Alberta Queen's Printer:

BUSINESS CORPORATIONS ACT

Chapter B‑9

Table of Contents

Part 1
Interpretation and Application

1 Definitions

1.1 Application

2 Relationship of corporations

3 Distribution to the public

4 Execution in counterpart

Part 2
Incorporation

5 Incorporation

6 Articles of incorporation

7 Delivery of articles of incorporation

8 Certificate of incorporation

9 Effect of certificate of incorporation

10 Corporate name

11 Assignment of name

12 Prohibited names

13 Direction to change corporate name

14 Certificate of amendment

15 Pre-incorporation contracts

Part 2.1
Special Rules Respecting Unlimited
Liability Corporations

15.1 Definition

15.2 Liability

15.3 Articles of incorporation, etc.

15.4 Corporate name

15.5 Continuance of extra‑provincial corporation

15.6 Conversion from unlimited liability corporation
to limited corporation

15.7 Continuation of actions after dissolution

15.8 Names of unlisted shareholders

15.9 Warning on certificate

Part 3
Capacity and Powers

16 Capacity of a corporation

17 Restriction on powers

18 No constructive notice

19 Authority of directors, officers and agents

Part 4
Registered Office, Records and Seal

20 Registered office, records office, address for service by mail

21 Corporate records

22 Additional copies to Registrar

23 Access to corporate records

24 Form of records

25 Corporate seal

Part 5
Corporate Finance

26 Shares and classes of shares

27 Issue of shares

27.1 Splitting of shares

28 Stated capital accounts

29 Shares in series

30 Shareholder’s pre-emptive right

31 Options and other rights to acquire securities

32 Prohibited share holdings

33 Exception

34 Acquisition by corporation of its own shares

35 Alternative acquisition by corporation of its own shares

36 Redemption of shares

37 Donated and escrowed shares

38 Other reduction of stated capital

39 Adjustment of stated capital account

40 Repayment, acquisition and reissue of debt obligations

41 Enforceability of contract against corporation

42 Commission on sale of shares

43 Dividends

44 Form of dividend

45 Financial assistance

46 Shareholder immunity

Part 6
Security Certificates, Registers and Transfers

Division 1
Interpretation and General

47 Transfers of securities

48 Security certificates

49 Securities records

50 Dealings with registered holders and transmission on death

51 Overissue

Part 7
Corporate Borrowing

Division 1
Trust Indentures

81 Interpretation and application

82 Conflict of interest

83 Qualification of trustee

84 List of security holders

85 Evidence of compliance

86 Contents of declaration

87 Further evidence of compliance

88 Trustee may require evidence of compliance

89 Notice of default

90 Trustee’s duty of care

91 Trustee’s reliance on statements

92 No exculpation of trustee by agreement

Part 8
Receivers and Receiver-Managers

93 Functions of receiver

94 Functions of receiver-manager

95 Directors’ powers during receivership

96 Court-appointed receiver or receiver-manager

97 Duty under debt obligation

98 Duty of care

99 Powers of the Court

100 Duties of receiver and receiver-manager

Part 9
Directors and Officers

101 Directors

102 Bylaws

103 General borrowing powers

104 Organization meeting

105 Qualifications of directors

106 Election and appointment of directors

107 Cumulative voting

108 Ceasing to hold office

109 Removal of directors

110 Attendance at meetings

111 Filling vacancies

112 Change in number of directors

113 Notice of change of directors

114 Meetings of directors

115 Delegation to managing director or committee

116 Validity of acts of directors, officers and committees

117 Resolution instead of meeting

118 Liability of directors and others

119 Directors’ liability for wages

120 Disclosure by directors and officers in relation to contracts

121 Officers

122 Duty of care of directors and officers

123 Dissent by director

124 Indemnification by corporation

125 Remuneration

Part 10
Insider Trading

126 Definitions

127,128 Deemed insiders

129 Business combination defined

130 Civil liability of insiders

Part 11
Shareholders

131 Place of shareholders’ meetings

132 Calling meetings

133 Record dates

134 Notice of meeting, adjournment, business and notice of business

135 Waiver of notice

136 Shareholder proposals

137 Shareholder list

138 Quorum

139 Right to vote

140 Voting

141 Resolution instead of meetings

142 Meeting on requisition of registered holders or
beneficial owners of shares

143 Meeting called by Court

144 Court review of election

145 Pooling agreement

146 Unanimous shareholder agreement

Part 12
Proxies

147 Definitions

148 Appointing proxyholder

149 Mandatory solicitation

150 Soliciting proxies

151 Exemption orders

152 Rights and duties of proxyholder

153 Duties of registrant

154 Court orders

Part 13
Financial Disclosure

155 Annual financial statements

156 Exemption

157 Consolidated statements

158 Approval of financial statements

159 Copies to shareholders

160 Copies to Executive Director

161 Qualification of the auditor

162 Auditor’s appointment and remuneration

163 Dispensing with auditor

164 Auditor ceasing to hold office

165 Removal of auditor

166 Filling vacancy

167 Court‑appointed auditor

168 Rights and liabilities of auditor or former auditor

169 Auditor’s duty to examine

170 Auditor’s right to information

171 Audit committee

172 Qualified privilege

Part 14
Fundamental Changes

173 Amendment of articles

174 Constrained shares

175 Proposal for amendment

176 Class votes

177 Delivery of articles of amendment

178 Certificate of amendment

179 Effect of certificate

180 Restated articles of incorporation

181 Amalgamation

182 Amalgamation agreement

183 Shareholder approval of amalgamation agreement

184 Vertical and horizontal short form amalgamation

185 Delivery of articles of amalgamation and statutory
declaration to Registrar

186 Effect of certificate of amalgamation

187 Amalgamation of Alberta corporation and extra-provincial corporation where one is wholly-owned subsidiary of the other

188 Continuance of an extra‑provincial corporation as an
Alberta corporation

189 Continuance of an Alberta corporation into another jurisdiction

190 Extraordinary sale, lease or exchange

191 Shareholder’s right to dissent

Part 15
Corporate Reorganization and Arrangements

192 Articles of reorganization resulting from court order

193 Court‑approved arrangements

Part 16
Take‑over Bids - Compulsory Purchase

194 Definitions

195 Compulsory acquisition of shares of dissenting offeree

196 Offeror’s notices

197 Surrender of share certificate and payment of money

198 Offeree corporation’s obligations

199 Offeror’s right to apply

200 No security for costs

201 Procedure on application

202 Court to fix fair value

203 Power of Court

204 Final order

205 Additional powers of Court

206 Corporation’s offer to repurchase its own shares

Part 17
Liquidation and Dissolution

206.1 Definition

207 Staying proceedings

208 Revival

209 Revival of society

210 Revival

211 Dissolution by directors or shareholders in special cases

212 Voluntary liquidation and dissolution

213 Dissolution by Registrar

214 Dissolution by court order

215 Other grounds for liquidation and dissolution pursuant
to court order

216 Application for court supervision

217 Show cause order

218 Powers of the Court

219 Commencement of liquidation

220 Effect of liquidation order

221 Appointment of liquidator

222 Duties of liquidator

223 Powers of liquidator

224 Final accounts and discharge of liquidator

225 Shareholder’s right to distribution in money

226 Custody of records after dissolution

227 Continuation of actions after dissolution

228 Unknown claimants

229 Property not disposed of

Part 18
Investigation

230 Definition

231 Court order for investigation

232 Powers of the Court

233 Powers of inspector

234 Hearings by inspector

235 Compelling evidence

236 Absolute privilege

237 Solicitor-client privilege

238 Inspector’s report as evidence

Part 19
Remedies, Offences and Penalties

239 Definitions

240 Commencing derivative action

241 Powers of the Court

242 Relief by Court on the ground of oppression or unfairness

243 Court approval of stay, dismissal, discontinuance or settlement

244 Court order to rectify records

245 Court order for directions

246 Refusal by Registrar to file

247 Appeal from decision of Registrar or Commission

248 Compliance or restraining order

249 Summary application to Court

250 Appeals from court orders

251 Offences relating to reports, returns, etc.

252 General offence

253 Order to comply

254 Security for costs

Part 20
General

255 Sending of notices and documents to shareholders and directors

256 Notice to and service on a corporation

257 Notice to and service on the Commission

258 Waiver of notice

259 Certificate of Registrar as evidence

260 Certificate of corporation as evidence

261 Copies

262 Proof required by Registrar

263 Appointment of Registrar, service

264 Registrar’s publication

265 Agreements regarding payment of fees

266 Regulations

267 Issuing of certificates by Registrar

268 Annual return

269 Alteration of documents

270 Errors in certificates

271 Inspection and copies

272 Records of Registrar

273 Continuance of Alberta companies as corporations under this Act

274 Continuance of revived Alberta companies

275 Capital redemption reserve fund

Part 21
Extra-provincial Corporations and
Extra‑provincial Matters

276 Definitions

277 Carrying on business in Alberta

278 Application

Division 1
Registration

279 Requirement to register

280 Application for registration

282 Name of extra-provincial corporation

283 Registration by pseudonym

284 Certificate of registration

285 Cancellation of registration

286 New certificate of registration

Division 2
Information

287 Use of corporate name

288 Attorney for service of an extra-provincial corporation

289 Changes in charter, head office, directors

290 Filing of instrument of amalgamation

291 Notices and returns respecting liquidation

292 Annual and other returns

293 Certificate of compliance

Division 2.1
Special Rules Respecting
Extra‑provincial Matters

293.1 Definitions

293.2 Agreements

293.3 Regulations

293.4 Regulation prevails

Division 3
Capacity, Disabilities and Penalties

294 Validity of acts

295 Capacity to commence and maintain legal proceedings

296 General penalty

Part 22
Other Extra‑provincial Legal Entities

297 Definition

298 Application of Part

299 Regulations

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Part 1
Interpretation and Application

Definitions

1 In this Act,

(a) “affairs” means the relationships among a corporation, its affiliates and the shareholders, directors and officers of those bodies corporate, but does not include the business carried on by those bodies corporate;

(b) “affiliate” means an affiliated body corporate within the meaning of section 2(1);

(c) “Alberta company” means a body corporate incorporated and registered under the Companies Act or any of its predecessors;

(d) “articles” means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution and articles of revival and includes an amendment to any of them;

(e) “associate”, when used to indicate a relationship with any person, means

(i) a body corporate of which that person beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or under any circumstances that have occurred and are continuing, or a currently exercisable option or right to purchase those shares or those convertible securities,

(ii) a partner of that person acting on behalf of the partnership of which they are partners,

(iii) a trust or estate in which that person has a substantial interest or in respect of which that person serves as a trustee or in a similar capacity,

(iv) a spouse or adult interdependent partner of that person, or

(v) a relative of that person or of that person’s spouse or adult interdependent partner if that relative has the same residence as that person;

(f) “auditor” includes a partnership of auditors;

(g) “beneficial interest” means an interest arising out of the beneficial ownership of securities;

(h) “beneficial ownership” includes ownership through a trustee, legal representative, agent or other intermediary;

(i) “body corporate” includes a company or other body corporate wherever or however incorporated;

(j) “Canada corporation” means a body corporate incorporated by or under an Act of the Parliament of Canada;

(k) “Commission” means the Alberta Securities Commission;

(l) “corporation” means a body corporate incorporated or continued under this Act and not discontinued under this Act;

(m) “Court” means the Court of Queen’s Bench of Alberta;

(n) “debt obligation” means a bond, debenture, note or other evidence of indebtedness or guarantee of a corporation, whether secured or unsecured;

(o) “director” means a person occupying the position of director by whatever name called and “directors” and “board of directors” includes a single director;

(p) “distributing corporation” means a corporation that is a reporting issuer for the purposes of the Securities Act;

(q) “Executive Director” means the Executive Director of the Commission as defined or otherwise provided for under the Securities Act;

(r) “extra‑provincial corporation” means a body corporate

(i) incorporated otherwise than by or under an Act of the Legislature or an Ordinance of the Northwest Territories, or

(ii) incorporated by or under an Ordinance of the Northwest Territories and not subject to the legislative authority of the Province by section 16 of the Alberta Act (Canada);

(s) “incorporator” means a person who signs articles of incorporation;

(t) “individual” means a natural person;

(u) “liability” includes a debt of a corporation arising under section 41, 191(19) or 242(3)(g) or (h);

(v) “Minister” means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act;

(w) “ordinary resolution” means a resolution

(i) passed by a majority of the votes cast by the shareholders who voted in respect of that resolution, or

(ii) signed by all the shareholders entitled to vote on that resolution;

(x) “person” includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative;

(y) “prescribed” means prescribed by the regulations;

(z) “professional corporation” means a corporation that has the words “Professional Corporation”, whether or not a professional descriptor is inserted between the words “Professional” and “Corporation”, as the last words of its name;

(aa) “redeemable share” means a share issued by a corporation that the corporation, by its articles

(i) is required to purchase or redeem at a specified time or on the happening of a certain event,

(ii) is required to purchase or redeem on the demand of a shareholder, or

(iii) may purchase or redeem on demand of the corporation,

and includes a share issued by a corporation that is purchased or redeemed by a combination of any of the methods referred to in subclauses (i) to (iii);

(aa.1) “registered form” means registered form as defined in the Securities Transfer Act;

(bb) “Registrar” means the Registrar of Corporations or a Deputy Registrar of Corporations appointed under section 263;

(cc) “Registrar’s periodical” means the periodical referred to in section 264;

(dd) “resident Canadian” means an individual who is

(i) a Canadian citizen ordinarily resident in Canada,

(ii) a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons, or

(iii) a permanent resident within the meaning of the Immigration Act (Canada) and ordinarily resident in Canada;

(ee) “security” means a share of any class or series of shares or a debt obligation of a corporation and includes a certificate evidencing such a share or debt obligation;

(ff) “security interest” means an interest in or charge on property of a corporation to secure payment of a debt or performance of any other obligation of the corporation;

(gg) “send” includes deliver;

(hh) “series” means, in relation to shares, a division of a class of shares;

(ii) “special resolution” means a resolution passed by a majority of not less than 2/3 of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution;

(ii.1) “spouse” means the husband or wife of a married person but does not include a spouse who is living separate and apart from the person if the person and spouse have separated pursuant to a written separation agreement or if their support obligations and family property have been dealt with by a court order;

(jj) “unanimous shareholder agreement” means

(i) a written agreement to which all the shareholders of a corporation are or are deemed to be parties, whether or not any other person is also a party, or

(ii) a written declaration by a person who is the beneficial owner of all the issued shares of a corporation,

that provides for any of the matters enumerated in section 146(1);

(kk) “unlimited liability corporation” means a corporation whose shareholders have unlimited liability for any liability, act or default of the corporation, as set out in section 15.2.

RSA 2000 cB‑9 s1;2002 cA‑4.5 s22;2005 c8 s2;
2006 cS‑4.5 s106

Application

1.1 Subject to Part 2.1, this Act applies to unlimited liability corporations.

2005 c8 s3

Relationship of corporations

2(1) For the purposes of this Act,

(a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person, and

(b) if 2 bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

(2) For the purposes of this Act, a body corporate is controlled by a person if

(a) securities of the body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person, and

(b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate.

(3) For the purposes of this Act, a body corporate is the holding body corporate of another if that other body corporate is its subsidiary.

(4) For the purposes of this Act, a body corporate is a subsidiary of another body corporate if

(a) it is controlled by

(i) that other,

(ii) that other and one or more bodies corporate, each of which is controlled by that other, or

(iii) 2 or more bodies corporate, each of which is controlled by that other,

(b) it is a subsidiary of a body corporate that is that other’s subsidiary.

1981 cB‑15 s2

Distribution to the public

3(1) For the purposes of this Act, securities of a corporation

(a) issued on a conversion of other securities, or

(b) issued in exchange for other securities

are deemed to be securities that are part of a distribution to the public if those other securities were part of a distribution to the public.

(2) Subject to subsection (3), for the purposes of this Act, a security of a body corporate

(a) is part of a distribution to the public if, in respect of the security, there has been a filing of a prospectus, statement of material facts, registration statement, securities exchange take‑over bid circular or similar document under the laws of Canada, a province or territory of Canada or a jurisdiction outside Canada, or

(b) is deemed to be part of a distribution to the public if the security has been issued and a filing referred to in clause (a) would be required if the security were being issued currently.

(3) On the application of a corporation, the Commission may determine that a security of the corporation is not or was not part of a distribution to the public if it is satisfied that its determination would not prejudice any security holder of the corporation.

1981 cB‑15 s3;1988 c7 s3;1995 c28 s64

Execution in counterpart

4 A document or writing required or permitted by this Act may be signed or executed in separate counterparts and the signing or execution of a counterpart shall have the same effect as the signing or execution of the original.

1981 cB‑15 s4

Part 2
Incorporation

Incorporation

5 One or more persons may incorporate a corporation by signing articles of incorporation and complying with section 7.

1981 cB‑15 s5

Articles of incorporation

6(1) Subject to section 15.3, articles of incorporation shall be in the prescribed form and shall set out, in respect of the proposed corporation,

(a) the name of the corporation,

(b) the classes and any maximum number of shares that the corporation is authorized to issue, and

(i) if there are 2 or more classes of shares, the special rights, privileges, restrictions and conditions attaching to each class of shares, and

(ii) if a class of shares may be issued in series, the authority given to the directors to fix the number of shares in, and to determine the designation of each series, and the rights, privileges, restrictions and conditions attaching to the shares of each series,

(c) if the right to transfer shares of the corporation is to be restricted, a statement that the right to transfer shares is restricted and either

(i) a statement of the nature of the restrictions, or

(ii) a statement that the nature of the restrictions appears in a unanimous shareholder agreement,

(d) the number of directors or, subject to section 107(a), the minimum and maximum number of directors of the corporation, and

(e) any restrictions on the businesses that the corporation may carry on.

(2) The articles may set out any provision permitted by this Act or by law to be set out in the bylaws of the corporation.

(3) Subject to subsection (4), if the articles or a unanimous shareholder agreement require a greater number of votes of directors or shareholders than that required by the Act to effect any action, the provisions of the articles or of the unanimous shareholder agreement prevail.

(4) The articles may not require a greater number of votes of shareholders to remove a director than the number required by section 109.

RSA 2000 cB‑9 s6;2005 c8 s4

Delivery of articles of incorporation

7(1) An incorporator shall send to the Registrar

(a) articles of incorporation, and

(b) the documents required by sections 12(3), 20 and 106.

(2) If the name of the corporation set out in the articles of incorporation contains the words “Professional Corporation”, the incorporator shall also send to the Registrar evidence satisfactory to the Registrar of an approval of the articles that is less than 2 years old by or on behalf of the governing body of the appropriate profession or occupation.

RSA 2000 cB‑9 s7;RSA 2000 cH‑7 s136

Certificate of incorporation

8 On receipt of the documents and evidence required under section 7 and the prescribed fees, the Registrar shall issue a certificate of incorporation in accordance with section 267.

1981 cB‑15 s8

Effect of certificate of incorporation

9(1) A corporation comes into existence on the date shown in the certificate of incorporation.

(2) A certificate of incorporation is conclusive proof for the purposes of this Act and for all other purposes

(a) that the provisions of this Act in respect of incorporation and all requirements precedent and incidental to incorporation have been complied with, and

(b) that the corporation has been incorporated under this Act as of the date shown in the certificate of incorporation.

1981 cB‑15 s9

Corporate name

10(1) Subject to section 15.4(1), the word “Limited”, “Limitée”, “Incorporated”, “Incorporée” or “Corporation” or the abbreviation “Ltd.”, “Ltée”, “Inc.” or “Corp.” shall be the last word of the name of every corporation, and a corporation may use and may be legally designated by either the full or the abbreviated form.

(2) Notwithstanding subsection (1), the words “Professional Corporation” shall be the last words of the name of every corporation whose incorporation is approved in accordance with section 7(2), but a professional corporation may add a professional descriptor to its name, and the professional descriptor may be inserted between the words “Professional” and “Corporation”.

