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Trust and Loan Companies Act (S.C. 1991, c. 45)

Act current to 2020-10-05 and last amended on 2019-06-17. Previous Versions

PART VCapital Structure (continued)

Share Capital (continued)

Marginal note:Stated capital of continued company

  •  (1) Where a body corporate is continued as a company under this Act, the company shall record in the stated capital account maintained for each class and series of shares then outstanding an amount that is equal to the aggregate of

    • (a) the aggregate amount paid up on the shares of each class and series of shares immediately before the body corporate was so continued, and

    • (b) the amount of the contributed surplus of the company that is attributable to those shares.

  • Marginal note:Contributed surplus entry

    (2) The amount of any contributed surplus recorded in the stated capital account pursuant to paragraph (1)(b) shall be deducted from the contributed surplus account of the company.

  • Marginal note:Shares issued before continuance

    (3) Any amount unpaid in respect of a share issued by a body corporate before it was continued as a company under this Act and paid after it was so continued shall be recorded in the stated capital account maintained by the company for the shares of that class or series.

Marginal note:Pre-emptive right

  •  (1) Where the by-laws of a company so provide, no shares of any class shall be issued unless the shares have first been offered to the shareholders holding shares of that class, and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others.

  • Marginal note:Exception

    (2) Notwithstanding the existence of a pre-emptive right, a shareholder of a company has no pre-emptive right in respect of shares of a class to be issued

    • (a) for a consideration other than money;

    • (b) as a share dividend; or

    • (c) pursuant to the exercise of conversion privileges, options or rights previously granted by the company.

  • Marginal note:Idem

    (3) Notwithstanding the existence of a pre-emptive right, a shareholder of a company has no pre-emptive right in respect of shares to be issued

    • (a) where the issue of shares to the shareholder is prohibited by this Act; or

    • (b) where, to the knowledge of the directors of the company, the offer of shares to a shareholder whose recorded address is in a country other than Canada ought not to be made unless the appropriate authority in that country is provided with information in addition to that submitted to the shareholders at the last annual meeting.

Marginal note:Conversion privileges

  •  (1) A company may issue conversion privileges, options or rights to acquire securities of the company, and shall set out the conditions thereof

    • (a) in the documents that evidence the conversion privileges, options or rights; or

    • (b) in the securities to which the conversion privileges, options or rights are attached.

  • Marginal note:Transferable rights

    (2) Conversion privileges, options and rights to acquire securities of a company may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from any securities to which they are attached.

  • Marginal note:Reserved shares

    (3) Where a company has granted privileges to convert any securities issued by the company into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, if the by-laws limit the number of authorized shares, the company shall reserve and continue to reserve sufficient authorized shares to meet the exercise of such conversion privileges, options and rights.

Marginal note:Holding of own shares

 Except as provided in sections 74 to 77, or unless permitted by the regulations, a company shall not

  • (a) hold shares of the company or of any body corporate that controls the company;

  • (b) hold any ownership interests of any unincorporated entity that controls the company;

  • (c) permit any of its subsidiaries to hold any shares of the company or of any body corporate that controls the company; or

  • (d) permit any of its subsidiaries to hold any ownership interests of any unincorporated entity that controls the company.

Marginal note:Purchase and redemption of shares

  •  (1) Subject to subsection (2) and to its by-laws, a company may, with the consent of the Superintendent, purchase, for the purpose of cancellation, any shares issued by it, or redeem any redeemable shares issued by it at prices not exceeding the redemption price thereof calculated according to a formula stated in its by-laws or the conditions attaching to the shares.

  • Marginal note:Restrictions on purchase and redemption

    (2) A company shall not make any payment to purchase or redeem any shares issued by it if there are reasonable grounds for believing that the company is, or the payment would cause the company to be, in contravention of any regulation referred to in subsection 473(1) or (2) or any direction made pursuant to subsection 473(3).

  • Marginal note:Donated shares

    (3) A company may accept from any shareholder a share of the company surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on any such share except in accordance with section 78.

Marginal note:Holding as personal representative

  •  (1) A company may, and may permit its subsidiaries to, hold, in the capacity of a personal representative, shares of the company or of any body corporate that controls the company or ownership interests in any unincorporated entity that controls the company, but only where the company or the subsidiary does not have a beneficial interest in the shares or ownership interests.

  • Marginal note:Security interest

    (2) A company may, and may permit its subsidiaries to, by way of a security interest

    • (a) hold shares of the company or of any body corporate that controls the company, or

    • (b) hold any ownership interests of any entity that controls the company,

    where the security interest is nominal or immaterial when measured by criteria established by the company that have been approved in writing by the Superintendent.

  • Marginal note:Saving

    (3) Nothing in subsection (2) precludes a former-Act company or any of its subsidiaries from holding any security interest held immediately prior to the coming into force of this Part.

  • 1991, c. 45, s. 75
  • 2005, c. 54, s. 375(F)

Marginal note:Exception — conditions before acquisition

  •  (1) A company may permit any of its subsidiaries to acquire shares of the company through the issuance of those shares by the company to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares.

  • Marginal note:Conditions after acquisition

    (2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met.

  • Marginal note:Non-compliance with conditions

    (3) If a company permits any of its subsidiaries to acquire shares of the company under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite section 15 and subsection 69(2), the company must comply with the prescribed requirements.

  • 2007, c. 6, s. 343

Marginal note:Cancellation of shares

  •  (1) Subject to subsection (2), where a company purchases shares of the company or fractions thereof or redeems or otherwise acquires shares of the company, the company shall cancel those shares.

  • Marginal note:Requirement to sell

    (2) Where a company or any of its subsidiaries, through the realization of security, acquires any shares of the company or of any body corporate that controls the company or any ownership interests in an unincorporated entity that controls the company, the company shall, or shall cause its subsidiaries to, as the case may be, within six months after the day of the realization, sell or otherwise dispose of the shares or ownership interests.

Marginal note:Subsidiary holding shares

 Subject to the regulations, a former-Act company shall cause any subsidiary of the company that holds shares of the company, or of any body corporate that controls the company, or any ownership interests of any unincorporated entity that controls the company to sell or otherwise dispose of those shares or ownership interests within six months after the day this section comes into force.

 
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