Marginal note:Exception — non-payment of incorporation fee
(3.1) Despite anything in this section, the Director may dissolve a cooperative by issuing a certificate of dissolution if the fee for the issuance of a certificate of incorporation is not paid.
Marginal note:Effect of certificate
(4) The cooperative ceases to exist on the date shown in the certificate of dissolution.
- 1998, c. 1, s. 311
- 2001, c. 14, s. 211
- 2018, c. 8, s. 79(F)
Marginal note:Grounds for dissolution
312 (1) Any interested person may apply to a court for an order dissolving a cooperative if the cooperative has
(a) failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings;
(b) contravened section 18, subsection 27(2) or section 31, 247 or 249; or
(c) procured any certificate under this Act by misrepresentation.
Marginal note:Notice to director
(2) An applicant under this section must give the Director notice of the application.
Marginal note:Dissolution order
(3) On an application under this section, the court may order that the cooperative be dissolved or that it be liquidated and dissolved under the supervision of the court, and the court may make any other order it thinks fit.
(4) On receipt of an order under this section or section 313, the Director must
(a) if the order is to dissolve the cooperative, issue a certificate of dissolution in the form that the Director fixes; or
(b) if the order is to liquidate and dissolve the cooperative under the supervision of the court, issue a certificate of intent to dissolve in the form that the Director fixes and publish notice of the order in a publication generally available to the public.
Marginal note:Effect of certificate
(5) The cooperative ceases to exist on the date shown in the certificate of dissolution.
- 1998, c. 1, s. 312
- 2001, c. 14, s. 212
- 2018, c. 8, s. 80(F)
Marginal note:Further grounds
313 (1) A court may order the liquidation and dissolution of a cooperative or any of its affiliates on the application of a member or a shareholder if the court is satisfied
(a) that the cooperative no longer carries on business or is no longer organized or operating on a cooperative basis;
(b) that an act or omission of the cooperative or any of its affiliates effects a result, that the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted in a manner, or that the powers of the directors of the cooperative or any of its affiliates are or have been exercised in a manner, that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member, shareholder, security holder, creditor, director or officer; or
(c) that events have occurred that entitle a member or shareholder, in accordance with a unanimous agreement, to demand that the cooperative be dissolved or that it is just and equitable that the cooperative be liquidated and dissolved.
Marginal note:Alternate order
(2) On an application under this section, a court may make any order under this section or section 340 that it thinks fit.
Marginal note:Application of section 341
(3) Section 341 applies to an application under this section.
- 1998, c. 1, s. 313
- 2001, c. 14, s. 213(F)
Marginal note:Application for supervision
314 (1) An application to a court to supervise a voluntary liquidation and dissolution under subsection 310(8) must state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation and dissolution.
Marginal note:Court supervision
(2) If a court makes an order applied for under subsection 310(8), the liquidation and dissolution of the cooperative continues under the supervision of the court in accordance with this Act.
Marginal note:Application to court
315 (1) An application to a court under subsection 313(1) must state the reasons, verified by an affidavit of the applicant, why the cooperative should be liquidated and dissolved.
Marginal note:Show cause order
(2) On an application under subsection 313(1), the court may make an order requiring the cooperative and any person who has an interest in it or claim against it to show cause, at a specified time and place, not less than four weeks after the date of the order, why the cooperative should not be liquidated and dissolved.
Marginal note:Powers of court
(3) On an application under subsection 313(1), the court may order the directors and officers of the cooperative to provide the court with all material information known to or reasonably ascertainable by them, including
(a) financial statements of the cooperative;
(b) the name and address of each member and shareholder; and
(c) the name and address of each known creditor or claimant, including any creditor or claimant with unliquidated, future or contingent claims, and any person with whom the cooperative has a contract.
(4) A copy of an order made under subsection (2) must be
(a) published as directed in the order, at least once in each week before the time appointed for the hearing, in a publication generally available to the public; and
(b) served on the Director and each person named in the order.
Marginal note:Person responsible
(5) Publication and service of an order under this section must be effected by the cooperative or by any other person and in any manner that the court may order.