(2.1) For the purposes of subsection (2), a professional descriptor is a term that describes the profession or occupation of the professional corporation, including the terms “Legal”, “Law”, “Medical”, “Dental” or others descriptive of the profession or occupation.

(3) Subject to section 15.4(2), no person other than a body corporate shall carry on business within Alberta under any name or title that contains the word “Limited”, “Limitée”, “Incorporated”, “Incorporée” or “Corporation” or the abbreviation “Ltd.”, “Ltée”, “Inc.” or “Corp.” or the words “Professional Corporation”.

(4) A person carrying on business in contravention of subsection (3) or section 15.4(2) is guilty of an offence and liable to a fine of not more than $5000.

(5) A corporation may file a notice in the prescribed form with the Registrar designating an additional form or forms of its name in accordance with subsection (6).

(6) Subject to section 12(1), the name of the corporation or an additional form of its name in a notice filed under subsection (5) may be in an English form or a French form or in a combined English and French form and the corporation may use and may be legally designated by any of those forms.

(7) Subject to section 12(1), a corporation may, outside Canada, use and may be legally designated by a name in any language form.

(8) A corporation shall set out its name in legible characters in or on all contracts, invoices, negotiable instruments, and orders for goods or services, issued or made by or on behalf of the corporation.

(9) Subject to subsections (8) and (10) and section 12(1) and to section 110 of the Partnership Act, a corporation may carry on business under or identify itself by a name other than its corporate name.

(10) Where a corporation carries on business or identifies itself by a name other than its corporate name, the name shall not contain a word referred to in subsection (3) or section 15.4(2).

RSA 2000 cB‑9 s10;2005 c8 s5

Assignment of name

11 If requested to do so by the incorporators or by an extra‑provincial corporation about to continue as a corporation pursuant to section 188, the Registrar shall assign to the corporation as its name a designated number determined by the Registrar.

1981 cB‑15 s11;1984 c12 s1

Prohibited names

12(1) A corporation shall not have a name

(a) that is prohibited by the regulations or contains a word or expression prohibited by the regulations,

(b) subject to the circumstances and conditions prescribed by the regulations, that is identical to the name of

(i) a body corporate incorporated under the laws of Alberta, unless the body corporate has been dissolved for a period of 6 years or more,

(ii) an extra‑provincial corporation registered in Alberta, or

(iii) a Canada corporation,

(i) a body corporate incorporated under the laws of Alberta,

(ii) an extra‑provincial corporation registered in Alberta, or

(iii) a Canada corporation,

if the use of that name is confusing or misleading, or

(d) that does not meet the requirements prescribed by the regulations.

(2) Where a body corporate incorporated under the laws of Alberta gives an undertaking to dissolve or change its name and the undertaking is not carried out within the time specified, the Registrar may, by notice in writing, giving the Registrar’s reasons, direct the body corporate to change its name to one that the Registrar approves within 60 days after the date of the notice.

(3) There shall be sent to the Registrar documents relating to corporate names that are prescribed by the regulations.

RSA 2000 cB‑9 s12;2005 c8 s6

Direction to change corporate name

13(1) If, through inadvertence or otherwise, a corporation comes into existence with or acquires a name that contravenes section 10 or 12, the Registrar may, by notice in writing, giving the Registrar’s reasons, direct the corporation to change its name to one that the Registrar approves within 60 days after the date of the notice.

(2) The Registrar may give a notice under subsection (1) on the Registrar’s own initiative or at the request of a person who feels aggrieved by the name that contravenes section 10 or 12, as the case may be.

(3) If a corporation

(a) is directed to change its name under section 12(2) or subsection (1) of this section, and

(b) does not appeal the request of the Registrar within 60 days after the date of the notice,

the Registrar may revoke the name of the corporation and assign to it a number designated or a name approved by the Registrar and, until changed in accordance with section 173, the name of the corporation is the number or name so assigned.

(4) If the Registrar is satisfied that a professional corporation has ceased to be the holder of a subsisting permit as a professional corporation issued under an Act governing a profession or occupation, the Registrar may, on giving notice to the professional corporation of the Registrar’s intention to do so, change the name of the corporation to exclude the words “Professional Corporation” and replace them with any word or abbreviation referred to in section 10(1).

RSA 2000 cB‑9 s13;2005 c8 s7

Certificate of amendment

14(1) When a corporation has had its name revoked and a name assigned to it under section 13(3), the Registrar shall issue a certificate of amendment showing the new name of the corporation.

(2) The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.

1981 cB‑15 s13;1984 c12 s1

Pre-incorporation contracts

15(1) This section applies unless the person referred to in subsection (2) and all parties to the contract referred to in that subsection

(a) believe that the body corporate exists and is incorporated under, or

(b) intend that the body corporate is to be incorporated under

the laws of a jurisdiction other than Alberta.

(2) Except as provided in this section, if a person enters or purports to enter into a written contract in the name of or on behalf of a body corporate before it comes into existence,

(a) that person is deemed to warrant to the other party to the contract

(i) that the body corporate will come into existence within a reasonable time, and

(ii) that the contract will be adopted within a reasonable time after the body corporate comes into existence,

(b) that person is liable to the other party to the contract for damages for a breach of that warranty, and

(c) the measure of damages for that breach of warranty shall be the same as if the body corporate existed when the contract was made, the person who made the contract on behalf of the body corporate had no authority to do so and the body corporate refused to ratify the contract.

(3) A corporation may, within a reasonable time after it comes into existence, by any act or conduct signifying its intention to be bound by it, adopt a written contract made before it came into existence in its name or on its behalf, and on the adoption

(a) the corporation is bound by the contract and is entitled to the benefits of the contract as if the corporation had been in existence at the date of the contract and had been a party to it, and

(b) a person who purported to act in the name of or on behalf of the corporation ceases, except as provided in subsection (5), to be liable under subsection (2) in respect of the contract.

(4) If a person enters or purports to enter into a contract in the name of or on behalf of a corporation before it comes into existence and the contract is not adopted by the corporation within a reasonable time after it comes into existence, that person or the other party to the contract may apply to the Court for an order directing the corporation to restore to the applicant, in specie or otherwise, any benefit received by the corporation under the contract.

(5) Except as provided in subsection (6), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to the Court for an order

(a) fixing obligations under the contract as joint or joint and several, or

(b) apportioning liability between or among the corporation and a person who purported to act in the name of or on behalf of the corporation,

and on the application the Court may make any order it thinks fit.

(6) A person who enters or purports to enter into a written contract in the name of or on behalf of a body corporate before it comes into existence is not in any event liable for damages under subsection (2) if the contract expressly provides that the person is not to be so liable.

RSA 2000 cB‑9 s15;2005 c8 s8

Part 2.1
Special Rules Respecting Unlimited
Liability Corporations

Definition

15.1 For the purposes of this Part, “limited corporation” means a corporation whose shareholders are not, as shareholders, liable for any liability, act or default of the corporation except under section 38(4), 146(7) or 227(4).

2005 c8 s9

Liability

15.2(1) The liability of each of the shareholders of a corporation incorporated under this Act as an unlimited liability corporation for any liability, act or default of the unlimited liability corporation is unlimited in extent and joint and several in nature.

(2) Notwithstanding subsection (1), but subject to any immunity from liability otherwise available on pleading the Limitations Act as a defence, a former shareholder of an unlimited liability corporation is not liable for any liability, act or default of the unlimited liability corporation unless an action to enforce a claim arising out of that liability, act or default is brought within 2 years from the date on which the former shareholder last ceased to be a shareholder of the unlimited liability corporation.

(3) A former shareholder of an unlimited liability corporation is not liable for any liability, act or default of the unlimited liability corporation that did not exist on or prior to the date on which the former shareholder last ceased to be a shareholder of the unlimited liability corporation.

2005 c8 s9;2005 c40 s2

Articles of incorporation, etc.

15.3 In addition to meeting the requirements of section 6, the articles of incorporation, amalgamation, amendment, continuance or conversion of an unlimited liability corporation shall contain an express statement that the liability of each of the shareholders of the unlimited liability corporation for any liability, act or default of the unlimited liability corporation is unlimited in extent and joint and several in nature.

2005 c8 s9

Corporate name

15.4(1) The name of every unlimited liability corporation shall end with the words “Unlimited Liability Corporation” or the abbreviation “ULC”, and an unlimited liability corporation may use and may be legally designated by either the full or the abbreviated form.

(2) No person other than a body corporate that is an unlimited liability corporation shall carry on business within Alberta under any name or title that contains the words “Unlimited Liability Corporation” or “ULC”.

2005 c8 s9

Continuance of extra‑provincial corporation

15.5(1) Section 188 applies to an extra‑provincial corporation continued as an unlimited liability corporation under this Act, and in addition,

(a) the property of the extra‑provincial corporation continues to be the property of the unlimited liability corporation,

(b) if prior to the date shown on the certificate of continuance the shareholders of the extra‑provincial corporation had unlimited liability for any liability, act or default of the extra‑provincial corporation, the unlimited liability corporation and the shareholders of the unlimited liability corporation continue to be liable without limit for any liability, act or default of the extra‑provincial corporation,

(c) if prior to the date shown on the certificate of continuance the shareholders of the extra‑provincial corporation were not, as shareholders, liable for any liability, act or default of the extra‑provincial corporation,

(i) the unlimited liability corporation continues to be liable for the obligations of the extra‑provincial corporation, and

(ii) the shareholders of the unlimited liability corporation become liable without limit for any liability, act or default of the extra‑provincial corporation that existed as of the date shown on the certificate of continuance and are liable without limit for any liability, act or default of the unlimited liability corporation on and from the date shown on the certificate of continuance,

(d) an existing cause of action, claim or liability to prosecution of the extra‑provincial corporation includes the unlimited liability corporation and the shareholders of the unlimited liability corporation,

(e) a civil, criminal or administrative action or proceeding pending by or against the extra‑provincial corporation may continue to be prosecuted by or against the unlimited liability corporation or the shareholders of the unlimited liability corporation,

(f) a conviction against, or ruling, order or judgment in favour of or against, the extra‑provincial corporation may be enforced against or by the unlimited liability corporation or the shareholders of the unlimited liability corporation.

(2) When an extra‑provincial corporation that was incorporated as an unlimited liability corporation is continued as a limited corporation,

(a) the shareholders of the extra‑provincial corporation as it existed prior to the date shown on the certificate of continuance continue to be liable without limit for any liability, act or default of the extra‑provincial corporation that existed as of the date shown on the certificate of continuance,

(b) an existing cause of action, claim or liability to prosecution is unaffected,

(c) a civil, criminal or administrative action pending by or against the extra‑provincial corporation may continue to be prosecuted by or against the shareholders of the extra‑provincial corporation as it existed prior to the date shown on the certificate of continuance or by or against the limited corporation, and

(d) a conviction against, or ruling, order or judgment in favour of or against, the unlimited liability corporation may be enforced against or by the shareholders of the extra‑provincial corporation as it existed prior to the date shown on the certificate of continuance or against or by the limited corporation.

(3) Section 188(2) to (6) and (8) to (12) apply to an application under this section.

2005 c8 s9

Conversion from unlimited liability corporation
to limited corporation

15.6(1) Sections 173 and 186(c) to (f) apply to an unlimited liability corporation that is converted to a limited corporation by amendment of its articles or by amalgamation, and in addition

(a) the shareholders of the unlimited liability corporation as it existed prior to the amendment or amalgamation continue to be liable without limit for any liability, act or default of the unlimited liability corporation that existed as of the date shown on the certificate of amendment or amalgamation,

(b) an existing cause of action, claim or liability to prosecution is unaffected,

(c) a civil, criminal or administrative action or proceeding pending by or against the unlimited liability corporation may continue to be prosecuted by or against the shareholders of the unlimited liability corporation as it existed prior to the amendment or amalgamation by or against the limited corporation, and

(d) a conviction against, or ruling, order or judgment in favour of or against, the unlimited liability corporation may be enforced by or against the shareholders of the unlimited liability corporation as it existed prior to the amendment, amalgamation or continuance or by or against the limited corporation.

(2) Section 186(a) to (c) and (g) apply to an amalgamation under this Part, and in addition, if a limited corporation amalgamates with an unlimited liability corporation and the resulting corporation is an unlimited liability corporation,

(a) the shareholders of the amalgamated unlimited liability corporation are liable for any liability, act or default of the amalgamated unlimited liability corporation, whether it arises before or after the date shown on the certificate of amalgamation,

(b) an existing cause of action, claim or liability to prosecution pertaining to the amalgamating unlimited liability corporation or the amalgamating limited corporation as it existed prior to amalgamation includes the shareholders of the amalgamated unlimited liability corporation,

(c) a civil, criminal or administrative action or proceeding pending by or against the amalgamating unlimited liability corporation or the amalgamating limited corporation as it existed prior to amalgamation may continue to be prosecuted by or against the amalgamated unlimited liability corporation or by or against the shareholders of the amalgamated unlimited liability corporation, and

(d) a conviction against, or ruling, order or judgment in favour of or against, the amalgamating unlimited liability corporation or the amalgamating limited corporation as it existed prior to amalgamation may be enforced by or against the amalgamated unlimited liability corporation or by or against the shareholders of the amalgamated unlimited liability corporation.

(3) If the articles of a limited corporation are amended to convert it to an unlimited liability corporation,

(a) the shareholders of the limited corporation as it existed prior to the date shown on the certificate of amendment

(i) become liable for any liability, act or default of the limited corporation that existed as of the date shown on the certificate of amendment, and

(ii) are liable for any liability, act or default of the unlimited liability corporation on and from the date shown on the certificate of amendment,

(b) an existing cause of action, claim or liability to prosecution includes the shareholders of the unlimited liability corporation,

(c) a civil, criminal or administrative action or proceeding pending by or against the limited corporation as of the date shown on the certificate of amendment may continue to be prosecuted by or against the unlimited liability corporation or by or against the shareholders of the unlimited liability corporation, and

(d) a conviction against, or ruling, order or judgment in favour of or against, the limited corporation as of the date shown on the certificate of amendment, may be enforced by or against the unlimited liability corporation or by or against the shareholders of the unlimited liability corporation.

2005 c8 s9

Continuation of actions after dissolution

15.7 Section 227 applies to a body corporate that before its dissolution was an unlimited liability corporation, and in addition

(a) the liability of the shareholders for obligations of the unlimited liability corporation arising from actions and proceedings commenced by or against it before its dissolution or within 2 years after its dissolution is unlimited, and

(b) any shareholder, including a former shareholder who last ceased to be a shareholder within 2 years prior to the date of dissolution, may be held responsible for the full amount of any claim against the unlimited liability corporation that originated before dissolution, regardless of the amount, if any, received by the shareholder on the distribution of the corporation’s property at dissolution.

2005 c8 s9;2005 c40 s3

Names of unlisted shareholders

15.8 The listed shareholders of an unlimited liability corporation shall provide to the Registrar on request the names and addresses of all unlisted shareholders of the unlimited liability corporation.

2005 c8 s9

Warning on certificate

15.9(1) An unlimited liability corporation must ensure that each share certificate issued by it displays in a prominent position on the face of the certificate the information that the liability of an owner of the share or shares represented by the certificate for any liability, act or default of the unlimited liability corporation is unlimited in extent and joint and several in nature.

(2) The liability of a shareholder of an unlimited liability corporation is unaffected by any failure of the unlimited liability corporation to comply with subsection (1).

2005 c8 s9

Part 3
Capacity and Powers

Capacity of a corporation

16(1) A corporation has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

(2) A corporation has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Alberta to the extent that the laws of that jurisdiction permit.

1981 cB‑15 s15

Restriction on powers

17(1) It is not necessary for a bylaw to be passed in order to confer any particular power on the corporation or its directors.

(2) A corporation shall not carry on any business or exercise any power that it is restricted by its articles from carrying on or exercising, nor shall the corporation exercise any of its powers in a manner contrary to its articles.

(3) No act of a corporation, including any transfer of property to or by a corporation, is invalid by reason only that the act or transfer is contrary to its articles or this Act.

1981 cB‑15 s16

No constructive notice

18 No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a corporation by reason only that the document has been filed by the Registrar or is available for inspection at an office of the corporation.

1981 cB‑15 s17

Authority of directors, officers and agents

19 A corporation, a guarantor of an obligation of the corporation or a person claiming through the corporation may not assert against a person dealing with the corporation or dealing with any person who has acquired rights from the corporation

(a) that the articles, bylaws or any unanimous shareholder agreement have not been complied with,

(b) that the persons named in the most recent notice filed by the Registrar under section 106 or 113 are not the directors of the corporation,

(c) that the place named as the registered office in the most recent notice filed by the Registrar under section 20 is not the registered office of the corporation,

(d) that the post office box designated as the address for service by mail in the most recent notice filed by the Registrar under section 20 is not the address for service by mail of the corporation,

(e) that a person held out by the corporation as a director, an officer or an agent of the corporation

(i) has not been duly appointed, or

(ii) has no authority to exercise a power or perform a duty that the director, officer or agent might reasonably be expected to exercise or perform,

(f) that a document issued by any director, officer or agent of the corporation with actual or usual authority to issue the document is not valid or not genuine, or

(g) that financial assistance referred to in section 45 or a sale, lease or exchange of property referred to in section 190 was not authorized,

unless the person has, or by virtue of the person’s position with or relationship to the corporation ought to have, knowledge of those facts at the relevant time.

1981 cB‑15 s18

Part 4
Registered Office, Records and Seal

Registered office, records office, address for service by mail

20(1) A corporation shall at all times have a registered office within Alberta.

(2) A notice of

(a) the registered office,

(b) a separate records office, if any, and

must be sent to the Registrar in the prescribed form together with the articles of incorporation.

(3) Subject to subsection (4), the directors of the corporation may at any time

(a) change the address of the registered office within Alberta,

(b) designate, or revoke or change a designation of, a records office within Alberta, or

(c) designate, or revoke or change a designation of, a post office box within Alberta as the address for service by mail of the corporation.

(4) A post office box designated as the corporation’s address for service by mail shall not be designated as the corporation’s records office or registered office.

(5) A corporation shall send to the Registrar, within 15 days after any change under subsection (3) or (4), a notice of that change in the prescribed form, and the Registrar shall file it.

(6) The corporation shall ensure that its registered office and its records office are

(a) accessible to the public during normal business hours, and

(b) readily identifiable from the address or other description given in the notice referred to in subsection (2).

(7) Unless the directors designate a separate records office, the registered office of a corporation is also its records office.

1981 cB‑15 s19;1983 c20 s3

Corporate records

21(1) A corporation shall prepare and maintain at its records office records containing

(a) the articles and the bylaws, all amendments to the articles and bylaws, a copy of any unanimous shareholder agreement and any amendment to a unanimous shareholder agreement,

(b) minutes of meetings and resolutions of shareholders,

(d) a securities register complying with section 49,

(e) copies of the financial statements, reports and information referred to in section 155(1), and

(f) a register of disclosures made pursuant to section 120.

(2) Notwithstanding subsection (1), a central securities register may be maintained at an office in Alberta of a corporation’s agent referred to in section 49(3)(a), and a branch securities register may be kept at any place in or out of Alberta designated by the directors.

(3) If a central securities register is maintained under subsection (2) at a place other than the records office, the corporation shall maintain at its records office a record containing the names and addresses of all agents and offices at which those registers are maintained and descriptions of all those registers.

(4) A corporation that

(a) complies with section 24(2), and

(b) maintains in Canada a register or record referred to in subsection (3)

complies with subsection (1).

(5) In addition to the records described in subsection (1), a corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committee of the directors.

(6) For the purposes of subsections (1)(b) and (2), if a body corporate is continued under this Act, “records” includes similar records required by law to be maintained by the body corporate before it was so continued.

(7) The records described in subsection (5) shall be kept at the registered office or records office of the corporation or at any other place the directors think fit and shall at all reasonable times be open to examination by the directors.

(8) If accounting records of a corporation are kept at a place outside Alberta, there shall be kept at the registered office or records office or at any other place in Alberta the directors think fit, accounting records adequate to enable the directors to ascertain the financial position of the corporation with reasonable accuracy on a quarterly basis, and those records shall at all reasonable times be open to examination by the directors.

