PART VICorporate Governance (continued)
Financial Statements and Auditors (continued)
Court-supervised Liquidation (continued)
Marginal note:Right to distribution of money
(a) exchange all or substantially all of the remaining property of the company for securities of another entity that are to be distributed to the shareholders or to the incorporators, or
(b) distribute all or part of the remaining property of the company to the shareholders or to the incorporators in kind,
a shareholder or incorporator may apply to the court for an order requiring the distribution of the remaining property of the company to be in money.
Marginal note:Powers of court
(2) On an application under subsection (1), the court may order
Marginal note:Order by court
(3) Where an order is made by a court under paragraph (2)(b), the court
(a) shall fix a fair value on the share of the property of the company attributable to the shareholder or incorporator;
(b) may in its discretion appoint one or more appraisers to assist the court in fixing a fair value in accordance with paragraph (a); and
(c) shall render a final order against the company in favour of the shareholder or incorporator for the amount of the share of the property of the company attributable to the shareholder or incorporator.
Marginal note:Dissolution by letters patent
Marginal note:Company dissolved
(2) A company in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the date of the issuance of the letters patent.
Definition of shareholder and incorporator
366 In sections 368 and 369, shareholder and incorporator include the heirs and personal representatives of a shareholder or incorporator.
Marginal note:Continuation of actions
(a) a civil, criminal or administrative action or proceeding commenced by or against the company before its dissolution may be continued as if the company had not been dissolved;
(b) a civil, criminal or administrative action or proceeding may be brought against the company within two years after its dissolution as if the company had not been dissolved; and
(c) any property that would have been available to satisfy any judgment or order if the company had not been dissolved remains available for that purpose.
Marginal note:Service on company
(2) Service of a document on a company after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the company or, if applicable, in the latest return sent to the Superintendent under section 499.
- 1991, c. 45, s. 367
- 1999, c. 31, s. 218
Marginal note:Limitations on liability
368 (1) Notwithstanding the dissolution of a company, a shareholder or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 367(1) to the extent of the amount received by that shareholder or incorporator on the distribution.
(2) An action to enforce liability under subsection (1) may not be commenced except within two years after the date of the dissolution of the company.
Marginal note:Action against class
(3) A court may order an action referred to in subsections (1) and (2) to be brought against the persons who were shareholders or incorporators as a class, subject to such conditions as the court thinks fit.
(4) If the plaintiff establishes a claim in an action under subsection (3), the court may refer the proceedings to a referee or other officer of the court who may
(a) add as a party to the proceedings each person found by the plaintiff to have been a shareholder or incorporator;
(b) determine, subject to subsection (1), the amount that each person who was a shareholder or incorporator must contribute towards satisfaction of the plaintiff’s claim; and
(c) direct payment of the amounts so determined.
Marginal note:Where creditor cannot be found
369 Where a creditor, shareholder or incorporator to whom property is to be distributed on the dissolution of a company cannot be found, the portion of the property to be distributed to that creditor, shareholder or incorporator shall be converted into money and paid in accordance with section 371.
Marginal note:Vesting in Crown
370 Subject to subsection 367(1) and sections 371 and 372, property of a company that has not been disposed of at the date of the dissolution of the company vests in Her Majesty in right of Canada.
Marginal note:Unclaimed money on winding-up
371 (1) Notwithstanding the Winding-up and Restructuring Act, where the business of a company is being wound up, the liquidator or the company shall pay to the Minister on demand and in any event before the final winding-up of that business any amount that is payable by the liquidator or the company to a creditor, shareholder or incorporator of the company to whom payment thereof has not, for any reason, been made.
(2) Where a liquidator or a company makes a payment to the Minister under subsection (1) with respect to a creditor, shareholder or incorporator, the liquidator or company shall concurrently forward to the Minister all documents, records and registers in the possession of the liquidator or company that relate to the entitlement of the creditor, shareholder or incorporator.
Marginal note:Payment to Bank of Canada
(3) The Minister shall pay to the Bank of Canada all amounts paid to the Minister under subsection (1) and shall provide the Bank of Canada with any document, record or register received by the Minister under subsection (2).
Marginal note:Liquidator and company discharged
(4) Payment by a liquidator or a company to the Minister under subsection (1) discharges the liquidator and the company in respect of which the payment is made from all liability for the amount so paid, and payment by the Minister to the Bank of Canada under subsection (3) discharges the Minister from all liability for the amount so paid.
- 1991, c. 45, s. 371
- 1996, c. 6, s. 167
Marginal note:Liability of Bank of Canada
372 (1) Subject to section 22 of the Bank of Canada Act, where payment has been made to the Bank of Canada of an amount under subsection 371(3), the Bank of Canada, if payment is demanded by a person who, but for subsection 371(4), would be entitled to receive payment of that amount from the liquidator, the company or the Minister, is liable to pay to that person at its head office an amount equal to the amount so paid to it, with interest thereon for the period, not exceeding ten years, from the day on which the payment was received by the Bank of Canada until the date of payment to the person, at such rate and computed in such manner as the Minister determines.
Marginal note:Enforcing liability
(2) The liability of the Bank of Canada under subsection (1) may be enforced by action against the Bank of Canada in the court in the province in which the debt or instrument was payable.
Marginal note:Custody of records after dissolution
373 A person who has been granted custody of the documents, records and registers of a dissolved company shall keep them available for production for six years following the date of the dissolution of the company or until the expiration of such shorter period as may be ordered by the court when it orders the dissolution.
(a) the payment of any amount due to Her Majesty in right of Canada, in trust or otherwise, except indebtedness evidenced by subordinated indebtedness, shall be a first charge on the assets of the company;
(b) the payment of any amount due to Her Majesty in right of a province, in trust or otherwise, except indebtedness evidenced by subordinated indebtedness, shall be a second charge on the assets of the company;
(c) the payment of the deposit liabilities of the company and all other liabilities of the company, except the liabilities referred to in paragraphs (d) and (e), shall be a third charge on the assets of the company;
(d) subordinated indebtedness of the company and all other liabilities that by their terms rank equally with or subordinate to such subordinated indebtedness shall be a fourth charge on the assets of the company; and
(e) the payment of any fines and penalties for which the company is liable shall be a last charge on the assets of the company.
Marginal note:Priority not affected
(2) Nothing in subsection (1) prejudices or affects the priority of any holder of any security interest in any property of a company.
(3) Priorities within each of paragraphs (1)(a) to (e) shall be determined in accordance with the laws governing priorities and, where applicable, by the terms of the indebtedness and liabilities referred to therein.
- 1991, c. 45, s. 374
- 2001, c. 9, s. 517
- Date modified: