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

Marginal note:Indemnification

• 113 (1) A cooperative may indemnify an individual who is or was a director or officer of the cooperative, or who acts or acted at the cooperative’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a claim, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved by reason of their association with the cooperative or entity.

• Marginal note:Advance of costs

  (2) A cooperative may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual must repay the moneys if the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

• Marginal note:Limitation

  (3) A cooperative may not indemnify an individual under subsection (1) unless the individual

  • (a) acted honestly and in good faith with a view to the best interests of the cooperative, or, as the case may be, to the best interests of the entity for which the individual acted as director or officer or in a similar capacity at the cooperative’s request; and

  • (b) in the case of a criminal or administrative proceeding, had reasonable grounds for believing that the individual’s conduct was lawful.

• Marginal note:Derivative action

  (4) A cooperative may not indemnify an individual under subsection (1) or advance costs under subsection (2) in respect of an action by or on behalf of the cooperative or entity unless a court so orders.

• Marginal note:Right to indemnity

  (5) An individual referred to in subsection (1) is entitled to indemnity from the cooperative for the costs, charges and expenses referred to in that subsection if the individual

  • (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and

  • (b) fulfils the conditions in subsection (3).

• Marginal note:Insurance

  (6) A cooperative may purchase and maintain insurance for the benefit of an individual referred to in subsection (1) against any liability incurred by the individual by reason of being or having been a director or officer of the cooperative, having been a director or officer of another entity or having acted in a similar capacity, if the individual acts or acted in that capacity at the cooperative’s request.