(8.1) Notwithstanding subsections (1) and (8), a corporation may keep all or any of its corporate records and accounting records referred to in subsection (1) or (2) at a place outside Alberta only if

(a) the records are available for examination, by means of a computer terminal or other technology, during regular office hours at the registered office or any other place in Alberta designated by the directors, and

(b) the corporation provides the technical assistance to facilitate an examination referred to in clause (a).

(9) A corporation that, without reasonable cause, contravenes this section is guilty of an offence and liable to a fine not exceeding $5000.

RSA 2000 cB‑9 s21;2005 c8 s10

Additional copies to Registrar

22 A corporation shall provide to the Registrar on request an additional copy in legible written form of any document previously sent to or filed with the Registrar pursuant to this Act or a regulation under this Act.

1987 c15 s3

Access to corporate records

23(1) The directors and shareholders of a corporation, their agents and legal representatives may examine the records referred to in section 21(1) during the usual business hours of the corporation free of charge.

(2) A shareholder of a corporation is entitled on request and without charge to one copy of the articles and bylaws and of any unanimous shareholder agreement, and amendments to them.

(3) Creditors of a corporation and their agents and legal representatives may examine the records referred to in section 21(1)(a), (c) and (d), other than a unanimous shareholder agreement or an amendment to a unanimous shareholder agreement, during the usual business hours of the corporation on payment of a reasonable fee and may make copies of those records.

(4) Any person may examine the records referred to in section 21(1)(c) and (d) during the usual business hours of the corporation on payment of a reasonable fee and may make copies of those records.

(5) If the corporation is a distributing corporation, any person, on payment of a reasonable fee and on sending to the corporation or its agent the statutory declaration referred to in subsection (9), may on application require the corporation or its agent to furnish within 10 days from the receipt of the statutory declaration a list, referred to in this section as the “basic list”, made up to a date not more than 10 days before the date of receipt of the statutory declaration setting out

(a) the names of the shareholders of the corporation,

(b) the number of shares owned by each shareholder, and

as shown on the records of the corporation.

(6) A person requiring a corporation to supply a basic list may, if the person states in the statutory declaration referred to in subsection (5) that the person requires supplemental lists, require the corporation or its agent on payment of a reasonable fee to furnish supplemental lists setting out any changes from the basic list in the information provided in it for each business day following the date the basic list is made up to.

(7) The corporation or its agent shall furnish a supplemental list required under subsection (6)

(a) on the date the basic list is furnished, if the information relates to changes that took place prior to that date, and

(b) on the business day following the day to which the supplemental list relates, if the information relates to changes that take place on or after the date the basic list is furnished.

(8) A person requiring a corporation to supply a basic list or a supplemental list may also require the corporation to include in that list the name and address of any known holder of an option or right to acquire shares in the corporation.

(9) The statutory declaration required under subsection (5) shall state

(a) the name and address of the applicant,

(b) the name and address for service of the body corporate if the applicant is a body corporate, and

(c) that the basic list and any supplemental lists obtained pursuant to subsection (6) will not be used except as permitted under subsection (11).

(10) If the applicant is a body corporate, the statutory declaration shall be made by a director or officer of the body corporate.

(11) A list of shareholders obtained under this section must not be used by any person except in connection with

(a) an effort to influence the voting of shareholders of the corporation,

(b) an offer to acquire shares of the corporation, or

(12) A person who, without reasonable cause, contravenes this section is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

1981 cB‑15 s21

Form of records

24(1) All registers and other records required by this Act to be prepared and maintained may be in a bound or loose‑leaf form or in a photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in legible written form within a reasonable time.

(2) If a person is entitled to examine any register or record that is maintained by a corporation in a form other than a written form and makes a request of the corporation to do so, the corporation shall

(a) make available to that person within a reasonable time a reproduction of the text of the register or record in legible written form, or

(b) provide facilities to enable that person to examine the text of the register or record in an legible written form otherwise than by providing a reproduction of that text,

and shall allow that person to make copies of that register or record.

(3) A corporation and its agents shall take reasonable precautions to

(a) prevent loss or destruction of,

(b) prevent falsification of entries in, and

the registers and other records required by this Act to be prepared and maintained.

(4) A person who, without reasonable cause, contravenes this section is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

1981 cB‑15 s22

Corporate seal

25(1) A corporation may adopt and change a corporate seal that shall contain the name of the corporation.

(2) A document executed on behalf of a corporation by a director, an officer or an agent of the corporation, is not invalid only because the corporate seal is not affixed to the document.

(3) Share certificates of a corporation may be issued under its corporate seal or a facsimile of that corporate seal.

(4) A document requiring authentication by a corporation may be signed by a director or the secretary or other authorized officer of the corporation and need not be under its corporate seal.

(5) A corporation may adopt a facsimile of its corporate seal for use in any other jurisdiction outside Alberta that complies with the laws of that jurisdiction.

1981 cB‑15 s23

Part 5
Corporate Finance

Shares and classes of shares

26(1) Shares of a corporation shall be in registered form and shall be without nominal or par value.

(2) If a body corporate is continued under this Act, a share with nominal or par value issued by the body corporate before it was so continued is, for the purpose of subsection (1), deemed to be a share without nominal or par value.

(3) If a corporation has only one class of shares, the rights of the holders of those shares are equal in all respects and include the rights

(a) to vote at any meeting of shareholders of the corporation,

(b) to receive any dividend declared by the corporation, and

(4) The articles may provide for more than one class of shares and, if they so provide,

(a) the rights, privileges, restrictions and conditions attaching to the shares of each class shall be set out in the articles, and

(b) the rights set out in subsection (3) shall be attached to at least one class of shares but all of those rights are not required to be attached to one class.

(5) Subject to section 29, if a corporation has more than one class of shares, the rights of the holders of the shares of any class are equal in all respects.

1981 cB‑15 s24

Issue of shares

27(1) Subject to the articles, the bylaws and any unanimous shareholder agreement and to section 30, shares may be issued at the times and to the persons and for the consideration that the directors determine.

(2) Shares issued by a corporation are non‑assessable and the holders are not liable to the corporation or to its creditors in respect of those shares.

(3) A share shall not be issued until the consideration for the share is fully paid in money or in property or past service that is not less in value than the fair equivalent of the money that the corporation would have received if the share had been issued for money.

(4) In determining whether property or past service is the fair equivalent of a money consideration, the directors may take into account reasonable charges and expenses of organization and reorganization and payments for property and past services reasonably expected to benefit the corporation.

(5) For the purposes of this section, “property” does not include a promissory note or promise to pay given by a person buying a share or a person who deals not at arm’s length, within the meaning of that expression in the Income Tax Act (Canada), with a person buying a share.

RSA 2000 cB‑9 s27;2005 c8 s11

Splitting of shares

27.1(1) Where the only issued shares of a corporation are of one class, the directors may authorize the splitting of the shares by resolution.

(2) Where a corporation has issued more than one class of shares, each class of shareholder shall vote separately on a special resolution to approve the proposed splitting of the shares of any class.

(3) Where the directors have authorized the splitting of shares under subsection (1), they must notify the shareholders within 60 days in accordance with section 255 of the manner in which the issued shares have been split.

2005 c8 s12

Stated capital accounts

28(1) A corporation shall maintain a separate stated capital account for each class and series of shares it issues.

(2) A corporation shall add to the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.

(3) Notwithstanding section 27(3) and subsection (2) of this section, if a corporation issues shares

(a) in exchange for

(i) property, other than a promissory note or promise to pay, or

(ii) issued shares of the corporation of a different class or series,

(b) pursuant to

(i) an amalgamation agreement referred to in section 182 or 187, or

(ii) an arrangement referred to in section 193(1)(b) or (c)

to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate,

the corporation may add the whole or any part of the amount of the consideration it receives in the exchange to the stated capital accounts maintained for the shares of the classes or series issued.

(4) On the issue of a share, a corporation shall not add to a stated capital account in respect of the share it issues an amount greater than the amount of the consideration it received for the share.

(5) If a corporation proposes to add any amount to a stated capital account it maintains in respect of a class or series of shares and

(a) the amount to be added was not received by the corporation as consideration for the issue of shares, and

(b) the corporation has issued any outstanding shares of more than one class or series,

the addition to the stated capital account must be approved by special resolution unless all the issued and outstanding shares are shares of not more than 2 classes of convertible shares referred to in section 39(5).

(6) When a body corporate is continued under this Act, it may add to a stated capital account any consideration received by it for a share it issued.

(7) A corporation at any time may, subject to subsection (5), add to a stated capital account any amount it credited to a retained earnings or other surplus account.

(8) When a body corporate is continued under this Act, subsection (2) does not apply to the consideration received by it before it was so continued unless the share in respect of which the consideration is received is issued after the corporation is so continued.

(9) When a body corporate is continued under this Act, any amount unpaid in respect of a share issued by the body corporate before it was so continued and paid after it was so continued must be added to the stated capital account maintained for the shares of that class or series.

(10) When a body corporate is continued under this Act, the stated capital of each class and series of shares of the corporation immediately following its continuance is deemed to equal the paid up capital of each class and series of shares of the body corporate immediately prior to its continuance.

(11) A corporation shall not reduce its stated capital or any stated capital account except in the manner provided in this Act.

(12) Subsections (1) to (11) and any other provisions of this Act relating to stated capital do not apply to an open‑end mutual fund.

(13) In subsection (12), “open‑end mutual fund” means a corporation that makes a distribution to the public of its shares and that carries on only the business of investing the consideration it receives for the shares it issues, and all or substantially all of those shares are redeemable on the demand of a shareholder.

1981 cB‑15 s26;1983 c20 s5;1987 c15 s4

Shares in series

29(1) The articles may authorize, subject to any limitations set out in them, the issue of any class of shares in one or more series and may do either or both of the following:

(a) fix the number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series;

(b) authorize the directors to fix the number of shares in each series and to determine the designation, rights, privileges and conditions attaching to the shares of each series at the time the shares are issued.

(2) If any cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

(3) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section shall confer on shares of a series

(a) greater voting rights than are attached to shares of any other series in the same class that are then outstanding, or

(b) a priority in respect of dividends or return of capital over shares of any other series in the same class that are then outstanding.

(4) Subsection (3) does not apply to a right or privilege to exchange a share or shares for, or to convert a share or shares into, a share or shares of another class.

(5) If the directors exercise their authority under subsection (1)(b), they shall, before the issue of shares of the series, send to the Registrar articles of amendment in the prescribed form to designate a series of shares.

(6) On receipt of articles of amendment designating a series of shares, the Registrar shall issue a certificate of amendment in accordance with section 267.

(7) The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.

RSA 2000 cB‑9 s29;2005 c8 s13

Shareholder’s pre-emptive right

30(1) If the articles or a unanimous shareholder agreement so provides, no shares of a 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 the same price and on the same terms as those shares are to be offered to others.

(2) Notwithstanding that the articles provide the pre‑emptive right referred to in subsection (1), shareholders have no pre‑emptive right in respect of shares to be issued

(a) for a consideration other than money,

(b) as a share dividend, or

1981 cB‑15 s28

Options and other rights to acquire securities

31(1) A corporation may issue certificates, warrants or other evidences of conversion privileges, options or rights to acquire securities of the corporation, and shall set out their conditions

(a) in the certificates, warrants or other evidences, or

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

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

(3) If a corporation has granted privileges to convert any securities issued by the corporation into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, the corporation shall reserve and continue to reserve sufficient authorized shares to meet the exercise of those conversion privileges, options and rights.

1981 cB‑15 s29

Prohibited share holdings

32(1) Except as provided in subsections (2) and (2.1) and sections 33 to 36, a corporation

(a) shall not hold shares in itself or in its holding body corporate, and

(b) shall not permit any of its subsidiary bodies corporate to acquire shares of the corporation.

(2) Not more than 1% of the issued shares of each class of shares of a holding body corporate may be held by all the subsidiaries of the holding body corporate.

(2.1) A corporation may from time to time hold shares in itself, or a subsidiary of the corporation may from time to time hold shares in the corporation, for a maximum of 30 days.

(2.2) At the expiry of the 30‑day period set out in subsection (2.1), the corporation or the subsidiary of the corporation shall

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

(b) return the consideration received by the corporation or the subsidiary of the corporation to the person or persons who paid it, and

(c) cancel the entry for the consideration in the stated capital account of the corporation or the subsidiary of the corporation.

(2.3) Subsection (2) does not apply to shares held by a corporation or a subsidiary of a corporation under subsection (2.1).

(3) Subject to subsections (2) and (4), a corporation shall cause a subsidiary body corporate of the corporation that holds shares of the corporation to sell or otherwise dispose of those shares within 5 years from the date that

(a) the body corporate became a subsidiary of the corporation, or

(b) the corporation was continued under this Act.

(4) This section does not apply to shares acquired by the subsidiary body corporate before the commencement of this Act.

RSA 2000 cB‑9 s32;2005 c8 s14

Exception

33(1) A corporation may in the capacity of a legal representative hold shares in itself or in its holding body corporate unless it or the holding body corporate or a subsidiary of either of them has a beneficial interest in the shares.

(2) A corporation may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money.

(3) A corporation holding shares in itself or in its holding body corporate shall not vote or permit those shares to be voted unless the corporation

(a) holds the shares in the capacity of a legal representative, and

(b) has complied with section 153.

(4) A corporation shall not permit any of its subsidiary bodies corporate holding shares in the corporation to vote those shares or permit those shares to be voted unless the subsidiary body corporate satisfies the requirements of subsection (3).

RSA 2000 cB‑9 s33;2005 c8 s15

Acquisition by corporation of its own shares

34(1) Subject to subsection (2) and to its articles, a corporation may purchase or otherwise acquire shares issued by it.

(2) A corporation shall not make any payment to purchase or otherwise acquire shares issued by it if there are reasonable grounds for believing that

(a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due, or

(b) the realizable value of the corporation’s assets would after the payment be less than the aggregate of its liabilities and stated capital of all classes.

(3) Subject to any unanimous shareholder agreement, a corporation that is not a distributing corporation shall, within 30 days after the purchase of any of its issued shares, notify its shareholders in accordance with section 255

(a) of the number of shares it has purchased,

(b) of the names of the shareholders from whom it has purchased the shares,

(d) if the consideration was other than cash, of the nature of the consideration given and the value attributed to it, and

(e) of the balance, if any, remaining due to shareholders or shareholders from whom it purchased the shares.

(4) Subject to any unanimous shareholder agreement, a shareholder of a corporation other than a distributing corporation is entitled on request and without charge to a copy of the agreement between the corporation and any of its other shareholders under which the corporation has agreed to purchase, or has purchased, any of its own shares.

1981 cB‑15 s32

Alternative acquisition by corporation of its own shares

35(1) Notwithstanding section 34(2), a corporation may, subject to subsection (3) and to its articles, purchase or otherwise acquire shares issued by it to

(a) settle or compromise a debt or claim asserted by or against the corporation,

(b) eliminate fractional shares, or

(c) fulfil the terms of a non‑assignable agreement under which the corporation has an option or is obliged to purchase shares owned by a director, an officer or an employee of the corporation.

(2) Notwithstanding section 34(2), a corporation may purchase or otherwise acquire shares issued by it to

(a) satisfy the claim of a shareholder who dissents under section 191, or

(b) comply with an order under section 242.

(3) A corporation shall not make any payment to purchase or acquire under subsection (1) shares issued by it if there are reasonable grounds for believing that

(a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due, or

(b) the realizable value of the corporation’s assets would after the payment be less than the aggregate of its liabilities and the amounts required for payment on a redemption or in a liquidation of all shares the holders of which have the right to be paid prior to the holders of the shares to be purchased or acquired.

(4) For the purposes of this section and sections 36(2), 38(3), 43, 185(2)(a) and 191(20), “liabilities” does not include the stated capital amount attributed to, or the amount payable on redemption or in liquidation in respect of, any shares of the corporation.

RSA 2000 cB‑9 s35;2005 c8 s16

Redemption of shares

36(1) Notwithstanding section 34(2) or 35(3), a corporation may, subject to subsection (2) and to its articles, purchase or redeem any redeemable shares issued by it at prices not exceeding the redemption price of those shares stated in the articles or calculated according to a formula stated in the articles.

(2) A corporation shall not make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that

(a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due, or

(b) the realizable value of the corporation’s assets would after the payment be less than the aggregate of

(i) its liabilities, and

(ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a redemption or in a liquidation, rateably with or prior to the holders of the shares to be purchased or redeemed.

1981 cB‑15 s34

Donated and escrowed shares

37(1) A corporation may accept from any shareholder a share of the corporation

(a) that is surrendered to it as a gift, or

(b) that has been held in escrow pursuant to an escrow agreement required by the Executive Director and that is surrendered pursuant to that agreement.

(2) The corporation may not extinguish or reduce a liability in respect of an amount unpaid on a share surrendered under subsection (1)(a) except in accordance with section 38.

1981 cB‑15 s35;1988 c7 s3;1995 c28 s64

Other reduction of stated capital

38(1) Subject to subsection (3), a corporation may by special resolution reduce its stated capital for any purpose including, without limiting the generality of the foregoing, the purpose of

(a) extinguishing or reducing a liability in respect of an amount unpaid on any share,

(b) distributing to the holders of the issued shares of any class or series of shares an amount not exceeding the stated capital of the class or series, and

(2) A special resolution under this section shall specify the capital account or accounts from which the reduction of stated capital effected by the special resolution is to be deducted.

(3) A corporation shall not reduce its stated capital for any purpose, other than the purpose mentioned in subsection (1)(c), if there are reasonable grounds for believing that

(a) the corporation is, or would after the reduction be, unable to pay its liabilities as they become due, or

(b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities.

(4) A creditor of a corporation is entitled to apply to the Court for an order compelling a shareholder or other recipient

(a) to pay to the corporation an amount equal to any liability of the shareholder that was extinguished or reduced contrary to this section, or

(b) to pay or deliver to the corporation any money or property that was paid or distributed to the shareholder or other recipient as a consequence of a reduction of capital made contrary to this section.

(5) An action to enforce a liability imposed by this section may not be commenced after 2 years from the date of the action complained of.

(6) This section does not affect any liability that arises under section 118.

1981 cB‑15 s36

Adjustment of stated capital account

39(1) On a purchase, redemption or other acquisition by a corporation under section 34, 35, 36, 46, 191 or 242(3)(g) of shares or fractions of shares issued by it, the corporation shall deduct from the stated capital account maintained for the class or series of shares purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares or fractions of shares of that class or series purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

(2) A corporation shall deduct the amount of a payment made by the corporation to a shareholder under section 242(3)(h) from the stated capital account maintained for the class or series of shares in respect of which the payment was made.

(3) A corporation shall adjust its stated capital account or accounts in accordance with a special resolution referred to in section 38(2).

(4) On a conversion or a change under section 173, 192, 193 or 242 of issued shares of a corporation into shares of another class or series, the corporation shall

(a) deduct from the stated capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, divided by the number of issued shares of that class or series immediately before the conversion or change, and

(b) add the result obtained under clause (a) and any additional consideration pursuant to the conversion or change to the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed.

(5) For the purposes of subsection (4) and subject to its articles, if a corporation issues 2 classes of shares and there is attached to each class a right to convert a share of the one class into a share of the other class and a share of one class is converted into a share of the other class, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of issued shares of both classes immediately before the conversion.

(6) Shares or fractions of shares issued by a corporation and purchased, redeemed or otherwise acquired by it shall either be cancelled or restored to the status of authorized but unissued shares.

(7) For the purposes of this section, a corporation holding shares in itself as permitted by section 33(1) and (2) is deemed not to have purchased, redeemed or otherwise acquired those shares.

(8) Shares issued by a corporation and converted pursuant to their terms or changed under section 173, 192, 193 or 242 into shares of another class or series shall become issued shares of the class or series of shares into which the shares have been converted or changed.

(9) If issued shares of a class or series have become, pursuant to subsection (8), issued shares of another class or series, the number of unissued shares of the first‑mentioned class or series must, unless the articles of amendment or reorganization otherwise provide, be increased by the number of shares that, pursuant to subsection (8), became shares of another class or series.