- 1998, c. 1, s. 315
- 2018, c. 8, s. 81(F)
Marginal note:Powers of court
316 In connection with the liquidation and dissolution of a cooperative, the court may, if it is satisfied that the cooperative is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit, including an order
(a) to liquidate;
(b) appointing a liquidator, with or without security, and fixing their remuneration, or replacing a liquidator;
(c) appointing inspectors or referees, specifying their powers and fixing their remuneration, or replacing inspectors or referees;
(d) determining the notice to be given to any interested person, or dispensing with notice to any person;
(e) determining the validity of any claim made against the cooperative;
(f) at any stage of the proceedings, restraining the directors and officers from
(i) exercising any of their powers, or
(ii) collecting or receiving any debt or other property of the cooperative, and from paying out or transferring any property of the cooperative, except as permitted by the court;
(g) determining and enforcing the duty or liability of any present or former director, officer, member or shareholder
(i) to the cooperative, or
(ii) for an obligation of the cooperative;
(h) approving the payment, satisfaction or compromise of claims against the cooperative and the retention of assets for those purposes, and determining the adequacy of provisions for the payment or discharge of obligations of the cooperative, whether liquidated, unliquidated, future or contingent;
(i) disposing of or destroying documents and records of the cooperative;
(j) on the application of a creditor, the inspectors or the liquidator, giving directions on any matter arising on the liquidation;
(k) after notice has been given to all interested parties, relieving a liquidator from an omission or default on any terms that the court thinks fit and confirming any act of the liquidator;
(l) subject to section 322, approving any proposed interim or final distribution to members or shareholders in money or in property in accordance with their respective rights;
(m) disposing of any property that belongs to creditors, members or shareholders who cannot be found;
(n) on the application of a director, officer, member, shareholder or creditor or the liquidator,
(i) staying the liquidation on any terms and conditions that the court thinks fit,
(ii) continuing or discontinuing the liquidation proceedings, or
(iii) to the liquidator, to restore to the cooperative all its remaining property; and
(o) after the liquidator has rendered a final account to the court, dissolving the cooperative.
- 1998, c. 1, s. 316
- 2011, c. 21, s. 108(F)
Marginal note:Effect of order
317 The liquidation of a cooperative commences when a court makes an order for liquidation.
Marginal note:Cessation of business and powers
318 (1) If a court makes an order for liquidation of a cooperative,
(a) the cooperative continues in existence but must cease to carry on business, except the business that is in the liquidator’s opinion required for an orderly liquidation; and
(b) the powers of the directors, members and shareholders cease and vest in the liquidator, except as specifically authorized by the court.
Marginal note:Delegation by liquidator
(2) The liquidator may delegate any of the powers vested in him or her by paragraph (1)(b) to the directors or members.
Marginal note:Appointment of liquidator
319 (1) When making an order for the liquidation of a cooperative or at any time after making one, the court may appoint any person, including a director, officer, member or shareholder, or any other body corporate, as liquidator of the cooperative.
(2) If an order for the liquidation of a cooperative has been made and the office of liquidator is or becomes vacant, the property of the cooperative is under the control of the court until the office of liquidator is filled.
Marginal note:Duties of liquidator
320 A liquidator must, without delay after being appointed,
(a) give notice of appointment to each claimant and creditor known to the liquidator;
(b) publish notice in a publication generally available to the public and take reasonable steps to give notice of the appointment in each province or other jurisdiction where the cooperative carries on business, requiring
(i) any person who is indebted to the cooperative to render an account and pay any amount owing to the liquidator at the time and place specified,
(ii) any person who possesses property of the cooperative to deliver it to the liquidator at the time and place specified, and
(iii) any person who has a claim against the cooperative, whether liquidated, unliquidated, future or contingent, to present particulars of it in writing to the liquidator not later than two months after the first publication of the notice;
(c) take the property of the cooperative into custody and control;
(d) open and maintain a trust account for money received by the liquidator in the course of the liquidation;
(e) keep accounts of the moneys of the cooperative received and paid out in the course of the liquidation;
(f) maintain separate lists of the members, shareholders and creditors and other persons who have claims against the cooperative;
(g) if at any time the liquidator determines that the cooperative is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;
(h) deliver to the court and to the Director, at least once in every twelve month period after appointment or more often as the court may require, financial statements of the cooperative in the form required by section 247, or in any other form that the liquidator may think proper or that the court may require; and
(i) after the final accounts are approved by the court, distribute any remaining property of the cooperative among the members and shareholders according to their respective rights.
- 1998, c. 1, s. 320
- 2018, c. 8, s. 82(F)
Marginal note:Powers of liquidator
321 (1) A liquidator may
(a) retain lawyers, notaries, accountants, engineers, appraisers and other professionals;
(b) bring, defend or take part in any civil, criminal, administrative, investigative or other action or proceeding in the name and on behalf of the cooperative;
(c) carry on the business of the cooperative as required for an orderly liquidation;
(d) sell any property of the cooperative by public auction or private sale;
(e) do all acts and execute or, in Quebec, sign any documents in the name and on behalf of the cooperative;
(f) borrow money on the security of the property of the cooperative;
(g) settle or compromise any claims by or against the cooperative; and
(h) do all other things necessary for the liquidation of the cooperative and the distribution of its property.
Marginal note:Due diligence
(2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the cooperative represented to the liquidator by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or
(b) a report of a person whose profession lends credibility to a statement made by the professional person.
Marginal note:Application to court
(3) If a liquidator has reason to believe that any property of the cooperative is in the possession or control of a person or that anyone has concealed, withheld or misappropriated any property of the cooperative, the liquidator may apply to the court for an order requiring the person to appear before the court at the time and place designated in the order and to be examined.
Marginal note:Power of court
(4) If the examination discloses that the person has concealed, withheld or misappropriated property of the cooperative, the court may order the person to restore it or pay compensation to the liquidator.
- 1998, c. 1, s. 321
- 2001, c. 14, s. 214
- 2011, c. 21, s. 109(E)
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