Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Marginal note:Inability to identify individuals

21.2 A corporation to which section 21.1 applies shall take prescribed steps if it is unable to identify any individuals with significant control over the corporation.

Marginal note:Disclosure to Director

• 21.3 (1) A corporation to which section 21.1 applies shall disclose to the Director, on request, any information in its register of individuals with significant control.

• Marginal note:Access — affidavit

  (2) Shareholders and creditors of the corporation or their personal representatives, on sending to the corporation or its agent or mandatary the affidavit referred to in subsection (3), may on application require the corporation or its agent or mandatary to allow the applicant access to the register of the corporation referred to in subsection 21.1(1) during the usual business hours of the corporation and, on payment of a reasonable fee, provide the applicant with an extract from that register.

• Marginal note:Affidavit

  (3) The affidavit required under subsection (2) shall contain

  • (a) the name and address of the applicant;

  • (b) the name and address for service of the body corporate, if the applicant is a body corporate; and

  • (c) a statement that any information obtained under subsection (2) will not be used except as permitted under subsection (5).

• Marginal note:Application by body corporate

  (4) If the applicant is a body corporate, the affidavit shall be made by a director or officer of the body corporate.

• Marginal note:Use of information

  (5) Information obtained under subsection (2) shall not be used by any person except in connection with

  • (a) an effort to influence the voting of shareholders of the corporation;

  • (b) an offer to acquire securities of the corporation; or

  • (c) any other matter relating to the affairs of the corporation.

• Marginal note:Offence

  (6) A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months, or to both.

Marginal note:Disclosure to investigative bodies

• 21.31 (1) On request by an investigative body referred to in subsection (2), a corporation to which section 21.1 applies shall, as soon as feasible after the request is served on the corporation or deemed to be received by it, and in the manner specified by the investigative body,

  • (a) provide the investigative body with a copy of the corporation’s register of individuals with significant control; or

  • (b) disclose to the investigative body any information specified by the investigative body that is in the corporation’s register of individuals with significant control.

• Marginal note:Investigative bodies

  (2) The investigative bodies for the purpose of this section are

  • (a) any police force;

  • (b) the Canada Revenue Agency and any provincial body that has responsibilities similar to those of the Canada Revenue Agency; and

  • (c) any prescribed body that has investigative powers in relation to offences referred to in the schedule.

• Marginal note:Requirement

  (3) An investigative body may make a request only if it has reasonable grounds to suspect that the copy of the register or the specified information would be relevant to investigating an offence referred to in the schedule and it also has reasonable grounds to suspect that

  • (a) the corporation that is the subject of the request committed the offence or was used to

    • (i) commit the offence,

    • (ii) facilitate the commission of the offence, or

    • (iii) protect from detection or punishment a person who has committed the offence;

  • (b) an individual with significant control over the corporation that is the subject of the request is also an individual with significant control over a corporation that committed the offence or was used to do anything referred to in any of subparagraphs (a)(i) to (iii); or

  • (c) an individual with significant control over the corporation that is the subject of the request is also an individual who, directly or indirectly, influences the affairs of an entity, other than a corporation, that committed the offence or was used to do anything referred to in any of subparagraphs (a)(i) to (iii).

• Marginal note:Service or sending of request

  (4) The request must be served on the corporation by leaving the request at the corporation’s registered office as shown in the last notice filed under section 19 or sent to the corporation by registered mail to that registered office and, if so sent, is deemed to be received at the time it would be delivered in the ordinary course of mail, unless there are reasonable grounds for believing that the corporation did not receive the request at that time or at all.

• Marginal note:Offence

  (5) A corporation that, without reasonable cause, contravenes subsection (1) is guilty of an offence and liable on summary conviction to a fine of not more than $5,000.

• Marginal note:Amendment to schedule

  (6) The Governor in Council may, by order, amend the schedule by adding or deleting a reference to an offence.

Marginal note:Record

• 21.32 (1) Every investigative body that makes a request under subsection 21.31(1) shall keep a record setting out the following:

  • (a) the name of the corporation that was the subject of the request;

  • (b) the reasonable grounds on which the request was based;

  • (c) information respecting what was requested;

  • (d) the date the request was served or deemed to have been received;

  • (e) information respecting the service or the sending of the request;

  • (f) all information received from the corporation in response to the request; and

  • (g) any prescribed information.

• Marginal note:Report

  (2) Every investigative body that makes a request under subsection 21.31(1) shall, within 90 days after the end the calendar year in which the request was made, provide the Director with a report setting out the total number of requests made by it in that year and, in the case of the Royal Canadian Mounted Police and the Canada Revenue Agency, the number of requests made in each province.

• Marginal note:Non-application

  (3) Section 251 does not apply in respect of a contravention of subsection (1) or (2).

Marginal note:Offence — contravention of subsection 21.1(1) or 21.31(1)

• 21.4 (1) Every director or officer of a corporation who knowingly authorizes, permits or acquiesces in the contravention of subsection 21.1(1) or 21.31(1) by that corporation commits an offence, whether or not the corporation has been prosecuted or convicted.

• Marginal note:Offence — recording of false or misleading information

  (2) Every director or officer of a corporation who knowingly records or knowingly authorizes, permits or acquiesces in the recording of false or misleading information in the register of the corporation referred to in subsection 21.1(1) commits an offence.

• Marginal note:Offence — provision of false or misleading information

  (3) Every director or officer of a corporation who knowingly provides or knowingly authorizes, permits or acquiesces in the provision to any person or entity of false or misleading information in relation to the register of the corporation referred to in subsection 21.1(1) commits an offence.

• Marginal note:Offence — subsection 21.1(4)

  (4) Every shareholder who knowingly contravenes subsection 21.1(4) commits an offence.

• Marginal note:Penalty

  (5) A person who commits an offence under any of subsections (1) to (4) is liable on summary conviction to a fine not exceeding $200,000 or to imprisonment for a term not exceeding six months, or to both.

Marginal note:Form of records

• 22 (1) All registers and other records required by this Act to be prepared and maintained may be in a bound or loose-leaf form or in a photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

• Marginal note:Precautions

  (2) A corporation or its agents or mandataries shall take reasonable precautions to

  • (a) prevent loss or destruction of,

  • (b) prevent falsification of entries in, and

  • (c) facilitate detection and correction of inaccuracies in

  the registers and other records required by this Act to be prepared and maintained.

• Marginal note:Offence

  (3) A person who, without reasonable cause, contravenes this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

Marginal note:Corporate seal

• 23 (1) A corporation may, but need not, adopt a corporate seal, and may change a corporate seal that is adopted.

• Marginal note:Validity of unsealed documents

  (2) A document executed or, in Quebec, signed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.

PART VCorporate Finance

Marginal note:Shares

• 24 (1) Shares of a corporation shall be in registered form and shall be without nominal or par value.

• Marginal note:Transitional

  (2) When a body corporate is continued under this Act, a share with nominal or par value issued by the body corporate before it was so continued is, for the purpose of subsection (1), deemed to be a share without nominal or par value.

• Marginal note:Rights attached to shares

  (3) Where a corporation has only one class of shares, the rights of the holders thereof are equal in all respects and include the rights

  • (a) to vote at any meeting of shareholders of the corporation;

  • (b) to receive any dividend declared by the corporation; and

  • (c) to receive the remaining property of the corporation on dissolution.

• Marginal note:Rights to classes of shares

  (4) The articles may provide for more than one class of shares and, if they so provide,

  • (a) the rights, privileges, restrictions and conditions attaching to the shares of each class shall be set out therein; and

  • (b) the rights set out in subsection (3) shall be attached to at least one class of shares but all such rights are not required to be attached to one class.

Marginal note:Issue of shares

• 25 (1) Subject to the articles, the by-laws and any unanimous shareholder agreement and to section 28, shares may be issued at such times and to such persons and for such consideration as the directors may determine.