1981 cB‑15 s37

Repayment, acquisition and reissue of debt obligations

40(1) Debt obligations issued, pledged, hypothecated or deposited by a corporation are not redeemed by reason only that the indebtedness evidenced by the debt obligations or in respect of which the debt obligations are issued, pledged, hypothecated or deposited is repaid, and those obligations remain obligations of the corporation until they are discharged.

(2) Debt obligations issued by a corporation and purchased, redeemed or otherwise acquired by it may be cancelled or, subject to any applicable trust indenture or other agreement, may be reissued, pledged or hypothecated to secure any obligation of the corporation then existing or thereafter incurred, and any such acquisition and reissue, pledge or hypothecation is not a cancellation of the debt obligations.

1981 cB‑15 s37.1;1983 c20 s6

Enforceability of contract against corporation

41(1) A contract with a corporation providing for the purchase by it of shares of the corporation is specifically enforceable against the corporation except to the extent that the corporation cannot perform the contract without being in breach of section 34 or 35.

(2) In an action brought on a contract referred to in subsection (1), the corporation has the burden of proving that performance of the contract is prevented by section 34 or 35.

(3) Until the corporation has fully performed a contract referred to in subsection (1), the other party to that contract retains the status of a claimant and is entitled to be paid as soon as the corporation is lawfully able to do so or, in liquidation, to be ranked subordinate to the rights of creditors and to the rights of any class of shareholders whose rights were in priority to the rights given to the class of shares that the claimant contracted to sell to the corporation, but in priority to the rights of the other shareholders.

1981 cB‑15 s38

Commission on sale of shares

42 The directors may authorize the corporation to pay a reasonable commission to any person in consideration of the person’s purchasing or agreeing to purchase shares of the corporation from the corporation or from any other person, or procuring or agreeing to procure purchasers for shares of the corporation.

1981 cB‑15 s39

Dividends

43 A corporation shall not declare or pay a dividend if there are reasonable grounds for believing that

(a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due, or

(b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

1981 cB‑15 s40

Form of dividend

44(1) A corporation may pay a dividend by issuing fully paid shares of the corporation and, subject to section 43, a corporation may pay a dividend in money or property.

(2) If shares of a corporation are issued in payment of a dividend, the directors may add all or part of the value of those shares to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend.

RSA 2000 cB‑9 s44;2005 c8 s17

Financial assistance

45(1) In this section, “financial assistance” means financial assistance by means of a loan, guarantee or otherwise.

(2) A corporation may give financial assistance to any person for any purpose.

(3) Subject to subsection (4), a corporation must disclose to its shareholders, in accordance with the regulations, financial assistance that the corporation gives to

(a) a shareholder or director of the corporation or of an affiliated corporation,

(b) an associate of a shareholder or director of the corporation or of an affiliated corporation, or

(c) any person for the purpose of or in connection with a purchase of a share issued or to be issued by the corporation or an affiliated corporation.

(4) A corporation is not required to disclose to its shareholders financial assistance that it gives

(a) to any person in the ordinary course of business if the lending of money is part of the ordinary business of the corporation,

(b) to any person on account of expenditures incurred or to be incurred on behalf of the corporation,

(d) to a subsidiary body corporate of the corporation,

(e) to employees of the corporation or any of its affiliates

(i) to enable them to purchase or erect or to assist them in purchasing or erecting living accommodation for their own occupation, or

(ii) in accordance with a plan for the purchase of shares of the corporation or any of its affiliates to be held by a trustee,

(f) to any person if all the shareholders have consented to giving the financial assistance.

(5) A contract made by a corporation in contravention of this section may be enforced by the corporation or by a lender for value in good faith without notice of the contravention.

1981 cB‑15 s42;2000 c10 s2

Shareholder immunity

46(1) The shareholders of a corporation are not, as shareholders, liable for any liability, act or default of the corporation except under section 38(4), 146(7) or 227(4) or Part 2.1.

(2) The articles may provide that the corporation has a lien on a share registered in the name of a shareholder or the shareholder’s legal representative for a debt of that shareholder to the corporation, including an amount unpaid in respect of a share issued by a body corporate on the date that it was continued under this Act.

(3) A corporation may enforce a lien referred to in subsection (2) in accordance with its bylaws.

RSA 2000 cB‑9 s46;2005 c8 s18;2006 cS‑4.5 s106

Part 6
Security Certificates,
Registers and Transfers

Division 1
Interpretation and General

Transfers of securities

47 Except as otherwise provided in this Act and the Civil Enforcement Act, the transfer or transmission of a security is governed by the Securities Transfer Act.

RSA 2000 cB‑9 s47;2006 cS‑4.5 s106

Security certificates

48(1) A security holder is entitled at the security holder’s option to a security certificate that complies with this Act or a non‑transferable written acknowledgment of the security holder’s right to obtain a security certificate from a corporation in respect of the securities of that corporation held by the security holder.

(2) A corporation may charge a fee in an amount not exceeding the maximum amount prescribed in the regulations for a security certificate issued in respect of a transfer.

(3) A corporation is not required to issue more than one security certificate in respect of securities held jointly by several persons, and delivery of a certificate to one of several joint holders is sufficient delivery to all.

(4) A security certificate must be signed by at least one director or officer of the corporation or by or on behalf of a registrar, transfer agent or branch transfer agent of the corporation or by a trustee who certifies it in accordance with a trust indenture.

(5) Any signatures required on a security certificate may be printed or otherwise mechanically reproduced on it.

(6) If a security certificate contains a printed or mechanically reproduced signature of a person, the corporation may issue the security certificate, notwithstanding that the person has ceased to be a director or an officer of the corporation, and the security certificate is as valid as if the person were a director or an officer at the date of its issue.

(7) There shall be stated legibly on the face of each share certificate issued by a corporation

(a) the name of the corporation,

(b) the words “Incorporated under the Business Corporations Act”,

(d) the number and class of shares and the designation of any series that the certificate represents.

(8) Repealed 2006 cS‑4.5 s106.

(9) A distributing corporation whose shares are held by more than one person shall not restrict the transfer of its shares except by way of a constraint permitted under section 174.

(10) There shall be stated legibly on a share certificate issued by a corporation that is authorized to issue shares of more than one class or series

(a) the rights, privileges, restrictions and conditions attached to the shares of each class and series that exists when the share certificate is issued, or

(b) that the class or series of shares that it represents has rights, privileges, restrictions or conditions attached to it and that the corporation will furnish to a shareholder, on demand and without charge, a full copy of the text of

(i) the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series insofar as they have been fixed by the directors, and

(ii) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series.

(11) If a share certificate issued by a corporation contains the statement mentioned in subsection (10)(b), the corporation shall furnish to a shareholder, on demand and without charge, a full copy of the text of

(a) the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series insofar as they have been fixed by the directors, and

(b) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series.

(12) A corporation may issue a certificate for a fractional share or may issue in its place scrip certificates in a form that entitles the holder to receive a certificate for a full share by exchanging scrip certificates aggregating a full share.

(13) The directors may attach conditions to any scrip certificates issued by a corporation, including conditions that

(a) the scrip certificates become void if they are not exchanged for a share certificate representing a full share before a specified date, and

(b) any shares for which those scrip certificates are exchangeable may, notwithstanding any pre‑emptive right, be issued by the corporation to any person and the proceeds of those shares distributed rateably to the holders of the scrip certificates.

(14) A holder of a fractional share issued by a corporation is not entitled to exercise voting rights or to receive a dividend in respect of the fractional share, unless

(a) the fractional share results from a consolidation of shares, or

(b) the articles of the corporation otherwise provide.

(15) A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate.

RSA 2000 cB‑9 s48;2005 c8 s19;2006 cS‑4.5 s106

Securities records

49(1) A corporation shall maintain a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series of securities

(a) the names, alphabetically arranged, and the latest known address of each person who is or has been a security holder,

(b) the number of securities held by each security holder, and

(2) A corporation shall keep the information entered in the register referred to in subsection (1) for the period of time prescribed in the regulations.

(3) A corporation may appoint

(a) one or more trust corporations as its agent or agents to maintain a central securities register or registers, and

(b) an agent or agents to maintain a branch securities register or registers.

(4) Registration of the issue or transfer of a security in the central securities register or in a branch securities register is complete and valid registration for all purposes.

(5) A branch securities register shall contain particulars of securities issued or transferred at that branch.

(6) Particulars of each issue or transfer of a security registered in a branch securities register shall also be kept in the corresponding central securities register.

(7) Neither a corporation, nor its agent nor a trustee defined in section 81(1) is required to produce

(a) a cancelled security certificate in registered form, an instrument referred to in section 31(1) that is cancelled or a like cancelled instrument in registered form 6 years after the date of its cancellation,

(b) a cancelled security certificate in bearer form or an instrument referred to in section 31(1) that is cancelled or a like cancelled instrument in bearer form after the date of its cancellation, or

(c) an instrument referred to in section 31(1) or a like instrument, irrespective of its form, after the date of its expiry.

1981 cB‑15 s46;1987 c15 s8;1991 cL‑26.5 s335(7)

Dealings with registered holders and transmission on death

50(1) A corporation or a trustee as defined in section 81(1) may, subject to sections 133, 134 and 137 and the Civil Enforcement Act, treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payments in respect of the security, and otherwise to exercise all the rights and powers of an owner of the security.

(2) Notwithstanding subsection (1), but subject to a unanimous shareholder agreement, a corporation whose articles restrict the right to transfer its securities shall, and any other corporation may, treat a person as a registered security holder entitled to exercise all the rights of the security holder the person represents if that person furnishes evidence as described in section 87(3) of the Securities Transfer Act to the corporation that the person is

(a) the executor, administrator, heir or legal representative of the heirs of the estate of a deceased security holder,

(b) a guardian, committee, trustee, curator or tutor representing a registered security holder who is an infant, an incompetent person or a missing person, or

(3) If a person on whom the ownership of a security devolves by operation of law, other than a person described in subsection (2), furnishes proof of the person’s authority to exercise rights or privileges in respect of a security of the corporation that is not registered in the person’s name, the corporation shall treat that person as entitled to exercise those rights or privileges.

(4) A corporation is not required to inquire into the existence of, or see to the performance or observance of, any duty owed to a third person by a registered holder of any of its securities or by anyone whom it treats, as permitted or required by this section, as the owner or registered holder of the securities.

(5) If an infant exercises any rights of ownership in the securities of a corporation, no subsequent repudiation or avoidance is effective against the corporation.

(6) A corporation shall treat as owner of a security the survivors of persons to whom the security was issued if

(a) it receives proof satisfactory to it of the death of any joint holder of the security, and

(b) the security provides that the persons to whom the security was issued are joint holders with right of survivorship.

(7) Subject to any applicable law relating to the collection of taxes, a person referred to in subsection (2)(a) is entitled to become a registered holder or to designate a registered holder, if the person deposits with the corporation or its transfer agent

(a) the original grant of probate or of letters of administration, or a copy of it certified to be a true copy by

(i) the court that granted the probate or letters of administration,

(ii) a trust company incorporated under the laws of Canada or a province or territory, or

(iii) a lawyer or notary acting on behalf of the person referred to in subsection (2)(a),

(b) in the case of transmission by notarial will in the Province of Quebec, a copy of the will authenticated pursuant to the laws of that province,

together with

(c) an affidavit, statutory declaration or declaration of transmission made by a person referred to in subsection (2)(a), stating the particulars of the transmission, and

(d) the security certificate that was owned by the deceased holder

(i) in the case of a transfer to a person referred to in subsection (2)(a), with or without the endorsement of that person, and

(ii) in the case of a transfer to any other person, endorsed in accordance with section 29 of the Securities Transfer Act,

and accompanied with any assurance the corporation may require under section 87 of the Securities Transfer Act.

(8) Notwithstanding subsection (7), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a legal representative of the deceased holder is entitled, subject to any applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder, if the legal representative deposits with the corporation or its transfer agent

(a) the security certificate that was owned by the deceased holder, and

(b) reasonable proof of the governing laws, of the deceased holder’s interest in the security and of the right of the legal representative or the person the legal representative designates to become the registered holder.

(9) Deposit of the documents required by subsection (7) or (8) empowers a corporation or its transfer agent to record in a securities register the transmission of a security from the deceased holder to a person referred to in subsection (2)(a) or to any person that the person referred to in subsection (2)(a) may designate and, subsequently, to treat the person who thus becomes a registered holder as the owner of the security.

RSA 2000 cB‑9 s50;2006 cS‑4.5 s106

Overissue

51(1) When there has been an overissue within the meaning of the Securities Transfer Act and the corporation subsequently amends its articles, or a trust indenture to which it is a party, to increase its authorized securities to a number equal to or in excess of the number of securities previously authorized plus the amount of the securities overissued, the securities so overissued are valid from the date of their issue.

(2) Subsection (1) does not apply if the issuer has purchased and delivered a security in accordance with section 67(2) or (3) of the Securities Transfer Act.

(3) A purchase or payment in accordance with section 67(2) or (3) of the Securities Transfer Act is not a purchase or payment to which section 34, 35, 36 or 39 applies.

RSA 2000 cB‑9 s51;2006 cS‑4.5 s106

52 to 80 Repealed 2006 cS‑4.5 s106.

Part 7
Corporate Borrowing

Division 1
Trust Indentures

Interpretation and application

81(1) In this Division,

(a) “event of default” means an event specified in a trust indenture on the occurrence of which

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

(ii) the principal, interest and other money payable under the trust indenture 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 that event for the giving of notice or the lapse of time or otherwise have been satisfied;

(b) “trustee” means any person appointed as trustee under the terms of a trust indenture to which a corporation is a party and includes any successor trustee;

(c) “trust indenture” means any deed, indenture or other instrument, including any supplement or amendment to it, 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 issued under it.

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

1981 cB‑15 s77

Conflict of interest

82(1) No person shall be appointed as trustee if there is a material conflict of interest between the person’s role as trustee and the person’s role in any other capacity.

(2) A trustee shall, within 90 days after the trustee becomes aware that a material conflict of interest exists,

(a) eliminate the conflict of interest, or

(b) resign from office.

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

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

1981 cB‑15 s78

Qualification of trustee

83 A trustee, or at least one of the trustees if more than one is appointed, shall be a trust corporation.

1981 cB‑15 s79;1991 cL‑26.5 s335(7)

List of security holders

84(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 15 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 of those holders, 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.

(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).

(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.

(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 of the body corporate, and

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

(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

(6) A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

1981 cB‑15 s80

Evidence of compliance

85(1) An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall before the doing of any act under clause (a), (b) or (c), furnish the trustee with evidence of compliance with the conditions in the trust indenture relating to

(a) the issue, certification and delivery of debt obligations under the trust indenture,

(b) the release or release and substitution of property subject to a security interest constituted by the trust indenture, or

(2) On the demand of a trustee, the issuer or guarantor of debt obligations issued or to be issued under a trust indenture shall furnish the trustee with evidence of compliance with the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

1981 cB‑15 s81

Contents of declaration

86 Evidence of compliance as required by section 85 shall consist of

(a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that section have been complied with, and

(b) if the trust indenture requires compliance with conditions that are subject to review

(i) by legal counsel, an opinion of legal counsel that those conditions have been complied with, and

(ii) by an auditor or accountant, an opinion or report of the auditor of the issuer or guarantor, or any other accountant the trustee may select, that those conditions have been complied with.

1981 cB‑15 s82

Further evidence of compliance

87 The evidence of compliance referred to in section 86 shall include a statement by the person giving the evidence

(a) declaring that the person has read and understands the conditions of the trust indenture described in section 85,

(b) describing the nature and scope of the examination or investigation on which the person based the certificate, statement or opinion, and

(c) declaring that the person has made any examination or investigation that the person believes necessary to enable the person to make the statements or give the opinions contained or expressed in it.

1981 cB‑15 s83

Trustee may require evidence of compliance

88(1) On the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with evidence in any form the trustee may require as to compliance with any condition of the trust indenture relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

(2) At least once in each 12‑month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with a certificate that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars of the failure.

1981 cB‑15 s84

Notice of default

89 The trustee shall, within 30 days after the trustee becomes aware of its occurrence, give to the holders of debt obligations issued under a trust indenture, notice of every event of default arising under the trust indenture and continuing at the time that the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs the issuer or guarantor in writing.

1981 cB‑15 s85

Trustee’s duty of care

90 A trustee in exercising the trustee’s powers and discharging the trustee’s duties shall

(a) act honestly and in good faith with a view to the best interests of the holders of the debt obligations issued under the trust indenture, and

(b) exercise the care, diligence and skill of a reasonably prudent trustee.

1981 cB‑15 s86

Trustee’s reliance on statements

91 Notwithstanding section 90, a trustee is not liable if the trustee relies in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

1981 cB‑15 s87

No exculpation of trustee by agreement

92 No term of a trust indenture or of any agreement between

(a) a trustee and the holders of debt obligations issued under the trust indenture, or

(b) between the trustee and the issuer or guarantor

shall operate so as to relieve a trustee from the duties imposed on the trustee by section 90.

1981 cB‑15 s88

Part 8
Receivers and Receiver‑Managers

Functions of receiver

93 A receiver of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property, pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver is appointed, but, except to the extent permitted by the Court, the receiver may not carry on the business of the corporation.

1981 cB‑15 s89

Functions of receiver-manager

94 A receiver of a corporation may, if the receiver is also appointed receiver‑manager of the corporation, carry on any business of the corporation to protect the security interest of those on behalf of whom the receiver is appointed.

1981 cB‑15 s90

Directors’ powers during receivership

95 If a receiver‑manager is appointed by the Court or under an instrument, the powers of the directors of the corporation that the receiver‑manager is authorized to exercise may not be exercised by the directors until the receiver‑manager is discharged.

1981 cB‑15 s91

Court-appointed receiver or receiver-manager

96 A receiver or receiver‑manager appointed by the Court shall act in accordance with the directions of the Court.

1981 cB‑15 s92

Duty under debt obligation

97 A receiver or receiver‑manager appointed under an instrument shall act in accordance with that instrument and any direction of the Court made under section 99.

1981 cB‑15 s93

Duty of care

98 A receiver or receiver‑manager of a corporation appointed under an instrument shall

(a) act honestly and in good faith, and

(b) deal with any property of the corporation in the receiver’s or receiver‑manager’s possession or control in a commercially reasonable manner.

1981 cB‑15 s94

Powers of the Court

99 On an application by a receiver or receiver‑manager, whether appointed by the Court or under an instrument, or on an application by any interested person, the Court may make any order it thinks fit including, without limiting the generality of the foregoing, any or all of the following:

(a) an order appointing, replacing or discharging a receiver or receiver‑manager and approving the receiver’s or receiver‑manager’s accounts;

(b) an order determining the notice to be given to any person or dispensing with notice to any person;

(d) an order

(i) requiring the receiver or receiver‑manager, or a person by or on behalf of whom the receiver or receiver‑manager is appointed, to make good any default in connection with the receiver’s or receiver‑manager’s custody or management of the property and business of the corporation;

(ii) relieving any of those persons from any default on any terms the Court thinks fit;

(iii) confirming any act of the receiver or receiver‑manager;

(e) an order that the receiver or receiver‑manager make available to the applicant any information from the accounts of the receiver’s or receiver‑manager’s administration that the Court specifies;

(f) an order giving directions on any matter relating to the duties of the receiver or receiver‑manager.

1981 cB‑15 s95;1987 c15 s9

Duties of receiver and receiver-manager

100 A receiver or receiver‑manager shall

(a) immediately notify the Registrar of the receiver’s or receiver‑manager’s appointment or discharge,

(b) take into the receiver’s or receiver‑manager’s custody and control the property of the corporation in accordance with the Court order or instrument under which the receiver or receiver‑manager is appointed,

(c) open and maintain a bank account in the receiver’s or receiver‑manager’s name as receiver or receiver‑manager of the corporation for the money of the corporation coming under the receiver’s or receiver‑manager’s control,

(d) keep detailed accounts of all transactions carried out by the receiver or receiver‑manager as receiver or receiver‑manager,

(e) keep accounts of the receiver’s or receiver‑manager’s administration that must be available during usual business hours for inspection by the directors of the corporation,

(f) prepare at least once in every 6‑month period after the date of the receiver’s or receiver‑manager’s appointment financial statements of the receiver’s or receiver‑manager’s administration as far as is practicable in the form required by section 155, and, subject to any order of the Court, file a copy of them with the Registrar within 60 days after the end of each 6‑month period, and

(g) on completion of the receiver’s or receiver‑manager’s duties,

(i) render a final account of the receiver’s or receiver‑manager’s administration in the form adopted for interim accounts under clause (f),

(ii) send a copy of the final report to the Registrar who shall file it, and

(iii) send a copy of the final report to each director of the corporation.

