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Canada Business Corporations Regulations, 2001 (SOR/2001-512)

Regulations are current to 2019-06-20 and last amended on 2019-06-17. Previous Versions

PART 2Corporate Names (continued)

Deceptively Misdescriptive Names

 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is deceptively misdescriptive if it is likely to mislead the public, in any language, with respect to any of the following:

  • (a) the business, goods or services in association with which it is proposed to be used;

  • (b) the conditions under which the goods or services will be produced or supplied or the persons to be employed in the production or supply of the goods or services; and

  • (c) the place of origin of the goods or services.

  • SOR/2010-72, s. 1

 For the purpose of subsection 10(3) of the Act, a combined English and French form of the name of a corporation shall include, from among the words and expressions set out in subsection 10(1) of the Act, only the expression “Inc.” which is to be placed at the end of the corporate name.

  • SOR/2010-72, s. 1

 [Repealed, SOR/2010-72, s. 1]

 [Repealed, SOR/2010-72, s. 1]

PART 3Corporate Interrelationships

Interpretation

 The following definitions apply in this Part.

delivery shares

delivery shares means shares issued by a corporation to a particular subsidiary for the purpose of an acquisition made under subsection 31(4) of the Act. (actions remises)

particular subsidiary

particular subsidiary means a subsidiary body corporate referred to in subsection 31(4) of the Act. (filiale donnée)

Prescribed Conditions

 For the purpose of subsection 31(4) of the Act, the prescribed conditions are that

  • (a) the consideration received by the corporation for the delivery shares is equal to the fair market value of those shares at the time of their issuance;

  • (b) the class of shares of which the delivery shares are a part is widely held and shares of that class are actively traded on any of the following stock exchanges in Canada, namely,

    • (i) the Canadian Venture Exchange,

    • (ii) The Montreal Exchange, or

    • (iii) the Toronto Stock Exchange;

  • (c) the sole purpose of effecting the acquisition by the particular subsidiary of delivery shares is to transfer them, as set out in paragraph 37(b), to the shareholders of another body corporate;

  • (d) immediately before the acquisition of the delivery shares by the particular subsidiary, the other body corporate and its shareholders deal at arm’s length, to be determined in accordance with the Income Tax Act, with the corporation and the particular subsidiary; and

  • (e) immediately before the acquisition of the delivery shares by the particular subsidiary, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act.

 For the purposes of subsection 31(5) of the Act, the prescribed conditions are that

  • (a) the particular subsidiary does not acquire a beneficial interest in the delivery shares as a result of its acquisition of those shares and the beneficial interest is acquired by the shareholders of the other body corporate;

  • (b) the acquisition by the particular subsidiary of the delivery shares is followed immediately by a transfer of the delivery shares by the particular subsidiary to shareholders of the other body corporate;

  • (c) immediately after the transfer of the delivery shares to the shareholders of the other body corporate, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act; and

  • (d) after the transfer of the delivery shares to the shareholders of the other body corporate, the other body corporate is a subsidiary body corporate of the particular subsidiary.

 For the purpose of subsection 31(6) of the Act, the prescribed consequences are that within 30 days after one of the conditions described in section 36 or 37 is not met or ceases to be met, the corporation shall

  • (a) cancel the delivery shares on condition that, if the articles of the corporation limit the number of authorized shares, the delivery shares may be restored to the status of authorized but unissued shares;

  • (b) return the consideration received by the corporation for the delivery shares to the particular subsidiary; and

  • (c) cancel the entry for the consideration in the corporation’s stated capital account.

  • SOR/2010-128, s. 8

PART 4Insider Trading

 For the purpose of paragraph 126(2)(a) of the Act, the prescribed percentage of voting rights is 10%.

 For the purpose of paragraph 131(1)(d) of the Act, the prescribed percentage of voting rights is 10%.

 For the purpose of subsection 131(3) of the Act, take-over bid means take-over bid under any legislation that is set out in column 2 of an item of Schedule 2.

  • SOR/2010-128, s. 9(F)

 For the purpose of paragraph 131(4)(c) of the Act, the prescribed circumstances are that the insider

  • (a) entered into the purchase or sale as an agent or mandatary pursuant to a specific unsolicited order to purchase or sell;

  • (b) made the purchase or sale pursuant to participation in an automatic dividend reinvestment plan, share purchase plan or other similar automatic plan that the insider entered into before the acquisition of the confidential information;

  • (c) made the purchase or sale to fulfil a legally binding obligation that the insider entered into before the acquisition of the confidential information; or

  • (d) purchased or sold the security as agent, mandatary or trustee in the circumstances described in paragraph (b) or (c).

  • SOR/2010-128, s. 10(E)

PART 5Meetings of Shareholders

Record Date

  •  (1) For the purpose of paragraphs 134(1)(a), (b) and (e) of the Act, the prescribed period for the directors to fix the record date is not more than 60 days before the day on which the particular action is to be taken.

  • (2) For the purposes of paragraphs 134(1)(c) and (d) of the Act, the prescribed period for the directors to fix the record date is not less than 21 days and not more than 60 days before the date of the meeting.

  • (3) For the purpose of subsection 134(3) of the Act, the prescribed period for the directors to provide notice of the record date is at least seven days before the date fixed.

  • SOR/2010-128, s. 11

Notice of Meetings

 For the purpose of subsection 135(1) of the Act, the prescribed period for the directors to provide notice of the time and place of a meeting of shareholders is not less than 21 days and not more than 60 days before the meeting.

Communication Facilities

  •  (1) For the purpose of subsection 141(3) of the Act, when a vote is to be taken at a meeting of shareholders, the voting may be carried out by means of a telephonic, electronic or other communication facility, if the facility

    • (a) enables the votes to be gathered in a manner that permits their subsequent verification; and

    • (b) permits the tallied votes to be presented to the corporation without it being possible for the corporation to identify how each shareholder or group of shareholders voted.

  • (2) For the purpose of subsection 141(4) of the Act, a person who is entitled to vote at a meeting of shareholders may vote by means of a telephonic, electronic or other communication facility, if the facility

    • (a) enables the vote to be gathered in a manner that permits its subsequent verification; and

    • (b) permits the tallied vote to be presented to the corporation without it being possible for the corporation to identify how the person voted.

  • SOR/2003-317, s. 6
  • SOR/2010-128, s. 12

PART 6Shareholder Proposals

 For the purpose of subsection 137(1.1) of the Act,

  • (a) the prescribed number of shares is the number of voting shares

    • (i) that is equal to 1% of the total number of the outstanding voting shares of the corporation, as of the day on which the shareholder submits a proposal, or

    • (ii) whose fair market value, as determined at the close of business on the day before the shareholder submits the proposal to the corporation, is at least $2,000; and

  • (b) the prescribed period is the six-month period immediately before the day on which the shareholder submits the proposal.

  • SOR/2010-128, s. 13
 
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