• Marginal note:Shares non-assessable

  (2) Shares issued by a corporation are non-assessable and the holders are not liable to the corporation or to its creditors in respect thereof.

• Marginal note:Consideration

  (3) A share shall not be issued until the consideration for the share is fully paid in money or in property or past services that are not less in value than the fair equivalent of the money that the corporation would have received if the share had been issued for money.

• Marginal note:Consideration other than money

  (4) In determining whether property or past services are the fair equivalent of a money consideration, the directors may take into account reasonable charges and expenses of organization and reorganization and payments for property and past services reasonably expected to benefit the corporation.

• Marginal note:Definition of property

  (5) For the purposes of this section, property does not include a promissory note, or a promise to pay, that is made by a person to whom a share is issued, or a person who does not deal at arm’s length, within the meaning of that expression in the Income Tax Act, with a person to whom a share is issued.

Marginal note:Stated capital account

• 26 (1) A corporation shall maintain a separate stated capital account for each class and series of shares it issues.

• Marginal note:Entries in stated capital account

  (2) A corporation shall add to the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.

• Marginal note:Exception for non-arm’s length transactions

  (3) Despite subsection (2), a corporation may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the consideration that it receives in an exchange if the corporation issues shares

  • (a) in exchange for

    • (i) property of a person who immediately before the exchange did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act,

    • (ii) shares of, or another interest or right in, a body corporate that immediately before the exchange, or that because of the exchange, did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, or

    • (iii) property of a person who, immediately before the exchange, dealt with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, if the person, the corporation and all the holders of shares in the class or series of shares so issued consent to the exchange; or

  • (b) pursuant to an agreement referred to in subsection 182(1) or an arrangement referred to in paragraph 192(1)(b) or (c) or to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate.

• Marginal note:Limit on addition to a stated capital account

  (4) On the issue of a share a corporation shall not add to a stated capital account in respect of the share it issues an amount greater than the amount of the consideration it received for the share.

• Marginal note:Constraint on addition to a stated capital account

  (5) Where a corporation proposes to add any amount to a stated capital account it maintains in respect of a class or series of shares, if

  • (a) the amount to be added was not received by the corporation as consideration for the issue of shares, and

  • (b) the corporation has issued any outstanding shares of more than one class or series,

  the addition to the stated capital account must be approved by special resolution unless all the issued and outstanding shares are shares of not more than two classes of convertible shares referred to in subsection 39(5).

• Marginal note:Other additions to stated capital

  (6) When a body corporate is continued under this Act, it may add to a stated capital account any consideration received by it for a share it issued and a corporation at any time may, subject to subsection (5), add to a stated capital account any amount it credited to a retained earnings or other surplus account.

• Marginal note:Transitional

  (7) When a body corporate is continued under this Act, subsection (2) does not apply to the consideration received by it before it was so continued unless the share in respect of which the consideration is received is issued after the corporation is so continued.

• Marginal note:Idem

  (8) When a body corporate is continued under this Act, any amount unpaid in respect of a share issued by the body corporate before it was so continued and paid after it was so continued shall be added to the stated capital account maintained for the shares of that class or series.

• Marginal note:Transitional

  (9) For the purposes of subsection 34(2), sections 38 and 42, and paragraph 185(2)(a), when a body corporate is continued under this Act its stated capital is deemed to include the amount that would have been included in stated capital if the body corporate had been incorporated under this Act.

• Marginal note:Restriction

  (10) A corporation shall not reduce its stated capital or any stated capital account except in the manner provided in this Act.

• Marginal note:Exception for an open-end mutual fund

  (11) Subsections (1) to (10) and any other provisions of this Act relating to stated capital do not apply to an open-end mutual fund.

• Marginal note:Definition of open-end mutual fund

  (12) For the purposes of this section, open-end mutual fund means a distributing corporation that carries on only the business of investing the consideration it receives for the shares it issues, and all or substantially all of those shares are redeemable on the demand of a shareholder.