1981 cB‑15 s96

Part 9
Directors and Officers

Directors

101(1) Subject to any unanimous shareholder agreement, the directors shall manage or supervise the management of the business and affairs of a corporation.

(2) A corporation shall have one or more directors but a distributing corporation whose shares are held by more than one person shall have not fewer than 3 directors, at least 2 of whom are not officers or employees of the corporation or its affiliates.

RSA 2000 cB‑9 s101;2005 c8 s20

Bylaws

102(1) Unless the articles, bylaws or a unanimous shareholder agreement otherwise provide, the directors may, by resolution, make, amend or repeal any bylaws that regulate the business or affairs of the corporation.

(2) The directors shall submit a bylaw, or an amendment or a repeal of a bylaw, made under subsection (1) to the shareholders at the next meeting of shareholders, and the shareholders may, by ordinary resolution, confirm, reject or amend the bylaw, amendment or repeal.

(3) A bylaw, or an amendment or a repeal of a bylaw, is effective from the date of the resolution of the directors under subsection (1) until it is confirmed, confirmed as amended or rejected by the shareholders under subsection (2) or until it ceases to be effective under subsection (4) and, if the bylaw is confirmed or confirmed as amended, it continues in effect in the form in which it was so confirmed.

(4) If a bylaw, or an amendment or a repeal of a bylaw, is rejected by the shareholders, or if the directors do not submit a bylaw, or an amendment or a repeal of a bylaw, to the shareholders as required under subsection (2), the bylaw, amendment or repeal ceases to be effective and no subsequent resolution of the directors to make, amend or repeal a bylaw having substantially the same purpose or effect is effective until it is confirmed or confirmed as amended by the shareholders.

(5) A shareholder entitled to vote at an annual meeting of shareholders may in accordance with section 136 make a proposal to make, amend or repeal a bylaw.

1981 cB‑15 s98

General borrowing powers

103(1) Unless the articles or bylaws of, or a unanimous shareholder agreement relating to, a corporation otherwise provide, the directors of a corporation may, without authorization of the shareholders,

(a) borrow money on the credit of the corporation,

(b) issue, reissue, sell or pledge debt obligations of the corporation,

(c) subject to section 45, give a guarantee on behalf of the corporation to secure performance of an obligation of any person, and

(d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the corporation, owned or subsequently acquired, to secure any obligation of the corporation.

(2) Notwithstanding sections 115(3) and 121(a), unless the articles or bylaws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the directors may, by resolution, delegate the powers referred to in subsection (1) to a director, a committee of directors or an officer.

1981 cB‑15 s98.1

Organization meeting

104(1) After issue of the certificate of incorporation, a meeting of the directors of the corporation shall be held at which the directors may

(a) make bylaws,

(b) adopt forms of security certificates and corporate records,

(d) appoint officers,

(e) appoint an auditor to hold office until the first annual meeting of shareholders,

(f) make banking arrangements, and

(g) transact any other business.

(2) Subsection (1) does not apply to a body corporate to which a certificate of amalgamation has been issued under section 185 or 187 or to which a certificate of continuance has been issued under section 188.

(3) An incorporator or a director may call the meeting of directors referred to in subsection (1) by giving not less than 5 days’ notice of the meeting to each director, stating the date, time and place of the meeting.

(4) A director may waive notice under subsection (3).

1981 cB‑15 s99

Qualifications of directors

105(1) The following persons are disqualified from being a director of a corporation:

(a) anyone who is less than 18 years of age;

(b) anyone who

(i) is a represented adult as defined in the Adult Guardianship and Trusteeship Act or is the subject of a certificate of incapacity that is in effect under the Public Trustee Act,

(ii) is a formal patient as defined in the Mental Health Act,

(iii) is the subject of an order under The Mentally Incapacitated Persons Act, RSA 1970 c232, appointing a committee of the person or estate, or both, or

(iv) has been found to be a person of unsound mind by a court elsewhere than in Alberta;

(d) a person who has the status of bankrupt.

(2) Unless the articles otherwise provide, a director of a corporation is not required to hold shares issued by the corporation.

(3) At least 1/4 of the directors of a corporation must be resident Canadians.

(4) Repealed 2005 c8 s21.

(5) A person who is elected or appointed a director is not a director unless

(a) the person was present at the meeting when the person was elected or appointed and did not refuse to act as a director, or

(b) if the person was not present at the meeting when the person was elected or appointed,

(i) the person consented to act as a director in writing before the person’s election or appointment or within 10 days after it, or

(ii) the person has acted as a director pursuant to the election or appointment.

(6) For the purpose of subsection (5), a person who is elected or appointed a director and refuses under subsection (5)(a) or fails to consent or act under subsection (5)(b) is deemed not to have been elected or appointed a director.

RSA 2000 cB‑9 s105;2005 c8 s21;2008 cA‑4.2 s121

Election and appointment of directors

106(1) At the time of sending articles of incorporation, the incorporators shall send to the Registrar a notice of directors in the prescribed form and the Registrar shall file the notice.

(2) Each director named in the notice referred to in subsection (1) holds office from the issue of the certificate of incorporation until the first meeting of shareholders.

(3) Subject to subsection (9)(a) and section 107, shareholders of a corporation shall, by ordinary resolution at the first meeting of shareholders and at each succeeding annual meeting at which an election of directors is required, elect directors to hold office for a term expiring not later than the close of the next annual meeting of shareholders following the election.

(4) If the articles so provide, the directors may, between annual general meetings, appoint one or more additional directors of the corporation to serve until the next annual general meeting, but the number of additional directors shall not at any time exceed 1/3 of the number of directors who held office at the expiration of the last annual meeting of the corporation.

(5) It is not necessary that all directors elected at a meeting of shareholders hold office for the same term.

(6) A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following the director’s election.

(7) Notwithstanding subsections (2), (3) and (6), if directors are not elected at a meeting of shareholders, the incumbent directors continue in office until their successors are elected.

(8) If a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles by reason of the disqualification or death of any candidate, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.

(9) The articles or a unanimous shareholder agreement may provide for the election or appointment of a director or directors

(a) for terms expiring not later than the close of the 3rd annual meeting of shareholders following the election, and

(b) by creditors or employees of the corporation or by a class or classes of those creditors or employees.

1981 cB‑15 s101;1983 c20 s11

Cumulative voting

107 If the articles provide for cumulative voting,

(a) the articles shall require a fixed number and not a minimum and maximum number of directors,

(b) each shareholder entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected, and the shareholder may cast all those votes in favour of one candidate or distribute them among the candidates in any manner,

(c) a separate vote of shareholders shall be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting 2 or more candidates to be elected by a single resolution,

(d) if a shareholder votes for more than one candidate without specifying the distribution of the shareholder’s votes among the candidates, the shareholder is deemed to have distributed the votes equally among the candidates for whom the shareholder voted,

(e) if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled,

(f) each director ceases to hold office at the close of the first annual meeting of shareholders following the director’s election,

(g) a director may not be removed from office if the votes cast against the director’s removal would be sufficient to elect the director, and those votes could be voted cumulatively, at an election at which the same total number of votes were cast and the number of directors required by the articles were then being elected, and

(h) the number of directors required by the articles may not be decreased if the votes cast against the motion to decrease would be sufficient to elect a director, and those votes could be voted cumulatively, at an election at which the same total number of votes were cast and the number of directors required by the articles were then being elected.

1981 cB‑15 s102

Ceasing to hold office

108(1) A director of a corporation ceases to hold office when

(a) the director dies or resigns,

(b) the director is removed in accordance with section 109, or

(2) A resignation of a director becomes effective at the time a written resignation is sent to the corporation, or at the time specified in the resignation, whichever is later.

1981 cB‑15 s103

Removal of directors

109(1) Subject to section 107(g) or a unanimous shareholder agreement, the shareholders of a corporation may by ordinary resolution at a special meeting remove any director or directors from office.

(2) If the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors, a director so elected may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series.

(3) Subject to section 107(b) to (e), a vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed or, if not so filled, may be filled under section 111.

(4) A director elected or appointed under section 106(9) may be removed only by those persons having the power to elect or appoint that director.

1981 cB‑15 s104

Attendance at meetings

110(1) A director of a corporation is entitled to receive notice of and to attend and be heard at every meeting of shareholders.

(2) A director who

(a) resigns,

(b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing the director from office, or

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire,

is entitled to submit to the corporation a written statement giving the reasons for the director’s resignation or the reasons why the director opposes any proposed action or resolution.

(3) A corporation shall forthwith send a copy of the statement referred to in subsection (2)

(a) to every shareholder entitled to receive notice of any meeting referred to in subsection (1) and,

(b) if the corporation is a distributing corporation, to the director

unless the statement is included in or attached to a management proxy circular required by section 150.

(4) No corporation or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (3).

1981 cB‑15 s105

Filling vacancies

111(1) Notwithstanding section 114(3), a quorum of directors may, subject to subsections (3) and (4), fill a vacancy among the directors, except a vacancy resulting from an increase in the number or minimum number of directors or from a failure to elect the number or minimum number of directors required by the articles.

(2) If there is not a quorum of directors, or if there has been a failure to elect the number or minimum number of directors required by the articles, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder.

(3) If the holders of any class or series of shares of a corporation or any other class of persons have an exclusive right to elect one or more directors and a vacancy occurs among those directors,

(a) subject to subsection (4), the remaining directors elected by that class or series may fill the vacancy except a vacancy resulting from an increase in the number or minimum number of directors for that class or series or from a failure to elect the number or minimum number of directors for that class or series, or

(b) if there are no such remaining directors, any holder of shares of that class or series or any member of that other class of persons, as the case may be, may call a meeting of those shareholders or those persons for the purpose of filling the vacancy.

(4) The articles or a unanimous shareholder agreement may provide that a vacancy among the directors shall only be filled by

(a) a vote of the shareholders,

(b) a vote of the holders of any class or series of shares having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by that class or series, or

(c) the vote of any class of persons having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by that class of persons.

(5) A director appointed or elected to fill a vacancy holds office for the unexpired term of the director’s predecessor.

1981 cB‑15 s106

Change in number of directors

112(1) The shareholders of a corporation may amend the articles to increase or, subject to section 107(h), to decrease the number of directors or the minimum or maximum number of directors, but no decrease shall shorten the term of an incumbent director.

(2) If the shareholders adopt an amendment to the articles of a corporation to increase the number or minimum number of directors, the shareholders may, at the meeting at which they adopt the amendment, elect an additional number of directors authorized by the amendment, and for that purpose, notwithstanding sections 179(1) and 267(3), on the issue of a certificate of amendment the articles are deemed to be amended as of the date on which the shareholders adopt the amendment to the articles.

1981 cB‑15 s107

Notice of change of directors

113(1) Within 15 days after a change is made among the directors, a corporation shall send to the Registrar a notice in the prescribed form setting out the change and the Registrar shall file the notice.

(1.1) Within 15 days after a director changes his or her address, the director or the corporation shall send to the Registrar a notice in the prescribed form setting out the change, and the Registrar shall file the notice.

(2) Any interested person, or the Registrar, may apply to the Court for an order to require a corporation or a director, as the case may be, to comply with this section, and the Court may so order and make any further order it thinks fit.

RSA 2000 cB‑9 s113;2005 c8 s22

Meetings of directors

114(1) Unless the articles otherwise provide, the directors may meet at any place and on any notice the bylaws require.

(2) Subject to the articles or bylaws, a majority of the number of directors appointed constitutes a quorum at any meeting of directors, and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

(3) Directors, other than directors of a corporation referred to in section 105(4), shall not transact business at a meeting of directors unless at least 1/4 of the directors present are resident Canadians.

(4) Notwithstanding subsection (3), directors may transact business at a meeting of directors when fewer than 1/4 of the directors present are resident Canadians if

(a) a resident Canadian director who is unable to be present approves in writing or by electronic means, telephone or other communication device the business transacted at the meeting, and

(b) the number of resident Canadian directors present at the meeting, together with any resident Canadian director who gives that director’s approval under clause (a), totals at least 1/4 of the directors present at the meeting.

(5) A notice of a meeting of directors shall specify any matter referred to in section 115(3) that is to be dealt with at the meeting but, unless the bylaws otherwise provide, need not specify the purpose or the business to be transacted at the meeting.

(6) A director may in any manner waive a notice of a meeting of directors, and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except when a director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called.

(7) Notice of an adjourned meeting of directors is not required to be given if the date, time and place of the adjourned meeting is announced at the original meeting.

(8) If a corporation has only one director, that director may constitute a meeting.

(9) A director may participate in a meeting of directors or of a committee of directors by electronic means, telephone or other communication facilities that permit all persons participating in the meeting to hear each other if

(a) the bylaws so provide, or

(b) subject to the bylaws, all the directors of the corporation consent,

and a director participating in a meeting by those means is deemed for the purposes of this Act to be present at that meeting.

RSA 2000 cB‑9 s114;2005 c8 s23

Delegation to managing director or committee

115(1) The directors of a corporation may appoint from their number a managing director, who must be a resident Canadian, or a committee of directors and delegate to the managing director or committee any of the powers of the directors.

(2) If the directors of a corporation, other than a corporation referred to in section 105(4), appoint a committee of directors, at least 1/4 of the members of the committee must be resident Canadians.

(3) Notwithstanding subsection (1), no managing director and no committee of directors has authority to

(a) submit to the shareholders any question or matter requiring the approval of the shareholders,

(b) fill a vacancy among the directors or in the office of auditor,

(b.1) appoint additional directors,

(d) declare dividends,

(e) purchase, redeem or otherwise acquire shares issued by the corporation, except in the manner and on the terms authorized by the directors,

(f) pay a commission referred to in section 42,

(g) approve a management proxy circular referred to in Part 12,

(h) approve any financial statements referred to in section 155, or

(i) adopt, amend or repeal bylaws.

RSA 2000 cB‑9 s115;2005 c8 s24

Validity of acts of directors, officers and committees

116(1) An act of a director or officer is valid notwithstanding an irregularity in the director’s or officer’s election or appointment or a defect in the director’s or officer’s qualification.

(2) An act of the directors or a committee of directors is valid notwithstanding non‑compliance with section 105(3) or (4), 114(3) or 115(2).

1981 cB‑15 s111

Resolution instead of meeting

117(1) Subject to the articles, the bylaws or a unanimous shareholder agreement, a resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors, is as valid as if it had been passed at a meeting of directors or committee of directors.

(2) A resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of directors, and signed by all the directors entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of directors.

(3) A copy of every resolution referred to in subsection (1) must be kept with the minutes of the proceedings of the directors or committee of directors.

1981 cB‑15 s112;1987 c15 s13

Liability of directors and others

118(1) Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under section 27 for a consideration other than money are jointly and severally liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution.

(2) Subsection (1) does not apply if the shares, on allotment, are held in escrow pursuant to an escrow agreement required by the Executive Director and are surrendered for cancellation pursuant to that agreement.

(3) Directors of a corporation who vote for or consent to a resolution authorizing

(a) a purchase, redemption or other acquisition of shares contrary to section 34, 35 or 36,

(b) a commission on a sale of shares not provided for in section 42,

(d) financial assistance contrary to section 45,

(e) a payment of an indemnity contrary to section 124, or

(f) a payment to a shareholder contrary to section 191 or 242,

are jointly and severally liable to restore to the corporation any amounts so paid and the value of any property so distributed, and not otherwise recovered by the corporation.

(4) A director who has satisfied a judgment rendered under this section is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded.

(5) If money or property of a corporation was paid or distributed to a shareholder or other recipient contrary to section 34, 35, 36, 42, 43, 45, 124, 191 or 242, the corporation, any director or shareholder of the corporation, or any person who was a creditor of the corporation at the time of the payment or distribution, is entitled to apply to the Court for an order under subsection (6).

(6) On an application under subsection (5), the Court may, if it is satisfied that it is equitable to do so, do any or all of the following:

(a) order a shareholder or other recipient to restore to the corporation any money or property that was paid or distributed to the shareholder or other recipient contrary to section 34, 35, 36, 42, 43, 45, 124, 191 or 242;

(b) order the corporation to return or issue shares to a person from whom the corporation has purchased, redeemed or otherwise acquired shares;

(7) A director is not liable under subsection (1) if the director proves that the director did not know and could not reasonably have known that the share was issued for a consideration less than the fair equivalent of the money that the corporation would have received if the share had been issued for money.

(8) A director is not liable under subsection (3)(d) if the director proves that the director did not know and could not reasonably have known that the financial assistance was given contrary to section 45.

(9) An action to enforce a liability imposed by this section may not be commenced after 2 years from the date of the resolution authorizing the action complained of.

1981 cB‑15 s113;1988 c7 s3;1995 c28 s64

Directors’ liability for wages

119(1) Directors of a corporation are jointly and severally liable to employees of the corporation for all debts not exceeding 6 months wages payable to each employee for services performed for the corporation while they are directors.

(2) Subsection (1) does not render a director liable for debts for wages

(a) if the director believes on reasonable grounds that the corporation can pay the debts as they become due, or

(b) if the debts are payable to employees for services performed while the property of the corporation is under the control of a receiver, receiver‑manager or liquidator.

(3) A director is not liable under subsection (1) unless

(a) the corporation has been sued for the debt within 6 months after it has become due and execution has been returned unsatisfied in whole or in part,

(b) the corporation has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proved within 6 months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution, or

(c) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy and Insolvency Act (Canada) and a claim for the debt has been proved within 6 months after the date of the assignment or receiving order.

(4) No action may be brought against a director under this section more than 2 years after the date on which the director ceased to be a director.

(5) If execution referred to in subsection (3)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

(6) If a director pays a debt referred to in subsection (1) that is proved in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to, and if a judgment has been obtained, the director is entitled to an assignment of the judgment.

(7) A director who has satisfied a claim under this section is entitled to contribution from the other directors who were liable for the claim.

1981 cB‑15 s114;1987 c15 s14;1994 c23 s51

Disclosure by directors and officers in relation to contracts

120(1) A director or officer of a corporation who

(a) is a party to a material contract or material transaction or proposed material contract or proposed material transaction with the corporation, or

(b) is a director or an officer of or has a material interest in any person who is a party to a material contract or material transaction or proposed material contract or proposed material transaction with the corporation,

shall disclose in writing to the corporation or request to have entered in the minutes of meetings of directors the nature and extent of the director’s or officer’s interest.

(2) Subject to subsection (3), the disclosure required by subsection (1) shall be made, in the case of a director,

(a) at the meeting at which a proposed contract or transaction is first considered,

(b) if the director was not interested in a proposed contract or transaction at the time of the meeting referred to in clause (a), at the first meeting after the director becomes so interested,

(c) if the director becomes interested after a contract or transaction is made, at the first meeting after the director becomes so interested, or

(d) if a person who is interested in a contract or transaction later becomes a director, at the first meeting after the director becomes a director.

(3) Where a proposed contract or transaction is dealt with by resolution under section 117 instead of at a meeting, the disclosure that would otherwise be required to be made in accordance with subsection (2)(a) or (b) shall be made

(a) forthwith on receipt of the resolution, or

(b) if the director was not interested in the proposed contract or transaction at the time of receipt of the resolution, at the first meeting after the director becomes so interested.

(4) The disclosure required by subsection (1) shall be made, in the case of an officer who is not a director,

(a) forthwith after the officer becomes aware that the contract or transaction or proposed contract or transaction is to be considered or has been considered at a meeting of directors,

(b) if the officer becomes interested after a contract or transaction is made, forthwith after the officer becomes so interested, or

(c) if a person who is interested in a contract or transaction later becomes an officer, forthwith after the officer becomes an officer.

(5) If a material contract or material transaction or proposed material contract or proposed material transaction is one that, in the ordinary course of the corporation’s business, would not require approval by the directors or shareholders, a director or officer shall disclose in writing to the corporation, or request to have entered in the minutes of meetings of directors, the nature and extent of the director’s or officer’s interest forthwith after the director or officer becomes aware of the contract or transaction or proposed contract transaction.

(6) A director referred to in subsection (1) shall not vote on any resolution to approve the contract or transaction unless the contract or transaction is

(a) an arrangement by way of security for money lent to or obligations undertaken by the director, or by a body corporate in which the director has an interest, for the benefit of the corporation or an affiliate,

(b) a contract or transaction relating primarily to the director’s remuneration as a director, officer, employee or agent of the corporation or an affiliate,

(d) a contract or transaction with an affiliate.

(7) For the purpose of this section, a general notice to the directors by a director or officer is a sufficient disclosure of interest in relation to any contract or transaction made between the corporation and a person in which the director has a material interest or of which the director is a director or officer if

(a) the notice declares the director is a director or officer of or has a material interest in the person and is to be regarded as interested in any contract or transaction made or to be made by the corporation with that person, and states the nature and extent of the director’s interest,

(b) at the time disclosure would otherwise be required under subsection (2), (3), (4) or (5), as the case may be, the extent of the director’s interest in that person is not greater than that stated in the notice, and

(c) the notice is given within the 12‑month period immediately preceding the time at which disclosure would otherwise be required under subsection (2), (3), (4) or (5), as the case may be.

(8) If a material contract or material transaction is made between a corporation and one or more of its directors or officers, or between a corporation and another person of which a director or officer of the corporation is a director or officer or in which the director or officer has a material interest,

(a) the contract or transaction is neither void nor voidable by reason only of that relationship, or by reason only that a director with an interest in the contract or transaction is present at or is counted to determine the presence of a quorum at a meeting of directors or committee of directors that authorized the contract or transaction, and

(b) a director or officer or former director or officer of the corporation to whom a profit accrues as a result of the making of the contract or transaction is not liable to account to the corporation for that profit by reason only of holding office as a director or officer,

if the director or officer disclosed the director’s or officer’s interest in accordance with subsection (2), (3), (4), (5) or (7), as the case may be, and the contract or transaction was approved by the directors or the shareholders and it was reasonable and fair to the corporation at the time it was approved.

(8.1) Even if the conditions of subsection (8) are not met, a director or officer acting honestly and in good faith is not accountable to the corporation or to its shareholders for any profit realized from a material contract or material transaction for which disclosure is required under subsection (1), and the material contract or material transaction is not void or voidable by reason only of the interest of the director or officer in the material contract or material transaction, if

(a) the material contract or material transaction was approved or confirmed by special resolution at a meeting of the shareholders,

(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the material contract or material transaction was approved or confirmed, and

(c) the material contract or material transaction was reasonable and fair to the corporation when it was approved or confirmed.

(9) If a director or an officer of a corporation fails to comply with this section, a Court may, on application of the corporation or any of its shareholders, set aside the material contract or material transaction on any terms that it thinks fit, or require the director or officer to account to the corporation for any profit or gain realized on it, or both.

(10) This section is subject to any unanimous shareholder agreement.

RSA 2000 cB‑9 s120;2005 c8 s25

Officers

121 Subject to the articles, the bylaws or any unanimous shareholder agreement,

(a) the directors may designate the offices of the corporation, appoint as officers individuals of full capacity, specify their duties and delegate to them powers to manage the business and affairs of the corporation, except powers to do anything referred to in section 115(3),

(b) a director may be appointed to any office of the corporation, and

1981 cB‑15 s116

Duty of care of directors and officers

122(1) Every director and officer of a corporation in exercising the director’s or officer’s powers and discharging the director’s or officer’s duties shall

(a) act honestly and in good faith with a view to the best interests of the corporation, and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) Every director and officer of a corporation shall comply with this Act, the regulations, articles, bylaws and any unanimous shareholder agreement.

(3) Subject to section 146(7), no provision in a contract, the articles, the bylaws or a resolution relieves a director or officer from the duty to act in accordance with this Act or the regulations or relieves the director or officer from liability for a breach of that duty.

(4) In determining whether a particular transaction or course of action is in the best interests of the corporation, a director, if the director is elected or appointed by the holders of a class or series of shares or by employees or creditors or a class of employees or creditors, may give special, but not exclusive, consideration to the interests of those who elected or appointed the director.

1981 cB‑15 s117

Dissent by director

123(1) A director who is present at a meeting of directors or committee of directors is deemed to have consented to any resolution passed or action taken at the meeting unless

(a) the director requests that the director’s abstention or dissent be, or the director’s abstention or dissent is, entered in the minutes of the meeting,

(b) the director sends the director’s written dissent to the secretary of the meeting before the meeting is adjourned,

(c) the director sends the director’s dissent by registered mail or delivers it to the registered office of the corporation immediately after the meeting is adjourned, or

(d) the director otherwise proves that the director did not consent to the resolution or action.

(2) A director who votes for or consents to a resolution or action is not entitled to dissent under subsection (1).

(3) A director is not liable under section 118, and has complied with the director’s duties under section 122, if the director exercises the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including reliance in good faith on

(a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the auditor of the corporation to reflect fairly the financial condition of the corporation, or

(b) an opinion or report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by that person.

RSA 2000 cB‑9 s123;2005 c8 s26

Indemnification by corporation

124(1) Except in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favour, a corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation’s request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and the director’s or officer’s heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the director or officer in respect of any civil, criminal or administrative action or proceeding to which the director or officer is made a party by reason of being or having been a director or officer of that corporation or body corporate, if

(a) the director or officer acted honestly and in good faith with a view to the best interests of the corporation, and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the director or officer had reasonable grounds for believing that the director’s or officer’s conduct was lawful.

(2) A corporation may with the approval of the Court indemnify a person referred to in subsection (1) in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favour, to which the person is made a party by reason of being or having been a director or an officer of the corporation or body corporate, against all costs, charges and expenses reasonably incurred by the person in connection with the action if the person fulfils the conditions set out in subsection (1)(a) and (b).

(3) Notwithstanding anything in this section, a person referred to in subsection (1) is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by the person in connection with the defence of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity

(a) was substantially successful on the merits in the person’s defence of the action or proceeding,

(b) fulfils the conditions set out in subsection (1)(a) and (b), and

(3.1) A corporation may advance funds to a person in order to defray the costs, charges and expenses of a proceeding referred to in subsection (1) or (2), but if the person does not meet the conditions of subsection (3) he or she shall repay the funds advanced.

(4) A corporation may purchase and maintain insurance for the benefit of any person referred to in subsection (1) against any liability incurred by the person

(a) in the person’s capacity as a director or officer of the corporation, except when the liability relates to the person’s failure to act honestly and in good faith with a view to the best interests of the corporation, or

(b) in the person’s capacity as a director or officer of another body corporate if the person acts or acted in that capacity at the corporation’s request, except when the liability relates to the person’s failure to act honestly and in good faith with a view to the best interests of the body corporate.

(5) A corporation or a person referred to in subsection (1) may apply to the Court for an order approving an indemnity under this section and the Court may so order and make any further order it thinks fit.

(6) On an application under subsection (5), the Court may order notice to be given to any interested person and that person is entitled to appear and be heard in person or by counsel.

RSA 2000 cB‑9 s124;2005 c8 s29

Remuneration

125(1) Subject to the articles, the bylaws or any unanimous shareholder agreement, the directors of a corporation may fix the remuneration of the directors, officers and employees of the corporation.

(2) Disclosure of the aggregate remuneration of directors, the aggregate remuneration of officers and the aggregate remuneration of employees shall be made as prescribed.

1981 cB‑15 s120

Part 10
Insider Trading

Definitions

126 In this Part,

(a) “corporation” does not include a distributing corporation;

(b) “insider” means, with respect to a corporation,

(i) the corporation, in respect of the purchase or other acquisition by it of shares issued by it or any of its affiliates,

(ii) a director or officer of the corporation,

(iii) a person who, with respect to at least 10% of the voting rights attached to the voting shares of the corporation,

(A) beneficially owns, directly or indirectly, voting shares carrying those voting rights,

(B) exercises control or direction over those voting rights, or

(C) beneficially owns, directly or indirectly, voting shares carrying some of those voting rights and exercises control or direction over the remainder of those voting rights,

(iv) a person employed by the corporation or retained by it on a professional or consulting basis,

(v) an affiliate of the corporation,

(vi) a person who receives specific confidential information from a person described in this clause or in section 128 and who has knowledge that the person giving the information is a person described in this clause or in section 128, and

(vii) a person who receives specific confidential information from the first mentioned person in subclause (vi) and who has knowledge that that person received that knowledge in the manner described in that subclause;

(c) “voting share” means an issued and outstanding share carrying voting rights under all circumstances or under any circumstances that have occurred and are continuing.

1981 cB‑15 s121

Deemed insiders

127 For the purposes of this Part,

(a) a director or an officer of a body corporate that is an insider of a corporation is deemed to be an insider of the corporation,

(b) a director or an officer of a body corporate that is a subsidiary is deemed to be an insider of its holding corporation,

(c) a person is deemed to own beneficially shares beneficially owned by a body corporate controlled by the person directly or indirectly, and

(d) a body corporate is deemed to own beneficially shares beneficially owned by its affiliates.

1981 cB‑15 s122

Deemed insiders

128 For the purposes of this Part,

(a) if a body corporate becomes an insider of a corporation or enters into a business combination with a corporation, a director or officer of the body corporate is deemed to have been an insider of the corporation for the previous 6 months or for any shorter period during which the director or officer was a director or officer of the body corporate, and

(b) if a corporation becomes an insider of a body corporate or enters into a business combination with a body corporate, a director or officer of the body corporate is deemed to have been an insider of the corporation for the previous 6 months or for any shorter period during which the director or officer was a director or officer of the body corporate.

1981 cB‑15 s123

Business combination defined

129 In section 128, “business combination” means an acquisition of all or substantially all the property of one body corporate by another or an amalgamation of 2 or more bodies corporate.

1981 cB‑15 s124

Civil liability of insiders

130(1) An insider who sells to or purchases from a shareholder of the corporation or any of its affiliates a security of the corporation or any of its affiliates and in connection with that sale or purchase makes use of any specific confidential information for the insider’s own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security

(a) is liable to compensate any person for any direct loss suffered by that person as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to that person at the time of the transaction, and

(b) is accountable to the corporation for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

(2) An action to enforce a right created by this section may be commenced only within 2 years after the date of completion of the transaction that gave rise to the cause of action.

1981 cB‑15 s125

Part 11
Shareholders

Place of shareholders’ meetings

131(1) Meetings of shareholders of a corporation must be held at the place within Alberta provided in the bylaws or, in the absence of such provision, at the place within Alberta that the directors determine.

(2) Notwithstanding subsection (1), a meeting of shareholders of a corporation may be held outside Alberta if all the shareholders entitled to vote at that meeting so agree, and a shareholder who attends a meeting of shareholders held outside Alberta is deemed to have so agreed except when the shareholder attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully held.

(3) Subject to any limitations or requirements set out in the regulations, if any, a shareholder or any other person entitled to attend a meeting of shareholders may participate in the meeting by electronic means, telephone or other communication facilities that permit all persons participating in the meeting to hear or otherwise communicate with each other if

(a) the bylaws so provide, or

(b) subject to the bylaws, all the shareholders entitled to vote at the meeting consent,

and a person participating in a meeting by those means is deemed for the purposes of this Act to be present at that meeting.

(3.1) If the directors or the shareholders of a corporation call a meeting of shareholders, the directors or the shareholders, as the case may be, may determine that the meeting shall be held, in accordance with the regulation, if any, entirely by electronic means, telephone or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the bylaws so provide.

(4) Notwithstanding subsections (1) and (2), if the articles so provide, meetings of shareholders may be held outside Alberta.

RSA 2000 cB‑9 s131;2005 c8 s28

Calling meetings

132(1) The directors of a corporation

(a) shall call an annual meeting of shareholders to be held not later than 18 months after

(i) the date of its incorporation, or

(ii) the date of its certificate of amalgamation, in the case of an amalgamated corporation,

and subsequently not later than 15 months after holding the last preceding annual meeting, and

(b) may at any time call a special meeting of shareholders.

(2) Notwithstanding subsection (1), the corporation may apply to the Court for an order extending the time in which the first or the next annual meeting of the corporation shall be held.

(3) Notice of any application under subsection (2) by a distributing corporation shall be filed with the Executive Director.

(4) If, on an application under subsection (2), the Court is satisfied that it is in the best interests of the corporation, the Court may extend the time in which the first or the next annual meeting of the corporation shall be held, in any manner and on any terms it thinks fit.

1981 cB‑15 s127;1988 c7 s3;1995 c28 s64

Record dates

133(1) For the purpose of determining shareholders

(a) entitled to receive payment of a dividend,

(b) entitled to participate in a liquidation distribution, or

the directors may fix in advance a date as the record date for that determination of shareholders, but that record date shall not precede by more than 50 days the particular action to be taken.

(2) For the purpose of determining shareholders entitled to receive notice of or to vote at a meeting of shareholders, the directors may fix in advance a date as the record date for that determination of shareholders, but that record date shall not precede by more than 50 days or by less than 21 days the date on which the meeting is to be held.

(3) If no record date is fixed,

(a) the record date for the determination of shareholders entitled to receive notice of a meeting of shareholders shall be

(i) at the close of business on the last business day preceding the day on which the notice is sent, or,

(ii) if no notice is sent, the day on which the meeting is held,

and

(b) the record date for the determination of shareholders for any purpose other than to establish a shareholder’s right to receive notice of or to vote at a meeting, is to be at the close of business on the day on which the directors pass the resolution relating to that purpose.

(4) If the directors of a distributing corporation fix a record date then, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fixed the record date, notice of the record date shall be given not less than 7 days before the date so fixed

(a) by advertisement in a newspaper published or distributed in the place where the corporation has its registered office and in each place in Canada where it has a transfer agent or where a transfer of its shares may be recorded, and

(b) by written notice to each stock exchange in Canada on which the shares of the corporation are listed for trading.

RSA 2000 cB‑9 s133;2005 c8 s29

Notice of meeting, adjournment, business and notice of business

134(1) Notice of the time and place of a meeting of shareholders shall be sent not less than 21 days and not more than 50 days before the meeting,

(a) to each shareholder entitled to vote at the meeting,

(b) to each director, and

(2) Notwithstanding section 255(3), a notice of a meeting of shareholders sent by mail to a shareholder, director or auditor in accordance with section 255(1) is deemed to be sent to the shareholder on the day on which it is deposited in the mail.

(3) A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the corporation or its transfer agent on the record date determined under section 133(2) or (3), but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

(4) If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of less than 30 days it is not necessary, unless the bylaws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the time of an adjournment.

(5) If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for an aggregate of more than 90 days, section 149(1) does not apply.

(6) All business transacted at a special meeting of shareholders and all business transacted at an annual meeting of shareholders, except consideration of the financial statements and auditor’s report, fixing the number of directors for the following year, election of directors and reappointment of the incumbent auditor, is deemed to be special business.

(7) Notice of a meeting of shareholders at which special business is to be transacted shall state

(a) the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment on that business, and

(b) the text of any special resolution to be submitted to the meeting.

(8) The text of a special resolution may be amended at a meeting of shareholders if the amendments correct manifest errors or are not material.

1981 cB‑15 s129;1987 c15 s16

Waiver of notice

135 A shareholder and any other person entitled to attend a meeting of shareholders may in any manner waive notice of a meeting of shareholders, and attendance of the shareholder or other person at a meeting of shareholders is a waiver of notice of the meeting, except when the shareholder or other person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called.

1981 cB‑15 s130

Shareholder proposals

136(1) A registered holder of shares entitled to vote at an annual meeting of shareholders, or a beneficial owner of shares, may

(a) submit to the corporation notice of any matter related to the business or affairs of the corporation that the registered holder or beneficial owner of shares proposes to raise at the meeting, referred to in this section as a “proposal”, and

(b) discuss at the meeting any matter in respect of which the registered holder or beneficial owner of shares would have been entitled to submit a proposal.

(1.1) To be eligible to make a proposal a person must

(a) be a registered holder or beneficial owner of the prescribed number of shares for the prescribed period,

(b) have the prescribed level of support of other registered holders or beneficial owners of shares,

(c) provide to the corporation his or her name and address and the names and addresses of those registered holders or beneficial owners of shares who support the proposal, and

(d) continue to hold or own the prescribed number of shares up to and including the day of the meeting at which the proposal is to be made.

(1.2) The information provided under subsection (1.1)(c) does not form part of the proposal or the supporting statement referred to in subsection (3) and is not included for the purposes of the maximum word limit set out in subsection (3).

(2) A corporation that solicits proxies shall set out the proposal in the management proxy circular required by section 150 or attach the proposal to it.

(3) If so requested by the registered holder or beneficial owner of shares, the corporation shall include in the management proxy circular or attach to it a statement by the registered holder or beneficial owner of shares of not more than 200 words in support of the proposal, and the name and address of the registered holder or beneficial owner of shares.

(4) A proposal may include nominations for the election of directors if the proposal is signed by one or more registered holders of shares representing in the aggregate not less than 5% of the shares or 5% of the shares of a class of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented, or by beneficial owners of shares representing in the aggregate the same percentage of shares, but this subsection does not preclude nominations made at a meeting of shareholders.

(5) A corporation is not required to comply with subsections (2) and (3) if

(a) the proposal is not submitted to the corporation at least 90 days before the anniversary date of the previous annual meeting of shareholders,

(b) it clearly appears that the proposal has been submitted by the registered holder or beneficial owner of shares primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the corporation, its directors, officers or security holders or any of them, or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes,

(c) the corporation, at the request of the registered holder or beneficial owner of shares, included a proposal in a management proxy circular relating to a meeting of shareholders held within 2 years preceding the receipt of the request, and the registered holder or beneficial owner of shares failed to present the proposal, in person or by proxy, at the meeting,

(d) substantially the same proposal was submitted to registered holders or beneficial owners of shares in a management proxy circular or a dissident’s proxy circular relating to a meeting of shareholders held within 2 years preceding the receipt of the request of the registered holder or beneficial owner of shares and the proposal was defeated, or

(e) the rights being conferred by this section are being abused to secure publicity.

(6) No corporation or person acting on its behalf incurs any liability by reason only of circulating a proposal or statement in compliance with this section.

(7) If a corporation refuses to include a proposal in a management proxy circular, the corporation shall, within 10 days after receiving the proposal, notify the registered holder or beneficial owner of shares submitting the proposal of its intention to omit the proposal from the management proxy circular and send to the registered holder or beneficial owner of shares a statement of the reasons for the refusal.

(8) On the application of a registered holder or beneficial owner of shares claiming to be aggrieved by a corporation’s refusal under subsection (7), the Court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

(9) The corporation or any person claiming to be aggrieved by a proposal may apply to the Court for an order permitting the corporation to omit the proposal from the management proxy circular, and the Court may, if it is satisfied that subsection (5) applies, make any order it thinks fit.

RSA 2000 cB‑9 s136;2005 c8 s30;2005 c40 s4

Shareholder list

137(1) A corporation shall prepare a list of shareholders entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of shares held by each shareholder,

(a) if a record date is fixed under section 133(2), not later than 10 days after that date, or

(b) if no record date is fixed,

(i) at the close of business on the last business day preceding the day on which the notice is given, or

(ii) if no notice is given, on the day on which the meeting is held.

