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Trust and Loan Companies Act (S.C. 1991, c. 45)

Act current to 2020-10-05 and last amended on 2019-06-17. Previous Versions

PART VCapital Structure (continued)

Share Capital (continued)

Marginal note:Classes of shares

  •  (1) The by-laws of a company may provide for more than one class of shares and, if they so provide, shall set out

    • (a) the rights, privileges, restrictions and conditions attaching to the shares of each class; and

    • (b) the maximum number, if any, of shares of any class that the company is authorized to issue.

  • Marginal note:Shareholder approval

    (2) Where a by-law referred to in subsection (1) is made, the directors of the company shall submit the by-law to the shareholders at the next meeting of shareholders.

  • Marginal note:Effective date

    (3) A by-law referred to in subsection (1) is not effective until it is confirmed or confirmed with amendments by special resolution of the shareholders at the meeting referred to in subsection (2).

  • 1991, c. 45, s. 64
  • 2001, c. 9, s. 493

Marginal note:Shares issued in series

  •  (1) The by-laws of a company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may

    • (a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and

    • (b) authorize the directors to do anything referred to in paragraph (a).

  • Marginal note:Series participation

    (2) If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

  • Marginal note:Voting rights

    (3) Where voting rights are attached to any series of a class of shares, the shares of every other series of that class shall have the same voting rights.

  • Marginal note:Restriction on series

    (4) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding.

  • Marginal note:Material to Superintendent

    (5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors.

  • 1991, c. 45, s. 65
  • 2005, c. 54, s. 373
  • 2007, c. 6, s. 342(E)

Marginal note:One share, one vote

  •  (1) Where voting rights are attached to a share of a company, the voting rights may confer only one vote in respect of that share.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of

    • (a) a share of a former-Act company issued on or before September 27, 1990 that entitled the holder to more than one vote, or to a fraction of a vote, in respect of that share; and

    • (b) any share of a former-Act company that is issued after September 27, 1990 pursuant to the conversion of a security of the former-Act company that was issued with such a conversion privilege prior to that date.

Marginal note:Shares non-assessable

 Shares issued by a company after the coming into force of this section are non-assessable and the shareholders are not liable to the company or to its creditors in respect thereof.

Marginal note:Consideration for share

  •  (1) No share of any class of shares of a company shall be issued until it is fully paid for in money or, with the approval of the Superintendent, in property.

  • Marginal note:Transitional

    (2) Where any share of a company is not fully paid for on the day this Part comes into force, the provisions of the Trust Companies Act or the Loan Companies Act that applied to the company immediately prior to that day and that relate to

    • (a) the liability of holders of shares of a company that are not fully paid for and the enforcement of that liability,

    • (b) the forfeiture of the share, and

    • (c) the forfeiture of the right to vote the share

    continue to apply in respect of that share.

  • Marginal note:Other currencies

    (3) When issuing shares, a company may provide that any aspect of the shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada.

Marginal note:Stated capital account

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

  • Marginal note:Addition to stated capital account

    (2) A company shall record in the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.

  • Marginal note:Exception

    (2.1) Despite subsection (2), a company may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares

    • (a) in exchange for

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

      • (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the company 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 company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the company and all of the holders of shares in the class or series of shares so issued consent to the exchange;

    • (b) under an agreement referred to in subsection 229(1); or

    • (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated company.

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

    (2.2) On the issuance of a share, a company shall not add to the stated capital account in respect of the share an amount greater than the amount of the consideration it receives for the share.

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

    (2.3) Where a company that has issued any outstanding shares of more than one class or series proposes to add to a stated capital account that it maintains in respect of a class or series of shares an amount that was not received by the company as consideration for the issue of shares, the addition must be approved by special resolution unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 80(4).

  • Marginal note:Stated capital of former-Act company

    (3) On the coming into force of this Part, a former-Act company shall record in the stated capital account maintained for each class and series of shares then outstanding an amount that is equal to the aggregate of

    • (a) the aggregate amount paid up on the shares of each class and series of shares immediately before the coming into force of this Part, and

    • (b) the amount of the contributed surplus of the company that is attributable to those shares.

  • Marginal note:Contributed surplus entry

    (4) The amount of any contributed surplus recorded in the stated capital account pursuant to paragraph (3)(b) shall be deducted from the contributed surplus account of the company.

  • Marginal note:Share issued before coming into force

    (5) Any amount unpaid in respect of a share issued by a former-Act company before the coming into force of this Part and paid after the coming into force of this Part shall be recorded in the stated capital account maintained by the company for the shares of that class or series.

  • 1991, c. 45, s. 69
  • 1997, c. 15, s. 345
  • 2005, c. 54, s. 374
 
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