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

Marginal note:Redemption of shares

• 36 (1) Notwithstanding subsection 34(2) or 35(3), but subject to subsection (2) and to its articles, a corporation may purchase or redeem any redeemable shares issued by it at prices not exceeding the redemption price thereof stated in the articles or calculated according to a formula stated in the articles.

• Marginal note:Limitation

  (2) A corporation shall not make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that

  • (a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

  • (b) the realizable value of the corporation’s assets would after the payment be less than the aggregate of

    • (i) its liabilities, and

    • (ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a redemption or in a liquidation, rateably with or before the holders of the shares to be purchased or redeemed, to the extent that the amount has not been included in its liabilities.