(2) If a corporation fixes a record date under section 133(2), the corporation shall, no later than 10 days after the record date, prepare a list of shareholders arranged in alphabetical order and showing the number of shares held by each shareholder, and each shareholder is entitled to vote the shares shown opposite the shareholder’s name at the meeting to which the list relates, except to the extent that

(a) the person has transferred the ownership of any of the person’s shares after the record date, and

(b) the transferee of those shares

(i) produces properly endorsed share certificates, or

(ii) otherwise establishes that the transferee owns the shares,

and demands, not later than 10 days before the meeting, or any shorter period before the meeting that the bylaws of the corporation may provide, that the transferee’s name be included in the list before the meeting,

in which case the transferee is entitled to vote the transferee’s shares at the meeting.

(3) If a corporation does not fix a record date under section 133(2), a person named in the list prepared under subsection (1)(b)(i) is entitled to vote the shares shown opposite the person’s name at the meeting to which the list relates, except to the extent that

(a) the person has transferred the ownership of any of the person’s shares after the date on which the list referred to in subsection (1)(b)(i) is prepared, and

(b) the transferee of those shares

(i) produces properly endorsed share certificates, or

(ii) otherwise establishes that the transferee owns the shares,

in which case the transferee is entitled to vote the transferee’s shares at the meeting.

(4) A shareholder may examine the list of shareholders

(a) during usual business hours at the records office of the corporation or at the place where its central securities register is maintained, and

(b) at the meeting of shareholders for which the list was prepared.

RSA 2000 cB‑9 s137;2005 c8 s31

Quorum

138(1) Unless the bylaws otherwise provide, a quorum of shareholders is present at a meeting of shareholders, irrespective of the number of persons actually present at the meeting, if the holder or holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy.

(2) If a quorum is present at the opening of a meeting of shareholders, the shareholders present may, unless the bylaws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

(3) If a quorum is not present at the opening of a meeting of shareholders, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business.

(4) If a corporation has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting.

1981 cB‑15 s133

Right to vote

139(1) Unless the articles otherwise provide, each share of a corporation entitles the holder of it to one vote at a meeting of shareholders.

(2) If a body corporate or association is a shareholder of a corporation, the corporation shall recognize any individual authorized by a resolution of the directors or governing body of the body corporate or association to represent it at meetings of shareholders of the corporation.

(3) An individual authorized under subsection (2) may exercise on behalf of the body corporate or association the individual represents all the powers it could exercise if it were an individual shareholder.

(4) Unless the bylaws otherwise provide, if 2 or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if 2 or more of those persons who are present, in person or by proxy, vote, they shall vote as one on the shares jointly held by them.

1981 cB‑15 s134

Voting

140(1) Unless the bylaws otherwise provide, voting at a meeting of shareholders shall be by a show of hands except when a ballot is demanded by a shareholder or proxyholder entitled to vote at the meeting.

(2) A shareholder or proxyholder may demand a ballot either before or on the declaration of the result of any vote by a show of hands.

(3) An entry in the minutes of the proceedings that a resolution was carried or defeated is sufficient proof of the results of the vote, and no record need be kept of the number or proportion of votes for or against the resolution.

(4) Notwithstanding subsection (1), unless the bylaws provide otherwise, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by electronic means, telephone or other communication facility, if the corporation makes such a communication facility available.

(5) Unless the bylaws provide otherwise, any person participating in a meeting of shareholders under section 131(3) and entitled to vote at the meeting may vote, in accordance with the regulations, if any, by electronic means, telephone or other communication facility that the corporation has made available for that purpose.

RSA 2000 cB‑9 s140;2005 c8 s32;2005 c40 s5

Resolution instead of meetings

141(1) A resolution in writing signed by all the shareholders entitled to vote on that resolution is as valid as if it had been passed at a meeting of shareholders.

(2) A resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of shareholders.

(3) A copy of every resolution referred to in subsection (1) or (2) shall be kept with the minutes of the meetings of shareholders.

1981 cB‑15 s136

Meeting on requisition of registered holders or
beneficial owners of shares

142(1) The registered holders or beneficial owners of not less than 5% of the issued shares of a corporation that carry the right to vote at a meeting sought to be held may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition, but the beneficial owners of shares do not hereby acquire the direct right to vote at the meeting that is the subject of the requisition.

(2) The requisition referred to in subsection (1), which may consist of several documents in the same form, each signed by one or more registered holders or beneficial owners of shares, shall state the business to be transacted at the meeting and shall be sent to each director and to the registered office of the corporation.

(3) On receiving the requisition referred to in subsection (1), the directors shall call a meeting of shareholders to transact the business stated in the requisition unless

(a) a record date has been fixed under section 133(2) and notice of the record date has been given or waived under section 133(4),

(b) the directors have called a meeting of shareholders and have given notice of the meeting under section 134, or

(4) If the directors do not, within 21 days after receiving the requisition referred to in subsection (1), call a meeting, any registered holder or beneficial owner of shares who signed the requisition may call the meeting.

(5) A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to the bylaws, this Part and Part 12.

(6) Unless the registered holders or beneficial owners of shares resolve otherwise at a meeting called under subsection (4), the corporation shall reimburse the registered holders or beneficial owners of shares for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

RSA 2000 cB‑9 s142;2005 c8 s33;2005 c40 s6

Meeting called by Court

143(1) If for any reason it is impracticable to call a meeting of shareholders of a corporation in the manner in which meetings of those shareholders may be called, or to conduct the meeting in the manner prescribed by the bylaws and this Act, or if for any other reason the Court thinks fit, the Court, on the application of a director, a shareholder entitled to vote at the meeting or, if the corporation is a distributing corporation the Executive Director, may order a meeting to be called, held and conducted in the manner that the Court directs.

(2) Without restricting the generality of subsection (1), the Court may order that the quorum required by the bylaws or this Act be varied or dispensed with at a meeting called, held and conducted pursuant to this section.

(3) A meeting called, held and conducted pursuant to this section is for all purposes a meeting of shareholders of the corporation duly called, held and conducted.

1981 cB‑15 s138;1988 c7 s3;1995 c28 s64

Court review of election

144(1) A corporation or a shareholder or director may apply to the Court to determine any controversy with respect to an election or appointment of a director or auditor of the corporation.

(2) On an application under this section, the Court may make any order it thinks fit including, without limiting the generality of the foregoing, any one or more of the following:

(a) an order restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute;

(b) an order declaring the result of the disputed election or appointment;

(c) an order requiring a new election or appointment, and including in the order directions for the management of the business and affairs of the corporation until a new election is held or appointment made;

(d) an order determining the voting rights of shareholders and of persons claiming to own shares.

1981 cB‑15 s139

Pooling agreement

145 A written agreement between 2 or more shareholders may provide that in exercising voting rights the shares held by them shall be voted as provided in the agreement.

1981 cB‑15 s139.1

Unanimous shareholder agreement

146(1) A unanimous shareholder agreement may provide for any or all of the following:

(a) the regulation of the rights and liabilities of the shareholders, as shareholders, among themselves or between themselves and any other party to the agreement;

(b) the regulation of the election of directors;

(c) the management of the business and affairs of the corporation, including the restriction or abrogation, in whole or in part, of the powers of the directors;

(d) any other matter that may be contained in a unanimous shareholder agreement pursuant to any other provision of this Act.

(2) If a unanimous shareholder agreement is in effect at the time a share is issued by a corporation to a person other than an existing shareholder,

(a) that person is deemed to be a party to the agreement whether or not the person had actual knowledge of it when the share certificate was issued,

(b) the issue of the share certificate does not operate to terminate the agreement, and

(c) if that person is a bona fide purchaser without actual knowledge of the unanimous shareholder agreement, that person may rescind the contract under which the shares were acquired by giving a notice to that effect to the corporation within a reasonable time after the person receives actual knowledge of the unanimous shareholder agreement.

(3) If a unanimous shareholder agreement is in effect when a person who is not a party to the agreement acquires a share of a corporation, other than under subsection (2),

(a) the person who acquired the share is deemed to be a party to the agreement whether or not the person had actual knowledge of it when the person acquired the share, and

(b) neither the acquisition of the share nor the registration of that person as a shareholder operates to terminate the agreement.

(4) If

(a) a person referred to in subsection (3) is a protected purchaser as defined in the Securities Transfer Act and did not have actual knowledge of the unanimous shareholder agreement, and

(b) the person’s transferor’s share certificate did not contain a reference to the unanimous shareholder agreement,

that person may, within 30 days after the person acquires actual knowledge of the existence of the agreement, send to the corporation a notice of objection to the agreement.

(5) If a person sends a notice of objection under subsection (4),

(a) the person is entitled to be paid by the corporation the fair value of the shares held by the person, determined as of the close of business on the day on which the person became a shareholder, and

(b) section 191(4) and (6) to (20) apply, with the necessary changes, as if the notice of objection under subsection (4) were a written objection sent to the corporation under section 191(5).

(6) A transferee who is entitled to be paid the fair value of the transferee’s shares under subsection (5) also has the right to recover from the transferor by action the amount by which the value of the consideration paid for the transferee’s shares exceeds the fair value of those shares.

(7) A shareholder who is a party or is deemed to be a party to a unanimous shareholder agreement has all the rights, powers and duties and incurs all the liabilities of a director of the corporation to which the agreement relates to the extent that the agreement restricts the powers of the directors to manage the business and affairs of the corporation, and the directors are thereby relieved of their duties and liabilities, including any liabilities under section 119 or any other enactment, to the same extent.

(8) A unanimous shareholder agreement may not be amended without the written consent of all those who are shareholders at the effective date of the amendment.

(9) A unanimous shareholder agreement may exclude the application to the agreement of all but not part of this section.

RSA 2000 cB‑9 s146;2005 c8 s34;2006 cS‑4.5 s106

Part 12
Proxies

Definitions

147 In this Part,

(a) “form of proxy” means a written or printed form that, on completion and execution by or on behalf of a shareholder, becomes a proxy;

(b) “proxy” means a completed and executed form of proxy by means of which a shareholder appoints a proxyholder to attend and act on the shareholder’s behalf at a meeting of shareholders;

(c) “registrant” means a person required to be registered to trade or deal in securities under the laws of any jurisdiction;

(d) “solicit” or “solicitation” includes

(i) a request for a proxy whether or not accompanied with or included in a form of proxy,

(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,

(iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

(iv) the sending of a form of proxy to a shareholder under section 149,

but does not include

(v) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,

(vi) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,

(vii) the sending by a registrant of the documents referred to in section 153, or

(viii) a solicitation by a person in respect of shares of which the person is the beneficial owner;

(e) “solicitation by or on behalf of the management of a corporation” means a solicitation by any person pursuant to a resolution or the instructions of, or with the acquiescence of, the directors or a committee of the directors.

1981 cB‑15 s141

Appointing proxyholder

148(1) A shareholder entitled to vote at a meeting of shareholders may by means of a proxy appoint a proxyholder and one or more alternate proxyholders, who are not required to be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.

(2) A proxy shall be executed by the shareholder or by the shareholder’s attorney authorized in writing.

(3) A proxy is valid only at the meeting in respect of which it is given or any adjournment of that meeting.

(4) A shareholder may revoke a proxy

(a) by depositing an instrument in writing executed by the shareholder or by the shareholder’s attorney authorized in writing

(i) at the registered office of the corporation at any time up to and including the last business day preceding the day of the meeting, or an adjournment of that meeting, at which the proxy is to be used, or

(ii) with the chair of the meeting on the day of the meeting or an adjournment of the meeting, or

(b) in any other manner permitted by law.

(5) The directors may specify in a notice calling a meeting of shareholders a time not exceeding 48 hours, excluding Saturdays and holidays, preceding the meeting or an adjournment of the meeting before which time proxies to be used at the meeting must be deposited with the corporation or its agent.

1981 cB‑15 s142

Mandatory solicitation

149(1) Subject to subsection (2), the management of a corporation that is not a private issuer within the meaning of the Securities Act shall, concurrently with giving notice of a meeting of shareholders, send a form of proxy in the prescribed form to each shareholder who is entitled to receive notice of the meeting.

(2) The management of a corporation that is not a private issuer within the meaning of the Securities Act is not required to send a form of proxy under subsection (1)

(a) repealed 2005 c8 s35,

(b) if all of the shareholders entitled to vote at a meeting of shareholders have agreed in writing to waive the application of subsection (1).

(3) A shareholder may revoke a waiver given under subsection (2)(b) in respect of any meeting of shareholders by sending to the corporation a notice in writing to that effect not less than 40 days before the date of the meeting in respect of which the waiver was given.

(4) If the management of a corporation, without reasonable cause, contravenes subsection (1), the corporation is guilty of an offence and liable to a fine of not more than $5000.

(5) If a corporation contravenes subsection (1), then, whether or not the corporation has been prosecuted or convicted in respect of that contravention, any director or officer of the corporation who knowingly authorizes, permits or acquiesces in the contravention is also guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

RSA 2000 cB‑9 s149;2005 c8 s35

Soliciting proxies

150(1) A person shall not solicit proxies unless

(a) in the case of solicitation by or on behalf of the management of a corporation, a management proxy circular in the prescribed form, either as an appendix to or as a separate document accompanying the notice of the meeting, or

(b) in the case of any other solicitation, a dissident’s proxy circular in the prescribed form stating the purposes of the solicitation

is sent to the auditor of the corporation, to each shareholder whose proxy is solicited and, if clause (b) applies, to the corporation.

(2) Subsection (1) does not apply to a corporation that has 15 or fewer shareholders entitled to vote at meetings of shareholders.

(3) A person required to send a management proxy circular or dissident’s proxy circular under subsection (1) shall, if the corporation is a distributing corporation, file concurrently a copy of it with the Executive Director, together with a copy of the notice of the meeting, form of proxy and any other documents for use in connection with the meeting.

(4) A person who contravenes subsection (1) or (3) is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

(5) If the person who contravenes subsection (3) is a body corporate, then, whether or not the body corporate has been prosecuted or convicted in respect of that contravention, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the contravention is also guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

1981 cB‑15 s144;1988 c7 s3;1995 c28 s64

Exemption orders

151 On the application of an interested person,

(a) the Commission, if the corporation is a distributing corporation, or

(b) the Court, if the corporation is not a distributing corporation,

may make an order on any terms it considers appropriate exempting that person from the application of section 149 or 150(1), and the order may have retrospective effect.

1981 cB‑15 s145;1988 c7 s3;1995 c28 s64

Rights and duties of proxyholder

152(1) A person who solicits a proxy and is appointed as a proxyholder shall attend in person or cause an alternate proxyholder to attend the meeting in respect of which the proxy is given and comply with the directions of the shareholder who appointed the person.

(2) A proxyholder or an alternate proxyholder has the same rights as the shareholder who appointed the proxyholder or alternate proxyholder to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of any show of hands.

(3) Notwithstanding subsections (1) and (2), if the chair of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what to the chair’s knowledge will be the decision of the meeting in relation to any matter or group of matters is less than 5% of the votes attached to the shares entitled to vote and represented at the meeting on that ballot, then, unless a shareholder or proxyholder demands a ballot,

(a) the chair may conduct the vote in respect of that matter or group of matters by a show of hands, and

(b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by a show of hands.

(4) A proxyholder or alternate proxyholder who without reasonable cause fails to comply with the directions of a shareholder under this section is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

1981 cB‑15 s146

Duties of registrant

153(1) Shares of a corporation that are registered in the name of a registrant or the registrant’s nominee and not beneficially owned by the registrant shall not be voted unless the registrant, forthwith after receipt of the notice of the meeting, financial statements, management proxy circular, dissident’s proxy circular and any other documents, other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy of those documents to the beneficial owner and, except where the registrant has received written voting instructions from the beneficial owner, a written request for voting instructions.

(2) A registrant shall not vote or appoint a proxyholder to vote shares registered in the registrant’s name or in the name of the registrant’s nominee that the registrant does not beneficially own unless the registrant receives voting instructions from the beneficial owner.

(3) A person by or on behalf of whom a solicitation is made shall, at the request of a registrant, forthwith furnish to the registrant at that person’s expense the necessary number of copies of the documents referred to in subsection (1) other than copies of the document requesting voting instructions.

(4) A registrant shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.

(5) If requested by a beneficial owner, a registrant shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

(6) The contravention of this section by a registrant does not render void any meeting of shareholders or any action taken at a meeting of shareholders.

(7) Nothing in this section gives a registrant the right to vote shares that the registrant is otherwise prohibited from voting.

(8) A registrant who knowingly contravenes this section is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

(9) If the registrant who contravenes this section is a body corporate, then, whether or not the body corporate has been prosecuted or convicted in respect of the contravention, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the contravention is also guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

1981 cB‑15 s147

Court orders

154 If a form of proxy, management proxy circular or dissident’s proxy circular contains an untrue statement of a material fact or omits to state a material fact required in it or necessary to make a statement contained in it not misleading in the light of the circumstances in which it was made, an interested person or, if the corporation is a distributing corporation the Executive Director, may apply to the Court and the Court may make any order it thinks fit including, without limiting the generality of the foregoing, any one or more of the following:

(a) an order restraining the solicitation, the holding of the meeting or any person from implementing or acting on any resolution passed at the meeting to which the form of proxy, management proxy circular or dissident’s proxy circular relates;

(b) an order requiring correction of any form of proxy or proxy circular and a further solicitation;

1981 cB‑15 s148;1988 c7 s3;1995 c28 s64

Part 13
Financial Disclosure

Annual financial statements

155(1) Subject to section 156, the directors of a corporation shall place before the shareholders at every annual meeting

(a) the following financial statements as prescribed:

(i) if the corporation has not completed a financial period and the meeting is held after the end of the first 6‑month period of that financial period, a financial statement for the period that began on the date the corporation came into existence and ended on a date occurring not earlier than 6 months before the annual meeting;

(ii) if the corporation has completed only one financial period, a financial statement for that year;

(iii) if the corporation has completed 2 or more financial periods, comparative financial statements for the last 2 completed financial periods;

(iv) if the corporation has completed one or more financial periods but the annual meeting is held after 6 months has expired in its current financial period, a financial statement for the period that

(A) began at the commencement of its current financial period, and

(B) ended on a date that occurred not earlier than 6 months before the annual meeting,

in addition to any statements required under subclause (ii) or (iii),

(b) the report of the auditor, if any, and

(c) any further information respecting the financial position of the corporation and the results of its operations required by the articles, the bylaws or any unanimous shareholder agreement.

(2) Notwithstanding subsection (1)(a)(iii), the financial statements for the earlier of the 2 financial periods referred to in that subclause may be omitted if the reason for the omission is set out in the financial statements, or in a note to them, to be placed before the shareholders at the annual meeting.

1981 cB‑15 s149

Exemption

156(1) Section 155 does not apply to a corporation that is subject to and complies with the provisions of the Securities Act relating to the financial statements to be placed before the shareholders at every annual meeting.

(2) A distributing corporation may apply to the Commission for an order authorizing the corporation to omit from its financial statements any item prescribed, or to dispense with the publication of any financial statement prescribed, and the Commission may, if it reasonably believes that the disclosure of the item or statement would be detrimental to the corporation, make the order on any reasonable conditions it thinks fit.

(3) The shareholders of the corporation may at any time, by unanimous resolution, waive their right to receive financial statements under section 155(1)(a)(i).

RSA 2000 cB‑9 s156;2005 c8 s36

Consolidated statements

157(1) A corporation shall keep at its records office a copy of the financial statements of each of its subsidiary bodies corporate and of each body corporate the accounts of which are consolidated in the financial statements of the corporation.

(2) Shareholders of a corporation and their agents and legal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the corporation, and may make extracts from them, free of charge.

(3) A corporation may, within 15 days after a request to examine under subsection (2), apply to the Court for an order barring the right of any person to so examine, and the Court may, if it is satisfied that the examination would be detrimental to the corporation or a subsidiary body corporate, bar that right and make any further order it thinks fit.

(4) A corporation shall give notice of an application under subsection (3) to the person making a request under subsection (2), and that person may appear and be heard in person or by counsel.

1981 cB‑15 s151

Approval of financial statements

158(1) The directors of a corporation shall approve the financial statements referred to in section 155 and the approval shall be evidenced by the signature of one or more directors or a facsimile version of the signature reproduced on the statements.

