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Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Act current to 2019-08-28 and last amended on 2019-06-21. Previous Versions

PART VIISecurity Certificates, Registers and Transfers (continued)

Registration (continued)

Marginal note:Limitation of issuer’s liability

  •  (1) Subject to any applicable law relating to the collection of taxes, the issuer is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a security if

    • (a) the necessary endorsements were on or with the security; and

    • (b) the issuer had no duty to inquire into adverse claims or had discharged any such duty.

  • Marginal note:Duty of issuer in default

    (2) If an issuer has registered a transfer of a security to a person not entitled to it, the issuer shall on demand deliver a like security to the owner unless

    • (a) subsection (1) applies;

    • (b) the owner is precluded by subsection 80(1) from asserting any claim; or

    • (c) the delivery would result in overissue, in which case the issuer’s liability is governed by section 52.

  • 1974-75-76, c. 33, s. 74
  • 1978-79, c. 9, s. 1(F)

Marginal note:Notice of lost or stolen security

  •  (1) Where a security has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact by giving the issuer written notice of an adverse claim within a reasonable time after discovering the loss, destruction or taking and if the issuer has registered a transfer of the security before receiving such notice, the owner is precluded from asserting against the issuer any claim to a new security.

  • Marginal note:Duty of issuer to issue a new security

    (2) Where the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer shall issue a new security in place of the original security if the owner

    • (a) so requests before the issuer has notice that the security has been acquired by a bona fide purchaser;

    • (b) furnishes the issuer with a sufficient indemnity bond; and

    • (c) satisfies any other reasonable requirements imposed by the issuer.

  • Marginal note:Duty to register transfer

    (3) If, after the issue of a new security under subsection (2), a bona fide purchaser of the original security presents the original security for registration of transfer, the issuer shall register the transfer unless registration would result in overissue, in which case the issuer’s liability is governed by section 52.

  • Marginal note:Right of issuer to recover

    (4) In addition to any rights on an indemnity bond, the issuer may recover a new security issued under subsection (2) from the person to whom it was issued or anyone taking under the person other than a bona fide purchaser.

  • R.S., 1985, c. C-44, s. 80
  • 2001, c. 14, s. 135(E)

Marginal note:Rights and obligations

  •  (1) An authenticating trustee, registrar, transfer agent or other agent or mandatary of an issuer has, in respect of the issue, registration of transfer and cancellation of a security of the issuer,

    • (a) a duty to the issuer to exercise good faith and reasonable diligence; and

    • (b) the same obligations to the holder or owner of a security and the same rights, privileges and immunities as the issuer.

  • Marginal note:Notice to agent or mandatary

    (2) Notice to an authenticating trustee, registrar, transfer agent or other agent or mandatary of an issuer is notice to the issuer with respect to the functions performed by the agent or mandatary.

  • R.S., 1985, c. C-44, s. 81
  • 2011, c. 21, s. 41

PART VIIITrust Indentures

Marginal note:Definitions

  •  (1) In this Part,

    event of default

    event of default means an event specified in a trust indenture on the occurrence of which

    • (a) a security interest constituted by the trust indenture becomes enforceable, or

    • (b) the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity,

    but the event is not an event of default until all conditions prescribed by the trust indenture in connection with such event for the giving of notice or the lapse of time or otherwise have been satisfied; (cas de défaut)

    trustee

    trustee means any person appointed as trustee, including the administrator of the property of others, under the terms of a trust indenture to which a corporation is a party and includes any successor trustee; (fiduciaire)

    trust indenture

    trust indenture means any deed, indenture or other instrument or act, including any supplement or amendment, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations. (acte de fiducie)

  • Marginal note:Application

    (2) This Part applies to a trust indenture if the debt obligations issued or to be issued under the trust indenture are part of a distribution to the public.

  • Marginal note:Exemption

    (3) The Director may exempt a trust indenture from this Part if the trust indenture, the debt obligations issued thereunder and the security interest effected thereby are subject to a law of a province or a country other than Canada that is substantially equivalent to this Part.

  • R.S., 1985, c. C-44, s. 82
  • 2001, c. 14, s. 34(F)
  • 2011, c. 21, s. 42

Marginal note:Conflict of interest

  •  (1) No person shall be appointed as trustee if there is a material conflict of interest between their role as trustee and their role in any other capacity.

  • Marginal note:Eliminating conflict of interest

    (2) A trustee shall, within ninety days after becoming aware that a material conflict of interest exists

    • (a) eliminate such conflict of interest; or

    • (b) resign from office.

  • Marginal note:Validity

    (3) A trust indenture, any debt obligations issued thereunder and a security interest effected thereby are valid notwithstanding a material conflict of interest of the trustee.

  • Marginal note:Removal of trustee

    (4) If a trustee contravenes subsection (1) or (2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit.

  • R.S., 1985, c. C-44, s. 83
  • 2001, c. 14, s. 135(E)

Marginal note:Qualification of trustee

 A trustee, or at least one of the trustees if more than one is appointed, shall be a body corporate incorporated under the laws of Canada or a province and authorized to carry on the business of a trust company.

  • 1974-75-76, c. 33, s. 79
  • 1978-79, c. 9, s. 1(F)

Marginal note:List of security holders

  •  (1) A holder of debt obligations issued under a trust indenture may, on payment to the trustee of a reasonable fee, require the trustee to furnish, within fifteen days after delivering to the trustee the statutory declaration referred to in subsection (4), a list setting out

    • (a) the names and addresses of the registered holders of the outstanding debt obligations,

    • (b) the principal amount of outstanding debt obligations owned by each such holder, and

    • (c) the aggregate principal amount of debt obligations outstanding

    as shown on the records maintained by the trustee on the day that the statutory declaration is delivered to that trustee.

  • Marginal note:Duty of issuer

    (2) On the demand of a trustee, the issuer of debt obligations shall furnish the trustee with the information required to enable the trustee to comply with subsection (1).

  • Marginal note:Corporate applicant

    (3) If the person requiring the trustee to furnish a list under subsection (1) is a body corporate, the statutory declaration required under that subsection shall be made by a director or officer of the body corporate.

  • Marginal note:Contents of statutory declaration

    (4) The statutory declaration required under subsection (1) shall state

    • (a) the name and address of the person requiring the trustee to furnish the list and, if the person is a body corporate, the address for service thereof; and

    • (b) that the list will not be used except as permitted under subsection (5).

  • Marginal note:Use of list

    (5) A list obtained under this section shall not be used by any person except in connection with

    • (a) an effort to influence the voting of the holders of debt obligations;

    • (b) an offer to acquire debt obligations; or

    • (c) any other matter relating to the debt obligations or the affairs of the issuer or guarantor thereof.

  • Marginal note:Offence

    (6) A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

  • 1974-75-76, c. 33, s. 80
  • 1978-79, c. 9, s. 1(F)
 
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