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

Act current to 2022-08-08 and last amended on 2018-05-01. Previous Versions

PART 16Fundamental Changes (continued)

Marginal note:Shareholders right to vote

 Each investment share carries the right to vote on a continuance under section 286 or 287, whether or not it otherwise carries the right to vote.

Marginal note:Amendment of articles

  •  (1) Subject to subsections (3) and 130(2) and sections 134, 290 and 291, the articles of a cooperative may be amended by a special resolution to

    • (a) change its name;

    • (b) change the place in which its registered office is situated;

    • (c) add, change or remove a restriction on the business or businesses that the cooperative may carry on;

    • (d) convert par-value membership shares into no-par-value membership shares and provide for a maximum number of membership shares that may be issued;

    • (e) change a price or formula at which membership shares may be issued or redeemed or otherwise acquired by the cooperative;

    • (f) add, change or remove restrictions on membership;

    • (g) convert a cooperative that is incorporated without membership shares to a cooperative with membership shares and provide for membership shares with a par value and their par value or membership shares without a par value and the maximum number of membership shares that may be issued;

    • (h) convert a cooperative with membership shares into a cooperative without membership shares and provide for the conversion of membership shares into member loans;

    • (i) change any maximum number of shares that the cooperative is authorized to issue;

    • (j) reduce or increase its stated capital, if its stated capital is set out in the articles;

    • (k) create investment shares or new classes of investment shares;

    • (l) change the designation of all or any of its investment shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its investment shares, whether issued or unissued;

    • (m) change the investment shares of any class or series, whether issued or unissued, into a different number of investment shares of the same class or series or into the same or a different number of investment shares of other classes or series;

    • (n) divide a class of investment shares, whether issued or unissued, into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of them;

    • (o) authorize the directors to divide any class of unissued investment shares into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of them;

    • (p) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued investment shares of any series;

    • (q) revoke, diminish or enlarge any authority conferred under paragraphs (o) and (p);

    • (r) increase or decrease the number of directors or the minimum or maximum number of directors, subject to section 76 and subsection 124(4);

    • (s) add, change or remove restrictions on the issue, transfer or ownership of investment shares; or

    • (t) add, change or remove any other provision that is permitted by this Act to be set out in the articles.

  • Marginal note:Termination

    (2) The directors may, if authorized by the special resolution effecting an amendment under this section, revoke the resolution before it is acted on without further approval of the members or shareholders.

  • Marginal note:Restriction on amendment

    (3) If the name of a cooperative is indicative of a restriction on the business that may be carried on by it, the articles of the cooperative may not be amended to remove that restriction unless its name is also amended.

  • Marginal note:Cooperative basis

    (4) An amendment to the articles of a cooperative may not be made if it would result in the cooperative not being organized or operated or not carrying on business on a cooperative basis or, if applicable, result in the cooperative not being in compliance with Part 20 or 21.

  • 1998, c. 1, s. 289
  • 2001, c. 14, s. 205

Marginal note:Proposal to amend

  •  (1) Subject to subsection (2), a person referred to in subsection 58(2) or (2.1) may make a proposal to amend the articles and section 58 applies, with any modifications that the circumstances require, to any meeting of the cooperative at which the proposal is to be considered.

  • Marginal note:Notice of amendment

    (2) Notice of the meeting of a cooperative at which a proposal to amend the articles is to be considered must set out the proposed amendment and, if applicable, state that a dissenting member or a dissenting shareholder is entitled to the benefit of section 302, but failure to make that statement does not invalidate an amendment.

  • Marginal note:Separate resolutions

    (3) A proposed amendment to the articles referred to in subsection (1) is adopted when approved by a special resolution of the members and, subject to section 134, if the cooperative has issued investment shares, by a separate special resolution of the shareholders or the class or series thereof.

  • Marginal note:Right to vote

    (4) Each investment share that is affected by a proposed amendment to the articles carries the right to vote in accordance with section 134.

  • 1998, c. 1, s. 290
  • 2001, c. 14, s. 206

Marginal note:Delivery of articles

  •  (1) Subject to any revocation under subsection 130(5) or 289(2), after an amendment has been adopted, articles of amendment in the form that the Director fixes must be sent to the Director, together with any information that the Director may require.

  • Marginal note:Reduction of stated capital

    (2) If an amendment effects or requires a reduction of stated capital, subsections 151(2) and (5) apply.

  • 1998, c. 1, s. 291
  • 2018, c. 8, s. 74

Marginal note:Certificate of amendment

 On receipt of articles of amendment, the Director must issue a certificate of amendment.

  • 1998, c. 1, s. 292
  • 2018, c. 8, s. 75

Marginal note:Effect of certificate

  •  (1) An amendment becomes effective on the date shown in the certificate of amendment and the articles are amended accordingly.

  • Marginal note:Existing claims not affected

    (2) No amendment to the articles affects an existing cause of action or claim or liability to prosecution in favour of or against the cooperative or its directors or officers, or any civil, criminal, administrative, investigative or other action or proceeding to which a cooperative or its directors or officers are a party.

Marginal note:Restated articles

  •  (1) The directors may at any time, and must when reasonably so directed by the Director, restate the articles of incorporation.

  • Marginal note:Sent to Director

    (2) Restated articles of incorporation in the form that the Director fixes must be sent to the Director.

  • Marginal note:Restated certificate

    (3) On receipt of restated articles of incorporation, the Director must issue a restated certificate of incorporation.

  • Marginal note:Effective date

    (4) Restated articles of incorporation are effective on the date shown in the restated certificate of incorporation.

  • 1998, c. 1, s. 294
  • 2001, c. 14, s. 207(E)

Marginal note:Amalgamation

 Two or more cooperatives, including holding and subsidiary cooperatives, may amalgamate and continue as one cooperative, provided that the amalgamation agreement sets out a capital and corporate structure for the amalgamated cooperative that is one that would meet the requirements for a cooperative to be incorporated under this Act.

Marginal note:Amalgamation agreement

  •  (1) Each cooperative proposing to amalgamate must enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out

    • (a) the provisions that are required to be included in articles of incorporation under section 11;

    • (b) the name and address of each proposed director of the amalgamated cooperative;

    • (c) the manner in which the shares of each amalgamating cooperative are to be converted into membership shares of the amalgamated cooperative and, if applicable, investment shares or other securities of the amalgamated cooperative;

    • (d) if any share of an amalgamating cooperative is not to be converted into shares or securities of the amalgamated cooperative, the amount of money or securities of a cooperative that the holders of those shares are to receive in addition to or instead of shares or securities of the amalgamated cooperative;

    • (e) the manner of payment of money instead of the issue of fractional shares of the amalgamated cooperative or of any other body corporate the securities of which are to be received in the amalgamation;

    • (f) whether the by-laws of the amalgamated cooperative are to be those of one of the amalgamating cooperatives, and if not, a copy of the proposed by-laws; and

    • (g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated cooperative.

  • Marginal note:Cancellation

    (2) If shares of one of the amalgamating cooperatives are held by or on behalf of another of the amalgamating cooperatives, the amalgamation agreement must provide for the cancellation of the shares when the amalgamation becomes effective without any repayment of capital in respect of them, and no provision may be made in the agreement for the conversion of those shares into shares of the amalgamated cooperative.

Marginal note:Approval

  •  (1) The directors of each amalgamating cooperative must submit the amalgamation agreement for approval to a meeting of the members of each amalgamating cooperative and to a meeting of the shareholders of each amalgamating cooperative and, subject to subsection (5), to the holders of each class or series of those investment shares.

  • Marginal note:Notice of meeting

    (2) A notice of a meeting of members or shareholders complying with section 52 must be sent in accordance with that section to each member and shareholder of each amalgamating cooperative and must

    • (a) include or be accompanied by a copy or summary of the amalgamation agreement; and

    • (b) state that a dissenting member or shareholder is entitled to the benefit of section 302.

  • Marginal note:Failure to make statement

    (3) Failure to make the statement referred to in paragraph (2)(b) does not invalidate an amalgamation.

  • Marginal note:Right to vote

    (4) Each investment share carries the right to vote with respect to an amalgamation agreement, whether or not it otherwise carries the right to vote.

  • Marginal note:Class vote

    (5) The holders of investment shares of a class or series are entitled to vote separately as a class or series in respect of the amalgamation agreement if it contains a provision that, if contained in a proposed amendment to the articles, would entitle them to vote as a class or series under subsection 290(4).

  • Marginal note:Approval

    (6) Subject to subsection (5), an amalgamation agreement is adopted when the members of each amalgamating cooperative and, if any of the amalgamating cooperatives has issued investment shares, their shareholders, have approved the amalgamation agreement by separate special resolutions.

  • Marginal note:Termination

    (7) An amalgamation agreement may provide that at any time before the issue of a certificate of amalgamation the agreement may be terminated by the directors of an amalgamating cooperative, even if the agreement has been approved by the members and shareholders of all or any of the amalgamating cooperatives.

Marginal note:Vertical short-form amalgamation

  •  (1) A cooperative that is a holding cooperative may amalgamate with one or more of its wholly owned subsidiary cooperatives. The cooperative and subsidiaries continue as one cooperative without complying with sections 295 to 297 if

    • (a) the amalgamation is approved by a resolution of the directors of each amalgamating cooperative; and

    • (b) the resolutions provide that

      • (i) the shares of each subsidiary be cancelled without any repayment of capital in respect of them,

      • (ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating holding cooperative, and

      • (iii) no shares or securities may be issued by the amalgamated cooperative in connection with the amalgamation.

  • Marginal note:Horizontal short-form amalgamation

    (2) Two or more wholly owned subsidiary cooperatives of a holding entity may amalgamate and continue as one cooperative without complying with sections 295 to 297 if

    • (a) the amalgamation is approved by a resolution of the directors of each amalgamating cooperative; and

    • (b) the resolutions provide that

      • (i) the shares of all but one of the amalgamating subsidiaries be cancelled without any repayment of capital in respect of them,

      • (ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating subsidiary cooperative whose shares are not cancelled, and

      • (iii) the stated capital of the amalgamating subsidiaries whose shares are cancelled are added to the stated capital of the amalgamating subsidiary whose shares are not cancelled.

  • Marginal note:Change of name

    (3) Despite subparagraph (2)(b)(ii) and section 289, the directors of the holding entity of the subsidiaries referred to in subsection (2) may, by resolution, approve a new name for the amalgamated cooperative, so long as, in a case to which Part 20 or 21 applies, the name would comply with the provisions of the applicable Part.

  • 1998, c. 1, s. 298
  • 2001, c. 14, s. 208

Marginal note:Sending of articles

  •  (1) After an amalgamation has been approved under section 297 or 298, articles of amalgamation in the form that the Director fixes must be sent to the Director, together with a notice of registered office and a notice of the directors of the amalgamated cooperative.

  • Marginal note:Attached statutory declarations

    (2) A statutory declaration of a director or officer of each amalgamating cooperative must be attached to the articles of amalgamation and must establish to the satisfaction of the Director

    • (a) to (c) [Repealed, 2018, c. 8, s. 76]

    • (d) that there are reasonable grounds to believe that

      • (i) each amalgamating cooperative is, and the amalgamated cooperative will be, able to pay its liabilities as they become due, and

      • (ii) the realizable value of the amalgamated cooperative’s assets will not be less than the total of its liabilities and stated capital of all classes; and

    • (e) that there are reasonable grounds to believe that

      • (i) no creditor will be prejudiced by the amalgamation, or

      • (ii) adequate notice has been given to all known creditors of the amalgamating cooperatives and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

  • Marginal note:Adequate notice

    (3) For the purpose of subparagraph (2)(e)(ii), adequate notice is given if

    • (a) a notice in writing is sent to each known creditor who has a claim against any of the amalgamating cooperatives that exceeds one thousand dollars;

    • (b) a notice in writing is published once in a newspaper published or distributed in the place where each amalgamating cooperative has its registered office and reasonable notice is given in each province where the cooperative carries on business; and

    • (c) each notice states that the cooperative intends to amalgamate with one or more specified cooperatives in accordance with this Act and that a creditor of the cooperative may object to the amalgamation not later than thirty days after the date of the notice.

  • Marginal note:Certificate of amalgamation

    (4) On receipt of articles of amalgamation and the declarations required by subsection (2), the Director must issue a certificate of amalgamation if the Director is satisfied that

    • (a) the articles are in accordance with section 11 and, if applicable, section 353 and subsection 359(2);

    • (b) the cooperative will be organized and operated and will carry on business on a cooperative basis;

    • (c) the things described in paragraphs (2)(d) and (e) are true; and

    • (d) if applicable, Part 20 or 21 has been complied with.

  • Marginal note:Reliance on certificate

    (5) For the purposes of paragraphs (4)(b) to (d), the Director may rely on the articles and the declarations required by subsection (2).

  • 1998, c. 1, s. 299
  • 2018, c. 8, s. 76
 
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