(2) A corporation shall not issue, publish or circulate copies of the financial statements referred to in section 155 unless the financial statements are

(a) approved and signed in accordance with subsection (1), and

(b) accompanied with the report of the auditor of the corporation, if any.

RSA 2000 cB‑9 s158;2005 c8 s37

Copies to shareholders

159(1) A corporation shall, not less than 21 days before each annual meeting of shareholders or before the signing of a resolution under section 141(2) instead of the annual meeting, send a copy of the documents referred to in section 155 to each shareholder, except to a shareholder who has informed the corporation in writing that the shareholder does not want a copy of those documents.

(2) A corporation that, without reasonable cause, contravenes subsection (1) is guilty of an offence and liable to a fine of not more than $5000.

(3) Notwithstanding subsection (1), the shareholders may, by unanimous resolution, waive their right to receive copies of documents referred to in section 155 in advance of the annual meeting.

RSA 2000 cB‑9 s159;2005 c8 s38

Copies to Executive Director

160(1) A distributing corporation shall, not less than 21 days before each annual meeting of shareholders or forthwith after the signing of a resolution under section 141(2) instead of the annual meeting, and in any event not later than 15 months after the last date when the last preceding annual meeting should have been held or a resolution instead of the meeting should have been signed, file a copy of the documents referred to in section 155 with the Executive Director.

(2) If a distributing corporation

(a) sends to its shareholders, or

(b) is required to file with or send to a public authority or a stock exchange

interim financial statements or related documents, the corporation shall forthwith file copies of them with the Executive Director.

(3) A subsidiary corporation is not required to comply with this section if

(a) the financial statements of its holding corporation are in consolidated or combined form and include the accounts of the subsidiary, and

(b) the consolidated or combined financial statements of the holding corporation are included in the documents filed with the Executive Director by the holding corporation in compliance with this section.

(4) A corporation that contravenes this section is guilty of an offence and liable to a fine of not more than $5000.

1981 cB‑15 s154;1988 c7 s3;1995 c28 s64

Qualification of the auditor

161(1) Subject to subsection (5), a person is disqualified from being an auditor of a corporation if the person is not independent of the corporation and its affiliates and the directors and officers of the corporation and its affiliates.

(2) For the purposes of this section,

(a) independence is a question of fact, and

(b) a person is deemed not to be independent if the person or the person’s business partner

(i) is a business partner, a director, an officer or an employee of the corporation or any of its affiliates, or a business partner of any director, officer or employee of the corporation or any of its affiliates,

(ii) beneficially owns or controls, directly or indirectly, an interest in the securities of the corporation or any of its affiliates, or

(iii) has been a receiver, receiver‑manager, liquidator or trustee in bankruptcy of the corporation or any of its affiliates within 2 years of the person’s proposed appointment as auditor of the corporation.

(2.1) For the purposes of subsection (2), a person’s business partner includes a shareholder of that person.

(3) An auditor who becomes disqualified under this section shall, subject to subsection (5), resign forthwith after becoming aware of the auditor’s disqualification.

(4) An interested person may apply to the Court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

(5) An interested person may apply to the Court for an order exempting an auditor from disqualification under this section and the Court may, if it is satisfied that an exemption would not unfairly prejudice the shareholders, make an exemption order on any terms it thinks fit and the exemption order may have retrospective effect.

RSA 2000 cB‑9 s161;2005 c8 s39

Auditor’s appointment and remuneration

162(1) Subject to section 163, shareholders of a corporation shall, by ordinary resolution, at the first annual meeting of shareholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

(2) An auditor appointed under section 104 is eligible for appointment under subsection (1).

(3) Notwithstanding subsection (1), if an auditor is not appointed at a meeting of shareholders, the incumbent auditor continues in office until the auditor’s successor is appointed.

(4) The remuneration of an auditor may be fixed by ordinary resolution of the shareholders or, if not so fixed, may be fixed by the directors.

1981 cB‑15 s156

Dispensing with auditor

163(1) The shareholders of a corporation other than a distributing corporation may resolve not to appoint an auditor.

(2) A resolution under subsection (1) is valid only until the next succeeding annual meeting of shareholders.

(3) A resolution under subsection (1) is not valid unless it is consented to by all the shareholders, including shareholders not otherwise entitled to vote.

1981 cB‑15 s157

Auditor ceasing to hold office

164(1) An auditor of a corporation ceases to hold office when

(a) the auditor dies or resigns, or

(b) the auditor is removed pursuant to section 165.

(2) A resignation of an auditor becomes effective at the time a written resignation is sent to the corporation or at the time specified in the resignation, whichever is later.

1981 cB‑15 s158

Removal of auditor

165(1) The shareholders of a corporation may by ordinary resolution at a special meeting remove from office the auditor, other than an auditor appointed by the Court under section 167.

(2) A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 166.

1981 cB‑15 s159

Filling vacancy

166(1) Subject to subsection (3), the directors shall forthwith fill a vacancy in the office of auditor.

(2) If there is not a quorum of directors, the directors then in office shall, within 21 days after a vacancy in the office of auditor occurs, call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors, the meeting may be called by any shareholder.

(3) The articles of a corporation may provide that a vacancy in the office of auditor shall only be filled by vote of the shareholders.

(4) An auditor appointed to fill a vacancy holds office for the unexpired term of the auditor’s predecessor.

(5) Subsections (1) and (2) do not apply if the shareholders have resolved under section 163 not to appoint an auditor.

1981 cB‑15 s160

Court-appointed auditor

167(1) If a corporation does not have an auditor, the Court may, on the application of a shareholder or, if the corporation is a distributing corporation the Executive Director, appoint and fix the remuneration of an auditor who holds office until an auditor is appointed by the shareholders.

(2) Subsection (1) does not apply if the shareholders have resolved under section 163 not to appoint an auditor.

1981 cB‑15 s161;1988 c7 s3;1995 c28 s64

Rights and liabilities of auditor or former auditor

168(1) The auditor of a corporation is entitled to receive notice of every meeting of shareholders and, at the expense of the corporation, to attend and be heard at every meeting on matters relating to the auditor’s duties as auditor.

(2) If a director or shareholder of a corporation, whether or not the shareholder is entitled to vote at the meeting, gives written notice to the auditor or a former auditor of the corporation not less than 10 days before a meeting of shareholders, the auditor or former auditor shall attend the meeting at the expense of the corporation and answer questions relating to the auditor’s duties as auditor or the former auditor’s former duties as auditor, as the case may be.

(3) A director or shareholder who sends a notice referred to in subsection (2) shall send concurrently a copy of the notice to the corporation.

(4) An auditor or former auditor of a corporation who without reasonable cause contravenes subsection (2) is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

(5) An auditor who

(a) resigns,

(b) receives a notice or otherwise learns of a meeting of directors or shareholders called for the purpose of removing the auditor from office,

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed to fill the office of auditor, whether because of resignation or removal of the incumbent auditor or because the incumbent auditor’s term of office has expired or is about to expire, or

(d) receives a notice or otherwise learns of a meeting of shareholders at which a resolution referred to in section 163 is to be proposed,

is entitled to submit to the corporation a written statement giving the reasons for the auditor’s resignation or the reasons why the auditor opposes any proposed action or resolution.

(5.1) In the case of a proposed replacement of an auditor, whether through removal or at the end of the auditor’s term, the following rules apply with respect to statements:

(a) the corporation shall make a statement on the reasons for the proposed replacement;

(b) the proposed replacement auditor may make a statement in which he or she comments on the reasons referred to in clause (a).

(6) The corporation shall forthwith

(a) send to every shareholder entitled to receive notice of any meeting referred to in subsection (1), and

(b) file with the Executive Director, if the corporation is a distributing corporation,

a copy of the statements referred to in subsections (5) and (5.1), unless the statements are included in or attached to a management proxy circular required by section 150.

(7) No person shall accept an appointment as or consent to be appointed as auditor of a corporation if the person is replacing an auditor who has resigned or been removed or whose term of office has expired or is about to expire until the person has requested and received from that auditor a written statement of the circumstances and the reasons why, in that auditor’s opinion, that auditor is to be replaced.

(8) Notwithstanding subsection (7), a person otherwise qualified may accept appointment or consent to be appointed as auditor of a corporation if, within 15 days after making the request referred to in that subsection, the person does not receive a reply.

RSA 2000 cB‑9 s168;2005 c8 s40

Auditor’s duty to examine

169(1) An auditor of a corporation shall make the examination that is in the auditor’s opinion necessary to enable the auditor to report in the prescribed manner on the financial statements required by this Act to be placed before the shareholders, except those financial statements or parts of those statements that relate to the earlier of the 2 financial years referred to in section 155(1)(a)(iii).

(2) Notwithstanding section 170, an auditor of a corporation may reasonably rely on the report of an auditor 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.

(3) For the purpose of subsection (2), reasonableness is a question of fact.

(4) Subsection (2) applies whether or not the financial statements of the holding corporation reported on by the auditor are in consolidated form.

1981 cB‑15 s163

Auditor’s right to information

170(1) On the demand of the auditor of a corporation, the present or former directors, officers, employees or agents of the corporation and the former auditors of the corporation shall furnish any

(a) information and explanations, and

(b) access to records, documents, books, accounts and vouchers of the corporation or any of its subsidiaries

that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 169 and that the directors, officers, employees, agents or former auditors are reasonably able to furnish.

(2) On the demand of the auditor of a corporation, the directors of the corporation shall

(a) to the extent they are reasonably able to do so, obtain from the present or former directors, officers, employees, agents or auditors of any subsidiary of the corporation the information and explanations that the present or former directors, officers, employees, agents or auditors are reasonably able to furnish and that are, in the opinion of the corporation’s auditor, necessary to enable the auditor to make the examination and report required under section 169, and

(b) furnish the information and explanations so obtained to the corporation’s auditor.

(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 the making of the communication.

RSA 2000 cB‑9 s170;2005 c8 s41

Audit committee

171(1) Subject to subsection (3), a distributing corporation shall, and any other corporation may, have an audit committee.

(2) The audit committee of a distributing corporation must be composed of not less than 3 directors of the corporation, a majority of whom are not officers or employees of the corporation or any of its affiliates.

(3) A distributing corporation may apply to the Commission for an order authorizing the corporation to dispense with an audit committee, and the Commission may, if it is satisfied that the shareholders will not be prejudiced by the order, permit the corporation to dispense with an audit committee on any reasonable conditions that it thinks fit.

(4) An audit committee shall review the financial statements of the corporation before they are approved under section 158.

(5) The auditor of a corporation is entitled to receive notice of every meeting of the audit committee and, at the expense of the corporation, to attend and be heard at the meeting, and, if so requested by a member of the audit committee, shall attend every meeting of the committee held during the term of office of the auditor.

(6) The auditor of a corporation or a member of the audit committee may call a meeting of the committee.

(7) A director or an officer of a corporation shall forthwith notify the audit committee and the auditor of any error or misstatement of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on.

(8) If the auditor or a former auditor of a corporation is notified or becomes aware of an error or misstatement in a financial statement on which the auditor or former auditor has reported, and if in the auditor’s or former auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director accordingly.

(9) When under subsection (8) the auditor or a former auditor 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 shareholders, and

(b) if the corporation is a distributing corporation, the corporation shall file the revised financial statements with the Executive Director or inform the Executive Director of the error or misstatement in the same manner that the shareholders were informed of it.

(10) Every director or officer of a corporation who knowingly contravenes subsection (7) or (9) is guilty of an offence and liable to a fine of not more than $5000 or to imprisonment for a term of not more than 6 months or to both.

1981 cB‑15 s165;1988 c7 s3;1995 c28 s64

Qualified privilege

172 Any oral or written statement or report made under this Act by the auditor or a former auditor of a corporation has qualified privilege.

1981 cB‑15 s166

Part 14
Fundamental Changes

Amendment of articles

173(1) Subject to sections 176 and 177, the articles of a corporation may by special resolution be amended to

(a) change its name, subject to section 12,

(b) add, change or remove any restriction on the business or businesses that the corporation may carry on,

(d) create new classes of shares,

(e) change the designation of all or any of its shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its shares, whether issued or unissued,

(f) change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series,

(g) divide a class of shares, whether issued or unissued, into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions of that series,

(h) cancel a class or series of shares where there are no issued or outstanding shares of that class or series,

(i) authorize the directors to divide any class of unissued shares into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions of that series,

(j) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series,

(k) revoke, diminish or enlarge any authority conferred under clauses (i) and (j),

(l) increase or decrease the number of directors or the minimum or maximum number of directors, subject to sections 107 and 112,

(m) subject to section 48(8), add, change or remove restrictions on the transfer of shares,

(m.1) add or remove an express statement establishing the unlimited liability of shareholders as set out in section 15.2, 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 shareholders in the special resolution effecting an amendment under this section, revoke the resolution before it is acted on without further approval of the shareholders.

(3) Notwithstanding subsection (1), but subject to section 12, where a corporation has a designating number as a name, the directors may amend its articles to change that name to a verbal name.

RSA 2000 cB‑9 s173;2005 c8 s42

Constrained shares

174(1) Subject to sections 176 and 177, a distributing corporation may by special resolution amend its articles in accordance with the regulations to constrain the issue or transfer of its shares

(a) to persons who are not resident Canadians, or

(b) to enable the corporation or any of its affiliates to qualify under any law of Canada or any province or territory of Canada referred to in the regulations

(i) to obtain a licence to carry on any business,

(ii) to become a publisher of a Canadian newspaper or periodical, or

(iii) to acquire shares of a financial intermediary as defined in the regulations.

(2) A corporation referred to in subsection (1) may by special resolution amend its articles to remove any constraint on the issue or transfer of its shares.

(3) The directors of a corporation may, if authorized by the shareholders in the special resolution effecting an amendment under subsection (1), revoke the resolution before it is acted on without further approval of the shareholders.

(4) The Lieutenant Governor in Council may make regulations with respect to a corporation that constrains the issue or transfer of its shares prescribing

(a) the disclosure required of the constraints in documents issued or published by the corporation,

(b) the duties and powers of the directors to refuse to issue or register transfers of shares in accordance with the articles of the corporation,

(d) the powers of the directors to require disclosure of beneficial ownership of shares of the corporation and the right of the corporation and its directors, employees and agents to rely on that disclosure and the effects of that reliance, and

(e) the rights of any person owning shares of the corporation at the time of an amendment to its articles constraining share issues or transfers.

(5) An issue or a transfer of a share or an act of a corporation is valid notwithstanding any contravention of this section or the regulations.

1981 cB‑15 s168;1987 c15 s17;1992 c21 s6

Proposal for amendment

175(1) Subject to subsection (2), a director or a shareholder who is entitled to vote at an annual meeting of shareholders may, in accordance with section 136, make a proposal to amend the articles.

(2) Notice of a meeting of shareholders at which a proposal to amend the articles is to be considered shall set out the proposed amendment and, if applicable, shall state that a dissenting shareholder is entitled to be paid the fair value of the shareholder’s shares in accordance with section 191, but failure to make that statement does not invalidate an amendment.

1981 cB‑15 s169

Class votes

176(1) The holders of shares of a class or, subject to subsection (2), of a series are entitled to vote separately as a class or series on a proposal to amend the articles to

(a) increase or decrease the maximum number of authorized shares of that class,

(b) increase the maximum number of authorized shares of a class having rights or privileges equal or superior to the rights or privileges attached to the shares of that class,

(d) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, without limiting the generality of the foregoing,

(i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends,

(ii) add, remove or change prejudicially redemption rights,

(iii) reduce or remove a dividend preference or a liquidation preference, or

(iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre‑emptive rights, rights to acquire securities of a corporation or sinking fund provisions,

(e) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the rights or privileges attached to the shares of that class,

(f) create a new class of shares having rights or privileges equal or superior to the rights or privileges attached to the shares of that class,

(g) make the rights or privileges of any class of shares having rights or privileges inferior to the rights or privileges of the shares of that class equal or superior to the rights or privileges of the shares of that class,

(h) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class, or

(i) constrain the issue or transfer of the shares of that class or extend or remove that constraint.

(2) The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) only if the series is affected by an amendment in a manner different from other shares of the same class.

(3) Subsection (1) applies whether or not shares of a class or series otherwise carry the right to vote.

(4) A proposed amendment to the articles referred to in subsection (1) is adopted when the holders of the shares of each class or series entitled to vote separately on the amendment as a class or series have approved the amendment by a special resolution.

1981 cB‑15 s170;1987 c15 s18

Delivery of articles of amendment

177(1) Subject to any revocation under section 173(2) or 174(3), after an amendment has been adopted under section 173, 174 or 176, articles of amendment in the prescribed form shall be sent to the Registrar.

(2) If an amendment is to change the name of a corporation, documents relating to corporate names that are prescribed by the regulations shall, unless otherwise provided by the Registrar, be sent to the Registrar.

(3) If an amendment effects or requires a reduction of stated capital, section 38(3) and (4) apply.

1981 cB‑15 s171;1983 c20 s13;1984 c12 s1

Certificate of amendment

178 On receipt of articles of amendment, the Registrar shall issue a certificate of amendment in accordance with section 267.

1981 cB‑15 s172

Effect of certificate

179(1) An amendment becomes effective on the date shown in the certificate of amendment and the articles are amended accordingly.

(2) No amendment to the articles affects an existing cause of action or claim or liability to prosecution in favour of or against the corporation or any of its directors or officers, or any civil, criminal or administrative action or proceeding to which a corporation or any of its directors or officers is a party.

1981 cB‑15 s173

Restated articles of incorporation

180(1) A corporation may at any time, and shall when reasonably so directed by the Registrar, restate the articles of incorporation as amended.

(2) A restatement of articles

(a) may be done by a resolution of the directors where the restatement only consolidates previous amendments or is done in conjunction with an amendment that the directors are authorized to make without a special resolution, and

(b) must be done by special resolution in all other cases.

(3) Restated articles of incorporation in prescribed form must be sent to the Registrar.

(4) On receipt of restated articles of incorporation, the Registrar shall issue a certificate of registration of restated articles in accordance with section 267.

(5) Restated articles of incorporation are effective on the date shown in the certificate of registration of restated articles and supersede the original articles of incorporation and all amendments to them.

1981 cB‑15 s174;1999 c26 s1

Amalgamation

181 Two or more corporations, including holding and subsidiary corporations, may amalgamate and continue as one corporation.

1981 cB‑15 s175;1996 c32 s1

Amalgamation agreement

182(1) Each corporation proposing to amalgamate shall enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out

(a) the provisions that are required to be included in articles of incorporation under section 6,

(b) the name and address of each proposed director of the amalgamated corporation,

(c) the manner in which the shares of each amalgamating corporation are to be converted into shares or other securities of the amalgamated corporation,

(d) if any shares of an amalgamating corporation are not to be converted into securities of the amalgamated corporation, the amount of money or securities of any body corporate that the holders of those shares are to receive in addition to or instead of securities of the amalgamated corporation,

(e) the manner of payment of money instead of the issue of fractional shares of the amalgamated corporation or of any other body corporate the securities of which are to be received in the amalgamation,

(f) whether the bylaws of the amalgamated corporation are to be those of one of the amalgamating corporations and, if not, a copy of the proposed bylaws, and

(g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated corporation.

(2) If shares of one of the amalgamating corporations are held by or on behalf of another of the amalgamating corporations, the amalgamation agreement shall provide for the cancellation of those shares when the amalgamation becomes effective without any repayment of capital in respect of those shares, and no provision shall be made in the agreement for the conversion of those shares into shares of the amalgamated corporation.

1981 cB‑15 s176

Shareholder approval of amalgamation agreement

183(1) The directors of each amalgamating corporation shall submit the amalgamation agreement for approval to a meeting of the holders of shares of the amalgamating corporation of which they are directors and, subject to subsection (4), to the holders of each class or series of those shares.

(2) A notice of a meeting of shareholders complying with section 134 shall be sent in accordance with that section to each shareholder of each amalgamating corporation and shall

(a) include or be accompanied with a copy or summary of the amalgamation agreement, and

(b) state that a dissenting shareholder is entitled to be paid the fair value of the shareholder’s shares in accordance with section 191, but failure to make that statement

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