Canada Cooperatives Act
Marginal note:Stated capital account
138 (1) A cooperative that is authorized to issue shares must maintain a stated capital account for each class and series of shares that it issues.
(2) A cooperative must add to the appropriate stated capital account the full amount of any money, or the value or any thing or service, that it receives for shares it issues.
Marginal note:Exception for non-arm’s length transactions
(3) Despite subsection (2), a cooperative may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the money, or the value of the things and services, it receives in an exchange if the cooperative issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the cooperative at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of, or another interest in, an entity that immediately before the exchange, or that because of the exchange, did not deal with the cooperative 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 cooperative at arm’s length within the meaning of that expression in the Income Tax Act, if the person, the cooperative and all the holders of shares in the class or series of shares so issued consent to the exchange; or
(b) under an amalgamation or arrangement, or to members or shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated cooperative.
Marginal note:Limit on addition to a stated capital account
(4) On the issue of a share, a cooperative may not add to a stated capital account in respect of the share it issues an amount greater than the amount of the money, or the value of the thing or service, it received for the share.
Marginal note:Constraint on addition to a stated capital account
(5) The proposed addition of an amount to a stated capital account maintained by a cooperative in respect of a class or series of shares must be approved in advance by a special resolution of the members and, if the cooperative has issued investment shares, by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of investment shares that is affected by the special resolution, if
(a) the amount to be added was not received by the cooperative as consideration for the issue of the shares; and
(b) the cooperative has issued shares of more than one class or series that are outstanding.
Marginal note:Membership share inclusion
(6) For greater certainty, if a cooperative issues membership shares with a par value, the cooperative is deemed, for the purposes of subsection 147(2), sections 151 and 154 and paragraph 299(2)(d), to have a stated capital account for its membership shares that includes each amount that has been received by the cooperative for the membership shares.
- 1998, c. 1, s. 138
- 2001, c. 14, s. 181
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