Canada Cooperatives Act (S.C. 1998, c. 1)

Application

Marginal note:Application

178 This Part governs the transfer or transmission of a security.

Security Certificates

Marginal note:Security certificate

179 Every security holder is entitled, at their option, to obtain from the cooperative

• (a) a security certificate that complies with this Act; or

• (b) a non-transferable written acknowledgement of their right to obtain a security certificate.

Marginal note:Fee

180 A cooperative may charge a reasonable fee for a security certificate issued in respect of a transfer.

Marginal note:Joint owners

181 If securities are held jointly by more than one person,

• (a) a cooperative is not required to issue more than one security certificate in respect of those securities; and

• (b) delivery of a security certificate to one of the joint owners is sufficient delivery to them all.

Marginal note:Signatures

• 182 (1) A security certificate must be signed by at least one of the following persons, or a facsimile of the signature must be reproduced on the certificate:

  • (a) a director, or an individual on their behalf, or an officer;

  • (b) a transfer agent or branch transfer agent of the cooperative, or an individual on their behalf; or

  • (c) a trustee who certifies it in accordance with a trust indenture.

• Marginal note:Former director

  (2) A cooperative may issue security certificates that contain the signature of a person who is no longer a director or officer and the validity of the certificate is not adversely affected.

Marginal note:Contents of certificate

• 183 (1) The following information must be stated on the face of each security certificate issued by a cooperative:

  • (a) the name of the cooperative;

  • (b) the words “Incorporated under the Canada Cooperatives Act”, “constituée sous l’autorité de la Loi canadienne sur les coopératives”, “Subject to the Canada Cooperatives Act” or “assujetti à la Loi canadienne sur les coopératives”;

  • (c) the name of the person to whom it was issued; and

  • (d) the number and class of shares and the designation of any series that the certificate represents.

• Marginal note:Notation of restrictions

  (2) No restriction, charge, lien, hypothec, agreement or endorsement described in subsection (3) is effective against a transferee of a security, issued by a cooperative or by a body corporate before it is continued under this Act, who has no actual knowledge of the restriction, charge, lien, hypothec, agreement or endorsement unless it or a reference to it is noted conspicuously on the security certificate.

• Marginal note:Restrictions, etc.

  (3) The restrictions, charges, liens, hypothecs, agreements and endorsements referred to in subsection (2) are

  • (a) a restriction on transfer other than a constraint under section 130;

  • (b) a charge, lien or hypothec in favour of the cooperative;

  • (c) a unanimous agreement; and

  • (d) an endorsement under subsection 302(10).

• Marginal note:Restrictions

  (4) If the issued investment shares of a distributing cooperative remain outstanding and are held by more than one person, the cooperative must not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 130.

• Marginal note:Conspicuous notation

  (5) A reference to a constraint on the issue, transfer or ownership of any class or series of investment shares must be noted conspicuously on every security certificate evidencing such a share that is issued after the share becomes subject to the constraint under this Act, if the constraint is one

  • (a) for the purpose of attaining or maintaining a level of Canadian ownership or control specified in its articles or required by law to carry on business or qualify for benefit; or

  • (b) to comply with any prescribed law.

• Marginal note:Effect of failure to note constraint

  (6) A failure to note a constraint under subsection (5) does not invalidate the investment share or the security certificate and does not render the constraint ineffective.

Marginal note:Contents of certificate

• 184 (1) Every share certificate for an investment share of a cooperative that is authorized to issue shares of more than one class or series must clearly state

  • (a) the rights, privileges, restrictions and conditions attached to the shares of each class and series that exist when the share certificate is issued; or

  • (b) that the class or series of shares that it represents has rights, privileges, restrictions or conditions attached to it and that the cooperative will provide a shareholder, on demand and without charge, with a full copy of the text of

    • (i) any rights, privileges, restrictions and conditions attached to each class authorized to be issued, and to each series, that have been fixed by the directors, and

    • (ii) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series.

• Marginal note:Copy of information

  (2) If a share certificate for an investment share contains the statement referred to in paragraph (1)(b), the cooperative must provide the shareholder, on demand and without charge, with a copy of

  • (a) the rights, privileges, restrictions and conditions attached to each class or series of investment shares authorized to be issued; and

  • (b) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series of investment shares in the same class.

Marginal note:Fractional shares

• 185 (1) A cooperative may issue for each fractional investment share, a certificate in registered form or scrip certificates in registered form that entitle the holder to receive a certificate for a full investment share in exchange for scrip certificates equalling a full investment share.

• Marginal note:Replacement

  (1.1) A cooperative must, on the request of a holder of a certificate for a fractional investment share or scrip certificate that is in bearer form and that was issued before the coming into force of this subsection, issue in exchange to that holder, in registered form, a certificate for a fractional investment share or a scrip certificate, as the case may be.

• Marginal note:Conditions

  (2) The directors may attach conditions to scrip certificates issued by the cooperative, including conditions that

  • (a) the scrip certificates become void or, in Quebec, null if not exchanged for an investment share representing a full investment share before a specified date; and

  • (b) any investment shares for which the scrip certificates are exchangeable may, despite any pre-emptive right, be issued by the cooperative to any person and the proceeds distributed rateably to the holders of the scrip certificates.

• Marginal note:Voting rights

  (3) A holder of a fractional investment share is not entitled to exercise voting rights or to receive a dividend in respect of the investment share unless

  • (a) the fractional share results from a consolidation of investment shares; or

  • (b) the articles of the cooperative provide otherwise.

• Marginal note:Exercise of voting rights

  (4) A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate.