PART 16Fundamental Changes (continued)
Marginal note:Vertical short-form amalgamation
298 (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
(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
299 (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(a) to (c) [Repealed, 2018, c. 8, s. 76]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
Marginal note:Effect of certificate
300 On the date shown in a certificate of amalgamation,
(a) the amalgamation of the amalgamating cooperatives and their continuance as one cooperative becomes effective;
(b) the property of each amalgamating cooperative continues to be the property of the amalgamated cooperative;
(c) the amalgamated cooperative continues to be liable for the obligations of each amalgamating cooperative;
(d) an existing cause of action, claim or liability to prosecute is unaffected;
(e) a civil, criminal, administrative, investigative or other action or proceeding pending by or against an amalgamating cooperative may be continued to be prosecuted by or against the amalgamated cooperative;
(f) a conviction against, or ruling, order or judgment in favour of or against, an amalgamating cooperative may be enforced by or against the amalgamated cooperative; and
(g) the articles of amalgamation are deemed to be the articles of incorporation of the amalgamated cooperative and the certificate of amalgamation is deemed to be the certificate of incorporation of the amalgamated cooperative.
Marginal note:Extraordinary disposition
301 (1) A sale, lease or exchange of all or substantially all of the property of a cooperative, other than in the ordinary course of business, requires the approval of the members and shareholders in accordance with subsections (2) to (7).
(2) A notice of meeting complying with section 52 must be sent to all members and shareholders and must
(a) include a copy or summary of the proposed agreement of sale, lease or exchange; and
(b) state that a dissenting member or shareholder is entitled to bring section 302 into effect.
Marginal note:Failure to make statement
(3) Failure to make the statement referred to in paragraph (2)(b) does not invalidate the disposition.
Marginal note:Right to vote
(4) Each investment share carries the right to vote with respect to an extraordinary disposition, 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 if the class or series is affected differently from another class or series by the proposed disposition.
(6) Subject to subsection (5), a disposition is authorized when approved by a special resolution of the members and, if the cooperative has issued investment shares, by a separate special resolution of the shareholders of each class or series. The special resolution may authorize the directors to fix any terms or conditions of a sale, lease or exchange.
(7) The directors, if authorized by the members and shareholders approving a proposed disposition, and subject to the rights of third parties, may abandon the disposition without further approval.
Marginal note:Right to dissent
302 (1) Unless section 303 or 340 applies, a member or shareholder may dissent if a cooperative resolves to
(a) amend its articles in a manner that adversely affects a member’s membership rights or that affects the rights of a shareholder in respect of an investment share;
(b) amend its articles to add, change or remove a restriction on the business the cooperative may carry on;
(c) amalgamate other than under section 298;
(d) apply for continuance under section 286 or 287; or
(e) sell, lease or exchange all or substantially all of its property under section 301.
Marginal note:Further right
(2) A holder of investment shares of any class or series of shares entitled to vote under section 134 may dissent if the cooperative resolves to amend its articles in a manner described in that section.
(3) A dissenting member or shareholder must send to the cooperative, at or before any meeting of members or meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the cooperative did not give notice to the member or shareholder of the purpose of the meeting and of the right to dissent.
Marginal note:Effect of dissent
(4) A dissenting member is deemed to have given notice of intent to withdraw from the cooperative under this section if the resolution is passed. A dissenting shareholder is deemed to have claimed under this section on behalf of all investment shares in a class held by the shareholder if the resolution is passed.
Marginal note:Notice of resolution
(5) The cooperative must, not later than ten days after the members and shareholders have adopted the resolution, send to each dissenting member and shareholder notice that the resolution has been adopted.
(6) A dissenting member or shareholder may, no later than twenty-one days after receiving the notice under subsection (5), or if no notice is received, no later than twenty-one days after learning that the resolution was adopted, send to the cooperative a written notice that contains
(a) the person’s name and address;
(b) if the person is a shareholder, the number of investment shares and the class or classes of the shares held; and
(c) a demand
(i) in the case of a dissenting member, for withdrawal from the cooperative, for payment of all membership shares at their fair value and for repayment of any other interest or right held by the member in the cooperative, fair value being determined on the day before the resolution was adopted, and
(ii) in the case of a dissenting shareholder, for payment of the fair market value of all investment shares of each class held by the shareholder, fair market value being determined on the day before the resolution was adopted.
Marginal note:Rights of members
(7) Despite the articles, the by-laws or section 39, a dissenting member who has sent a demand under subsection (6) does not have the right to vote at a meeting of the cooperative after having sent the notice. Despite the articles, the by-laws or section 146, the member is entitled to be paid the value of their membership shares in the cooperative in accordance with this section or a court order under subsection 304(4).
