PART 12Public Accountant (continued)
Marginal note:Report on financial statements
191 After conducting an audit engagement or a review engagement, the public accountant shall report in the prescribed manner on the financial statements required by this Act to be placed before the members, except any financial statements or part of those statements that relate to the period referred to in subparagraph 172(1)(a)(ii).
Marginal note:Reliance on other public accountant
192 (1) Despite section 193, a public accountant of a holding corporation may reasonably rely on the report of a public accountant of a body corporate or an unincorporated business the accounts of which are included in whole or in part in the financial statements of the corporation.
(2) For the purpose of subsection (1), reasonableness is a question of fact.
(3) Subsection (1) applies whether or not the financial statements of the holding corporation reported on by the public accountant are in consolidated form.
Marginal note:Right to information
193 (1) At the request of a public accountant of a corporation, the present or former directors, officers, employees, agents or mandataries of the corporation shall furnish the following, if they are reasonably able to do so and if, in the opinion of the public accountant, it is necessary to enable the public accountant to conduct the review or audit engagement required under section 188 or 189 and to make the report required under section 191:
Marginal note:Directors to obtain and furnish information
(2) On the demand of the public accountant of a corporation, the directors of the corporation shall
(a) obtain from the present or former directors, officers, employees, agents or mandataries of any subsidiary of the corporation the information and explanations that they are reasonably able to furnish and that are, in the opinion of the public accountant, necessary to enable the public accountant to conduct the review or audit engagement required under section 188 or 189 and to make the report required under section 191; and
(b) furnish the public accountant with the information and explanations so obtained.
Marginal note:No civil liability
(3) A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil proceeding arising from having made the communication.
Marginal note:Audit committee
194 (1) A corporation may have an audit committee and, if it does, the committee shall be composed of not less than three directors, a majority of whom are not officers or employees of the corporation or any of its affiliates.
Marginal note:Duty of committee
(2) The audit committee shall review the financial statements of the corporation before they are approved under section 178.
Marginal note:Public accountant’s attendance
(3) The corporation shall send the public accountant notice of the time and place of any meeting of the audit committee. The public accountant is entitled to attend the meeting at the expense of the corporation and be heard, and shall attend every meeting of the committee if requested to do so by one of its members.
Marginal note:Calling meeting
(4) The public accountant or a member of the audit committee may call a meeting of the committee.
Marginal note:Notice of errors
195 (1) A director or an officer of a corporation shall immediately notify any audit committee and the public accountant of any error or misstatement of which the director or officer becomes aware in a financial statement that the public accountant or a former public accountant has reported on.
Marginal note:Directors to be informed
(2) A public accountant or former public accountant of a corporation who is notified or becomes aware of an error or misstatement in a financial statement on which they have reported shall, if in their opinion the error or misstatement is material, inform each director accordingly.
Marginal note:Duty of directors
(3) When the public accountant or former public accountant informs the directors of an error or misstatement in a financial statement,
(a) the directors shall prepare and issue revised financial statements or otherwise inform the members; and
(b) the corporation shall send the Director a copy of the revised financial statements or a notice of the error or misstatement, if the corporation is one that is required to comply with section 176.
Marginal note:Qualified privilege — defamation
196 Any oral or written statement or report made under this Act by the public accountant or former public accountant of a corporation has qualified privilege.
PART 13Fundamental Changes
Marginal note:Amendment of articles or by-laws
197 (1) A special resolution of the members — or, if section 199 applies, of each applicable class or group of members — is required to make any amendment to the articles or the by-laws of a corporation to
(a) change the corporation’s name;
(b) change the province in which the corporation’s registered office is situated;
(c) add, change or remove any restriction on the activities that the corporation may carry on;
(d) create a new class or group of members;
(e) change a condition required for being a member;
(f) change the designation of any class or group of members or add, change or remove any rights and conditions of any such class or group;
(g) divide any class or group of members into two or more classes or groups and fix the rights and conditions of each class or group;
(h) add, change or remove a provision respecting the transfer of a membership;
(i) subject to section 133, increase or decrease the number of — or the minimum or maximum number of — directors fixed by the articles;
(j) change the statement of the purpose of the corporation;
(k) change the statement concerning the distribution of property remaining on liquidation after the discharge of any liabilities of the corporation;
(l) change the manner of giving notice to members entitled to vote at a meeting of members;
(m) change the method of voting by members not in attendance at a meeting of members; or
(n) add, change or remove any other provision that is permitted by this Act to be set out in the articles.
(2) The directors of a corporation may, if authorized by the members in the special resolution effecting an amendment under this section, revoke the resolution before it is acted on without further approval of the members.
Marginal note:Amendment of number name
(3) Despite subsection (1), if a corporation has a designating number as a name, the directors may amend its articles to change that name to a verbal name.
Marginal note:Proposal to amend
198 (1) Subject to subsection (2), a director, or a member who is entitled to vote at an annual meeting of members, may, in accordance with section 163, propose to make an amendment referred to in subsection 197(1).
Marginal note:Notice of amendment
(2) Notice of a meeting of members at which a proposal to make an amendment referred to in subsection 197(1) is to be considered shall set out the proposed amendment.
Marginal note:Class vote
199 (1) The members of a class or group of members are, unless the articles otherwise provide in the case of an amendment referred to in paragraphs (a) and (e), entitled to vote separately as a class or group on a proposal to make an amendment referred to in subsection 197(1) to
(a) effect an exchange, reclassification or cancellation of all or part of the memberships of the class or group;
(b) add, change or remove the rights or conditions attached to the memberships of the class or group, including
(c) increase the rights of any other class or group of members having rights equal or superior to those of the class or group;
(d) increase the rights of a class or group of members having rights inferior to those of the class or group to make them equal or superior to those of the class or group;
(e) create a new class or group of members having rights equal or superior to those of the class or group; or
(f) effect an exchange or create a right of exchange of all or part of the memberships of another class or group into the memberships of the class or group.
Marginal note:Right to vote
(2) Subsection (1) applies whether or not memberships of a class or group otherwise carry the right to vote.
Marginal note:Separate resolutions
(3) A proposal to make an amendment referred to in subsection (1) is adopted when the members of each class or group entitled to vote separately on the amendment as a class or group have approved the amendment by a special resolution.
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