Marginal note:Share certificates
(8) A dissenting shareholder must, not later than thirty days after sending the notice under subsection (6), send the certificates representing the investment shares held in the cooperative to the cooperative or to its transfer agent.
(9) A dissenting shareholder who fails to comply with subsection (8) has no right to claim under this section.
Marginal note:Endorsing certificate
(10) Each certificate sent under subsection (8) must be endorsed by the cooperative or its transfer agent with a notice that the holder is a dissenting shareholder and must be returned to the shareholder.
Marginal note:Suspension of rights
(11) On sending a notice under subsection (6), a member’s rights as a member, and a shareholder’s rights as a shareholder, other than the right to be paid in accordance with subsection (6), are suspended.
(12) The rights of the member or shareholder are reinstated as of the date of the notice referred to in subsection (6) if
(a) the dissenting member or shareholder withdraws the demand made under paragraph (6)(c) before the cooperative makes an offer under subsection (13);
(b) the cooperative fails to make an offer in accordance with subsection (13) and the dissenting member or shareholder withdraws their notice; or
(c) the directors revoke a resolution to amend the articles under subsection 289(2), terminate an amalgamation agreement under subsection 297(7) or an application for continuance under subsection 286(3) or 287(3), or abandon a sale, lease or exchange under subsection 301(7).
Marginal note:Offer to pay
(13) A cooperative must, not later than seven days after the later of the day on which the resolution under subsection (1) or (2) is effective or the day the cooperative receives the notice under subsection (6), send to each dissenting member or shareholder
(a) a written offer to pay the amount determined in accordance with subsection (6) and a statement showing how the amount was calculated; or
(b) a statement that subsection (23) or (24) applies.
Marginal note:Same terms
(14) Every offer for membership shares must be on the same terms and every offer for the same class or series of investment shares must be on the same terms.
(15) Subject to subsection (23) or (24), a cooperative must pay to the dissenting member or shareholder the amount offered under subsection (13) no later than ten days after acceptance, but the offer lapses if it is not accepted within thirty days after being made.
Marginal note:Application to court
(16) If the dissenting member or shareholder fails to accept the offer, the cooperative may, not later than fifty days after the resolution is approved or any later time that the court may allow, apply to the court to fix the amount to be paid under subsection (6).
Marginal note:If no application
(17) If the cooperative fails to make an application under subsection (16) — or fails to make an offer under subsection (13) within the time set out in subsection (16) — a dissenting member or shareholder may, no later than twenty days after the end of that period, make an application for the same purpose.
(18) An application under subsection (16) or (17) may be made to the court having jurisdiction where the registered office of the cooperative is located or to a court having jurisdiction where the dissenting member or shareholder resides if the cooperative carries on business in that jurisdiction.
(19) On an application under subsection (16) or (17), all dissenting members and shareholders whose shares or other interests or rights have not been purchased are joined as parties and the cooperative must notify them, advising each of them of the right to participate in, and the consequences of, the application. No dissenting member or shareholder is required to give security for costs in the application.
Marginal note:Powers of court
(20) On an application under subsection (16) or (17), the court must determine who is a dissenting member or shareholder and fix the amount to be paid under subsection (6) and may make any further order that the court thinks fit.
Marginal note:Notice if subsection (23) or (24) applies
(21) If subsection (23) or (24) applies, the cooperative must, no later than ten days after the determination under subsection (20), advise each dissenting member and shareholder that subsection (23) or (24) applies.
Marginal note:Effect if subsection (23) or (24) applies
(22) If subsection (23) or (24) applies,
(a) a dissenting member or shareholder, not later than thirty days after the notice under subsection (21), may by notice to the cooperative withdraw the notice of demand, in which case the member is reinstated as a member or the shareholder is reinstated as a shareholder; or
(b) if no notice is given to the cooperative under paragraph (a), the dissenting member or shareholder retains the status of a claimant to be paid as soon as the cooperative may lawfully do so or, in liquidation, to be paid in priority to the remaining members and shareholders.
(23) The cooperative may not make a payment to a dissenting member or shareholder under this section if there are reasonable grounds to believe that after that payment the cooperative would be in breach of section 149.
(24) If the directors determine that the payment to a dissenting member as member would adversely affect the financial well-being of the cooperative, payment may be made at the times that the directors determine, over a period that begins on the day on which the resolution was adopted and ends not later than
(a) five years after that day; or
(b) any other day that is not more than ten years after the day on which the resolution was adopted and that is specified in the articles of the cooperative.
(25) Payments under subsection (24) shall bear interest at the rates prescribed by or calculated in accordance with the regulations.
- 1998, c. 1, s. 302
- 2011, c. 21, s. 107
- Date modified: