Notes:
a) Not all the provisions of the Act pertain to Trent Radio, being a corporation
without share capital. Parts and sections specifically or generally relations to
such corporations are marked (*)
b) This act is revised from time to time. This copy was rendered on 17 July 2000 from a web page found at;
http://209.195.107.57/en/index.html
| TITLE or PART |
Section #
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| Definitions |
1
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-
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2
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*
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| PART I Corporations, Incorporation & Name |
3
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-
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16
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*
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| PART II Companies |
17
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-
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116
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*
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| PART III Corporations Without Share Capital |
117
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-
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133
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*
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| PART IV Mining Companies |
134
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-
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139
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| PART V Insurance Corporations |
140
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-
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227
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| PART VI Winding Up |
228
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-
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271
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*
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| PART VII Corporations, General |
272
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-
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334
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*
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| Schedule | ||||
Corporations Act
Revised Statutes of Ontario, 1990, Chapter C.38
AMENDED BY: 1992, C. 32, S. 6; 1993, C. 16, S. 3; 1993, C. 27, SCHED.;
1994, C. 11, S. 384; 1994, C. 17, S. 31; 1994, C. 27, S. 78; 1997, C. 19,
S. 31; 1997, C. 28, SS. 50, 51; 1998, C. 18, SCHED. E, SS. 59-82. 1.
Definitions
1. In this Act,
"books" includes loose-leaf books where reasonable precautions are
taken against the misuse of them; ("livres")
"Commission" means the Ontario Securities Commission; ("Commission")
"company" means a corporation with share capital; ("compagnie")
"corporation" means a corporation with or without share capital, but
in Part III "corporation" means a corporation without share
capital; ("personne morale")
"court" means the Ontario Court (General Division); ("tribunal")
"Minister" means the member of the Executive Council to whom the
administration of this Act is assigned by the Lieutenant Governor
in Council; ("ministre")
"officer" means president, chair of the board of directors, vice-
president, secretary, assistant secretary, treasurer, assistant
treasurer, manager or any other person designated an officer by by-
law of the corporation; ("dirigeant")
"private company" means a company as to which by its special Act,
letters patent or supplementary letters patent,
(a)the right to transfer its shares is restricted,
(b)the number of its shareholders, exclusive of persons who are in
the employment of the company, is limited to fifty, two or more
persons holding one or more shares jointly being counted as a
single shareholder, and
(c)any invitation to the public to subscribe for its shares or
securities is prohibited; ("compagnie ferm,e")
"public company" means a company that is not a private company;
("compagnie ouverte")
"registers" includes loose-leaf registers where reasonable
precautions are taken against the misuse of them; ("registres")
"securities" means the bonds, debentures, debenture stock or other
like liabilities of a corporation whether constituting a charge on
its property or not; ("valeurs mobiliSres")
"special resolution" means a resolution passed by the directors and
confirmed with or without variation by at least two-thirds of the
votes cast at a general meeting of the shareholders or members of
the corporation duly called for that purpose, or, in lieu of such
confirmation, by the consent in writing of all the shareholders or
members entitled to vote at such meeting. ("r,solution sp,ciale")
R.S.O. 1990, c. C.38, s. 1.
2. Application
2. This Act does not apply to a company to which the Business
Corporations Act or the Co-operative Corporations Act applies.
R.S.O. 1990, c. C.38, s. 2.
PART I
CORPORATIONS, INCORPORATION AND NAME
3. Application
3. This Part, except where it is otherwise expressly provided,
applies,
(a) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Upper
Canada;
(b) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Canada
that has its head office and carries on business in Ontario and
that was incorporated with objects to which the authority of
the Legislature extends; and
(c) to every corporation incorporated by or under a general or
special Act of the Legislature,
but this Part does not apply to a corporation incorporated for the
construction and working of a railway, an incline railway or a
street railway, or to a corporation within the meaning of the Loan
and Trust Corporations Act except as provided by that Act. R.S.O.
1990, c. C.38, s. 3.
4.(1) Incorporation by letters patent
4.(1) The Lieutenant Governor may in his or her discretion, by
letters patent, issue a charter to any number of persons, not fewer
than three, of eighteen or more years of age, who apply therefor,
constituting them and any others who become shareholders or members
of the corporation thereby created a corporation for any of the
objects to which the authority of the Legislature extends, except
those of railway and incline railway and street railway corporations
and corporations within the meaning of the Loan and Trust
Corporations Act. R.S.O. 1990, c. C.38, s. 4 (1).
4.(2)
4.(2) REPEALED: 1994, c. 27, s. 78 (1).
4.(3) Incorporation of private company with limited objects
4.(3) Despite subsection (1), a private company may be incorporated
under this Act with power to lend and invest money on mortgage of
real estate or otherwise, or with power to accept and execute the
office of liquidator, receiver, assignee, trustee in bankruptcy or
trustee for the benefit of creditors and to accept the duty of and
to act generally in the winding up of corporations, partnerships and
estates, other than estates of deceased persons, and shall not by
reason thereof be deemed to be a corporation within the meaning of
the Loan and Trust Corporations Act, but the number of its
shareholders, exclusive of persons who are in the employment of the
company, shall be limited by its letters patent or supplementary
letters patent to five, two or more persons holding one or more
shares jointly being counted as a single shareholder, and no such
company shall issue securities except to its shareholders, or borrow
money on the security of its property except from its shareholders,
or receive money on deposit. R.S.O. 1990, c. C.38, s. 4 (3).
5.(1) Supplementary letters patent
5.(1) The Lieutenant Governor may in his or her discretion issue
supplementary letters patent to any corporation that applies
therefor amending or otherwise altering or modifying its letters
patent or prior supplementary letters patent.
5.(2) No supplementary letters patent if corporation in default
5.(2) Despite subsection (1), the Lieutenant Governor shall not
issue supplementary letters patent to a corporation that is in
default of a filing requirement under the Corporations Information
Act or that has any unpaid fees or penalties outstanding.
5.(3) Commencement
5.(3) Subsection (2) comes into force on a day to be named by
proclamation of the Lieutenant Governor. R.S.O. 1990, c. C.38, s. 5.
6. Powers of Minister
6. The Minister may in his or her discretion and under the seal of
his or her office have, use, exercise and enjoy any power, right or
authority conferred by this Act on the Lieutenant Governor, but not
those conferred on the Lieutenant Governor in Council. R.S.O. 1990,
c. C.38, s. 6.
7. Sufficiency of material to be established
7. An applicant under this Act shall establish to the satisfaction
of the Minister the sufficiency of the application and all documents
filed therewith and shall furnish such evidence regarding the
application as the Minister considers proper. R.S.O. 1990, c. C.38,
s. 7.
8. Proof under oath
8. The Minister or any person in his or her ministry to whom an
application is referred may take evidence under oath with respect
thereto. R.S.O. 1990, c. C.38, s. 8.
9. Variation of terms of application
9. On an application for letters patent, supplementary letters
patent or an order, the Lieutenant Governor may give the corporation
a name different from its proposed or existing name, may vary the
objects or other provisions of the application and may impose such
conditions as he or she considers proper. R.S.O. 1990, c. C.38, s. 9.
10. Defects in form not to invalidate letters patent
10. The provisions of this Act relating to matters preliminary to
the issue of letters patent or supplementary letters patent or an
order are directory only, and no letters patent or supplementary
letters patent or order are void or voidable on account of any
irregularity or insufficiency in any matter preliminary to the issue
thereof. R.S.O. 1990, c. C.38, s. 10.
11.
11. REPEALED: 1994, c. 27, s. 78 (2).
12.(1) Commencement of existence
12.(1) A corporation comes into existence on the date of the letters
patent incorporating it.
12.(2) Effective date of letters patent, etc.
12.(2) Letters patent of incorporation, letters patent of
continuation, letters patent of amalgamation and supplementary
letters patent, issued under this Act or any predecessor thereof,
take effect on the date set forth therein. R.S.O. 1990, c. C.38, s. 12.
13.(1) Corporate name
13.(1) A corporation shall not be given a name,
(a) that is the same as or similar to the name of a known
corporation, association, partnership, individual or business
if its use would be likely to deceive, except where the
corporation, association, partnership, individual or person
consents in writing that its, his or her name in whole or in
part be granted, and, if required by the Minister,
(i) in the case of a corporation, undertakes to dissolve or
change its name within six months after the incorporation
of the new corporation, or
(ii) in the case of an association, partnership or
individual, undertakes to cease to carry on its, his or her
business or activities, or change its, his or her name,
within six months after the incorporation of the new
corporation;
(b) that suggests or implies a connection with the Crown or any
member of the Royal Family or the Government of Canada or the
government of any province of Canada or any department, branch,
bureau, service, agency or activity of any such government
without the consent in writing of the appropriate authority;
(c) that, when the objects applied for are of a political
nature, suggests or implies a connection with a political party
or a leader of a political party;
(d) that is objectionable on any public grounds. R.S.O. 1990,
c. C.38, s. 13 (1).
13.(2) Change of name
13.(2) If a corporation, through inadvertence or otherwise, has
acquired a name that is objectionable, the Minister may, after
giving the corporation an opportunity to be heard, issue
supplementary letters patent changing the name of the corporation to
the name specified in the supplementary letters patent.
13.(2.1) Written hearing
13.(2.1) A hearing under subsection (2) shall be in writing in
accordance with rules made by the Minister under the Statutory
Powers Procedure Act. 1998, c. 18, Sched. E, s. 59.
13.(3) Reference to court
13.(3) A person who feels aggrieved as a result of the giving of a
name under subsection (1) or the changing or refusing to change a
name under subsection (2) may, upon at least seven days notice to
the Minister and to such other persons as the court directs, apply
to the court for a review of the matter, and the court may make an
order changing the name of the corporation to such name as it
considers proper or may dismiss the application.
13.(4) Filing
13.(4) A copy of an order made under subsection (3), certified under
the seal of the court, shall be filed with the Minister by the
corporation within ten days after it is made.
13.(5) Offence
13.(5) A corporation that fails to comply with subsection (4) is
guilty of an offence and on conviction is liable to a fine of not
more than $200, and every director or officer of the corporation who
authorizes, permits or acquiesces in any such failure is guilty of
an offence and on conviction is liable to a like fine. R.S.O. 1990,
c. C.38, s. 13 (3-5).
14. Change not to affect rights, etc.
14. A change in the name of a corporation does not affect its rights
or obligations. R.S.O. 1990, c. C.38, s. 14.
15. Unauthorized use of "Limited", etc.
15. A person, partnership or association that trades or carries on a
business or undertaking under a name in which "Limited", "Limit,e",
"Incorporated", "Incorpor,e", or "Corporation" or any abbreviation
thereof is used, unless incorporated, is guilty of an offence and on
conviction is liable to a fine of not more than $200. R.S.O. 1990,
c. C.38, s. 15.
16.(1) Corrected letters patent, etc.
16.(1) If letters patent or supplementary letters patent issued
under this Act or a predecessor of this Act contain an error, the
directors or members of the corporation may apply to the Minister
for corrected letters patent or corrected supplementary letters
patent.
16.(2) Same
16.(2) The Minister, on his or her own initiative or on an
application under subsection (1), may issue corrected letters patent
or corrected supplementary letters patent.
16.(3) Surrender of documents
16.(3) The corporation shall surrender the letters patent or
supplementary letters patent which are being corrected,
(a)at the time of making an application under subsection (1); or
(b)forthwith upon the request of the Minister if he or she is
issuing the correcting documents on his or her own initiative.
16.(4) Conditions
16.(4) The Minister may issue the corrected letters patent or
supplementary letters patent subject to such conditions as he or she
may impose.
16.(5) Date of corrections
16.(5) Corrected letters patent or supplementary letters patent may
bear the date of the letters patent or supplementary letters patent
which are being replaced. 1994, c. 27, s. 78 (3).
PART II
COMPANIES
17. Application
17. Subject to section 2 and except where it is otherwise expressly
provided, this Part applies,
(a) to every company incorporated by or under a general or
special Act of the Parliament of the late Province of Upper
Canada;
(b) to every company incorporated by or under a general or
special Act of the Parliament of the late Province of Canada
that has its head office and carries on business in Ontario and
that was incorporated with objects to which the authority of
the Legislature extends; and
(c) to every company incorporated by or under a general or
special Act of the Legislature,
but this Part does not apply to a company, incorporated for the
construction and working of a railway, an incline railway or a
street railway, or to a corporation within the meaning of the Loan
and Trust Corporations Act except as provided by that Act. R.S.O.
1990, c. C.38, s. 17.
18.(1) Application for incorporation
18.(1) The applicants for incorporation of a company shall file with
the Lieutenant Governor an application showing:
1. The names in full, the place or residence and the calling
of each of the applicants.
2. The name of the company to be incorporated.
3. The objects for which the company is to be incorporated.
4. The place in Ontario where the head office of the company
is to be situate.
5. The authorized capital, the classes of shares, if any,
into which it is to be divided, the number of shares of each
class, and the par value of each share, or, where the shares
are to be without par value, the consideration, if any,
exceeding which each share or the aggregate consideration, if
any, exceeding which all the shares of each class may not be
issued.
6. Where there are to be preference shares, the preferences,
rights, conditions, restrictions, limitations or prohibitions
attaching to them or each class of them.
7. Where the company is to be a private company, a statement
to that effect and the restrictions to be placed on the
transfer of its shares.
8. The names of the applicants who are to be the first
directors of the company.
9. The class and number of shares to be taken by each
applicant and the amount to be paid therefor.
10. Any other matters that the applicants desire to have
included in the letters patent.
18.(2)Idem
18.(2) The applicants may ask to have included in the letters patent
any provision that could be the subject of a by-law of the company.
R.S.O. 1990, c. C.38, s. 18.
19. Original shareholders
19. Upon incorporation of a company, each applicant becomes a
shareholder holding the class and number of shares stated in the
application to be taken by the applicant and is liable to the
company for the amount to be paid therefor. R.S.O. 1990, c. C.38, s. 19.
20.(1) Use of word "Limited"
20. 20.(1) The name of a company shall have the word "Limited" or
"Limit,e" as the last word thereof, but a company may use the
abbreviation "Ltd." or "Lt,e" and may be referred to in the same
manner.
20.(2) Not applicable to insurers
20.(2) This section does not apply to insurers incorporated under
Part V. R.S.O. 1990, c. C.38, s. 20.
21.(1) Use of name
21. 21.(1) Where a company or a director, officer or employee
thereof uses the name of the company, the word "Limited" or
"Limit,e", or the abbreviation "Ltd." or "Lt,e", shall appear as the
last word thereof.
21.(2) Exception
21.(2) Stamping, writing, printing or otherwise marking on goods,
wares and merchandise of the company or upon packages containing the
same shall not be deemed a use of the name within the meaning of
subsection (1). R.S.O. 1990, c. C.38, s. 21 (1, 2).
21.(3)Idem
21.(3) A private company shall have the words "private company" or
the words "compagnie ferm,e" on its seal, if it has a seal. R.S.O.
1990, c. C.38, s. 21 (3); 1993, c. 27, Sched.; 1998, c. 18, Sched.
E, s. 60.
21.(4)Offence
21.(4) A company that contravenes any requirement of this section
and every director, officer or employee of the company who
authorizes, permits or acquiesces in any such contravention is
guilty of an offence and on conviction is liable to a fine of not
more than $200. R.S.O. 1990, c. C.38, s. 21 (4).
22. Use of name
22. Despite subsection 20 (1) and section 21, a company may use its
name in such form and in such language as the letters patent or
supplementary letters patent provide. R.S.O. 1990, c. C.38, s. 22.
23.(1) Incidental powers
23.(1) A company possesses, as incidental and ancillary to the
objects set out in the letters patent or supplementary letters
patent, power,
(a) to carry on any other business capable of being
conveniently carried on in connection with its business or
likely to enhance the value of or make profitable any of its
property or rights;
(b) to acquire or undertake the whole or any part of the
business, property and liabilities of any person carrying on
any business that the company is authorized to carry on;
(c) to apply for, register, purchase, lease, acquire, hold,
use, control, license, sell, assign or dispose of patents,
patent rights, copyrights, trade marks, formulae, licences,
inventions, processes, distinctive marks and similar rights;
(d) to enter into partnership or into any arrangement for
sharing of profits, union of interests, co-operation, joint
adventure, reciprocal concession or otherwise with any person
or company carrying on or engaged in or about to carry on or
engage in any business or transaction that the company is
authorized to carry on or engage in or any business or
transaction capable of being conducted so as to benefit the
company, and to lend money to, guarantee the contracts of, or
otherwise assist any such person or company, and to take or
otherwise acquire shares and securities of any such company,
and to sell, hold, reissue, with or without guarantee, or
otherwise deal with the same;
(e) to take or otherwise acquire and hold shares in any other
company having objects altogether or in part similar to those
of the company or carrying on any business capable of being
conducted so as to benefit the company;
(f) to enter into arrangements with any public authority that
seem conducive to the company's objects and obtain from any
such authority any rights, privileges or concessions;
(g) to establish and support or aid in the establishment and
support of associations, institutions, funds or trusts for the
benefit of employees or former employees of the company or its
predecessors, or the dependants or connections of such
employees or former employees, and grant pensions and
allowances, and make payments towards insurance or for any
object similar to those set forth in this clause, and subscribe
or guarantee money for charitable, benevolent, educational or
religious objects or for any exhibition or for any public,
general or useful objects;
(h) to promote any company for the purpose of acquiring or
taking over any of the property and liabilities of the company,
or for any other purpose that may benefit the company;
(i) to purchase, lease or take in exchange, hire or otherwise
acquire any personal property and any rights or privileges that
the company may think necessary or convenient for the purposes
of its business;
(j) to construct, improve, maintain, work, manage, carry out or
control any roads, ways, tramways, branches, sidings, bridges,
reservoirs, watercourses, wharves, factories, warehouses,
electric works, shops, stores and other works and conveniences
that may advance the company's interests, and to contribute to,
subsidize or otherwise assist or take part in the construction,
improvement, maintenance, working, management, carrying out or
control thereof;
(k) to raise and assist in raising money for, and to aid by way
of bonus, loan, promise, endorsement, guarantee or otherwise,
any person or company with whom the company may have business
relations or any of whose shares, securities or other
obligations are held by the company and to guarantee the
performance or fulfilment of any contracts or obligations of
any such person or company, and in particular to guarantee the
payment of the principal of and interest on securities,
mortgages and liabilities of any such person or company;
(l) to draw, make, accept, endorse, discount, execute and issue
bills of exchange, promissory notes, bills of lading, warrants
and other negotiable or transferable instruments;
(m) to sell, lease, exchange or dispose of the undertaking of
the company or any part thereof as an entirety or substantially
as an entirety for such consideration as the company thinks
fit, and in particular for shares or securities of any other
company having objects altogether or in part similar to those
of the company, if authorized so to do by a special resolution;
(n) to sell, improve, manage, develop, exchange, lease, dispose
of, turn to account or otherwise deal with the property of the
company in the ordinary course of its business;
(o) to adopt such means of making known the products of the
company as seems expedient, and in particular by advertising in
the press, by circulars, by purchase and exhibition of works of
art or interest, by publication of books and periodicals or by
granting prizes and rewards or making donations;
(p) to cause the company to be registered and recognized in any
foreign country or province or territory of Canada, and to
designate persons therein according to the laws of such foreign
country or province or territory to represent the company and
to accept service for and on behalf of the company of any
process or suit;
(q) to allot and issue fully-paid shares of the company in
payment or part payment of any property purchased or otherwise
acquired by the company or for any past services rendered to
the company;
(r) to distribute among the shareholders of the company in
money, kind, specie or otherwise as may be resolved, by way of
dividend, bonus or in any other manner considered advisable,
any property of the company, but no such distribution shall
decrease the capital of the company unless made in accordance
with this Act;
(s) to pay all costs and expenses of or incidental to the
incorporation and organization of the company;
(t) to invest and deal with the money of the company not
immediately required for its objects in such manner as may be
determined;
(u) to do any of the above things and all things authorized by
the letters patent and supplementary letters patent as
principals, agents, contractors, trustees or otherwise, and
either alone or in conjunction with others;
(v) to do all such other things as are incidental or conducive
to the attainment of the above objects and of the objects set
out in the letters patent and supplementary letters patent.
23.(2) Powers may be withheld
23.(2) Any of the powers set out in subsection (1) may be withheld
or limited by the letters patent or supplementary letters patent.
R.S.O. 1990, c. C.38, s. 23.
24.(1) Loans to shareholders and directors
24.(1) Except as provided in subsection (2), a company shall not
make loans to any of its shareholders or directors or give, directly
or indirectly, by means of a loan, guarantee, the provision of
security or otherwise, any financial assistance for the purpose of,
or in connection with, a purchase made or to be made by any person
of any shares of the company.
24.(2) Exceptions
24.(2) A company may,
(a) make loans to any of its shareholders or directors in the
ordinary course of its business where the making of loans is
part of the ordinary business of the company;
(b) make loans to full-time employees of the company whether or
not they are shareholders or directors, with a view to enabling
them to purchase or erect dwelling houses for their own
occupation, and may take from such employees mortgages or other
securities for the repayment of such loans;
(c) provide, in accordance with a scheme for the time being in
force, money by way of loan for the purchase by trustees of
fully-paid shares of the company, to be held by or for the
benefit of employees of the company, whether or not they are
shareholders or directors;
(d) make loans to employees of the company, other than
directors, whether or not they are shareholders, with a view to
enabling them to purchase fully-paid shares of the company to
be held by them by way of beneficial ownership; or
(e) if it is a private company, make loans to any of its
shareholders or directors with a view to enabling them to
purchase issued shares of the company.
24.(3) By by-law only
24.(3) The power mentioned in clause (2) (b), (c), (d) or (e) may be
exercised only under the authority of a by-law passed by the
directors and confirmed by at least two-thirds of the votes cast at
a general meeting of the shareholders duly called for considering
the by-law.
24.(4) Liability of directors
24.(4) Every director and officer of a company making or assenting
to a loan in contravention of this section is, until repayment of
the loan, jointly and severally liable to the company and to its
creditors for the debts of the company then existing or thereafter
contracted to the amount of the loan with interest at the rate of 5
per cent per year. R.S.O. 1990, c. C.38, s. 24.
25.(1) Authorized capital
25.(1) The authorized capital of a company shall be divided into
shares with par value or without par value or both and may consist
of shares of more than one class.
25.(2) Par shares
25.(2) Where the shares of a company are with par value, its
authorized capital shall be expressed in dollars, pounds, francs or
other currency in the letters patent or supplementary letters patent
and is an amount equal to the total of the products of the number of
shares of each class multiplied by the par value thereof.
25.(3) No par or par and no par shares
25.(3) Where the shares of a company are without par value or where
part of its shares are with par value and part are without par
value, its authorized capital shall be expressed as a specified
number of shares in the letters patent or supplementary letters
patent. R.S.O. 1990, c. C.38, s. 25 (1-3).
25.(4) Consideration for no par shares
25.(4) Where the shares of a company are without par value or where
part of its shares are with par value and part are without par
value, the letters patent or supplementary letters patent may
provide that each share without par value or the shares of each
class of shares without par value are not to be issued for a
consideration exceeding in amount or value a stated amount in
dollars, pounds, francs or other currency, and the letters patent or
supplementary letters patent may provide, in addition, that such
share or shares may be issued for such greater amount as the board
of directors of the company considers expedient. R.S.O. 1990, c.
C.38, s. 25 (4); 1994, c. 27, s. 78 (4).
26. Nature of shares
26. Each share of a class shall be the same in all respects as every
other share of that class. R.S.O. 1990, c. C.38, s. 26.
27.(1) More than one class of shares
27. 27.(1) If a company has more than one class of shares, one class
shall be common shares designated as such and the other class or
classes shall be preference shares howsoever designated.
27.(2) Application
27.(2) Subsection (1) does not apply to shares authorized before the
30th day of April, 1954. R.S.O. 1990, c. C.38, s. 27.
28.(1) Preference shares
28.(1) If a company has more than one class of shares, the letters
patent or supplementary letters patent shall provide that the
preference shares of a class confer upon the holders thereof a
preference or right over the holders of shares of another class,
either preference or common, and such preference or right, without
limiting the nature thereof, may be in respect of dividends,
repayment of capital, the right to elect part of the board of
directors or the right to convert such shares into shares of another
class or other classes of shares or into securities.
28.(2) Conditions, etc.
28.(2) The letters patent or supplementary letters patent of a
company may provide that the preference shares of a class may have
attached thereto conditions, restrictions, limitations or
prohibitions including, but without limiting the nature thereof, the
right of the company to purchase for cancellation or at its option
to redeem all or part of the shares of that class or conditions,
restrictions, limitations or prohibitions on the right to vote.
28.(3) Redemption by shareholders
28.(3) If the letters patent or supplementary letters patent so
provide or if a by-law creating preference shares passed and
confirmed before the 30th day of April, 1954, so provides, any
preference shares of a class may be redeemed by the company at the
request of a holder or of a number or proportion of such holders.
28.(4) No par preference shares not to be redeemed
28.(4) Preference shares without par value do not have a preference
in respect of the repayment of capital and are not subject to
redemption or purchase for cancellation.
28.(5) Redemption of par value preference shares
28.(5) Where preference shares with par value are to be redeemed,
they shall be redeemed at the amount paid up thereon, but, if the
letters patent or supplementary letters patent so provide or if a
by-law creating preference shares passed and confirmed before the
30th day of April, 1954, so provides, a premium, unpaid dividends or
other stated amount may be paid.
28.(6)Redemption at actual value
28.(6) Despite subsection (5), if the letters patent or
supplementary letters patent so provide, the preference shares of a
class may be redeemed out of money set aside in a fund for such
purpose at a price as near as may be to the actual value thereof,
and the method of determining such actual value shall be set out in
the letters patent or supplementary letters patent.
28.(7)Redemption of part
28.(7) Where the preference shares of a class are made redeemable by
the letters patent or supplementary letters patent and where at any
time some but not all of such shares are to be redeemed, the shares
to be redeemed shall, except as provided in subsections (8) and (9),
be selected by lot in such manner as the board of directors
determines or as nearly as may be in proportion to the number of
shares registered in the name of each shareholder.
28.(8)Redemption of all or part
28.(8) Where at least 95 per cent of the holders of the preference
shares of a class holding at least 95 per cent of the issued shares
of such class consent in writing and where, after twenty-one days
notice has been given by sending the notice to each of the holders
of shares of such class to the holder's last address as shown on the
books of the company, none of the holders of shares of such class
dissents in writing to the company, the company may redeem all or
any of such shares in such manner as the board of directors
determines.
28.(9) Redemption of preference shares of private company
28.(9) Where a holder of preference shares of a private company dies
or leaves its employment, it may within one year of such event
redeem all or any of the preference shares held by the deceased
shareholder or former employee.
28.(10) Power to withhold
28.(10) The letters patent or supplementary letters patent of a
company may withhold any of the powers set out in subsection (7),
(8) or (9).
28.(11) Purchase of preference shares by company
28.(11) Where the letters patent or supplementary letters patent
provide that the preference shares may be purchased for cancellation
by the company, the company may purchase some or all of such shares
at the lowest price at which, in the opinion of the directors, such
shares are obtainable, but not exceeding the amount paid up thereon;
but, if the letters patent or supplementary letters patent so
provide, a premium, unpaid dividends or other stated amount may be
paid.
28.(12) Insolvency
28.(12) Preference shares shall not be redeemed or purchased for
cancellation by the company if the company is insolvent or if the
redemption or purchase would render the company insolvent.
28.(13) Effect of redemption
28.(13) Where preference shares are redeemed or purchased for
cancellation by the company, they shall be thereby cancelled, and
the authorized and the issued capital of the company shall be
thereby decreased.
28.(14) Conversion of preference shares
28.(14) Where preference shares are converted into the same or
another number of shares of another class or classes, whether
preference or common, the shares converted thereupon become the same
in all respects as the shares of the class or classes respectively
into which they are converted and the number of shares of each class
affected by the conversion is changed accordingly.
28.(15) Issued capital unchanged on conversion
28.(15) Where preference shares are converted into another class or
other classes of shares, the issued capital of the company shall not
be increased or decreased by the conversion.
28.(16) Application
28.(16) Subsections (1), (4), (7), (8), (9) and (11) do not apply to
shares authorized before the 30th day of April, 1954. R.S.O. 1990,
c. C.38, s. 28.
29.(1) Preference shares in series
29.(1) The letters patent or supplementary letters patent of a
company may authorize the issue from time to time in one or more
series of the preference shares of a class and may authorize the
directors to fix from time to time before such issue the
designation, preferences, rights, conditions, restrictions,
limitations or prohibitions attaching to the shares of each series
of such class.
29.(2) Voting rights
29.(2) The shares of all series of the same class of preference
shares shall carry the same voting rights or the same restrictions,
conditions, limitations or prohibitions on the right to vote.
29.(3) Dividends
29.(3) Where any dividends or amounts payable on a repayment of
capital are not paid in full, the shares of all series of the same
class of preference shares shall participate rateably in respect of
such dividends, including accumulations, if any, in accordance with
the sums that would be payable on such shares if all such dividends
were declared and paid in full, and on any repayment of capital in
accordance with the sums that would be payable on such repayment of
capital if all sums so payable were paid in full.
29.(4) Conditions precedent to issue
29.(4) No shares of any series of a class of preference shares shall
be issued until supplementary letters patent have been issued
setting forth the designation, preferences, rights, conditions,
restrictions, limitations or prohibitions attaching to the shares of
such series except in the case of the first series if such
designation, preferences, rights, conditions, restrictions,
limitations or prohibitions have been set forth in the letters
patent or prior supplementary letters patent.
29.(5) Issue of supplementary letters patent
29.(5) The Lieutenant Governor may issue such supplementary letters
patent on the application of the company authorized by a resolution
of the directors fixing the designation, preferences, rights,
conditions, restrictions, limitations or prohibitions attaching to
the shares of such series and the filing with the Minister of
evidence of the due compliance with the conditions, if any,
contained in the letters patent or in any prior supplementary
letters patent, precedent to the creation and issue of the shares of
such series. R.S.O. 1990, c. C.38, s. 29.
30.(1) Voting rights
30.(1) Subject to subsection 28 (2), every holder of a preference
share or a common share is entitled to one vote for each preference
share or each common share held by the holder at all meetings of the
shareholders of the company, but this subsection does not apply to
shares authorized before the 30th day of April, 1954.
30.(2) Votes
30.(2) The letters patent or supplementary letters patent may
provide for a greater number of votes for each share of a class or
classes at all times or on the happening of a stated event. R.S.O.
1990, c. C.38, s. 30.
31.(1) Issued capital, par value shares
31.(1) Where the shares of a company are with par value, its issued
capital shall be expressed in dollars, pounds, francs or other
currency and is an amount equal to the total of the products of the
number of issued shares of each class multiplied by the par value
thereof.
31.(2) No par value shares, etc.
31.(2) Where the shares of a company are without par value or where
part of its shares are with par value and part are without par
value, its issued capital shall be expressed in dollars, pounds,
francs or other currency and is an amount equal to the total of the
products of the number of issued shares of each class with par value
multiplied by the par value thereof, together with the amount of the
consideration for which the shares without par value from time to
time outstanding were issued and together with such amounts as from
time to time by by-law of the company may be transferred thereto.
31.(3)Idem
31.(3) Nothing in subsection (2) affects the capital of a company in
respect of shares without par value issued before the 30th day of
April, 1954, if the letters patent or the supplementary letters
patent of the company provide that the capital is to be at least
equal to the sum of the aggregate par value of all issued shares
having par value plus a sum in dollars, pounds, francs or other
currency in respect of every issued share without par value plus
such amounts as from time to time by by-law of the company may be
transferred thereto.
31.(4)Idem
31.(4) Where, before the 30th day of April, 1954, a company has set
aside part of the consideration received upon the allotment and
issue of shares without par value as distributable surplus, the
amount of such distributable surplus does not form part of its
issued capital. R.S.O. 1990, c. C.38, s. 31.
32.(1) Issue of shares
32. 32.(1) In the absence of a provision to the contrary in the
letters patent, supplementary letters patent or by-laws of the
company, shares may be allotted and issued at such times and in such
manner and to such persons or class of persons as the directors
determine.
32.(2) Consideration, par value shares
32.(2) Shares with par value shall not be allotted and issued as
fully paid except for a consideration payable in cash at least
equal to the product of the number of shares allotted and issued
multiplied by the par value thereof or for a consideration payable
directly or indirectly in property or past services which the
directors in good faith determine by express resolution to be in
all circumstances of the transaction the fair equivalent of such
cash consideration.
32.(3) Consideration, no par shares
32.(3) Shares without par value may be allotted and issued for such
consideration as is fixed by the directors acting in good faith and
in the best interests of the company.
32.(4) Idem
32.(4) Shares without par value shall not be allotted and issued as
fully paid except for the consideration fixed by the directors as
aforesaid payable in cash to the total amount of the consideration
so fixed or for a consideration payable directly or indirectly in
property or past services which the directors in good faith
determine by express resolution to be in all circumstances of the
transaction the fair equivalent of such cash consideration.
32.(5) Holders not liable to creditors, etc.
32.(5) Shares allotted and issued in accordance with this section
shall be fully paid and non-assessable upon receipt by the company
of the consideration for the allotment and issue thereof, and upon
such receipt the holders of such shares are not liable to the
company or to its creditors in respect thereof. R.S.O. 1990, c.
C.38, s. 32.
33.(1) Commission on sale of shares
33. 33.(1) The directors may pass by-laws for the payment of
commissions to persons in consideration of their subscribing or
agreeing to subscribe, whether absolutely or conditionally, for
shares in the company, or procuring or agreeing to procure
subscriptions, whether absolute or conditional for such shares, but
no such commission shall exceed 25 per cent of the amount of the
subscription.
33.(2) Commission by-laws to be confirmed
33.(2) No by-law passed under subsection (1) is effective until it
is confirmed by at least two-thirds of the votes cast at a general
meeting of shareholders duly called for considering it.
33.(3) No unauthorized commissions
33.(3) Except as provided in subsection (1), no company shall apply
any of its shares or capital, either directly or indirectly, in
payment of any commission, discount or allowance to any person in
consideration of the person's subscribing or agreeing to subscribe,
whether absolutely or conditionally, for shares of the company or
procuring or agreeing to procure subscriptions, whether absolute or
conditional, for such shares, whether the shares or capital is so
applied by being added to the purchase money of any property
acquired by the company or to the contract price of any work to be
executed for the company, or is paid out of the nominal purchase
money or contract price or otherwise. R.S.O. 1990, c. C.38, s. 33.
34.(1) Supplementary letters patent
34.(1) A company may apply to the Lieutenant Governor for the issue
of supplementary letters patent,
(a) extending, limiting or otherwise varying its objects;
(b) changing its name;
(c) increasing its authorized capital;
(d) decreasing,
(i) its authorized capital by cancelling issued or unissued
shares with or without par value or by reducing the par
value of issued or unissued shares, or
(ii) its issued capital, if it has shares without par value,
and, where it has more capital than it requires, authorizing
the repayment of capital to the shareholders to the extent that
the issued capital is decreased in any way under this clause;
(e) redividing its authorized capital into shares of lesser or
greater par value;
(f) consolidating or subdividing any of its shares without par
value;
(g) changing any of its shares with par value into shares
without par value;
(h) changing any of its shares without par value into shares
with par value;
(i) reclassifying any shares with or without par value into
shares of a different class;
(j) varying any provision in its letters patent or prior
supplementary letters patent;
(k) providing for any other matter or thing in respect of which
provision may be made in letters patent under this Act;
(l) converting it into a public company;
(m) making it subject to Part IV;
(n) making it not subject to Part IV;
(o) converting it into a private company;
(p) converting it into a corporation without share capital;
(q) converting it into a corporation, with or without share
capital.
34.(2) Authorization
34.(2) An application under clauses (1) (a) to (n) shall be
authorized by a special resolution.
34.(3)Idem
34.(3) An application under clauses (1) (o) to (q) shall be
authorized by a resolution of the board of directors and confirmed
in writing,
(a) by 100 per cent of the shareholders; or
(b) by at least 95 per cent of the shareholders holding at
least 95 per cent of the issued capital,
but, in the case of confirmation under clause (b), the application
shall not be made until twenty-one days notice of the application
has been given by sending the notice to each shareholder to the
shareholder's last address as shown on the books of the company and
only if at the expiration of the twenty-one days none of the
shareholders has dissented in writing to the company.
34.(4) Additional authorization for variation of rights of preference
shareholders
34.(4) If the application is to delete or vary a preference, right,
condition, restriction, limitation or prohibition attaching to a
class of preference shares or to create preference shares ranking in
priority to or on a parity with an existing class of preference
shares, then, subject to subsection (5) and, in addition to the
authorization required by subsection (2), the application shall not
be made until the application has been authorized in writing,
(a)by 100 per cent of the holders of the shares of such class
or classes of shares; or
(b)by at least 95 per cent of the holders of the shares of such
class or classes of shares holding at least 95 per cent of the
issued shares of such class or classes,
but, in the case of authorization under clause (b), the application
shall not be made until twenty-one days notice of the application
has been given by sending the notice to each of the holders of
shares of such class or classes to the holder's last address as
shown on the books of the company and only if at the expiration of
twenty-one days none of the holders of such class or classes has
dissented in writing to the company.
34.(5) Idem
34.(5) If the letters patent or supplementary letters patent so
provide, the authorization required by subsection (4) may be given
by at least two-thirds of the votes cast at a meeting of the holders
of such class or classes of shares duly called for that purpose.
34.(6) Exception
34.(6) Where letters patent or supplementary letters patent issued
before the 30th day of April, 1954, provide for an authorization for
an application for supplementary letters patent to delete or vary a
preference, right, condition, restriction, limitation or prohibition
attaching to preference shares or to create preference shares
ranking in priority to or on a parity with an existing class of
preference shares, such authorization is effective, and subsections
(4) and (5) do not apply. R.S.O. 1990, c. C.38, s. 34 (1-6).
34.(7)
34.(7) Repealed: 1998, c. 18, Sched. E, s. 61.
34.(8) Exception
34.(8) Subsection (4) does not apply to an arrangement under section 112.
34.(9)Special Act corporations excepted
34.(9) This section does not apply to a company incorporated by
special Act, except that a company incorporated by special Act may
apply under this section for the issue of supplementary letters
patent changing its name. R.S.O. 1990, c. C.38, s. 34 (8, 9).
35. Reduction of capital
35. On an application for supplementary letters patent decreasing
authorized or issued capital, the company shall establish to the
satisfaction of the Minister that after the decrease the company
will be solvent and, if required by the Minister, shall establish to
his or her satisfaction that there are no creditors who object to
the application. R.S.O. 1990, c. C.38, s. 35.
36. Decrease of issued capital
36. Where issued shares without par value are cancelled, the issued
capital is thereby decreased by an amount equal to the total of the
products of the average consideration for which the shares of each
such class were issued multiplied by the number of shares cancelled
of each such class, respectively. R.S.O. 1990, c. C.38, s. 36.
37.(1) Liability on decrease of issued capital
37.(1) On a decrease of the issued capital of a company by
supplementary letters patent, each person who was a shareholder on
the date of the supplementary letters patent is individually liable
to the creditors of the company for the debts due on that date to an
amount not exceeding the amount of the repayment to the person or
reduction of the person's liability, or both, as the case may be.
37.(2) Limitation of liability
37.(2) A person is not liable under subsection (1),
(a) unless the company has been sued for the debt within six
months after the date of the supplementary letters patent and
execution has been returned unsatisfied in whole or in part;
and
(b) unless the person is sued for the debt within two years
from the date of the supplementary letters patent.
37.(3) Idem
37.(3) After execution has been so returned, the amount due on the
execution, not exceeding the amount of the repayment to the person
or the reduction of the person's liability, is the amount
recoverable against the person.
37.(4) Class actions
37.(4) Where it is made to appear that there are numerous
shareholders who may be liable under this section, the court may
permit an action to be brought against one or more of them as
representatives of the class and, if the plaintiff establishes the
plaintiff's claim as creditor, may make an order of reference and
add as parties on the reference all such shareholders as may be
found, and the referee shall determine the amount that each should
contribute towards the plaintiff's claim and may direct payment of
the sums so determined. R.S.O. 1990, c. C.38, s. 37 (1-4).
37.(5) Shareholder holding shares in fiduciary capacity
37.(5) No person holding shares as executor, administrator, guardian
or trustee, who is registered on the books of the company as a
shareholder and therein described as representing in any such
capacity a named estate, person or trust, is personally liable under
this section, but the estate, person or trust is subject to all
liabilities imposed by this section. R.S.O. 1990, c. C.38, s. 37
(5); 1992, c. 32, s. 6 (1).
38.(1) Fractional shares
38.(1) A person entitled to a fraction of a share is not entitled to
be registered on the books of the company in respect thereof or to
receive a share certificate therefor, but the person is entitled to
receive a bearer fractional certificate in respect of such fraction
and, on presentation at the head office of the company, or at a
place designated by the company, of bearer fractional certificates
for fractions that together represent a whole share, a share
certificate for a whole share shall be issued in exchange therefor
and the person in whose name such certificate is issued shall be
registered on the books of the company as the holder of such share.
38.(2) Transfer
38.(2) Such a bearer fractional certificate is transferable by
delivery.
38.(3) Purchase by company
38.(3) For the purpose of consolidating fractions of shares into
whole shares, a company may purchase fractions of shares and, if it
does so, it shall sell forthwith the whole shares resulting from the
consolidation. R.S.O. 1990, c. C.38, s. 38.
39. Shares deemed personal estate
39. The shares of a company shall be deemed to be personal estate.
R.S.O. 1990, c. C.38, s. 39.
40.(1) Transfer of shares
40. 40.(1) The shares of a company are transferable on the books of
the company subject to such conditions and restrictions as this Act,
the special Act, the letters patent or supplementary letters patent
prescribe.
40.(2) Transfer by-laws
40.(2) Subject to subsection (3), no by-law shall be passed that in
any way restricts the right of a holder of fully-paid shares to
transfer them, but by-laws may be passed regulating the method of
their transfer.
40.(3) Where shareholder indebted to company
40.(3) Except in the case of shares listed on a recognized stock
exchange, where the letters patent, supplementary letters patent or
by-laws so provide, the directors may refuse to permit the
registration of a transfer of fully-paid shares registered in the
name of a shareholder who is indebted to the company. R.S.O. 1990,
c. C.38, s. 40.
41. Register of transfers
41. Every company shall cause to be kept a register of transfers in
which all transfers of shares and the date and other particulars of
each transfer shall be set out. R.S.O. 1990, c. C.38, s. 41.
42. Transfer agents
42. A company may appoint a transfer agent to keep the register of
shareholders and the register of transfers and may also appoint one
or more branch transfer agents to keep branch registers of
shareholders and branch registers of transfers. R.S.O. 1990, c.
C.38, s. 42.
43.(1) Where registers to be kept
43.(1) The register of shareholders and the register of transfers
shall be kept at the head office of the company or at such other
office or place in Ontario as is appointed by resolution of the
directors, and the branch register or registers of shareholders and
the branch register or registers of transfers may be kept at such
office or offices of the company or other place or places, either in
or outside Ontario, as are appointed by resolution of the directors.
43.(2) Valid registration
43.(2) Registration of the transfer of a share of the company in the
register of transfers or a branch register of transfers is a
complete and valid registration for all purposes.
43.(3)Entry in branch transfer register
43.(3) In each branch register of transfers shall be recorded only
the particulars of the transfers of shares registered in that branch
register of transfers.
43.(4)Entry in register of transfers
43.(4) Particulars of every transfer of shares registered in every
branch register of transfers shall be recorded in the register of
transfers.
43.(5) Closing of register of transfers
43.(5) The directors of a company may by resolution close the
register of transfers and the branch register or registers of
transfers, if any, for a period of time not exceeding forty-eight
hours, exclusive of Saturdays and holidays, immediately preceding
any meeting of the shareholders, and notice of every such closing
shall be given in a newspaper published in the place where the
register of transfers is kept and in a newspaper published in each
place in which a branch register of transfers is kept. R.S.O. 1990,
c. C.38, s. 43.
44.(1) Share certificates
44.(1) Every shareholder is entitled to a share certificate in
respect of the shares held by the shareholder, signed by the proper
officers in accordance with the company's by-laws in that regard,
but the company is not bound to issue more than one share
certificate in respect of a share or shares held jointly by several
persons and delivery of a share certificate to one of several joint
shareholders is sufficient delivery to all.
44.(2) Title
44.(2) A share certificate is proof, in the absence of evidence to
the contrary, of the title of the shareholder to the shares
represented thereby.
44.(3) Fee
44.(3) A company may charge a fee of not more than 50 cents for
every share certificate issued, except that, in the case of the
allotment and issue of shares, no fee shall be charged. R.S.O. 1990,
c. C.38, s. 44.
45. Lost certificates
45. Where a share certificate is defaced, destroyed or lost, a new
certificate may be issued in its place on payment of such fee, if
any, not exceeding $1 and on such terms, if any, as to evidence and
indemnity as the directors determine. R.S.O. 1990, c. C.38, s. 45.
46.(1) Contents of share certificates
46.(1) Every share certificate,
(a)shall bear upon its face the name of the company, a
statement in English or in French that the company is
incorporated in the Province of Ontario and a statement of its
authorized capital;
(b)shall state the number and class of shares represented
thereby and whether the shares are with par value or without
par value and, if partly paid, the amount paid up thereon or
that the shares are fully paid, as the case may be;
(c)if it represents preference shares, shall state thereon in
legible characters the preferences, rights, conditions,
restrictions, limitations or prohibitions attaching to the
class of preference shares to which it belongs; and
(d) if it represents shares of a private company, shall bear
upon its face the words "Private Company" or the words
"compagnie ferm,e".
46.(2) Exception
46.(2) Where some but not all of the preference shares of a class
are converted, redeemed or purchased for cancellation, it is
unnecessary for the company to change the statement of its
authorized capital on its share certificates. R.S.O. 1990, c. C.38,
s. 46.
47. Signing of share certificates
47. A share certificate shall be signed manually by at least one
officer of the company or by or on behalf of a transfer agent or
branch transfer agent of the company, and the company may by by-law
provide that any additional signatures required on share
certificates may be printed, engraved, lithographed or otherwise
mechanically reproduced thereon, and in such event share
certificates so signed are as valid as if they had been signed
manually. R.S.O. 1990, c. C.38, s. 47.
48.(1) Trusts
48.(1) A company is not bound to see to the execution of any trust,
whether express, implied or constructive, in respect of any share.
48.(2)Discharge
48.(2) The receipt of the shareholder in whose name the share is
registered on the books of the company is a valid and binding
discharge to the company for any payment made in respect of such
share whether notice of such trust has been given to the company or
not.
48.(3)Application of money paid
48.(3) The company is not bound to see to the application of the
money paid upon such receipt. R.S.O. 1990, c. C.38, s. 48 (1-3).
48.(4)Authority to transfer
48.(4) The written authorization of an executor, administrator,
guardian or trustee who is registered on the books of the company as
holding shares in any such capacity is sufficient justification for
the company to register a transfer of such shares, including a
transfer into the name of such executor, administrator, guardian or
trustee absolutely. R.S.O. 1990, c. C.38, s. 48 (4); 1992, c. 32, s.
6 (2).
49.(1) Share warrants
49.(1) A public company, if so authorized by its letters patent or
supplementary letters patent and subject to the provisions
respecting share warrants therein contained, may, with respect to
any fully-paid shares, issue under the seal of the company a share
warrant stating that the bearer of it is entitled to the share or
shares therein specified, and may provide, by coupons or otherwise,
for the payment of future dividends on the share or shares specified
in the share warrant.
49.(2) Entry of share warrant in company books
49.(2) On the issue of a share warrant, the company shall remove
from its books the name of the shareholder then entered thereon as
holding such share or shares as if the person had ceased to be a
shareholder and shall enter in such books the following particulars:
1. The fact of the issue of the share warrant.
2. A statement of the shares specified in the share warrant.
3. The date of the issue of the share warrant.
49.(3) Transfer
49.(3) A share warrant entitles the bearer thereof to the shares
therein specified and the shares may be transferred by delivery of
the warrant.
49.(4) Bearer of share warrant deemed shareholder
49.(4) The bearer of a share warrant shall be deemed to be a
shareholder of the company, except that the bearer is not entitled
to receive notice of meetings or a copy of any financial statement
or auditor's report and is not qualified in respect of shares
specified in the share warrant to be a director of the company.
49.(5) Voting rights
49.(5) Upon presentation of a share warrant at a meeting of
shareholders, its bearer is entitled to attend the meeting and vote
the shares specified in it.
49.(6) Definition
49.(6) For the purpose of subsection (5), the expression "share
warrant" includes a certificate or other document satisfactory to
the company to the effect that its bearer is the holder of a share
warrant in respect of the shares specified in the certificate or
other document.
49.(7) Exchange of warrant for registration as shareholder
49.(7) The bearer of a share warrant is, subject to the provisions
respecting share warrants contained in the letters patent or
supplementary letters patent, entitled, on surrendering it for
cancellation, to have the shares specified in it registered in the
bearer's name on the books of the company, and the company is
responsible for any loss incurred by any person by reason of the
company entering on its books the name of the bearer of a share
warrant in respect of the shares specified in it without the warrant
being surrendered and cancelled.
49.(8) Surrender of share warrant
49.(8) Upon the surrender of a share warrant for cancellation, the
date of the surrender shall be entered in the books of the company.
R.S.O. 1990, c. C.38, s. 49.
50.(1) Transfers valid only after registration
50.(1) No transfer of shares, unless made by sale under an execution
or under a decree, order or judgment of a court of competent
jurisdiction, is valid for any purpose whatsoever until registration
thereof has been duly made in the register of transfers or in a
branch register of transfers of the company, save only as exhibiting
the rights of the parties thereto towards each other and, if
absolute, of rendering any transferee jointly and severally liable
with the transferor to the company and to its creditors.
50.(2) Exception
50.(2) Despite subsection (1), where fully-paid shares are listed on
a recognized stock exchange at the time of the delivery of a
certificate for such shares with a duly executed instrument of
transfer endorsed thereon or accompanying it, such delivery
constitutes a valid transfer of the shares represented by such
certificate, but, until registration of such transfer is duly made
in the register of transfers or in a branch register of transfers of
the company, the company may treat the person in whose name the
shares represented by such certificate are registered on the books
of the company as being solely entitled to receive notice of and
vote at meetings of shareholders and receive any payments in respect
of such shares whether by way of dividends or otherwise.
50.(3) Power of attorney not revoked by death
50.(3) A power of attorney contained in a duly executed instrument
of transfer endorsed on or accompanying a share certificate
delivered for value before the death of the transferor is not
revoked by the death of the transferor but is valid and effectual
subject to the conditions or restrictions, if any, contained
therein. R.S.O. 1990, c. C.38, s. 50.
51.(1) Notice to owner
51.(1) The directors may refuse to permit the registration of a
transfer of shares on the books of the company for the purpose of
notifying the person registered thereon as owner of such shares of
the application for such registration, and in that event the company
shall forthwith give notice to such person of such application.
51.(2) Owner may lodge caveat
51.(2) The owner may within seven days after the giving of such
notice lodge a caveat against the registration of the transfer and
thereupon the registration of the transfer shall not be made for a
period of forty-eight hours.
51.(3) Transfer may be registered if no order served
51.(3) If within one week after the giving of such notice or the
expiration of such period of forty-eight hours, whichever last
expires, no order of a competent court enjoining the registration of
the transfer has been served upon the company, the transfer may be
registered.
51.(4) Liability of company
51.(4) Where a transfer of shares is registered after the
proceedings mentioned in this section, the company is not liable in
respect of such shares to a person whose rights are purported to be
transferred, but nothing in this subsection prejudices any claim the
transferor may have against the transferee. R.S.O. 1990, c. C.38, s.
51.
52.(1) Where consent of directors to transfer required
52.(1) No registration of a transfer of shares that are not fully
paid shall be made without the consent of the directors and of the
transferee and, subject to subsection (4), where such registration
is made with the consent of the directors, the transferor is not
liable to the company or to its creditors for the amount unpaid on
such shares.
52.(2) Directors' liability
52.(2) Subject to subsection (3), where registration is made with
the consent of the directors of a transfer of shares that are not
fully paid to a person whom the directors have reason to believe is
not of sufficient means to pay fully for such shares, the directors
are jointly and severally liable to the company and to its creditors
in the same manner and to the same extent as the transferor would
have been liable if the registration had not been made.
52.(3) Relief from liability
52.(3) If a director, present when such consent to registration is
given, forthwith, or, if a director then absent, within seven days
after he or she becomes aware of such consent, delivers to an
officer of the company a written protest against such consent and,
within seven days after delivery of such protest, sends a copy of
such protest by registered mail to the Minister, such director
thereby and not otherwise exonerates himself or herself from
liability under subsection (2).
52.(4) Liability where call remains unpaid
52.(4) Where the transfer of a share upon which a call is unpaid is
registered with the consent of the directors and of the transferee,
the transferee is liable for the call to the same extent and with
the same liability to forfeiture of the share, if the call remains
unpaid, as if the transferee had been the holder when the call was
made, and the transferor also remains liable for the call until it
is paid. R.S.O. 1990, c. C.38, s. 52.
53. Transmission of deceased shareholder's shares
53. Where upon the death of a holder of any shares or securities of
a company a transmission thereof takes place to or title to or
control thereof vests or is claimed to vest in any person, herein
called "the successor", the company is justified in permitting or
consenting to the registration thereof in the name of the successor
on the company's books or in paying the principal amount thereof or
any dividend or interest thereon to the successor,
(a) if the successor claims by virtue of a grant of probate or
letters of administration or other instrument issued or
purporting to be issued by a court or other judicial authority
in any jurisdiction, upon production of the same or an
authenticated copy thereof or extract therefrom or a
certificate of such grant under the seal of such court or other
authority without any proof of the authenticity of such seal or
other proof whatever and deposit of a copy thereof;
(b) if the successor claims by virtue of the laws of any
jurisdiction in which any such transmission or vesting of title
or control takes place without a grant of probate or letters of
administration or other court or judicial action, upon
production and deposit of proof thereof in accordance with the
laws of such jurisdiction and reasonable evidence of such laws;
or
(c) if the net value of the estate of the deceased holder is
less than $1,500 or if the market value of the shares or
securities is less than $300, upon proof thereof to the
reasonable satisfaction of the company,
together with, in any such event, production and deposit by the
successor of a sworn statement showing the nature of the
transmission or vesting of title or control, as the case may be.
R.S.O. 1990, c. C.38, s. 53.
54.(1) Calls on shares
54.(1) The directors may by resolution call in and by notice thereof
in writing demand from the shareholders the whole or any part of the
amount unpaid on shares held by them at such times and places and in
such payments or instalments as this Act, the special Act, the
letters patent, the supplementary letters patent, the by-laws or the
terms of allotment and issue of such shares require or allow.
54.(2) Demand to state liability to forfeiture
54.(2) The demand shall state that, in the event of the call not
being paid in accordance with the demand, the shares in respect of
which the call was made will be liable to be forfeited.
54.(3) Liability for interest
54.(3) If a shareholder fails to pay a call due by the shareholder
on or before the day appointed for the payment thereof, the
shareholder is liable to pay interest on the amount thereof at the
rate of 5 per cent per year from the day appointed for payment to
the time of payment.
54.(4) Forfeiture of shares
54.(4) In the event of the call not being paid in accordance with
the demand, the directors may forfeit any shares on which the call
is not paid.
54.(5) Sale of forfeited shares
54.(5) Any forfeited shares become the property of the company upon
the forfeiture, and, subject to its by-laws, may be sold.
54.(6) Continuing liability
54.(6) Despite such forfeiture, the holder of such shares at the
time of forfeiture continues liable to the company and to its
creditors for the full amount unpaid on such shares at the time of
forfeiture, less any sums that are subsequently received by the
company in respect thereof.
54.(7) Refund of excess on sale
54.(7) Where the company receives on the sale of forfeited shares an
amount in excess of the amount then unpaid on such shares, the
excess amount shall be paid to the person whose shares were
forfeited.
54.(8) Recovery of calls by suit
54.(8) The directors may, instead of forfeiting any shares, enforce
payment of all calls and interest thereon by action in a court of
competent jurisdiction. R.S.O. 1990, c. C.38, s. 54.
55. Right to receive uncalled money
55. The directors may receive at any time from a shareholder all or
any part of the money uncalled and unpaid upon shares held by the
shareholder. R.S.O. 1990, c. C.38, s. 55.
56.(1) Shareholder's liability limited
56.(1) A shareholder shall not, as such, be held answerable or
responsible for any act, default, obligation or liability of the
company, or for any engagement, claim, payment, loss, injury,
transaction, matter or thing relating to or connected with the
company beyond the amount unpaid on the shareholder's shares.
56.(2) Shareholder's liability
56.(2) A shareholder, until the whole amount has been paid up on the
shareholder's shares, is liable to the creditors of the company to
an amount equal to that unpaid thereon, but the shareholder is not
liable to an action therefor by a creditor until an execution at the
suit of the creditor against the company has been returned
unsatisfied in whole or in part.
56.(3) Amount recoverable
56.(3) The amount due on such execution, not exceeding the amount
unpaid on the shareholder's shares, is the amount recoverable from
such shareholder and, when so recovered, shall be considered as paid
on those shares.
56.(4)Set-off
56.(4) A shareholder may plead by way of defence, in whole or in
part, to any such action by a creditor any setoff that the
shareholder could set up against the company except a claim for
unpaid dividends or a salary or allowance as a director or officer
of the company. R.S.O. 1990, c. C.38, s. 56.
57.(1) Trustees, etc., not personally liable
57.(1) No executor, administrator, guardian or trustee who is
registered on the books of the company as a shareholder and therein
described as representing in any such capacity a named estate,
person or trust is personally liable in respect of the shares that
he, she or it so represents. R.S.O. 1990, c. C.38, s. 57 (1); 1992,
c. 32, s. 6 (3).
57.(2)Liability of estate, etc.
57.(2) The estate, person or trust so represented is liable as if
the testator, intestate, mentally incapable person, ward or
beneficiary were registered on the books of the company as the
holder of the shares. R.S.O. 1990, c. C.38, s. 57 (2); 1992, c. 32,
s. 6 (4).
57.(3)Where trustee, etc., liable
57.(3) If the testator, intestate, mentally incapable person, ward
or beneficiary so represented is not named on the books of the
company, the executor, administrator, committee, guardian or trustee
is personally liable in respect of such shares as if he, she or it
held them in his, her or its own name as owner thereof. R.S.O. 1990,
c. C.38, s. 57 (3); 1992, c. 32, s. 6 (5).
58.(1) Definition
58.(1) The word "mortgagee", as used in subsection (2), includes a
trustee for holders of securities.
58.(2) Mortgagee not personally liable
58.(2) No mortgagee of a share of a company and no person holding
such a share as collateral security who is registered on the books
of the company as the holder of such share and therein described as
representing in either of such capacities a named mortgagor or
person giving such collateral security is personally liable in
respect of such share that he, she or it so represents, but the
mortgagor or other person giving such collateral security is liable
as if the mortgagor or other person were registered on the books of
the company as the holder of such share. R.S.O. 1990, c. C.38, s.
58.
59.(1) Borrowing powers
59.(1) The directors may pass by-laws,
(a) for borrowing money on the credit of the company;
(b) for issuing, selling or pledging securities of the company; or
(c) for charging, mortgaging, hypothecating or pledging all or
any of the property of the company, including book debts and
unpaid calls, rights, powers, franchises and undertaking, to
secure any securities or any money borrowed, or other debt, or
any other obligation or liability of the company.
59.(2) Definition
59.(2) The expression "property of the company" in subsection (1)
and in every predecessor thereof includes and has included always
both present and future property of the company.
59.(3) Borrowing by-laws to be confirmed
59.(3) No by-law passed under subsection (1) is effective until it
has been confirmed by at least two-thirds of the votes cast at a
general meeting of shareholders duly called for considering it.
R.S.O. 1990, c. C.38, s. 59.
60. Irredeemable securities
60. A condition contained in a security or in a deed for securing a
security is not invalid by reason only that the security is thereby
made irredeemable or redeemable only on the happening of a
contingency, however remote, or on the expiration of a period,
however long. R.S.O. 1990, c. C.38, s. 60.
61.(1) Duplicate to be filed
61.(1) A duplicate original, or a copy certified under the seal of
the company, of any charge, mortgage or other instrument of
hypothecation or pledge made by the company to secure its securities
shall be filed forthwith in the office of the Minister.
61.(2) Exception
61.(2) Subsection (1) does not apply to a charge or mortgage filed
with the Minister under any other Act. R.S.O. 1990, c. C.38, s. 61.
62.(1) Power to declare dividends
62.(1) Subject to the special Act, letters patent or supplementary
letters patent of the company, the directors may declare and the
company may pay dividends on the issued shares of the company.
62.(2) Manner of payment
62.(2) A dividend may be paid in money or in specie or in kind not
exceeding in value the amount of the dividend.
62.(3) When dividend not to be declared
62.(3) The directors shall not declare and the company shall not pay
any dividend or bonus when the company is insolvent, or any dividend
or bonus the payment of which renders the company insolvent or that
diminishes its capital, and, if any dividend or bonus is declared
and paid contrary to this subsection, the directors are jointly and
severally liable to the company for the amount of the dividend so
declared and paid or such part thereof as renders the company
insolvent or diminishes its capital.
62.(4) Relief from liability
62.(4) If a director, present when any such dividend or bonus is
declared, forthwith, or, if a director then absent, within seven
days after he or she becomes aware of such declaration, delivers to
an officer of the company a written protest against such declaration
and, within seven days after delivery of such protest, sends a copy
of such protest by registered mail to the Minister, such director
thereby and not otherwise exonerates himself or herself from
liability under subsection (3).
62.(5) Companies with wasting assets
62.(5) Nothing in this section prevents a mining company or a
company whose assets are of a wasting character, or a company
incorporated for the object of acquiring and administering the
assets or a substantial part of the assets of another corporation,
either from such corporation or from the assign of such corporation,
for the purpose of converting such assets into money and
distributing the money among the shareholders of the company, from
declaring and paying dividends out of funds derived from the
operations of the company.
62.(6) Extent of impairment of capital
62.(6) The powers conferred by subsection (5) may be exercised
despite the fact that the value of the net assets of the company may
be thereby reduced to less than the issued capital of the company if
the payment of the dividends does not reduce the value of its
remaining assets to an amount insufficient to meet all the
liabilities of the company exclusive of its issued capital.
62.(7) Where confirmed by-law required
62.(7) Subject to subsection (8), the powers conferred by subsection
(5) may be exercised only under the authority of a by-law passed by
the directors and confirmed by at least two-thirds of the votes cast
at a general meeting of the shareholders duly called for considering
it.
62.(8) Idem
62.(8) Where dividends have been paid by a company in any of the
cases mentioned in subsection (5) without the authority of a by-law,
the payment thereof is nevertheless valid if a by-law adopting and
approving the payment is passed by the directors and confirmed by
the shareholders in the manner mentioned in subsection (7). R.S.O.
1990, c. C.38, s. 62.
63. Stock dividends
63. For the amount of any dividend that the directors may declare
payable in money, they may declare a stock dividend and issue
therefor shares of the company as fully paid or may credit the
amount of such dividend on shares of the company already issued but
not fully paid, and the liability of the holders of such shares
shall be reduced by the amount of such dividend. R.S.O. 1990, c.
C.38, s. 63.
64. Closing transfer registers
64. The directors, upon declaring a dividend, may direct that no
transfer of shares shall be registered on the books of the company
for a stated period, not exceeding two weeks, immediately preceding
the payment of the dividend, and payment thereof shall be made to
the shareholders of record on the date of closing the books. R.S.O.
1990, c. C.38, s. 64.
65. Cumulative voting for directors
65. The letters patent, supplementary letters patent or by-laws of a
company may provide that every shareholder entitled to vote at an
election of directors has the right to cast thereat 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 such votes in favour of one
candidate or distribute them among the candidates in such manner as
the shareholder sees fit, and that, where a shareholder has voted
for more than one candidate without specifying the distribution of
the votes among such candidates the shareholder shall be deemed to
have divided the votes equally among the candidates for whom the
shareholder voted. R.S.O. 1990, c. C.38, s. 65.
66. Removal of directors
66. Where the letters patent, supplementary letters patent or by-
laws of a company provide for the election of directors by
cumulative voting under section 65, the letters patent,
supplementary letters patent or by-laws may provide that the
shareholders may, by a resolution passed by at least two-thirds of
the votes cast at a general meeting of which notice specifying the
intention to pass such resolution has been given, remove any
director before the expiration of his or her term of office, and
may, by a majority of the votes cast at that meeting, elect any
person in his or her stead for the remainder of the term, but that
no director shall be removed where the votes cast against the
resolution for his or her removal would, if cumulatively voted at an
election of the full board of directors, be sufficient to elect one
or more directors. R.S.O. 1990, c. C.38, s. 66.
67.(1) Idem
67.(1) Where the letters patent, supplementary letters patent or by-
laws of a company do not provide for cumulative voting under section
65, the letters patent, supplementary letters patent or by-laws may
provide that the shareholders may, by a resolution passed by at
least two-thirds of the votes cast at a general meeting of which
notice specifying the intention to pass such resolution has been
given, remove any director before the expiration of his or her term
of office, and may, by a majority of the votes cast at that meeting,
elect any person in his or her stead for the remainder of the term.
67.(2)Exception
67.(2) Subsection (1) does not affect the operation of any provision
respecting the removal of directors in the letters patent or
supplementary letters patent of a company issued before the 30th day
of April, 1954. R.S.O. 1990, c. C.38, s. 67.
68.(1) By-laws
68.(1) The directors may pass by-laws not contrary to this Act or to
the letters patent or supplementary letters patent to regulate,
(a) the allotment and issue of shares, the making of calls
thereon, the payment thereof, the issue of share certificates,
the forfeiture of shares for non-payment, the sale of forfeited
shares, the transfer and the registration of transfers of
shares;
(b) the declaration and payment of dividends;
(c) the qualification and remuneration of the directors;
(d) the time for and the manner of election of directors;
(e) the appointment, remuneration, functions, duties and
removal of agents, officers and employees of the company and
the security, if any, to be given by them to it;
(f) the time and place and the notice to be given for the
holding of meetings of the shareholders and of the board of
directors, the quorum at meetings of shareholders, the
requirements as to proxies, and the procedure in all things at
shareholders' meetings and at meetings of the board of
directors;
(g) the conduct in all other particulars of the affairs of the
company.
68.(2) Confirmation
68.(2) A by-law passed under subsection (1) and a repeal, amendment
or re-enactment thereof, unless in the meantime confirmed at a
general meeting of the shareholders duly called for that purpose, is
effective only until the next annual meeting of the shareholders
unless confirmed thereat and, in default of confirmation thereat,
ceases to have effect at and from that time, and in that case no new
by-law of the same or like substance has any effect until confirmed
at a general meeting of the shareholders.
68.(3) Rejection, etc.
68.(3) The shareholders may at the general meeting or the annual
meeting mentioned in subsection (2) confirm, reject, amend or
otherwise deal with any by-law passed by the directors and submitted
to the meeting for confirmation, but no act done or right acquired
under any such by-law shall be prejudicially affected by any such
rejection, amendment or other dealing. R.S.O. 1990, c. C.38, s. 68.
69. Payment of president and directors
69. No by-law for the payment of the president as president or of
any director as a director is effective until it has been confirmed
at a general meeting of the shareholders duly called for that
purpose. R.S.O. 1990, c. C.38, s. 69.
70.(1) Executive committee
70.(1) Where the number of directors on the board of directors of a
company is more than six, the directors may pass a by-law
authorizing them to elect from among their number an executive
committee consisting of not fewer than three and to delegate to the
executive committee any powers of the board, subject to the
restrictions, if any, contained in the by-law or imposed from time
to time by the directors.
70.(2) Confirmation
70.(2) The by-law is not effective until it has been confirmed by at
least two-thirds of the votes cast at a general meeting of the
shareholders duly called for that purpose.
70.(3) Quorum
70.(3) An executive committee may fix its quorum at not less than a
majority of its members. R.S.O. 1990, c. C.38, s. 70.
71.(1) Disclosure by directors of interests in contracts
71.(1) Every director of a company who is in any way directly or
indirectly interested in a proposed contract or a contract with the
company shall declare his or her interest at a meeting of the
directors of the company.
71.(2) Time of declaration
71.(2) In the case of a proposed contract, the declaration required
by this section shall be made at the meeting of the directors at
which the question of entering into the contract is first taken into
consideration or, if the director is not at the date of that meeting
interested in the proposed contract, at the next meeting of the
directors held after he or she becomes so interested, and, in a case
where the director becomes interested in a contract after it is
made, the declaration shall be made at the first meeting of the
directors held after he or she becomes so interested.
71.(3) General notice
71.(3) For the purposes of this section, a general notice given to
the directors of a company by a director to the effect that he or
she is a shareholder of or otherwise interested in any other
company, or is a member of a specified firm and is to be regarded as
interested in any contract made with such other company or firm,
shall be deemed to be a sufficient declaration of interest in
relation to a contract so made, but no such notice is effective
unless it is given at a meeting of the directors or the director
takes reasonable steps to ensure that it is brought up and read at
the next meeting of the directors after it is given.
71.(4) Effect of declaration
71.(4) If a director has made a declaration of his or her interest
in a proposed contract or contract in compliance with this section
and has not voted in respect of the contract, the director is not
accountable to the company or to any of its shareholders or
creditors for any profit realized from the contract, and the
contract is not voidable by reason only of the director holding that
office or of the fiduciary relationship established thereby.
71.(5) Confirmation by shareholders
71.(5) Despite anything in this section, a director is not
accountable to the company or to any of its shareholders or
creditors for any profit realized from such contract and the
contract is not by reason only of the director's interest therein
voidable if it is confirmed by a majority of the votes cast at a
general meeting of the shareholders duly called for that purpose and
if the director's interest in the contract is declared in the notice
calling the meeting.
71.(6) Offence
71.(6) If a director is liable in respect of profit realized from
any such contract and the contract is by reason only of his or her
interest therein voidable, the director is guilty of an offence and
on conviction is liable to a fine of not more than $200. R.S.O.
1990, c. C.38, s. 71.
72.(1) Definitions
72. 72.(1) In this section and in sections 73 to 78,
"affiliate" means an affiliated company within the meaning of
subsection 106 (3); ("membre du m^me groupe")
"associate", where used to indicate a relationship with any
person, means,
(a) any company of which such person beneficially owns directly
or indirectly equity shares carrying more than 10 per cent of
the voting rights attached to all equity shares of the company
for the time being outstanding,
(b) any trust or estate in which such person has a substantial
beneficial interest or as to which such person serves as
trustee or in a similar capacity,
(c) any person of the opposite sex to whom the person is
married or with whom the person is living in a conjugal
relationship outside marriage, or
(d) any relative of the person or of a person mentioned in
clause (c) who, in any such case, has the same home as the
person; ("personne qui a un lien")
"capital security" means any share of any class of shares of a
company or any bond, debenture, note or other obligation of a
company, whether secured or unsecured; ("valeurs")
"equity share" means any share of any class of shares of a
company carrying voting rights under all circumstances and any
share of any class of shares carrying voting rights by reason
of the occurrence of any contingency that has occurred and is
continuing; ("action participante")
"insider" or "insider of a company" means,
(a) any director or senior officer of a public company that has
fifteen or more shareholders, two or more persons who are the
joint registered owners of one or more shares being counted as
one shareholder,
(b) any person who beneficially owns directly or indirectly
equity shares of such a company carrying more than 10 per cent
of the voting rights attached to all equity shares of the
company for the time being outstanding, provided that in
computing the percentage of voting rights attached to equity
shares owned by an underwriter there shall be excluded any
equity shares that have been acquired by the underwriter as
underwriter in the course of distribution to the public of such
shares, but such exclusion ceases to have effect on completion
or cessation of the distribution to the public by the
underwriter, or
(c) any person who exercises control or direction over the
equity shares of such a company carrying more than 10 per cent
of the voting rights attached to all equity shares of the
company for the time being outstanding; ("initi,s", "initi,s
d'une compagnie")
"senior officer" means,
(a) the chair or any vice-chair of the board of directors, the
president, any vice-president, the secretary, the treasurer or
the general manager of a company or any other individual who
performs functions for the company similar to those normally
performed by an individual occupying any such office, and
(b) each of the five highest paid employees of a company,
including any individual referred to in clause (a); ("cadre
dirigeant")
"underwriter" has the same meaning as in the Securities Act.
("souscripteur . forfait")
72.(2) Interpretation
72.(2) For the purposes of this section and sections 73 to 78,
(a) every director or senior officer of a company that is
itself an insider of another company shall be deemed to be an
insider of such other company;
(b) an individual shall be deemed to own beneficially capital
securities beneficially owned by a company controlled by him or
her or by an affiliate of such company;
(c) a company shall be deemed to own beneficially capital
securities beneficially owned by its affiliates; and
(d) the acquisition or disposition by an insider of a put, call
or other transferable option with respect to a capital security
shall be deemed a change in the beneficial ownership of the
capital security to which such transferable option relates.
R.S.O. 1990, c. C.38, s. 72.
73.(1) Report
73.(1) A person who becomes an insider of a company shall, within
ten days after the end of the month in which the person becomes an
insider, file with the Commission a report, as of the day on which
the person became an insider, of the person's direct or indirect
beneficial ownership of or control or direction over capital
securities of the company.
73.(2) Idem
73.(2) If a person who is an insider of a company, but has no direct
or indirect beneficial ownership of or control or direction over
capital securities of the company, acquires direct or indirect
beneficial ownership of or control or direction over any such
securities, the person shall, within ten days after the end of the
month in which the person acquired such direct or indirect
beneficial ownership or such control or direction, file with the
Commission a report, as of the date of such acquisition, of the
person's direct or indirect beneficial ownership of or control or
direction over capital securities of the company.
73.(3) Report of subsequent changes
73.(3) A person who has filed or is required to file a report under
this section or any predecessor thereof and whose direct or indirect
beneficial ownership of or control or direction over capital
securities of the company changes from that shown or required to be
shown in such report or in the last report filed by the person under
this subsection shall, within ten days following the end of the
month in which such change takes place, provided that the person was
an insider of the company at any time during such month, file with
the Commission a report of the person's direct or indirect
beneficial ownership of or the person's control or direction over
capital securities of the company at the end of such month and the
change or changes therein that occurred during the month, and giving
such details of each transaction as may be required by the
regulations made under section 78. R.S.O. 1990, c. C.38, s. 73.
74.(1) Reports may be inspected
74.(1) All reports filed with the Commission under section 73 or any
predecessor thereof shall be open to public inspection at the
offices of the Commission during normal business hours of the
Commission, and any person may make extracts from such reports.
74.(2) Publication of information contained in reports
74.(2) The Commission shall summarize in or as part of a monthly
periodical for distribution to the public on payment of a reasonable
fee therefor the information contained in the reports so filed.
R.S.O. 1990, c. C.38, s. 74.
75.(1) Offence
75.(1) Every person who is required to file a report under section
73 or any predecessor thereof and who fails so to do is guilty of an
offence and on conviction is liable to a fine of not more than
$1,000, and, where such person is a company, every director or
officer of such company who authorized, permitted or acquiesced in
such failure is also guilty of an offence and on conviction is
liable to a like fine.
75.(2) Idem
75.(2) Every person who files a report under section 73 or any
predecessor thereof that is false or misleading by reason of the
misstatement or omission of a material fact is guilty of an offence
and on conviction is liable to a fine of not more than $1,000, and,
where such person is a company, every director or officer of such
company who authorized, permitted or acquiesced in the filing of
such false or misleading report is also guilty of an offence and on
conviction is liable to a like fine.
75.(3) Saving
75.(3) No person is guilty of an offence under subsection (2) if the
person did not know and in the exercise of reasonable diligence
could not have known that the report was false or misleading by
reason of the misstatement or omission of a material fact.
75.(4) Consent to prosecute
75.(4) No prosecution shall be brought under subsection (1) or (2)
without the consent of the Commission. R.S.O. 1990, c. C.38, s. 75.
76.(1) Liability of insiders
76.(1) Every insider of a company or associate or affiliate of such
insider, who, in connection with a transaction relating to the
capital securities of the company, makes use of any specific
confidential information for his, her or its own benefit or
advantage that, if generally known, might reasonably be expected to
affect materially the value of such securities, is liable to
compensate any person for any direct loss suffered by such person as
a result of such transaction, unless such information was known or
ought reasonably to have been known to such person at the time of
such transaction, and is also accountable to the company for any
direct benefit or advantage received or receivable by such insider,
associate or affiliate, as the case may be, as a result of such
transaction.
76.(2) Limitation period
76.(2) An action to enforce any right created by subsection (1) may
be commenced only within two years after the date of completion of
the transaction that give rise to the cause of action. R.S.O. 1990,
c. C.38, s. 76.
77.(1) Order to commence action
77.(1) Upon application by any person who was at the time of a
transaction referred to in subsection 76 (1) or is at the time of
the application an owner of capital securities of the company, the
court may, if satisfied that,
(a) such person has reasonable grounds for believing that the
company has a cause of action under section 76; and
(b) either,
(i) the company has refused or failed to commence an action
under section 76 within sixty days after receipt of a
written request from such person so to do, or
(ii) the company has failed to prosecute diligently an
action commenced by it under section 76,
make an order, upon such terms as to security for costs and
otherwise as to the court seems fit, requiring the Commission
to commence or continue an action in the name of and on behalf
of the company to enforce the liability created by section 76.
77.(2) Notice to company and O.S.C.
77.(2) The company and the Commission shall be given notice of any
application under subsection (1) and shall have the right to appear
and be heard thereon.
77.(3) Order to require company to co-operate
77.(3) Every order made under subsection (1) shall provide that the
company shall cooperate fully with the Commission in the
institution and prosecution of such action and shall make available
to the Commission all books, records, documents and other material
or information known to the company or reasonably ascertainable by
the company relevant to such action.
77.(4) Appeal
77.(4) An appeal lies to the Divisional Court from an order made
under subsection (1). R.S.O. 1990, c. C.38, s. 77.
78. Regulations
78. The Lieutenant Governor in Council may make regulations,
(a) prescribing the form and content of the reports required to
be filed under section 73;
(b) respecting any other matter necessary or advisable to carry
out effectively the intent and purpose of sections 72 to 77.
R.S.O. 1990, c. C.38, s. 78.
79.(1) Exception
79.(1) Upon the application of any interested person, the Commission
may, if satisfied upon the circumstances of the particular case that
there is adequate justification for so doing, make an order upon
such terms and conditions as seem to the Commission to be expedient
exempting in whole or in part any person from the requirements of
section 73.
79.(2) Hearing of Commission
79.(2) The provisions of the Securities Act respecting hearings by
the Commission apply, so far as possible, to hearings of the
Commission under this section.
79.(3) Appeal from Commission
79.(3) Any person who feels aggrieved by a decision of the
Commission under this section may appeal the decision to the
Divisional Court, and subsections 9 (2) to (6) of the Securities Act
apply to the appeal. R.S.O. 1990, c. C.38, s. 79.
80. Director indemnified in suits respecting execution of office
80. Every director and officer of a company, and his or her heirs,
executors and administrators, and estate and effects, respectively,
may, with the consent of the company, given at any meeting of the
shareholders, from time to time and at all times, be indemnified and
saved harmless out of the funds of the company, from and against,
(a) all costs, charges and expenses whatsoever that he, she or
it sustains or incurs in or about any action, suit or
proceeding that is brought, commenced or prosecuted against
him, her or it, for or in respect of any act, deed, matter or
thing whatsoever, made, done or permitted by him, her or it, in
or about the execution of the duties of his, her or its office;
and
(b) all other costs, charges and expenses that he, she or it
sustains or incurs in or about or in relation to the affairs
thereof, except such costs, charges or expenses as are
occasioned by his, her or its own wilful neglect or default.
R.S.O. 1990, c. C.38, s. 80; 1998, c. 18, Sched. E, s. 62.
81.(1) Liability of directors for wages
81.(1) The directors of a company are jointly and severally liable
to the employees, apprentices and other wage earners thereof for all
debts due while they are directors for services performed for the
company, not exceeding six months wages, and for the vacation pay
accrued for not more than twelve months under the Employment
Standards Act or any predecessor thereof and the regulations
thereunder or under any collective agreement made by the company.
81.(2) Limitation of liability
81.(2) A director is not liable under subsection (1),
(a) unless the company has been sued for the debt within six
months after it has become due and execution has been returned
unsatisfied in whole or in part, or the company has within that
period gone into liquidation or has been ordered to be wound up
or has made an authorized assignment under the Bankruptcy Act
(Canada), or a receiving order under the Bankruptcy Act
(Canada) has been made against it and the claim on the debt has
been fully filed and proved; and
(b) unless he or she is sued for the debt while a director or
within six months after he or she ceases to be a director.
81.(3) Idem
81.(3) After execution has been so returned against the company, the
amount recoverable against the director is the amount remaining
unsatisfied on the execution.
81.(4) Rights of director who pays the debt
81.(4) If the claim for the debt has been proved in liquidation or
winding-up proceedings or under the Bankruptcy Act (Canada), a
director who pays the debt is entitled to any preference that the
creditor paid would have been entitled to or, if a judgment has been
recovered for the debt, the director is entitled to an assignment of
the judgment. R.S.O. 1990, c. C.38, s. 81 (1-4).
81.(5) Director holding shares in fiduciary capacity
81.(5) No director holding shares as executor, administrator,
guardian or trustee who is registered on the books of the company as
a shareholder and therein described as representing in any such
capacity a named estate, person or trust is personally liable under
this section, but the estate, person or trust is subject to all the
liabilities imposed by this section. R.S.O. 1990, c. C.38, s. 81
(5); 1992, c. 32, s. 6 (6).
82.(1) Place of meetings
82.(1) Subject to subsections (2) and (3), the meetings of the
shareholders, the board of directors and the executive committee
shall be held at the place where the head office of the company is
situate.
82.(2) Exception
82.(2) Where the by-laws of the company so provide, the meetings of
the board of directors and of the executive committee may be held at
any place in or outside Ontario and the meetings of the shareholders
may be held at any place in Ontario.
82.(3) Exception
82.(3) Where the letters patent or supplementary letters patent of
the company so provide, the meetings of the shareholders may be held
at one or more places outside Ontario designated therein.
82.(4) Where section not to apply
82.(4) This section does not affect the operation of any provision
in the letters patent or supplementary letters patent of a company
issued before the 30th day of April, 1954, respecting the holding of
the meetings of the shareholders at any place outside Ontario.
R.S.O. 1990, c. C.38, s. 82.
83. Definitions
83. In this section and in sections 84 to 90,
"form of proxy" means a written or printed form that, upon
completion and execution by or on behalf of a shareholder, becomes
a proxy; ("formule de procuration")
"information circular" means the circular referred to in subsection
86 (1); ("circulaire d'information")
"proxy" means a completed and executed form of proxy by means of
which a shareholder has appointed a person as the shareholder's
nominee to attend and act for the shareholder and on the
shareholder's behalf at a meeting of shareholders; ("procuration")
"solicit" and "solicitation" include,
(a) any request for a proxy whether or not accompanied by or
included in a form of proxy,
(b) any request to execute or not to execute a form of proxy or
to revoke a proxy,
(c) the sending or delivery 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
(d) the sending or delivery of a form of proxy to a shareholder
pursuant to section 85,
but do not include,
(e) the sending or delivery of a form of proxy to a shareholder
in response to an unsolicited request made by the shareholder
or on the shareholder's behalf, or
(f) the performance by any person of ministerial acts or
professional services on behalf of a person soliciting a proxy.
("solicitation", "solliciter") R.S.O. 1990, c. C.38, s. 83.
84.(1) Proxies
84.(1) Every shareholder, including a shareholder that is a
corporation, entitled to vote at a meeting of shareholders may by
means of a proxy appoint a person, who need not be a shareholder, as
the shareholder's nominee to attend and act at the meeting in the
manner, to the extent and with the power conferred by the proxy.
84.(2) Execution and termination
84.(2) A proxy shall be executed by the shareholder or the
shareholder's attorney authorized in writing or, if the shareholder
is a corporation, under its corporate seal or by an officer or
attorney thereof duly authorized, and ceases to be valid one year
from its date.
84.(3) Contents
84.(3) In addition to the requirements, where applicable, of section
88, a proxy shall contain the date thereof and the appointment and
name of the nominee and may contain a revocation of a former proxy
and restrictions, limitations or instructions as to the manner in
which the shares in respect of which the proxy is given are to be
voted or that may be necessary to comply with the laws of any
jurisdiction in which the shares of the company are listed on a
stock exchange or a restriction or limitation as to the number of
shares in respect of which the proxy is given.
84.(4) Revocation
84.(4) In addition to revocation in any other manner permitted by
law, a proxy may be revoked by instrument in writing executed by the
shareholder or by the shareholder's attorney authorized in writing
or, if the shareholder is a corporation, under its corporate seal or
by an officer or attorney thereof duly authorized, and deposited
either at the head office of the company at any time up to and
including the last business day preceding the day of the meeting, or
any adjournment thereof, at which the proxy is to be used or with
the chair of such meeting on the day of the meeting, or adjournment
thereof, and upon either of such deposits the proxy is revoked.
84.(5) Time limit for deposit
84.(5) The directors may by resolution fix a time not exceeding
forty-eight hours, excluding Saturdays and holidays, preceding any
meeting or adjourned meeting of shareholders before which time
proxies to be used at that meeting must be deposited with the
company or an agent thereof, and any period of time so fixed shall
be specified in the notice calling the meeting or in the information
circular relating thereto. R.S.O. 1990, c. C.38, s. 84.
85.(1) Mandatory solicitation of proxies
85.(1) Subject to section 87, the management of a company shall,
concurrently with or prior to giving notice of a meeting of
shareholders of the company, send by prepaid mail to each
shareholder who is entitled to vote at such meeting at the
shareholder's last address as shown on the books of the company a
form of proxy for use at such meeting that complies with section 88.
85.(2) Offence
85.(2) If the management of a company fails to comply with
subsection (1), the company is guilty of an offence and on
conviction is liable to a fine of not more than $1,000, and every
director or officer of the company who authorized, permitted or
acquiesced in such failure is also guilty of an offence and on
conviction is liable to a like fine. R.S.O. 1990, c. C.38, s. 85.
86.(1) Information circular
86.(1) Subject to subsection (2) and section 87, no person shall
solicit proxies unless,
(a) in the case of a solicitation by or on behalf of the
management of a company, an information circular, either as an
appendix to or as a separate document accompanying the notice
of the meeting, is sent by prepaid mail to each shareholder of
the company whose proxy is solicited at the shareholder's last
address as shown on the books of the company; or
(b) in the case of any other solicitation, the person making
the solicitation, concurrently with or prior thereto, delivers
or sends an information circular to each shareholder of the
company whose proxy is solicited.
86.(2)Where subs. (1) does not apply
86.(2) Subsection (1) does not apply to,
(a) any solicitation, otherwise than by or on behalf of the
management of a company, where the total number of shareholders
whose proxies are solicited is not more than fifteen, two or
more persons who are the joint registered owners of one or more
shares being counted as one shareholder;
(b) any solicitation by a person made under section 49 of the
Securities Act; and
(c) any solicitation by a person in respect of shares of which
the person is the beneficial owner.
86.(3) Offence
86.(3) A person who fails to comply with subsection (1) is guilty of
an offence and on conviction is liable to a fine of not more than
$1,000, and, where such person is a company, every director or
officer of such company who authorized, permitted or acquiesced in
such failure is also guilty of an offence and on conviction is
liable to a like fine.
86.(4) Idem
86.(4) A person who effects a solicitation that is subject to this
section by means of a form of proxy, information circular or other
communication that contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make any
statement contained therein not misleading in the light of the
circumstances in which it was made is guilty of an offence and on
conviction is liable to a fine of not more than $1,000, and, where
such person is a company, every director or officer of such company
who authorized, permitted or acquiesced in such offence is also
guilty of an offence and on conviction is liable to a like fine.
86.(5) Saving
86.(5) No person is guilty of an offence under subsection (4) in
respect of any untrue statement of a material fact or omission to
state a material fact in a form of proxy or information circular, if
the untruth of such statement or the fact of such omission was not
known to the person who effected the solicitation and in the
exercise of reasonable diligence could not have been known to such
person. R.S.O. 1990, c. C.38, s. 86.
87.(1) Where ss. 85, 86 (1) do not apply
87.(1) Section 85 and subsection 86 (1) do not apply to a private
company or to a public company that has fewer than fifteen
shareholders, two or more persons who are the joint registered
owners of one or more shares being counted as one shareholder.
87.(2) Exemption orders
87.(2) Upon the application of any interested person, the Commission
may, if satisfied that in the circumstances of the particular case
there is adequate justification for so doing, make an order, on such
terms and conditions as seem to the Commission to be just and
expedient, exempting any person from the requirements, in whole or
in part, of section 85 or of subsection 86 (1).
87.(3) Hearing of Commission
87.(3) The provisions of the Securities Act respecting hearings by
the Commission apply, so far as possible, to hearings of the
Commission under this section.
87.(4) Appeal from Commission
87.(4) Any person who feels aggrieved by a decision of the
Commission under this section may appeal the decision to the
Divisional Court, and subsections 9 (2) to (6) of the Securities Act
apply to the appeal. R.S.O. 1990, c. C.38, s. 87.
88. Special form of proxy
88. Where section 85 or 86 is applicable to a solicitation of
proxies,
(a) the form of proxy sent to a shareholder by a person
soliciting proxies,
(i) shall indicate in bold-face type whether or not the
proxy is solicited by or on behalf of the management of the
company, and
(ii) shall provide a specifically designated blank space
for dating the form of proxy;
(b) the form of proxy shall provide means whereby the person
whose proxy is solicited is afforded an opportunity to specify
that the shares registered in the person's name shall be voted
by the nominee in favour of or against, in accordance with such
person's choice, each matter or group of related matters
identified therein or in the information circular as intended
to be acted upon, other than the election of directors and the
appointment of auditors, provided that a proxy may confer
discretionary authority with respect to matters as to which a
choice is not so specified by such means if the form of proxy
or the information circular states in boldface type how it is
intended to vote the shares represented by the proxy in each
such case;
(c) a proxy may confer discretionary authority with respect to,
(i) amendments or variations to matters identified in the
notice of meeting, or
(ii) other matters which may properly come before the
meeting,
provided that,
(iii) the person by whom or on whose behalf the
solicitation is made is not aware a reasonable time prior
to the time the solicitation is made that any such
amendments, variations or other matters are to be presented
for action at the meeting, and
(iv) a specific statement is made in the information
circular or in the form of proxy that the proxy is
conferring such discretionary authority;
(d) no proxy shall confer authority,
(i) to vote for the election of any person as a director of
the company unless a nominee proposed in good faith for
such election is named in the information circular, or
(ii) to vote at any meeting other than the meeting
specified in the notice of meeting or any adjournment
thereof;
(e) the information circular or form of proxy shall state that
the shares represented by the proxy will be voted and that,
where the person whose proxy is solicited specifies a choice
with respect to any matter to be acted upon pursuant to clause
(b), the shares shall, subject to section 89, be voted in
accordance with the specifications so made;
(f) the information circular or form of proxy shall indicate in
boldface type that the shareholder has the right to appoint a
person to attend and act for the shareholder and on the
shareholder's behalf at the meeting other than the person, if
any, designated in the form of proxy, and shall contain
instructions as to the manner in which the shareholder may
exercise such right; and
(g) if the form of proxy contains a designation of a named
person as nominee, means shall be provided whereby the
shareholder may designate in a form of proxy some other person
as the shareholder's nominee for the purpose of subsection 84
(1). R.S.O. 1990, c. C.38, s. 88.
89. Where vote by ballot not required
89. If the aggregate number of shares represented at a meeting by
proxies required to be voted for or against a particular matter or
group of matters carries, to the knowledge of the chair of the
meeting, less than 5 per cent of the voting rights attached to the
shares entitled to vote and represented at the meeting, the chair of
the meeting has the right not to conduct a vote by way of ballot on
any such matter or group of matters unless a poll is demanded at the
meeting. R.S.O. 1990, c. C.38, s. 89.
90. Regulations re contents of information circular
90. The Lieutenant Governor in Council may make such regulations
respecting the form and content of an information circular as the
Lieutenant Governor in Council considers necessary or appropriate in
the public interest. R.S.O. 1990, c. C.38, s. 90.
91. Trustees, etc., may vote
91. An executor, administrator, guardian or trustee, and, where a
corporation is such executor, administrator, committee, guardian or
trustee of a testator, intestate, mentally incapable person, ward or
beneficiary, any person duly appointed a proxy for such corporation,
shall represent the shares in his, her or its hands at all meetings
of the shareholders of the company and may vote accordingly as a
shareholder, and every person who mortgages or hypothecates his, her
or its shares may nevertheless represent the shares at all such
meetings and may vote accordingly as a shareholder unless in the
instrument creating the mortgage or hypothec the person has
expressly empowered the holder of such mortgage or hypothec to vote
thereon, in which case only such holder or the holder's proxy may
vote in respect of such shares. R.S.O. 1990, c. C.38, s. 91; 1992,
c. 32, s. 6 (7).
92. Joint holders of stock
92. If shares are held jointly by two or more persons, any one of
them present at a meeting of the shareholders of the company may, in
the absence of the other or others, vote thereon, but, if more than
one of them are present or represented by proxy, they shall vote
together on the shares jointly held. R.S.O. 1990, c. C.38, s. 92.
93.(1) Shareholders' meetings
93.(1) Subject to subsection (2) and in the absence of other
provisions in that behalf in the by-laws of the company,
(a) notice of the time and place for holding a meeting of the
shareholders shall, unless all the shareholders entitled to
notice of the meeting have waived in writing the notice, be
given by sending it to each shareholder entitled to notice of
the meeting by prepaid mail ten days or more before the date of
the meeting to the shareholder's last address as shown on the
books of the company;
(b) no shareholder in arrear in respect of any call is entitled
to vote at a meeting;
(c) all questions proposed for the consideration of the
shareholders at a meeting of shareholders shall be determined
by the majority of the votes cast and the chair presiding at
the meeting has a second or casting vote in case of an equality
of votes;
(d) the chair presiding at a meeting of shareholders may, with
the consent of the meeting and subject to such conditions as
the meeting decides, adjourn the meeting from time to time and
from place to place;
(e) the president or, in his or her absence, a vice-president
who is a director shall preside as chair at a meeting of
shareholders, but, if there is no president or such a vice-
president or if at a meeting neither of them is present within
fifteen minutes after the time appointed for the holding of the
meeting, the shareholders present shall choose a person from
their number to be the chair;
(f) unless a poll is demanded, an entry in the minutes of a
meeting of shareholders to the effect that the chair declared a
motion to be carried is admissible in evidence as proof of the
fact, in the absence of evidence to the contrary, without proof
of the number or proportion of votes recorded in favour of or
against the motion.
93.(2) Notice
93.(2) The by-laws of the company shall not provide for fewer than
ten days notice of meetings of shareholders and shall not provide
that notice may be given otherwise than individually.
93.(3) Poll
93.(3) If a poll is demanded, it shall be taken in such manner as
the by-laws prescribe, and, if the by-laws make no provision
therefor, then as the chair directs. R.S.O. 1990, c. C.38, s. 93.
94.(1) Auditors
94.(1) The shareholders of a company at their first general meeting
shall appoint one or more auditors to hold office until the first
annual meeting and, if the shareholders fail to do so, the directors
shall forthwith make such appointment or appointments.
94.(2) Idem
94.(2) The shareholders shall at each annual meeting appoint one or
more auditors to hold office until the next annual meeting and, if
an appointment is not so made, the auditor in office shall continue
in office until a successor is appointed.
94.(3) Casual vacancy
94.(3) The directors may fill any casual vacancy in the office of
auditor, but, while such vacancy continues, the surviving or
continuing auditor, if any, may act.
94.(4) Removal
94.(4) The shareholders may, by resolution passed by at least two-
thirds of the votes cast at a general meeting of which notice of
intention to pass the resolution has been given, remove any auditor
before the expiration of the auditor's term of office, and shall by
a majority of the votes cast at that meeting appoint another auditor
in the auditor's stead for the remainder of the term.
94.(5) Remuneration
94.(5) The remuneration of an auditor appointed by the shareholders
shall be fixed by the shareholders, or by the directors if they are
authorized so to do by the shareholders, and the remuneration of an
auditor appointed by the directors shall be fixed by the directors.
94.(6) Appointment by Minister
94.(6) If for any reason no auditor is appointed, the Minister may,
on the application of a shareholder, appoint one or more auditors
for that year and fix the remuneration to be paid by the company for
the services of the auditor or auditors.
94.(7) Notice
94.(7) Notice of the appointment of an auditor shall be given in
writing to the auditor forthwith after the appointment is made.
R.S.O. 1990, c. C.38, s. 94.
95.(1) Qualification of auditor
95.(1) Except as provided in subsection (2), no person shall be
appointed as auditor of a company who is a director, officer or
employee of that company or an affiliated company or who is a
partner, employer or employee of any such director, officer or
employee.
95.(2) Private companies
95.(2) Upon the unanimous vote of the shareholders of a private
company present or represented at the meeting at which the auditor
is appointed, a director, officer or employee of that company or an
affiliated company, or a partner, employer or employee of such
director, officer or employee may be appointed as auditor of that
company, if it is not a subsidiary company of a company incorporated
by any legislative jurisdiction in Canada which is not a private
company within the meaning of this Act.
95.(3) Notice
95.(3) A person appointed as auditor under subsection (2) shall
indicate in the person's report to the shareholders on the annual
financial statement of the company that the person is a director,
officer or employee of the company or a partner, employer or
employee of such director, officer or employee. R.S.O. 1990, c.
C.38, s. 95.
96.(1) Annual audit
96.(1) The auditor shall make such examination as will enable the
auditor to report to the shareholders as required under subsection (2).
96.(2) Auditor's report
96.(2) The auditor shall make a report to the shareholders on the
financial statement, other than the part thereof that relates to the
period referred to in subclause 97 (1) (b) (ii), to be laid before
the company at any annual meeting during the auditor's term of
office and shall state in the report whether in the auditor's
opinion the financial statement referred to therein presents fairly
the financial position of the company and the results of its
operations for the period under review in accordance with generally
accepted accounting principles applied on a basis consistent with
that of the preceding period.
96.(3) Idem
96.(3) If the financial statement contains a statement of source and
application of funds or a statement of changes in net assets, the
auditor shall include in the auditor's report a statement whether in
the auditor's opinion, in effect, the statement of source and
application of funds or the statement of changes in net assets
presents fairly the information shown therein.
96.(4)Idem
96.(4) The auditor in the auditor's report shall make such
statements as the auditor considers necessary,
(a) if the company's financial statement is not in agreement
with its accounting records;
(b) if the company's financial statement is not in accordance
with the requirements of this Act;
(c) if the auditor has not received all the information and
explanations that the auditor has required; or
(d) if proper accounting records have not been kept, so far as
appears from the auditor's examination.
96.(5) Right of access, etc.
96.(5) The auditor of a company has right of access at all times to
all records, documents, books, accounts and vouchers of the company
and is entitled to require from the directors and officers of the
company such information and explanation as in the auditor's opinion
are necessary to enable the auditor to report as required by
subsection (2).
96.(6) Auditor may attend shareholders' meetings
96.(6) The auditor of a company is entitled to attend any meeting of
shareholders of the company and to receive all notices and other
communications relating to any such meeting that a shareholder is
entitled to receive and to be heard at any such meeting that the
auditor attends on any part of the business of the meeting that
concerns the auditor as auditor. R.S.O. 1990, c. C.38, s. 96.
96.1. Exemption from annual audit
96.1 In respect of a financial year of a company, the company is
exempt from the requirements of this Part regarding the appointment
and duties of an auditor if,
(a) the company is not a public company;
(b) the annual income of the company is less than $10,000; and
(c) all of the shareholders consent, in writing, to the
exemption in respect of the year. 1998, c. 18, Sched. E, s. 63.
97.(1) Information to be laid before annual meeting
97.(1) The directors shall lay before each annual meeting of shareholders,
(a) in the case of a private company, a financial statement for
the period that commenced on the date of incorporation and
ended not more than six months before such annual meeting or,
if the company has completed a financial year, that commenced
immediately after the end of the last completed financial year
and ended not more than six months before such annual meeting,
as the case may be, made up of,
(i) a statement of profit and loss for such period,
(ii) a statement of surplus for such period, and
(iii) a balance sheet as at the end of such period;
(b) in the case of a public company, a comparative financial
statement relating separately to,
(i) the period that commenced on the date of incorporation
and ended not more than six months before such annual
meeting or, if the company has completed a financial year,
that commenced immediately after the end of the last
completed financial year and ended not more than six months
before such annual meeting, as the case may be, and
(ii) the period covered by the financial year next preceding
such latest completed financial year, if any,
made up of,
(iii) a statement of profit and loss for each period,
(iv) a statement of surplus for each period,
(v) a statement of source and application of funds for each
period, and
(vi) a balance sheet as at the end of each period;
(c) the report of the auditor to the shareholders;
(d) such further information respecting the financial position
of the company as the letters patent, supplementary letters
patent or by-laws of the company require.
97.(2) Designation of statements
97.(2) It is not necessary to designate the statements referred to
in subsection (1) as the statement of profit and loss, statement of
surplus, statement of source and application of funds and balance
sheet.
97.(3) Auditor's report to be read
97.(3) The report of the auditor to the shareholders shall be read
at the annual meeting and shall be open to inspection by any
shareholder.
97.(4) Omission of comparative statement
97.(4) Despite clause (1) (b), the financial statement referred to
in such clause may relate only to the period that ended not more
than six months before the annual meeting if the reason for the
omission of the statement in respect of the period covered by the
previous financial statement is set out in the financial statement
to be laid before such meeting or by way of note thereto.
97.(5) Omission of source and application statement
97.(5) Despite subclause (1) (b) (v), the statement of source and
application of funds may be omitted if the reason for such omission
is set out in the financial statement or by way of note thereto.
R.S.O. 1990, c. C.38, s. 97.
98.(1) Statement of profit and loss
98.(1) The statement of profit and loss to be laid before an annual
meeting shall be drawn up so as to present fairly the results of the
operations of the company for the period covered by the statement
and so as to distinguish severally at least,
(a) in the case of a public company, sales or gross operating
revenue;
(b) the operating profit or loss before including or providing
for other items of income or expense that are required to be
shown separately;
(c) income from investments in subsidiaries whose financial
statements are not consolidated with those of the company;
(d) income from investments in affiliated companies other than
subsidiaries;
(e) income from other investments;
(f) non-recurring profits and losses of significant amount
including profits or losses on the disposal of capital assets
and other items of a special nature to the extent that they are
not shown separately in the statement of earned surplus;
(g) provision for depreciation or obsolescence or depletion;
(h) amounts written off for goodwill or amortization of any
other intangible assets to the extent that they are not shown
separately in the statement of earned surplus;
(i) interest on indebtedness initially incurred for a term of
more than one year, including amortization of debt discount or
premium and expense;
(j) taxes on income imposed by any taxing authority,
and shall show the net profit or loss for the financial period.
98.(2) Notes
98.(2) Despite subsection (1), items of the natures described in
clauses (1) (g) and (h) may be shown by way of note to the statement
of profit and loss.
98.(3) Order for omission of sales or gross operating revenue
98.(3) A public company may apply to the Commission for an order
permitting sales or gross operating revenue referred to in clause
(1) (a) of this section or subclause 110 (1) (b) (i) to be omitted
from the statement of profit and loss or the interim financial
statement, as the case may be, and the Commission may, on such terms
and conditions as it may impose, permit such omission where it is
satisfied that in the circumstances the disclosure of such
information would be unduly detrimental to the interests of the
company.
98.(4) Hearing of Commission
98.(4) The provisions of the Securities Act respecting hearings by
the Commission apply, so far as possible, to hearings of the
Commission under this section.
98.(5) Appeal from Commission
98.(5) Any person who feels aggrieved by a decision of the
Commission under this section may appeal the decision to the
Divisional Court, and subsections 9 (2) to (6) of the Securities Act
apply to the appeal. R.S.O. 1990, c. C.38, s. 98.
99.(1) Statement of surplus
99.(1) The statement of surplus shall be drawn up so as to present
fairly the transactions reflected in the statement and shall show
separately a statement of contributed surplus and a statement of
earned surplus.
99.(2) Contributed surplus
99.(2) The statement of contributed surplus shall be drawn up so as
to include and distinguish the following items:
1. The balance of such surplus at the end of the preceding
financial period.
2. The additions to and deductions from such surplus during the
financial period including,
(a) the amount of surplus arising from the issue of shares
or the reorganization of the company's issued capital,
including,
(i) the amount of premiums received on the issue of
shares at a premium,
(ii) the amount of surplus realized on the purchase for
cancellation of shares; and
(b) donations of cash or other property by shareholders.
3. The balance of such surplus at the end of the financial
period.
99.(3) Earned surplus
99.(3) The statement of earned surplus shall be drawn up so as to
distinguish at least the following items:
1. The balance of such surplus at the end of the preceding
financial period.
2. The additions to and deductions from such surplus during the
financial period and without restricting the generality of the
foregoing at least the following:
i. The amount of the net profit or loss for the financial
period.
ii. The amount of dividends declared on each class of
shares.
iii. The amount transferred to or from reserves.
3. The balance of such surplus at the end of the financial
period. R.S.O. 1990, c. C.38, s. 99.
100. Statement of source and application of funds
100. The statement of source and application of funds referred to in
subclause 97 (1) (b) (v) and clause 110 (1) (a) shall be drawn up so
as to present fairly the information shown therein for the period,
and shall show separately at least,
(a) funds derived from,
(i) current operations,
(ii) sale of non-current assets, segregating investments,
fixed assets and intangible assets,
(iii) issue of securities or other indebtedness maturing
more than one year after issue, and
(iv) issue of shares; and
(b) funds applied to,
(i) purchase of non-current assets, segregating investments,
fixed assets and intangible assets,
(ii) redemption or other retirement of securities or
repayment of other indebtedness maturing more than one year
after issue,
(iii) redemption or other retirement of shares, and
(iv) payment of dividends. R.S.O. 1990, c. C.38, s. 100.
101. Balance sheet
101. The balance sheet to be laid before an annual meeting shall be
drawn up so as to present fairly the financial position of the
company as at the date to which it is made up and so as to
distinguish severally at least the following:
1. Cash.
2. Debts owing to the company from its directors, officers or
shareholders, except debts of reasonable amount arising in
the ordinary course of its business that are not overdue
having regard to its ordinary terms of credit.
3. Debts owing to the company, whether on account of a loan
or otherwise, from subsidiaries whose financial statements
are not consolidated with those of the company.
4. Debts owing to the company, whether on account of a loan
or otherwise, from affiliated companies other than
subsidiaries.
5. Other debts owing to the company, segregating those that
arose otherwise than in the ordinary course of its business.
6. Inventory, stating the basis of valuation.
7. Shares, bonds, debentures and other investments owned by
the company, except those referred to in items 8 and 9,
stating their nature and the basis of their valuation and
showing separately those that are marketable with a notation
of their market value.
8. Shares or securities of subsidiaries whose financial
statements are not consolidated with those of the company,
stating the basis of valuation.
9. Shares or securities of affiliated companies other than
subsidiaries, stating the basis of valuation.
10. Lands, buildings, and plant and equipment, stating the
basis of valuation, whether cost or otherwise, and, if valued
on the basis of an appraisal, the date of appraisal, the name
of the appraiser, the basis of the appraisal value and, if
such appraisal took place within five years preceding the
date to which the balance sheet is made up, the disposition
in the accounts of the company of any amounts added to or
deducted from such assets on appraisal and also the amount or
amounts accumulated in respect of depreciation, obsolescence
and depletion.
11. There shall be stated under separate headings, in so far
as they are not written off, (i) expenditures on account of
future business; (ii) any expense incurred in connection with
any issue of shares; (iii) any expense incurred in connection
with any issue of securities, including any discount thereon;
and (iv) any one or more of the following: goodwill,
franchises, patents, copyrights, trade marks and other
intangible assets and the amount, if any, by which the value
of any such assets has been written up after the 30th day of
April, 1954.
12. The aggregate amount of any outstanding loans under
clauses 24 (2) (c), (d) and (e).
13. Bank loans and overdrafts.
14. Debts owing by the company on loans from its directors,
officers or shareholders.
15. Debts owing by the company to subsidiaries whose
financial statements are not consolidated with those of the
company, whether on account of a loan or otherwise.
16. Debts owing by the company to affiliated companies other
than subsidiaries whether on account of a loan or otherwise.
17. Other debts owing by the company, segregating those that
arose otherwise than in the ordinary course of its business.
18. Liability for taxes, including the estimated liability
for taxes in respect of the income of the period covered by
the statement of profit and loss.
19. Dividends declared but not paid.
20. Deferred income.
21. Securities issued by the company, stating the interest
rate, the maturity date, the amount outstanding and the
existence of sinking fund, redemption requirements and
conversion rights, if any.
22. The authorized capital, giving the number of each class
of shares and a brief description of each such class, and
indicating therein any class of shares that is redeemable and
the redemption price thereof.
23. The issued capital, giving the number of shares of each
class issued and outstanding and the amount received therefor
that is attributable to capital, and showing,
(a) the number of shares of each class issued since the
date of the last balance sheet and the value attributed
thereto, distinguishing shares issued for cash, shares
issued for services and shares issued for other
consideration; and
(b) where any shares have not been fully paid,
(i) the number of shares in respect of which calls have
not been made and the aggregate amount that has not
been called, and
(ii) the number of shares in respect of which calls have
been made and not paid and the aggregate amount that
has been called and not paid.
24. Contributed surplus.
25. Earned surplus.
26. Reserves, showing the amounts added thereto and the
amounts deducted therefrom during the financial period.
R.S.O. 1990, c. C.38, s. 101.
102. Notes to balance sheet
102. Explanatory information or particulars of any item mentioned in
section 101 may be shown by way of note to the balance sheet. R.S.O.
1990, c. C.38, s. 102.
103.(1) Notes to financial statement
103.(1) There shall be stated by way of note to the financial
statement particulars of any change in accounting principle or
practice or in the method of applying any accounting principle or
practice made during the period covered that affects the
comparability of any of the statements with any of those for the
preceding period, and the effect, if material, of any such change
upon the profit or loss for the period.
103.(2) Change in accounting practice
103.(2) For the purpose of subsection (1), a change in accounting
principle or practice or in the method of applying any accounting
principle or practice affects the comparability of a statement with
that for the preceding period, even though it did not have a
material effect upon the profit or loss for the period.
103.(3)Idem
103.(3) Where applicable, the following matters shall be referred to
in the financial statement or by way of note thereto:
1. The basis of conversion of amounts from currencies other
than the currency in which the financial statement is
expressed.
2. Foreign currency restrictions that affect the assets of
the company.
3. Contractual obligations that will require abnormal
expenditures in relation to the company's normal business
requirements or financial position or that are likely to
involve losses not provided for in the accounts.
4. Material contractual obligations in respect of long-term
leases, including, in the year in which the transaction was
effected, the principal details of any sale and lease
transaction.
5. Contingent liabilities, stating their nature and, where
practicable, the approximate amounts involved.
6. Any liability secured otherwise than by operation of law
on any asset of the company, stating the liability so
secured.
7. Any default of the company in principal, interest, sinking
fund or redemption provisions with respect to any issue of
its securities or credit agreements.
8. The gross amount of arrears of dividends on any class of
shares and the date to which such dividends were last paid.
9. Where a company has contracted to issue shares or has
given an option to purchase shares, the class and number of
shares affected, the price and the date for issue of the
shares or exercise of the option.
10. The aggregate direct remuneration paid or payable by the
company and its subsidiaries whose financial statements are
consolidated with those of the company to the directors, and
the senior officers as defined in subsection 72 (1), of the
company and, as a separate amount, the aggregate direct
remuneration paid or payable to such directors and senior
officers by the subsidiaries of the company whose financial
statements are not consolidated with those of the company.
11. In the case of a holding company, the aggregate of any
shares in, and the aggregate of any securities of, the
holding company held by subsidiary companies whose financial
statements are not consolidated with that of the holding
company.
12. The amount of any loans by the company, or by a
subsidiary company, otherwise than in the ordinary course of
business, during the company's financial period, to the
directors or officers of the company.
13. Any restriction by the letters patent, supplementary
letters patent or by-laws of the company or by contract on
the payment of dividends that is significant in the light of
the company's financial position.
14. Any event or transaction, other than one in the normal
course of business operations, between the date to which the
financial statement is made up and the date of the auditor's
report thereon that materially affects the financial
statement.
15. In the case of a public company, the amount of any
obligation for pension benefits arising from service prior to
the date of the balance sheet, whether or not such obligation
has been provided for in the accounts of the company, the
manner in which the company proposes to satisfy such
obligation and the basis on which it has charged or proposes
to charge the related costs against operations.
103.(4)Idem
103.(4) A note to a financial statement is a part of it. R.S.O.
1990, c. C.38, s. 103.
104. Insignificant circumstances
104. Despite sections 98 to 103, it is not necessary to state in a
financial statement any matter that in all the circumstances is of
relative insignificance. R.S.O. 1990, c. C.38, s. 104.
105.(1) Consolidated financial statement
105.(1) A company, in this section referred to as "the holding
company", may include in the financial statement to be submitted at
an annual meeting the assets and liabilities and income and expense
of any one or more of its subsidiaries, making due provision for
minority interests, if any, and indicating in such financial
statement that it is presented in consolidated form.
105.(2)Idem
105.(2) Where the assets and liabilities and income and expense of
any one or more subsidiaries of the holding company are not so
included in the financial statement of the holding company,
(a) the financial statement of the holding company shall
include a statement setting forth,
(i) the reason why the assets and liabilities and income and
expense of such subsidiary or subsidiaries are not included
in the financial statement of the holding company,
(ii) if there is only one such subsidiary, the amount of the
holding company's proportion of the profit or loss of such
subsidiary for the financial period coinciding with or
ending in the financial period of the holding company, or,
if there is more than one such subsidiary, the amount of the
holding company's proportion of the aggregate profits less
losses, or losses less profits, of all such subsidiaries for
the respective financial periods coinciding with or ending
in the financial period of the holding company,
(iii) the amount included as income from such subsidiary or
subsidiaries in the statement of profit and loss of the
holding company and the amount included therein as a
provision for the loss or losses of such subsidiary or
subsidiaries,
(iv) if there is only one such subsidiary, the amount of the
holding company's proportion of the undistributed profits of
such subsidiary earned since the acquisition of the shares
of such subsidiary by the holding company to the extent that
such amount has not been taken into the accounts of the
holding company, or, if there is more than one such
subsidiary, the amount of the holding company's proportion
of the aggregate undistributed profits of all such
subsidiaries earned since the acquisition of their shares by
the holding company less its proportion of the losses, if
any, suffered by any such subsidiary since the acquisition
of its shares to the extent that such amount has not been
taken into the accounts of the holding company,
(v) any qualifications contained in the report of the
auditor of any such subsidiary on its financial statement
for the financial period ending as aforesaid, and any note
or reference contained in that financial statement to call
attention to a matter that, apart from the note or
reference, would properly have been referred to in such a
qualification, in so far as the matter that is the subject
of the qualification or note is not provided for by the
company's own financial statement and is material from the
point of view of its shareholders;
(b) if for any reason the directors of the holding company are
unable to obtain such information as is necessary for the
preparation of the statement that is to be included in the
financial statement of the holding company, the directors who
sign the financial statement shall so report in writing and
their report shall be included in the financial statement in
lieu of the statement;
(c) true copies of the latest financial statement of such
subsidiary or subsidiaries shall be kept on hand by the holding
company at its head office and shall be open to inspection by
the shareholders of the holding company on request during the
normal business hours of the holding company, but the directors
of the holding company may by resolution refuse the right of
such inspection if such inspection is not in the public
interest or would prejudice the holding company or such
subsidiary or subsidiaries, which resolution may, on the
application of any such shareholder to the court, be set aside
by the court;
(d) if, in the opinion of the auditor of the holding company,
adequate provision has not been made in the financial statement
of the holding company for the holding company's proportion,
(i) where there is only one such subsidiary, of the loss of
such subsidiary suffered since acquisition of its shares by
the holding company, or
(ii) where there is more than one such subsidiary, of the
aggregate losses suffered by such subsidiaries since
acquisition of their shares by the holding company in excess
of its proportion of the undistributed profits, if any,
earned by any of such subsidiaries since such acquisition,
the auditor shall state in the auditor's report the additional
amount that in the auditor's opinion is necessary to make full
provision therefor. R.S.O. 1990, c. C.38, s. 105.
106.(1) Definitions: subsidiary company
106.(1) For the purposes of this Act, a company shall be deemed to
be a subsidiary of another company if, but only if,
(a) it is controlled by,
(i) that other, or
(ii) that other and one or more companies each of which is
controlled by that other, or
(iii) two or more companies each of which is controlled by
that other; or
(b) it is a subsidiary of a company that is that other's
subsidiary.
106.(2) Holding Company
106.(2) For the purposes of this Act, a company shall be deemed to
be another's holding company if, but only if, that other is its
subsidiary.
106.(3) Affiliated Company
106.(3) For the purposes of this Act, one company shall be deemed to
be affiliated with another company if, but only if, one of them is
the subsidiary of the other or both are subsidiaries of the same
company or each of them is controlled by the same person.
106.(4) Control
106.(4) For the purposes of this Act, a company shall be deemed to be
controlled by another company or person or by two or more companies
if, but only if,
(a) shares of the first-mentioned company carrying more than 50
per cent of the votes for the election of directors are held,
otherwise than by way of security only, by or for the benefit
of such other company or person or by or for the benefit of
such other companies; and
(b) the votes carried by such shares are sufficient, if
exercised, to elect a majority of the board of directors of the
first-mentioned company. R.S.O. 1990, c. C.38, s. 106.
107. Reserves
107. In a financial statement, the term "reserve" shall be used to
describe only,
(a) amounts appropriated from earned surplus at the discretion
of management for some purpose other than to meet a liability
or contingency known or admitted or a commitment made as at the
statement date or a decline in value of an asset that has
already occurred;
(b) amounts appropriated from earned surplus pursuant to the
instrument of incorporation, instrument amending the instrument
of incorporation or by-laws of the company for some purpose
other than to meet a liability or contingency known or admitted
or a commitment made as at the statement date or a decline in
value of an asset that has already occurred; and
(c) amounts appropriated from earned surplus in accordance with
the terms of a contract and that can be restored to the earned
surplus when the conditions of the contract are fulfilled.
R.S.O. 1990, c. C.38, s. 107.
108. Approval of financial statement
108. The financial statement shall be approved by the board of
directors, such approval to be evidenced by the signature at the
foot of the balance sheet by two of the directors duly authorized to
sign, and the auditor's report shall be attached to the financial
statement or there shall be inserted at the foot of the balance
sheet a reference to the report. R.S.O. 1990, c. C.38, s. 108.
109.(1) Mailing of financial statement to shareholders
109.(1) A public company shall, ten days or more before the date of
the annual meeting, send by prepaid mail to each shareholder at the
shareholder's last address as shown on the books of the company a
copy of the financial statement and a copy of the auditor's report.
109.(2) Financial statement, private companies
109.(2) A shareholder of a private company is entitled to be
furnished by the company on demand with a copy of the documents
mentioned in subsection (1).
109.(3) Offence
109.(3) A company that fails to comply with subsection (1) or (2) is
guilty of an offence and on conviction is liable to a fine of not
more than $200, and every director or officer of the company who
authorizes, permits or acquiesces in any such failure is guilty of
an offence and on conviction is liable to a like fine. R.S.O. 1990,
c. C.38, s. 109.
110.(1) Comparative interim financial statement
110.(1) A public company shall send to each shareholder a copy of a
comparative interim financial statement for the six-month period
that commenced on the date of incorporation or, if the company has
completed a financial year, for the six-month period that commenced
immediately after the end of the last completed financial year and
for the comparable six-month period, if any, in the twelve months
immediately preceding the commencement of the six-month period in
respect of which such interim financial statement is issued, made up
of,
(a) a statement of source and application of funds for each
period that complies with section 100; and
(b) sufficient relevant financial information in summary form
to present fairly the results of the operations of the company
for each period, including,
(i) a statement of sales or gross operating revenue,
(ii) extraordinary items of income or expense,
(iii) net income before taxes on income imposed by any
taxing authority,
(iv) taxes on income imposed by any taxing authority, and
(v) net profit or loss.
110.(2)Idem
110.(2) The interim financial statement required by subsection (1)
may omit either or both of,
(a) the information relating to the comparable period; and
(b) the statement of source and application of funds,
if the reason for the omission or omissions, as the case may be, is
set out in the interim financial statement or by way of note
thereto.
110.(3)Idem
110.(3) There shall be stated by way of note to the interim
financial statement required by subsection (1) particulars of any
change in accounting principle or practice or in the method of
applying any accounting principle or practice made during the period
covered that affects the comparability of such statement with the
statement for the preceding period or with the interim financial
statement for a part of the preceding period, and the effect, if
material, of any such change upon the profit or loss for the period
covered by the interim financial statement.
110.(4)Idem
110.(4) For the purpose of subsection (3), a change in accounting
principle or practice or in the method of applying any accounting
principle or practice affects the comparability of a statement with
that for the preceding period or part thereof, even though it did
not have a material effect upon the profit or loss for the period
covered by the interim financial statement.
110.(5) Idem
110.(5) The interim financial statement required by subsection (1)
shall be sent by prepaid mail to each shareholder, within sixty days
of the date to which it is made up, at the shareholder's last
address as shown on the books of the company.
110.(6) Offence
110.(6) A company that fails to comply with this section is guilty
of an offence and on conviction is liable to a fine of not more than
$1,000, and every director or officer of the company who authorized,
permitted or acquiesced in any such failure is guilty of an offence
and on conviction is liable to a like fine. R.S.O. 1990, c. C.38, s.
110.
111.(1) Subsidiaries not to hold shares of holding companies
111.(1) Except in the cases mentioned in this section, a company
shall not be a shareholder of a company that is its holding company,
and any allotment or transfer of shares of a company to its
subsidiary company is void. R.S.O. 1990, c. C.38, s. 111 (1).
111.(2) Application
111.(2) This section does not apply to a subsidiary holding shares
as executor, administrator, guardian or trustee unless the holding
company or a subsidiary thereof is beneficially interested under the
trust and is not so interested only 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. R.S.O. 1990, c.
C.38, s. 111 (2); 1992, c. 32, s. 6 (8).
111.(3)Exception
111.(3) This section does not prevent a subsidiary that on the 30th
day of April, 1954, held shares of its holding company from
continuing to hold such shares, but, subject to subsection (2), the
subsidiary has no right to vote at meetings of shareholders of the
holding company or at meetings of any class of shareholders thereof.
111.(4)Nominees
111.(4) Subject to subsection (2), subsections (1) and (3) apply in
relation to a nominee for a company that is a subsidiary as if the
references in subsections (1) and (3) to such a company included
references to a nominee for it. R.S.O. 1990, c. C.38, s. 111 (3, 4).
112.(1) Definition
112. 112.(1) In this section,
"arrangement" includes a reorganization of the authorized capital
of a company and includes, without limiting the generality of the
foregoing, the consolidation of shares of different classes, the
reclassification of shares of a class into shares of another
class and the variation of the terms, preferences, rights,
conditions, restrictions, limitations or prohibitions attaching
to shares of any class, and includes a reconstruction under which
a company transfers or sells or proposes to transfer or to sell
to another company the whole or a substantial part of its
undertaking for a consideration consisting in whole or in part of
shares or securities of the other company and in which it
proposes to distribute a part of such consideration among its
shareholders of any class or to cease carrying on its undertaking
or the part of its undertaking so transferred or sold or so
proposed to be transferred or sold.
112.(2) Arrangements
112.(2) Where an arrangement is proposed between a company and its
shareholders or a class or classes of them affecting the rights of
such shareholders or class or classes under the company's letters
patent or supplementary letters patent or by-laws, the court may, on
application of the company or of a shareholder, order a meeting of
the shareholders of the company or of the class or classes affected,
as the case may be, to be held on twenty-one days notice, or such
shorter time as the court directs, served in such manner as the
court directs.
112.(3) Contents of notice calling meeting
112.(3) Where a meeting of the shareholders or of any class or
classes of shareholders is called under subsection (2), the notice
calling the meeting shall contain a statement explaining the effect
of the arrangement and in particular stating any interest of the
directors of the company, whether as directors or as shareholders of
the company or otherwise, and the effect thereon of the arrangement,
in so far as it is different from the effect on the like interest of
other persons.
112.(4) Sanction by court
112.(4) If the shareholders of the company or of the class or
classes affected, as the case may be, present in person or by proxy
at the meeting, agree by at least three-fourths of the shares of
each class represented to the arrangement either as proposed or as
varied at the meeting, the arrangement may be sanctioned by the
court and, if so sanctioned, the arrangement and any decrease or
increase in the authorized capital and any provisions for the
allotment or disposition thereof by sale or otherwise as therein set
forth may be confirmed by supplementary letters patent and thereupon
is binding on the company and on the shareholders of the company or
on the class or classes of shareholders affected.
112.(5) Notice to dissenters
112.(5) If dissenting votes are cast at the meeting and, despite
such dissenting votes, the arrangement is agreed to by the
shareholders or the class or classes represented in accordance with
subsection (4) and unless the court in its discretion otherwise
orders, the company shall notify each dissenting shareholder in such
manner as the court directs of the time and place when application
will be made to it for the sanction of the arrangement. R.S.O. 1990,
c. C.38, s. 112.
113.(1) Amalgamation
113.(1) Any two or more companies, including a holding and
subsidiary company, having the same or similar objects may
amalgamate and continue as one company.
113.(2) Agreement
113.(2) The companies proposing to amalgamate may enter into an
agreement for the amalgamation prescribing the terms and conditions
of the amalgamation, the mode of carrying the amalgamation into
effect and stating the name of the amalgamated company, the names,
callings and places of residence of the first directors thereof and
how and when the subsequent directors are to be elected with such
other details as may be necessary to perfect the amalgamation and to
provide for the subsequent management and working of the amalgamated
company, the authorized capital of the amalgamated company and the
manner of converting the authorized capital of each of the companies
into that of the amalgamated company. R.S.O. 1990, c. C.38, s. 113
(1, 2).
113.(3)Adoption by shareholders
113.(3) The agreement shall be submitted to the shareholders of each
of the amalgamating companies at general meetings thereof called for
the purpose of considering the agreement, and, if two-thirds of the
votes cast at each such meeting are in favour of the adoption of the
agreement, that fact shall be certified upon the agreement by the
secretary of each of the amalgamating companies. R.S.O. 1990, c.
C.38, s. 113 (3); 1998, c. 18, Sched. E, s. 64.
113.(4) Joint application for letters patent
113.(4) If the agreement is adopted in accordance with subsection
(3), the amalgamating companies may apply jointly to the Lieutenant
Governor for letters patent confirming the agreement and
amalgamating the companies so applying, and on and from the date of
the letters patent such companies are amalgamated and are continued
as one company by the name in the letters patent provided, and the
amalgamated company possesses all the property, rights, privileges
and franchises and is subject to all liabilities, contracts,
disabilities and debts of each of the amalgamating companies. R.S.O.
1990, c. C.38, s. 113 (4).
114.(1) Distribution of assets where winding up protracted
114.(1) Where a company has ceased to carry on business except for
the purpose of winding up its affairs and has no debts or
obligations that have not been provided for or protected, the
directors may pass by-laws for distributing in money, kind, specie
or otherwise the property of the company or any part of it rateably
among the shareholders according to their rights and interests in
the company.
114.(2) Confirmation
114.(2) The by-law is not effective until it has been confirmed by
two-thirds of the votes cast at a meeting of the shareholders duly
called for considering the by-law nor until it has been confirmed by
the Lieutenant Governor in Council. R.S.O. 1990, c. C.38, s. 114.
115.(1) Private companies contravening privileges, etc.
115.(1) If a private company contravenes any of the provisions of
its special Act, letters patent or supplementary letters patent
respecting the restriction on the right to transfer its shares, the
limitation on the number of its shareholders or the prohibition on
invitations to the public to subscribe for its shares or securities,
it ceases to be entitled to the privileges and exemptions conferred
on private companies under this Act and thereupon this Act applies
to the company as if it were not a private company.
115.(2) Relief
115.(2) The court, on being satisfied that any such contravention
was accidental or due to inadvertence or to some other sufficient
cause, or that on other grounds it is just and equitable to grant
relief, may, on the application of the company or any other person
interested and on such terms and conditions as the court considers
proper, order that the company be relieved from the consequences
mentioned in subsection (1).
115.(3) Offence
115.(3) In addition to the consequences mentioned in subsection (1),
every private company that contravenes any of the provisions of its
special Act, letters patent or supplementary letters patent
respecting the restriction on the right to transfer its shares, the
limitation on the number of its shareholders or the prohibition on
invitations to the public to subscribe for its shares or securities,
and every director or officer of the company who authorizes, permits
or acquiesces in any such contravention, is guilty of an offence and
on conviction is liable to a fine of not more than $200. R.S.O.
1990, c. C.38, s. 115.
116.(1) Private company, rights of dissenting shareholders
116.(1) If, in the case of a private company, at a meeting of
shareholders,
(a) a resolution passed by the directors authorizing the sale
or disposition of the undertaking of the company or any part
thereof as an entirety or substantially as an entirety is
confirmed with or without variation by the shareholders;
(b) a resolution passed by the directors authorizing an
application for the issue of supplementary letters patent
providing for the conversion of the company into a public
company is confirmed with or without variation by the
shareholders; or
(c) an agreement for the amalgamation of the company with one
or more other companies, whether public or private, is
confirmed by the shareholders,
any shareholder who has voted against the confirmation of such
resolution or agreement, as the case may be, may within two days
after the date of the meeting give notice in writing to the company
requiring it to purchase the shareholder's shares.
116.(2) Company bound to purchase shares
116.(2) Within ninety days from the date of the completion of the
sale or disposition or the issue of the supplementary letters patent
or the letters patent, as the case may be, the company shall
purchase the shares of every shareholder who has given notice under
subsection (1).
116.(3) Saving
116.(3) The company shall not purchase any shares under subsection
(2) if it is insolvent or if such purchase would render the company
insolvent.
116.(4) Price of shares
116.(4) The price and terms of the purchase of such shares shall be
as may be agreed upon by the company and the dissenting shareholder,
but, if they fail to agree, the price and terms shall be as
determined by the court on the application of the dissenting
shareholder.
116.(5) Sale of shares
116.(5) Any shares purchased under subsection (2) shall not be
cancelled by reason only of such purchase, and may be sold by the
company at such price and on such terms as the directors determine.
116.(6) Where sale not completed
116.(6) If the sale or disposition is not completed or the
supplementary letters patent or letters patent are not issued, the
rights of the dissenting shareholder under this section cease and
the company shall not purchase the shares of such shareholder under
this section. R.S.O. 1990, c. C.38, s. 116.
PART III
CORPORATIONS WITHOUT SHARE CAPITAL
117. Application
117. This Part, except where it is otherwise expressly provided,
applies,
(a) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Upper
Canada;
(b) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Canada
that has its head office and carries on business in Ontario and
that was incorporated with objects to which the authority of
the Legislature extends; and
(c) to every corporation incorporated by or under a general or
special Act of the Legislature,
but this Part does not apply to a corporation incorporated for the
construction and working of a railway, incline railway or street
railway. R.S.O. 1990, c. C.38, s. 117.
118. Incorporation
118. A corporation may be incorporated to which Part V applies or
that has objects that are within the jurisdiction of the Province of
Ontario. 1994, c. 27, s. 78 (5).
119.(1) Application for incorporation
119.(1) The applicants for the incorporation of a corporation shall
file with the Lieutenant Governor an application showing:
1. The names in full, the place of residence and the calling of
each of the applicants.
2. The name of the corporation to be incorporated.
3. The objects for which the corporation is to be incorporated.
4. The place in Ontario where the head office of the
corporation is to be situate.
5. The names of the applicants who are to be the first
directors of the corporation.
6. Any other matters that the applicants desire to have
embodied in the letters patent.
119.(2)Idem
119.(2) The applicants may ask to have embodied in the letters
patent any provision that may be made the subject of a by-law of the
corporation. R.S.O. 1990, c. C.38, s. 119.
119.(3)Exception
119.(3) Subsection (2) does not apply to a provision providing for
the election and retirement of directors in accordance with
subsection 287 (2) or (5). 1998, c. 18, Sched. E, s. 65.
120. Classes of membership
120. The letters patent, supplementary letters patent or by-laws of
a corporation may provide for more than one class of membership and
in that case shall set forth the designation of and the terms and
conditions attaching to each class. R.S.O. 1990, c. C.38, s. 120.
121. Applicants become members
121. Upon incorporation of a corporation, each applicant becomes a
member thereof. R.S.O. 1990, c. C.38, s. 121.
122. Members not liable
122. A member shall not, as such, be held answerable or responsible
for any act, default, obligation or liability of the corporation or
for any engagement, claim, payment, loss, injury, transaction,
matter or thing relating to or connected with the corporation.
R.S.O. 1990, c. C.38, s. 122.
123. Number of members
123. Unless the letters patent, supplementary letters patent or by-
laws of a corporation otherwise provide, there is no limit on the
number of members of the corporation. R.S.O. 1990, c. C.38, s. 123.
124.(1) Admission to membership
124.(1) Subject to subsection (2), a person or unincorporated
association may be admitted to membership in a corporation by
resolution of the board of directors, but the letters patent,
supplementary letters patent or by-laws may provide that such
resolution is not effective until it has been confirmed by the
members in general meeting. R.S.O. 1990, c. C.38, s. 124 (1); 1994,
c. 27, s. 78 (6).
124.(2)Idem
124.(2) The letters patent, supplementary letters patent or by-laws
of a corporation may provide for the admission of members by virtue
of their office. R.S.O. 1990, c. C.38, s. 124 (2).
125. Voting powers of members
125. Each member of each class of members of a corporation has one
vote, unless the letters patent, supplementary letters patent or by-
laws of the corporation provide that each such member has more than
one vote or has no vote. R.S.O. 1990, c. C.38, s. 125.
126.(1) Not to be carried on for gain
126.(1) A corporation, except a corporation to which Part V applies,
shall be carried on without the purpose of gain for its members and
any profits or other accretions to the corporation shall be used in
promoting its objects and the letters patent shall so provide, and,
where a company is converted into a corporation, the supplementary
letters patent shall so provide.
126.(2)Exception
126.(2) Nothing in subsection (1) prohibits a director from
receiving reasonable remuneration and expenses for his or her
services to the corporation as a director or prohibits a director or
member from receiving reasonable remuneration and expenses for his
or her services to the corporation in any other capacity, unless the
letters patent, supplementary letters patent or by-laws otherwise
provide. R.S.O. 1990, c. C.38, s. 126.
127. Directors by virtue of their office
127. Subject to section 286, the letters patent, supplementary
letters patent or by-laws of a corporation may provide for persons
becoming directors by virtue of their office, in lieu of election.
R.S.O. 1990, c. C.38, s. 127.
128.(1) Memberships not transferable, termination
128.(1) Unless the letters patent or supplementary letters patent
otherwise provide, the interest of a member in a corporation is not
transferable and lapses and ceases to exist upon the member's death
or when the member ceases to be a member by resignation or otherwise
in accordance with the by-laws of the corporation.
128.(2) Where transferable
128.(2) Where the letters patent or supplementary letters patent
provide that the interest of a member in the corporation is
transferable, the by-laws shall not restrict the transfer of such
interest. R.S.O. 1990, c. C.38, s. 128.
129.(1) By-laws
129.(1) The directors of a corporation may pass by-laws not contrary
to this Act or to the letters patent or supplementary letters patent
to regulate,
(a) the admission of persons and unincorporated associations as
members and as members by virtue of their office and the
qualification of and the conditions of membership;
(b) the fees and dues of members;
(c) the issue of membership cards and certificates;
(d) the suspension and termination of memberships by the
corporation and by the member;
(e) the transfer of memberships;
(f) the qualification of and the remuneration of the directors
and the directors by virtue of their office, if any;
(g) the time for and the manner of election of directors;
(h) the appointment, remuneration, functions, duties and
removal of agents, officers and employees of the corporation
and the security, if any, to be given by them to it;
(i) the time and place and the notice to be given for the
holding of meetings of the members and of the board of
directors, the quorum at meetings of members, the requirement
as to proxies, and the procedure in all things at members'
meetings and at meetings of the board of directors;
(j) the conduct in all other particulars of the affairs of the
corporation.
129.(2) Confirmation
129.(2) A by-law passed under subsection (1) and a repeal, amendment
or reenactment thereof, unless in the meantime confirmed at a
general meeting of the members duly called for that purpose, is
effective only until the next annual meeting of the members unless
confirmed thereat, and, in default of confirmation thereat, ceases
to have effect at and from that time, and in that case no new by-law
of the same or like substance has any effect until confirmed at a
general meeting of the members.
129.(3) Rejection
129.(3) The members may at the general meeting or the annual meeting
mentioned in subsection (2) confirm, reject, amend or otherwise deal
with any by-law passed by the directors and submitted to the meeting
for confirmation, but no act done or right acquired under any such
by-law is prejudicially affected by any such rejection, amendment or
other dealing. R.S.O. 1990, c. C.38, s. 129.
130.(1) By-laws respecting delegates
130.(1) The directors of a corporation may pass by-laws providing
for,
(a) the division of its members into groups that are composed
of territorial groups, common interest groups or both
territorial and common interest groups;
(b) the election of some or all of its directors,
(i) by such groups on the basis of the number of members in
each group, or
(ii) for the groups in a defined geographical area, by the
delegates of such groups meeting together;
(c) the election of delegates and alternative delegates to
represent each group on the basis of the number of members in
each group;
(d) the number and method of electing delegates;
(e) the holding of meetings of delegates;
(f) the authority of delegates at meetings or providing that a
meeting of delegates shall for all purposes be deemed to be and
to have all the powers of a meeting of the members;
(g) the holding of meetings of members or delegates
territorially or on the basis of common interest. R.S.O. 1990,
c. C.38, s. 130 (1); 1998, c. 18, Sched. E, s. 66.
130.(2) Confirmation
130.(2) No by-law passed under subsection (1) is effective until it
has been confirmed by at least two-thirds of the votes cast at a
general meeting of the members duly called for considering the by-
law.
130.(3) Voting
130.(3) A delegate has only one vote and shall not vote by proxy.
130.(4) Qualification of delegates
130.(4) No person shall be elected a delegate who is not a member of
the corporation.
130.(5) Saving
130.(5) No such by-law shall prohibit members from attending
meetings of delegates and participating in the discussions at such
meetings. R.S.O. 1990, c. C.38, s. 130 (2-5).
131.(1) Supplementary letters patent
131.(1) A corporation may apply to the Lieutenant Governor for the
issue of supplementary letters patent,
(a) extending, limiting or otherwise varying its objects;
(b) changing its name;
(c) varying any provision in its letters patent or prior
supplementary letters patent;
(d) providing for any matter or thing in respect of which
provision may be made in letters patent under this Act;
(e) converting it into a company;
(f) converting it into a corporation, with or without share
capital.
131.(2)Authorization
131.(2) An application under clauses (1) (a) to (d) shall be
authorized by a special resolution.
131.(3)Idem
131.(3) An application under clauses (1) (e) to (f) shall be
authorized by resolution of the board of directors and confirmed in
writing,
(a) by 100 per cent of the members; or
(b) by at least 95 per cent of the members,
but, in the case of confirmation under clause (b), the application
shall not be made until twenty-one days notice of the application
has been given by sending the notice to each member to the member's
last address as shown on the books of the corporation and only if at
the expiration of the twenty-one days none of the members has
dissented in writing to the corporation.
131.(4) Contents of application for conversion into company
131.(4) If the application is under clause (1) (e) or (f) and the
corporation is to become a company, the application shall set forth
the authorized capital, the classes of shares, if any, into which it
is to be divided, the number of shares of each class, the par value
of each share or, where the shares are to be without par value, the
consideration, if any, exceeding which each share or the aggregate
consideration, if any, exceeding which all the shares of each class
may not be issued, and, where there are to be preference shares, the
preferences, rights, conditions, restrictions, limitations or
prohibitions attaching to them or each class of them, and the terms
and conditions on which the members will become shareholders. R.S.O.
1990, c. C.38, s. 131 (1-4).
131.(5)
131.(5) Repealed: 1998, c. 18, Sched. E, s. 67.
131.(6) Special Act corporations excepted
131.(6) This section does not apply to a corporation incorporated by
special Act, except that a corporation incorporated by special Act
may apply under this section for the issue of supplementary letters
patent changing its name. R.S.O. 1990, c. C.38, s. 131 (6).
132.(1) Disposition of property on dissolution
132.(1) A corporation may pass by-laws providing that, upon its
dissolution and after the payment of all debts and liabilities, its
remaining property or part thereof shall be distributed or disposed
of to charitable organizations or to organizations whose objects are
beneficial to the community.
132.(2) Confirmation
132.(2) Such a by-law is not effective until it has been confirmed
by two-thirds of the votes cast at a general meeting of the members
duly called for that purpose. R.S.O. 1990, c. C.38, s. 132 (1, 2).
132.(3)
132.(3) , (4) Repealed: 1998, c. 18, Sched. E, s. 68.
132.(5) Where no by-law
132.(5) In the absence of such by-law and upon the dissolution of
the corporation, the whole of its remaining property shall be
distributed equally among the members or, if the letters patent,
supplementary letters patent or by-laws so provide, among the
members of a class or classes of members. R.S.O. 1990, c. C.38, s.
132 (5).
133.(1) Application of Part II provisions to Part III corporations
133.(1) Section 22, clauses 23 (1) (a) to (p) and (s) to (v),
subsection 23 (2), sections 59 to 61, 67, 69 to 71, 80 to 82, 84, 93
and 94, subsection 95 (1), sections 96 and 96.1, clauses 97 (1) (a),
(c) and (d), subsection 97 (3) and section 113 apply with necessary
modifications to corporations to which this Part applies, and in so
applying them the words "company" and "private company" mean
"corporation" and the word "shareholder" means "member". R.S.O.
1990, c. C.38, s. 133 (1); 1994, c. 27, s. 78 (7); 1998, c. 18,
Sched. E, s. 69 (1).
133.(2) Charitable corporation
133.(2) Despite subsection (1), in the case of a corporation to
which this Part applies, the objects of which are exclusively for
charitable purposes, it is sufficient notice of any meeting of the
members of the corporation if notice is given by publication at
least once a week for two consecutive weeks next preceding the
meeting in a newspaper or newspapers circulated in the municipality
or municipalities in which the majority of the members of the
corporation reside as shown by their addresses on the books of the
corporation. R.S.O. 1990, c. C.38, s. 133 (2).
133.(2.1)Exemptions
133.(2.1) Despite subsection (1), sections 80 and 96.1 do not apply
to a corporation referred to in subsection 1 (2) of the Charities
Accounting Act. 1998, c. 18, Sched. E, s. 69 (2).
133.(3)Insurers
133.(3) Clauses 97 (1) (a), (c) and (d), subsections 97 (2) and (3),
subsection 98 (1), except clause (a) thereof, subsection 98 (2),
sections 99, 101, 102, 107 and 108 and subsections 109 (1) and (3)
apply with necessary modifications to corporations to which Part V
applies, and in so applying them the words "company" and "private
company" mean "corporation" and the word "shareholder" means
"member". R.S.O. 1990, c. C.38, s. 133 (3).
PART IV
MINING COMPANIES
134. Definition
134. In this Part,
"company" means a company to which this Part applies. R.S.O.
1990, c. C.38, s. 134.
135. Application
135. This Part applies,
(a) to every mining company incorporated before the 1st day of
July, 1907;
(b) to every mining company that was made subject to a
predecessor of this Part by its letters patent or supplementary
letters patent where the subjection has not been removed by
supplementary letters patent; and
(c) to every mining company made subject to this Part by its
letters patent or supplementary letters patent where the
subjection has not been removed by supplementary letters
patent. R.S.O. 1990, c. C.38, s. 135.
136.(1) Par value shares only
136.(1) The shares of a company shall be with par value.
136.(2) Exception
136.(2) Subsection (1) does not apply to shares authorized before
the 30th day of April, 1954. R.S.O. 1990, c. C.38, s. 136.
137.(1) Issue of shares at discount
137.(1) Unless the letters patent, supplementary letters patent or
by-laws otherwise provide, a company may issue its shares at a
discount.
137.(2)At par
137.(2) Despite subsection (1), preference shares shall not be
issued at a discount.
137.(3)Rate of discount
137.(3) Where shares are to be issued at a discount, the rate of
discount shall be specified in the resolution of the directors
allotting such shares. R.S.O. 1990, c. C.38, s. 137.
138. Shareholders' liability
138. No shareholder of a company who holds shares that were validly
issued at a discount before the 30th day of April, 1954, or that are
validly issued at a discount on or after the 30th day of April,
1954, is personally liable for nonpayment of any calls made upon
the shareholder's shares beyond the amount agreed to be paid
therefor. R.S.O. 1990, c. C.38, s. 138.
139. Share certificates
139. A company shall have upon every share certificate issued by it
distinctly written or printed in red ink, where such certificates
are issued with respect to shares subject to call, the words
"SUBJECT TO CALL" or "NON LIBRES" or, where issued with respect to
shares not subject to call, the words "NOT SUBJECT TO CALL" or
"ENTIEREMENT LIBRES". R.S.O. 1990, c. C.38, s. 139.
PART V
INSURANCE CORPORATIONS
140. Definitions
140. In this Part, unless the context otherwise requires, the words
and expressions defined in section 1 of the Insurance Act have the
same meaning as in that Act. R.S.O. 1990, c. C.38, s. 140.
141.(1) Application of Part
141. 141.(1) This Part applies to all applications for incorporation
of insurers intending to undertake contracts of insurance in
Ontario, and to such insurers when incorporated, and to all insurers
incorporated before the 30th day of April, 1954, under the laws of
Ontario.
141.(2) Application of Act
141.(2) Except where inconsistent with this Part and except as
provided in subsection (3), the other provisions of this Act apply
to all such insurers.
141.(3) Exception
141.(3) Sections 97 to 107 and 110 do not apply to insurers
undertaking and transacting life insurance.
141.(4) Syndicates excluded
141.(4) Corporations incorporated for the sole purpose of
participating in or constituting a syndicate operating on The
Canadian Insurance Exchange are not insurers within the meaning of
subsection (1). R.S.O. 1990, c. C.38, s. 141.
141.(5) Networking
141.(5) An insurer incorporated under this Act may,
(a) act as an agent for any person in respect of the provision
of any service that is provided by a financial institution;
(b) enter into an arrangement with any person in respect of the
provision of that service; and
(c) refer any other person to a person referred to in clause
(a) or (b). 1994, c. 11, s. 384.
142.(1) Incorporation of joint stock insurance companies
142.(1) A joint stock insurance company may be incorporated for the
purpose of undertaking and transacting any class of insurance for
which a joint stock insurance company may be licensed under the
Insurance Act.
142.(2) Notice
142.(2) Applicants for incorporation shall, immediately before the
application is made, publish in at least four consecutive issues of
The Ontario Gazette notice of their intention to apply, and shall
also, if so required by the Minister, publish elsewhere notice of
such intention.
142.(3) Notice to Superintendent
142.(3) Applicants for incorporation shall also give at least one
month's notice to the Superintendent of their intention to apply for
incorporation. R.S.O. 1990, c. C.38, s. 142.
143.(1) Definition
143.(1) In this section,
"money received on account of shares" includes money received as
premium on shares.
143.(2) Authorized capital
143.(2) The authorized capital of a company shall be not less than
$500,000.
143.(3)Exception
143.(3) A company whose authorized capital immediately before the
13th day of June, 1968 was less than $500,000 shall not decrease its
authorized capital, and subsection (2) does not apply to the
corporation until its authorized capital is increased to $500,000 or
more.
143.(4) Par value of shares
143.(4) The authorized capital shall be divided into shares of $100
each, but, where not less than $200,000 of the authorized capital
has been paid in in cash, the shares or any class of shares may be
redivided into shares having a par value of $1 or a multiple
thereof, or an additional class or classes of shares having a par
value of $1 or a multiple thereof may be created.
143.(5) Application of money received on account of shares
143.(5) All money received on account of shares shall be paid into a
branch or agency in Ontario of a bank listed under Schedule I or II
to the Bank Act (Canada) or into a registered trust corporation in
trust for the proposed company, and no money paid on account of
shares before the first general meeting of the company has been
organized shall be withdrawn or paid over to the company until after
such meeting has been organized and an election of directors held
thereat.
143.(6) Return of subscriptions on failure to secure licence
143.(6) A subscription for shares made before the granting of a
licence under the Insurance Act shall contain the stipulation that
all money received on account of shares will be returned to the
subscribers without any deduction for promotion, organization or
other expenses, in case the insurer fails to procure such a licence.
143.(7) Limit of percentage of subscriptions for charges
143.(7) A subscription for shares shall contain the stipulation that
no sum will be used or paid, before or after incorporation, for
commission, promotion or organization expenses in excess of a
percentage, not exceeding 15, of the amount of money received on
account of shares. R.S.O. 1990, c. C.38, s. 143.
144.(1) Definition
144. 144.(1) In subsection (2),
"surplus to policyholders" means surplus of assets over
liabilities excluding issued capital shown in the annual
financial statement of the company at the end of the next
preceding calendar year as filed with and approved by the
Superintendent.
144.(2) Reduction of capital of life insurance companies
144.(2) Where a company undertaking life insurance has insurance in
force of less than $25,000,000 and has a surplus to policyholders of
more than $500,000, the directors may pass a by-law authorizing an
application to the Lieutenant Governor for the issue of
supplementary letters patent decreasing its authorized, subscribed
and paid-in capital by not more than 50 per cent.
144.(3) New par value to be declared
144.(3) The by-law and the supplementary letters patent shall
declare the new par value of the shares and the liability of the
shareholders on partially paid-in shares.
144.(4) Application, when to be made
144.(4) The application shall not be made until the by-law has been
confirmed by a vote of the shareholders present or represented by
proxy at a general meeting duly called for considering it and
holding not less than two-thirds of the votes cast at such meeting.
144.(5) Surplus not to be decreased by dividends to shareholders
144.(5) The supplementary letters patent shall contain a provision
that any surplus created by reason of such decrease of capital will
not be decreased by dividends subsequently declared to shareholders.
R.S.O. 1990, c. C.38, s. 144.
145. Ss 165 (2-4), 167, 168 applicable to company undertaking life
insurance
145. A company undertaking life insurance may, by resolution passed
at a special general meeting called for such purpose, provide that
subsections 165 (2), (3) and (4) and sections 167 and 168 apply to
such company. R.S.O. 1990, c. C.38, s. 145.
146. Amalgamation
146. Subject to the approval of the agreement of amalgamation under
the Insurance Act, section 113 of this Act applies to the
amalgamation of two or more joint stock insurance companies. R.S.O.
1990, c. C.38, s. 146.
147.(1) Amalgamation, etc., of mutual corporation and joint stock corporation
147.(1) Subject to the Insurance Act, a mutual corporation
incorporated under the laws of Ontario transacting life insurance
may amalgamate with or transfer its contracts to or reinsure such
contracts with any licensed insurer transacting life insurance and
may enter into all agreements necessary to such amalgamation,
transfer or reinsurance.
147.(2) Confirmation of agreement
147.(2) Despite anything in its Act or instrument of incorporation
or in its constitution and by-laws, the board of directors may enter
into any such agreement on behalf of the mutual corporation through
its president and secretary, but no such agreement is binding or
effective unless evidence satisfactory to the Superintendent is
produced showing that the agreement has been confirmed by a vote of
the majority of the members present or duly represented by proxy at
a general or special general meeting of the mutual corporation and
unless the agreement has been approved by the Lieutenant Governor in
Council under the Insurance Act.
147.(3) Agreement binding on all members of mutual corporation
147.(3) Despite anything in its Act or instrument of incorporation
or in its constitution and by-laws, or in any policy or certificate
or other document evidencing a contract issued by a mutual
corporation, or in the constitution or laws of or certificates
issued by a fraternal society whose contracts have been assumed by
the mutual corporation or for which the mutual corporation has
become responsible, the terms of any such agreement so confirmed and
approved are valid and binding as of the date stipulated in the
agreement upon all the members of the mutual corporation and upon
their beneficiaries and legal representatives and upon all persons
deriving legal rights from any such member or beneficiary so long as
they do not involve any new or increased rates of contribution or
premium, and the claims of all persons under any such contract of
insurance shall be restricted to such benefits only as are continued
in accordance with the terms of such agreement, and such contracts
shall be deemed to be amended accordingly.
147.(4) Standard of valuations
147.(4) Upon the coming into force of any such agreement, the
reinsurer, in complying with the requirements of the Insurance Act
in respect of the valuation of contracts so reinsured or
transferred, is entitled to base its valuation upon such tables of
mortality and upon such rates of interest as would have been
authorized by law for such mutual corporation if no such agreement
had been made. R.S.O. 1990, c. C.38, s. 147.
148.(1) Incorporation of mutual and cash-mutual insurance corporations
148.(1) A mutual or cash-mutual corporation may be incorporated for
the purpose of undertaking and transacting any class of insurance
for which a mutual or cash-mutual insurance corporation may be
licensed under the Insurance Act.
148.(2)Idem
148.(2) A mutual insurance corporation may be incorporated for the
purpose of undertaking contracts of fire insurance on the premium
note plan upon agricultural property, weather insurance or livestock
insurance.
148.(3) Corporation for reinsurance
148.(3) A mutual insurance corporation, all the members of which are
mutual or cash-mutual corporations, may be incorporated for the
purpose of reinsuring contracts of insurance and such a corporation
may enter into contracts of reinsurance for the purpose of
retroceding all or part of reinsurance contracts entered into by it.
R.S.O. 1990, c. C.38, s. 148.
149.(1) Incorporation of mutual fire insurance corporation
149.(1) Ten residents in any county or district may call a meeting
of the residents thereof to consider whether it is expedient to
establish therein a mutual fire insurance corporation to undertake
contracts of fire insurance on the premium note plan upon
agricultural property.
149.(2) Advertisements calling meeting
149.(2) The meeting shall be called by advertisement, stating the
time, place and object of the meeting, and the advertisement shall
be published once in The Ontario Gazette and at least once a week
for three consecutive weeks in a newspaper published in the county
or district.
149.(3) Subscription book
149.(3) If thirty residents are present at the meeting and a
majority of them determine that it is expedient to establish a
mutual fire insurance corporation, they may elect from among
themselves three persons to open and keep a subscription book in
which owners of real or personal property in Ontario may sign their
names and enter the sum for which they respectively bind themselves
to effect insurance in the corporation.
149.(4) When meeting may be called
149.(4) When 100 or more of such owners have signed their names in
the subscription book and bound themselves to effect insurance in
the corporation amounting in the aggregate to $250,000 or more, a
meeting shall be called as hereinafter provided.
149.(5) How meeting to be called
149.(5) When the subscription has been completed, any ten of the
subscribers may call the first meeting of the proposed corporation
at such time and place in the county or district as they determine
by sending a printed notice by mail, addressed to each subscriber at
the subscriber's post office address, at least ten days before the
day of the meeting, and by advertisement in a newspaper having
general circulation in the county or district.
149.(6) Contents of notice
149.(6) The notice and advertisement shall state the object of the
meeting and the time and place at which it is to be held.
149.(7) Election of directors
149.(7) At such meeting, or at any adjournment of it, the name and
style of the company, which shall include the word "mutual" or the
word "mutuelle", shall be adopted, an acting secretary appointed, a
board of directors elected as hereinafter provided and a central and
generally accessible place in the county or district at which the
head office of the company is to be located.
149.(8) Quorum of meeting
149.(8) The presence of at least twenty-five of the subscribers is
necessary to constitute a valid meeting.
149.(9) First meeting of directors
149.(9) As soon as convenient after the meeting, the acting secretary
shall call a meeting of the board of directors for the
election from among themselves of a president and a vice-president,
for the appointment of a secretary and a treasurer or a secretary-
treasurer or a manager and for the transaction of such other
business as may be brought before the meeting.
149.(10) Certain documents to be delivered
149.(10) With the application for incorporation, the applicants
shall produce to the Minister, certified as correct under the hands
of the chair and secretary,
(a) a copy of the minutes of the meeting, including all
resolutions respecting the objects of the proposed corporation,
its name and the location of its head office;
(b) a copy of the subscription book;
(c) a list showing the names and addresses of the directors
elected and of the officers appointed; and
(d) such further information as the Minister may require.
149.(11) Production of originals
149.(11) There shall also, for verification, be produced to the
Minister, if requested, the originals of such documents.
149.(12) Minister to ascertain correctness of proceedings
149.(12) The Minister shall ascertain and determine whether the
proceedings for the incorporation have been taken in accordance with
this section and whether the subscriptions are genuine and by
persons possessing property to insure.
149.(13) Powers deemed in letters patent
149.(13) A mutual insurance corporation incorporated for the purpose
of undertaking contracts of fire insurance on the premium note plan
or under a contract to which the Fire Mutuals Guarantee Fund is
applicable in accordance with section 166 of the Insurance Act, has
the power, and its letters patent shall be deemed to include the
power, to undertake all classes of insurance for which a joint stock
insurance company may be licensed under the Insurance Act. R.S.O.
1990, c. C.38, s. 149.
150.(1) Incorporation of mutual livestock insurance corporation
150.(1) Ten owners of livestock in any county or district may call a
meeting of the owners of livestock to consider whether it is
expedient to establish a livestock insurance corporation upon the
mutual plan.
150.(2) Organization
150.(2) The mode of calling such meeting and the proceedings for the
formation of the corporation shall be the same with necessary
modifications as in the case of the formation of a mutual fire
insurance corporation, except that the determination that it is
expedient to establish the corporation shall be by thirty residents
of the county or district, being owners of livestock in Ontario, and
that the meeting for the organization of the corporation shall not
be held unless fifty owners of livestock in Ontario have signed
their names to the subscription book and bound themselves to effect
insurance in the corporation that in the aggregate amounts to
$50,000 or more.
150.(3) Powers
150.(3) The letters patent or supplementary letters patent shall
limit the powers of a mutual livestock insurance corporation
incorporated under this section to undertaking contracts of
insurance on the premium note plan against loss of livestock by
fire, lightning, accident, disease or any other means, except that
of design on the part of the insured or by the invasion of an enemy
or by insurrection. R.S.O. 1990, c. C.38, s. 150.
151.(1) Incorporation of mutual weather insurance corporation
151.(1) Ten owners of agricultural property in any county or
district may call a meeting of the owners of agricultural property
to consider whether it is expedient to establish therein a weather
insurance corporation upon the mutual plan.
151.(2) Organization
151.(2) The mode of calling such meeting and the proceedings for the
formation of the corporation shall be the same with necessary
modifications as in the case of the formation of a mutual fire
insurance corporation, except that the determination that it is
expedient to establish the corporation shall be by thirty residents
of the county or district, being owners of agricultural property in
Ontario, and that the meeting for the organization of the
corporation shall not be held unless fifty owners of agricultural
property in Ontario have signed their names to the subscription book
and bound themselves to effect insurance in the corporation that in
the aggregate amounts to $50,000 or more.
151.(3) Powers
151.(3) The letters patent or supplementary letters patent shall
limit the powers of a mutual weather insurance corporation
incorporated under this section to undertaking contracts of
insurance on the premium note plan on any kind of agricultural
property or property that is not mercantile or manufacturing against
loss or injury arising from such atmospheric disturbances,
discharges or conditions as the contract of insurance specifies.
R.S.O. 1990, c. C.38, s. 151.
152.(1) Incorporation of cash-mutual insurance corporations
152.(1) Ten residents of any county or district may call a meeting
of other residents thereof to consider whether it is expedient to
establish a cash-mutual insurance corporation for the purpose of
undertaking any class of insurance for which a cash-mutual
corporation may be licensed under the Insurance Act.
152.(2) Organization
152.(2) The mode of calling such meeting and the proceedings for the
formation of the corporation shall be the same with necessary
modifications as in the case of a mutual fire insurance corporation
undertaking contracts of fire insurance under the premium note plan,
except that the determination that it is expedient to establish the
corporation shall be by thirty residents of the county or district,
and that the meeting for the organization of the corporation shall
not be held unless fifty residents have signed the subscription book
and bound themselves to effect insurance in the corporation that in
the aggregate amounts to $250,000 or more. R.S.O. 1990, c. C.38, s.
152.
153.(1) When mutual company writing on the premium note plan may become a
cash-mutual corporation
153.(1) A mutual insurance corporation incorporated for the purposes
of undertaking contracts of insurance on the premium note plan that
has a net surplus of assets over all liabilities of not less than
$500,000, may apply to the Lieutenant Governor in Council for the
issue of supplementary letters patent converting it into a cash-
mutual corporation in the manner provided in this Act.
153.(2) Approval of members
153.(2) The application shall be authorized by a resolution of
three-fourths in number of the directors of the corporation and
confirmed by the members of the corporation by vote representing at
least 90 per cent of the members present at a special general
meeting duly called for that purpose, but the application shall not
be made until twenty-one days notice of the application has been
given by sending the notice to each member at the member's latest
address as shown on the books of the corporation.
153.(3) Notice of application
153.(3) Notice of intention to make the application and of the
confirmation by the members of the corporation shall be published in
at least four consecutive issues of The Ontario Gazette and in a
newspaper having general circulation in the county or district in
which the head office of the corporation is situate at least once a
week for four consecutive weeks.
153.(4) Certain documents to be delivered
153.(4) With the application for supplementary letters patent,
submitted under this section, the applicants shall produce to the
Minister certified as correct under the hands of the chair and
secretary,
(a) a copy of the notice of the special meeting of the members
of the corporation and the notices published in The Ontario
Gazette and the newspaper;
(b) a copy of the minutes of the special meeting of the
members, including all resolutions respecting the objects of
the proposed corporation, its name and the location of its head
office;
(c) a copy of the corporation's audited financial statement
made up to a date not more than seven months prior to the date
of the application;
(d) a list of the proposed officers and directors of the cash-
mutual corporation;
(e) such further information as the Minister may require.
153.(5) Report by Superintendent
153.(5) The Superintendent shall report to the Minister whether the
proceedings for supplementary letters patent are in accordance with
this section and the requirements of the Insurance Act. R.S.O. 1990,
c. C.38, s. 153.
154.(1) When cash-mutual company may become a joint stock company
154.(1) A mutual or a cash-mutual corporation that has surplus
assets, not including premium notes, sufficient to reinsure all its
outstanding risks may apply to the Lieutenant Governor for the issue
of supplementary letters patent converting it into a joint stock
insurance corporation in the manner provided in this Act.
154.(2) Approval of members
154.(2) The application shall be authorized by a resolution of
three-fourths in number of the directors of the corporation and
confirmed by the members of the corporation by vote representing at
least 90 per cent of the members present at a special general
meeting duly called for that purpose, but the application shall not
be made until twenty-one days notice of the application has been
given by sending the notice to each member at the member's latest
address as shown on the books of the corporation.
154.(3) Notice of application
154.(3) Notice of intention to make the application and of the
confirmation by the members of the corporation shall be published in
at least four consecutive issues of The Ontario Gazette and in a
newspaper having general circulation in the county or district in
which the head office of the corporation is situate at least once a
week for four consecutive weeks.
154.(4) Priority of members in subscribing stock
154.(4) A person who is a member of the corporation on the day of
the meeting is entitled to priority in subscribing to the capital
stock of the corporation for one month after the opening of the
books of subscription in the ratio that the insurance held by the
person bears to the aggregate of the unexpired risks then in force.
154.(5) Certain documents to be delivered
154.(5) With the application for supplementary letters patent,
submitted under this section, the applicants shall produce to the
Minister certified as correct under the hands of the chair and
secretary,
(a) a copy of the notice of the special meeting of the members
of the corporation and the notices published in The Ontario
Gazette and the newspaper;
(b) a copy of the minutes of the special general meeting of
members, including all resolutions respecting the objects of
the proposed corporation, its name and the location of its head
office;
(c) a copy of the corporation's audited financial statement
made up to a date not more than seven months prior to the date
of the application;
(d) a list of the proposed officers and directors of the
corporation;
(e) such further information as the Minister may require.
154.(6) Report of Superintendent
154.(6) The Superintendent shall report to the Minister whether the
application for supplementary letters patent is in accordance with
this section and the requirements of the Insurance Act. R.S.O. 1990,
c. C.38, s. 154.
155. Vesting of assets and preservation of liabilities
155. A corporation formed under section 153 or 154 is answerable for
all liabilities of the corporation from which it has been formed and
may sue and be sued under its new corporate name, and the assets and
property of the old corporation are vested in the new corporation
from the date of its formation. R.S.O. 1990, c. C.38, s. 155.
156. When distribution of assets among members permitted
156. No mutual or cash-mutual insurance corporation that has ceased
to do new business shall divide among its members any part of its
assets, except income from investments, until it has performed or
cancelled its policy obligations and upon proof to the
Superintendent that such policy obligations have been performed or
cancelled. R.S.O. 1990, c. C.38, s. 156.
157. Application of Ss 158-173
157. Sections 158 to 173 apply only to mutual and cash-mutual
insurance corporations. R.S.O. 1990, c. C.38, s. 157.
158.(1) Insured deemed member
158.(1) A person insured under a policy issued by a corporation
shall, from the date upon which the insurance becomes effective, be
deemed a member of such corporation.
158.(2) Member's liability
158.(2) No member is liable in respect of any claim or demand
against the corporation beyond the amount unpaid on the member's
premium note.
158.(3) Member withdrawing
158.(3) A member may, with the consent of the directors, withdraw
from the corporation on such terms as the directors lawfully
prescribe, subject to the Insurance Act. R.S.O. 1990, c. C.38, s.
158.
159.(1) Annual meeting
159.(1) A meeting of the shareholders and members for the election
of directors shall be held within the first three months of every
year at such time and place as the by-laws of the corporation
prescribe. R.S.O. 1990, c. C.38, s. 159 (1); 1998, c. 18, Sched. E,
s. 70.
159.(2) Annual statement
159.(2) Before the election, the annual statement for the year
ending on the previous 31st day of December shall be presented and
read. R.S.O. 1990, c. C.38, s. 159 (2).
160. Failure to elect directors
160. If an election of directors is not made on the day on which it
ought to have been made, the corporation shall not for that cause be
dissolved, but the election may be held on a subsequent day at a
meeting to be called by the directors or as otherwise provided by
the by-laws of the corporation, and in such case the directors then
in office continue to hold office until their successors are
elected. R.S.O. 1990, c. C.38, s. 160.
161.(1) Notice of annual or special meetings
161.(1) Notice of every annual or special general meeting of the
corporation shall be sent by mail to every shareholder and member or
shall be published in a newspaper published at or near the place
where the head office is located at least seven days before the day
of the meeting. R.S.O. 1990, c. C.38, s. 161 (1); 1998, c. 18,
Sched. E, s. 71 (1).
161.(2) Power of directors
161.(2) The directors may call a general meeting of the corporation
at any time. R.S.O. 1990, c. C.38, s. 161 (2).
161.(3) Annual statement
161.(3) The directors shall, at least seven days before the day of
the annual meeting, send to each member by mail or publish in a
newspaper published at or near the place where the head office is
located the annual statement for the year ending on the previous
December 31.
161.(4) Form of annual statement
161.(4) The annual statement shall be certified by the auditors and
shall be in the form prescribed by the regulations made under
section 105 of the Insurance Act. 1998, c. 18, Sched. E, s. 71 (2).
162.(1) Voting of members of mutual or cash-mutual insurance corporations
162.(1) A member of a mutual or cash-mutual insurance corporation
who is not in arrear for any assessment or cash payment due by the
member to the corporation is entitled at all meetings of the
corporation to one vote if the amount of premium paid by the member
annually is in excess of $25 and no member is entitled to more than
one vote.
162.(2) Where policy made to two or more persons
162.(2) Where a policy on the premium note plan is made to two or
more persons, one only is entitled to vote, and the right of voting
belongs to the one first named on the register of policyholders if
the person is present or, if not present, to the one who stands
second, and so on.
162.(3) Where property insured by trustee board
162.(3) Where property is insured by a trustee board, any member of
the board or its secretary-treasurer duly appointed in writing
pursuant to its resolution may vote on its behalf. R.S.O. 1990, c.
C.38, s. 162.
163. Right of mere applicants
163. No applicant for insurance is competent to vote or otherwise
take part in the corporation's proceedings until the applicant's
application has been accepted by the directors. R.S.O. 1990, c.
C.38, s. 163.
164.(1) Qualifications of directors
164.(1) No person is eligible to be or shall act as a director
unless he or she is a member of the corporation, insured therein for
the time he or she holds office and entitled to a vote.
164.(2) Where corporation has a share capital
164.(2) Where the corporation has a share capital, not less than
two-thirds of the directors shall also be holders of shares, each to
an amount not less than $1,000, upon which all calls have been paid.
164.(3) Representation of corporations
164.(3) The president or director of a member corporation that has
the qualifications that would qualify an individual to be a director
is eligible to be a director of the corporation.
164.(4) Representation of partnerships
164.(4) Where a partnership has the qualifications that would
qualify an individual to be a director of the corporation, one
member of the partnership is eligible to be a director of the
corporation. R.S.O. 1990, c. C.38, s. 164.
165.(1) Number of directors
165.(1) The board shall consist of six, nine, twelve or fifteen
directors, to be determined by resolution passed at the meeting held
under subsection 149 (5).
165.(2) Increase or decrease in number
165.(2) The number of directors may from time to time be increased
or decreased if so determined at a special general meeting of the
corporation called for the purpose, or at an annual general meeting,
if notice in writing of the intention to propose a by-law for that
purpose at such annual meeting is given to the secretary of the
corporation at least one month before the holding of the meeting,
but the increased or decreased number of directors shall in any such
case be six, nine, twelve or fifteen.
165.(3) Notice of proposed change
165.(3) Where such a notice has been given to the secretary, that
fact shall be stated in the notice of the annual general meeting.
165.(4) Copy of resolution and list of directors to be filed
165.(4) With the copy of the by-law filed with the Superintendent
there shall be filed a list of the directors elected thereunder
certified under the hands of the chair and secretary of the meeting.
R.S.O. 1990, c. C.38, s. 165.
166. Filing by-laws for remuneration of directors
166. At any annual general meeting of the shareholders or members of
a corporation, or at any special general meeting thereof, if such
purpose was clearly expressed in the notice of the special general
meeting, it is lawful to pass by-laws for the remuneration of the
directors, and a certified copy of every such by-law shall, within
seven days after its passing, be filed with the Superintendent.
R.S.O. 1990, c. C.38, s. 166.
167. Retirement of directors in rotation
167. One-third of the directors shall retire annually, in rotation,
and, at the first meeting of the directors or as soon thereafter as
possible, it shall be determined by lot which of them shall hold
office for one, two or three years respectively, and the
determination shall be entered on the minutes of the meeting. R.S.O.
1990, c. C.38, s. 167.
168. Annual election to fill vacancies
168. At every annual general meeting thereafter, one-third of the
total number of directors shall be elected for a period of three
years to fill the places of the retiring directors, who are eligible
for re-election. R.S.O. 1990, c. C.38, s. 168.
169. Manager may be a director and be paid salary
169. The manager of the corporation, even if he or she does not have
the qualifications required by section 164, may be a director of the
corporation and may be paid an annual salary under a by-law passed
as provided by section 166. R.S.O. 1990, c. C.38, s. 169.
170. Certain persons not eligible as directors
170. No agent or paid officer, or officer of the bankers of the
corporation, or person in the employment of the corporation, other
than the manager, is eligible to be elected as a director or shall
interfere in the election of directors. R.S.O. 1990, c. C.38, s.
170.
171.(1) Election of directors
171.(1) The election of directors shall be held and made by such
shareholders and members as attend for that purpose in person, or in
the case of a corporation or partnership by a director, officer or
member authorized in writing to represent it.
171.(2) Ballot
171.(2) The election shall be by ballot.
171.(3) Case of a tie at an election
171.(3) If two or more members have an equal number of votes so that
less than the whole number to be elected appear to have been chosen
directors by a majority of votes, the members present shall proceed
to ballot until it is determined which of the persons so having an
equal number of votes shall be the director or directors.
171.(4) Election of president and vice-president
171.(4) The directors shall, at their first meeting after any such
election, elect by ballot from among themselves a president and
vice-president, and the secretary shall preside at such election.
R.S.O. 1990, c. C.38, s. 171.
172. Interim vacancies
172. If a vacancy occurs among the directors, during the term for
which they have been elected, by death, resignation, ceasing to have
the prescribed qualification, insolvency or by absence without
previous leave of the directors from three successive regular
meetings, which shall by reason of that fact create such vacancy,
the vacancy, in the case of a board limited to six directors, shall
be filled and, in the case of a board limited to a number of
directors exceeding six, may be filled until the next annual general
meeting by any person duly qualified chosen by a majority of the
remaining directors as soon as may be after the vacancy occurs, and
at the next annual general meeting the vacancy shall be filled for
the portion of the term still unexpired. R.S.O. 1990, c. C.38, s.
172.
173.(1) Quorum of directors
173.(1) A majority of the directors constitutes a quorum for the
transaction of business, and, in the case of an equality of votes at
any meeting, the question passes in the negative.
173.(2) Recording dissent
173.(2) A director disagreeing with the majority at a meeting may
have his or her dissent recorded with the reasons therefor. R.S.O.
1990, c. C.38, s. 173.
174.(1) Security of accountants
174.(1) Every officer or person appointed or elected to any office
concerning the receipt or proper application of money shall furnish
security for the just and faithful execution of the duties of the
person's office according to the by-laws or rules of the
corporation, and any person entrusted with the performance of any
other service may be required to furnish similar security, and
security so furnished and then subsisting shall be produced to the
auditors at the annual audit.
174.(2) Minimum security
174.(2) The security given by the treasurer or other officer having
charge of the money of the corporation shall not be less than $5,000
or such greater amount as may be required by the by-laws of the
corporation or by the Superintendent. R.S.O. 1990, c. C.38, s. 174.
175. Amalgamation
175. Subject to the approval of the agreement of amalgamation under
the Insurance Act, section 113 applies with necessary modifications
to the amalgamation of two or more mutual or cash-mutual insurance
corporations. R.S.O. 1990, c. C.38, s. 175.
176.(1) Incorporation of fraternal societies
176.(1) The Lieutenant Governor may in his or her discretion, by
letters patent, issue a charter to any number of persons, not fewer
than seventy-five, of eighteen or more years of age, five of whom
apply therefor, constituting such persons and any others who have
signed the membership book, and persons who thereafter become
members in the fraternal society thereby created, a corporation for
the purposes of undertaking any class of insurance for which a
fraternal society may be licensed under the Insurance Act.
176.(2) Notice
176.(2) The applicants for incorporation, immediately before the
application, shall publish in at least four consecutive issues of
The Ontario Gazette notice of their intention to apply and shall
also, if so required, publish elsewhere notice of such intention.
176.(3) Particulars of application
176.(3) The application for the incorporation of a fraternal society shall
show,
(a) its proposed name;
(b) the place in Ontario where its head office is to be
situate;
(c) the name in full, the place of residence and the calling of
each of the applicants who are to be its first trustees or
managing officers;
(d) such other information as the Minister requires.
176.(4) Other documents
176.(4) The application shall be accompanied by the original
membership book or list containing the signatures duly certified of
at least seventy-five persons who thereby agree to become members of
the fraternal society if and when incorporated, by a copy of the
proposed by-laws of the fraternal society and by evidence that the
approval of the Superintendent to the proposed by-laws and rules has
been obtained. R.S.O. 1990, c. C.38, s. 176.
177. Organization meeting
177. Within thirty days after the issue of the letters patent and
upon due notice to all members of the society, an organization
meeting of the society shall be held at which the by-laws shall be
adopted and the officers of the society elected. R.S.O. 1990, c.
C.38, s. 177.
178.(1) Incorporation of foreign fraternal society
178.(1) Where a fraternal society licensed under the Insurance Act
has its head office elsewhere than in Ontario, the grand or other
provincial body of the lodges or a majority of the lodges in Ontario
may apply to the Lieutenant Governor for the issue of a charter and,
from the time of the issue of the letters patent, the applicants
become a corporation for the purpose of undertaking any class of
insurance for which a fraternal society may be licensed under the
Insurance Act.
178.(2) Application of s. 176 (1)
178.(2) Subsection 176 (1) applies to an incorporation under this
section.
178.(3) Approval of Superintendent
178.(3) Before the issue of the letters patent, evidence shall be
produced to the Minister that the approval of the Superintendent to
the application has been secured. R.S.O. 1990, c. C.38, s. 178.
179. Incorporation of local branch
179. An auxiliary or local subordinate body or branch of a licensed
fraternal society may be separately incorporated by like
proceedings. R.S.O. 1990, c. C.38, s. 179.
180.(1) Amalgamation or reinsurance by fraternal society
180.(1) Subject to the Insurance Act, any fraternal society may
amalgamate with any other fraternal society or transfer all or any
portion of its contracts to or reinsure them with any insurer
licensed for the transaction of life insurance and may enter into
all agreements necessary to such amalgamation, transfer or
reinsurance.
180.(2) Agreement for amalgamation, etc.
180.(2) Despite anything in its Act or instrument of incorporation
or in its constitution and by-laws, the governing executive
authority may enter into any such agreement on behalf of the society
through its principal officer and secretary, but no such agreement
is binding or effective unless evidence satisfactory to the
Superintendent is produced showing that the principle of
amalgamation, transfer or reinsurance has been approved and that the
agreement has been confirmed by a vote of the majority of the
members present or duly represented at a general or special meeting
of the supreme legislative or governing body of the society duly
called. R.S.O. 1990, c. C.38, s. 180.
181. Confirmation of amalgamation
181. Subsection 113 (4) applies with necessary modifications to the
amalgamation of two or more fraternal societies. R.S.O. 1990, c.
C.38, s. 181.
182.
182. Repealed: 1997, c. 19, s. 31 (1).
183. Application of Ss 184-195
183. Sections 184 to 195 apply to pension fund and employees' mutual
benefit societies incorporated under this Part. R.S.O. 1990, c.
C.38, s. 183.
184. Definitions
184. In this section and in sections 185 to 195,
"parent corporation" means a corporation any of whose officers
establish a pension fund or employees' mutual benefit society
under this Part; ("personne morale mSre")
"society" means a pension fund or employees' mutual benefit
society incorporated under this Part; ("soci,t,")
"subsidiary corporation" means a corporation, wherever
incorporated, at least 75 per cent of whose issued common shares
are owned by a parent corporation. ("filiale") R.S.O. 1990, c.
C.38, s. 184.
185.(1) Charter by letters patent
185. 185.(1) The Lieutenant Governor may in his or her discretion,
by letters patent, issue a charter to any number of persons, not
fewer than five, of eighteen or more years of age, two of whom are
officers of a corporation legally transacting business in Ontario
who apply therefor, constituting such persons and the employees of
such corporation and of its subsidiary corporations who join the
society and those who replace them from time to time a pension fund
or employees' mutual benefit society corporation.
185.(2) Contents of application
185.(2) The application for the incorporation of a pension fund or
employees' mutual benefit society shall show,
(a) its proposed name;
(b) the name of its parent corporation;
(c) the place in Ontario where its head office is to be
situate;
(d) the name in full and place of residence and calling of each
of the applicants; and
(e) the names, not fewer than five, of those who are to be its
first directors.
185.(3) Notice
185.(3) Notice of the application for incorporation of a society
shall be published in at least four consecutive issues of The
Ontario Gazette and the notice shall state,
(a) its proposed name;
(b) the place in Ontario where its head office is to be
situate; and
(c) the name of its secretary. R.S.O. 1990, c. C.38, s. 185.
186. First meeting
186. The first directors have power to call the first meeting of the
society and at such meeting directors may be elected and by-laws may
be passed under this Act, and a copy of such by-laws shall be filed
with the Minister within two weeks after the passing thereof, and
copies of subsequent by-laws in amendment thereof, in addition
thereto or diminution therefrom, shall also be filed with the
Minister within two weeks after the passing thereof. R.S.O. 1990, c.
C.38, s. 186.
187.(1) Directors
187.(1) The affairs of the society shall be administered by a board
of directors who shall be appointed or elected in such manner, in
such number, with such qualifications and for such period as are
determined by the by-laws, but at the first meeting of the society
five directors shall be elected, subject to addition to such number
if so sanctioned by the by-laws, and other officers may be appointed
in such manner with such remuneration and under such provisions
touching their powers and duties as are established by the by-laws.
187.(2) Management of fund by trust corporation
187.(2) The board of directors may by by-law entrust the whole or a
part of the fund of the society to a trust corporation licensed
under the law of Ontario and may delegate to such trust corporation
all or any of its powers and discretions relating to the custody and
management of the fund. R.S.O. 1990, c. C.38, s. 187.
188.(1) Definition
188. 188.(1) In this section,
"dependants" means the wives, husbands, and children under
eighteen years of age, including adopted children, of officers or
employees within the meaning of this section.
188.(2) Powers and objects of society
188.(2) After its incorporation, every pension fund and employees'
mutual benefit society has the power, by means of voluntary
contribution or otherwise as its by-laws provide, to form a fund or
funds and may invest, hold and administer the same and may
therefrom,
(a) provide for the support and payment of pensions and other
benefits to officers and employees of the parent corporation
and its subsidiary corporations who have retired or who cease
to be employed by the parent corporation or one of its
subsidiary corporations;
(b) provide, in such manner as the by-laws specify, for the
payment of pensions, annuities, gratuities or other benefits to
the widows, widowers and children or other surviving relatives
or legal representatives of officers and employees or retired
officers and employees of the parent corporation and its
subsidiary corporations who have died;
(c) provide for the payment of benefits to officers and
employees of the parent corporation or one of its subsidiary
corporations by reason of illness, accident or disability;
(d) provide for the payment of benefits by reason of illness,
accident or disability to former officers and employees of the
parent corporation and its subsidiary corporations who are
retired;
(e) provide for the payment of benefits to officers and
employees or retired officers and employees of the parent
corporation or one of its subsidiary corporations in respect of
illness, accident or disability affecting dependants of such
officers or employees; and
(f) upon the death of such officers or employees, pay a funeral
benefit in such manner as the by-laws specify. R.S.O. 1990, c.
C.38, s. 188.
189.(1) Power to pass by-laws
189.(1) A pension fund and employees' mutual benefit society has all
corporate powers necessary for its purposes and may pass by-laws not
contrary to law defining and regulating in the premises, and
prescribing the mode of enforcement of, all the rights, powers and
duties of,
(a) the society;
(b) its individual members;
(c) the officers and employees of the parent corporation and
its subsidiary corporations;
(d) the widows, widowers and children or other surviving
relatives, or the personal representatives of such officers and
employees; and
(e) the parent corporation.
189.(2) Additional by-laws
189.(2) Every such society may also make by-laws as aforesaid for,
(a) the formation and maintenance of the fund;
(b) the management and distribution of the fund;
(c) the enforcement of any penalty or forfeiture in the
premises; and
(d) the government and ordering of all business and affairs of
the society.
189.(3) Sanction of parent corporation
189.(3) No such by-law is effective unless it has been sanctioned by
the board of directors of the parent corporation. R.S.O. 1990, c.
C.38, s. 189.
190. By-laws defining rights and remedies of beneficiaries, etc.
190. All the powers, authority, rights, penalties and forfeitures
whatever of the society or of its members, officers or employees, or
of such widows, widowers and children or other surviving relatives
or legal representatives, or of the parent corporation shall be such
and such only and may be enforced in such mode and in such mode
only, as by such by-laws are defined and limited. R.S.O. 1990, c.
C.38, s. 190.
191. Revenue
191. All the revenue of the society, from whatever source derived,
shall be devoted exclusively to the maintenance of the society and
the furtherance of the objects of the fund and to no other purpose.
R.S.O. 1990, c. C.38, s. 191.
192. Contribution by parent corporation
192. The parent corporation may contribute annually or otherwise to
the funds of the society by a vote of its directors or its
shareholders. R.S.O. 1990, c. C.38, s. 192.
193. Prohibition against member assigning interest
193. The interest of a member in the funds of the society is not
transferable or assignable by way of pledge, hypothecation, sale,
security or otherwise. R.S.O. 1990, c. C.38, s. 193.
194.(1) Special audit
194.(1) Where it is shown to the satisfaction of the Minister that
the accounts of a society have been materially or willfully
falsified, or where there is filed in the office of the Minister a
requisition for audit bearing the signatures, addresses and callings
of at least 25 per cent of the members of the society and alleging
in a sufficiently particular manner to the satisfaction of the
Minister specific fraudulent or illegal acts, or the repudiation of
obligations, or insolvency, the Minister may appoint one or more
accountants or actuaries who shall, under the Minister's direction,
make a special audit of the books and accounts and report thereon in
writing verified upon oath to the Minister.
194.(2) Security for costs
194.(2) Where an audit is requested, the persons requesting it
shall, with their requisition, deposit with the Minister security
for the costs of the audit in such sum as the Minister fixes, and,
where the facts alleged in the requisition appear to the Minister to
have been partly or wholly disproved by the audit, he or she may pay
the costs thereof partly or wholly out of the deposit.
194.(3) Duty to facilitate special audit
194.(3) The society, its officers and servants shall facilitate the
making of such special audit so far as it is in their power and
shall produce for inspection and examination by the person so
appointed such books, securities and documents as the person may
require.
194.(4) Expense of special audit
194.(4) Subject to subsection (2), the expense of such special audit
shall be borne by the society, and the auditor's account, when
approved in writing by the Minister, shall be paid by the society
forthwith. R.S.O. 1990, c. C.38, s. 194.
195. Return to Minister
195. A society formed under this Act shall at all times when
thereunto required by the Minister make a full return of its assets
and liabilities and of its receipts and expenditures for such period
and with such details and other information as the Minister may
require. R.S.O. 1990, c. C.38, s. 195.
196.(1) When charter to be forfeited for non-user or discontinuance
196.(1) If an insurer incorporated under the law of Ontario, whether
under this Act or under any general or special Act, does not go into
actual operation within two years after incorporation, or if, after
an insurer has undertaken contracts, such insurer discontinues
business for one year, or if its licence remains suspended for one
year, or is cancelled and is not revived within the period of sixty
days, the insurer's corporate powers by reason of that fact cease
and determine, except for the sole purpose of winding up its
affairs, and in any action or proceeding in which such nonuser is
alleged, proof of user is upon the insurer, and the court, upon the
petition of the Attorney General or of any person interested, may
limit the time within which the insurer is to settle and close its
accounts, and may, for that purpose or for the purpose of
liquidation generally, appoint a receiver. R.S.O. 1990, c. C.38, s.
196 (1); 1997, c. 19, s. 31 (2).
196.(2) Rights of creditors
196.(2) No such forfeiture affects prejudicially the rights of
creditors as they exist at the date of the forfeiture. R.S.O. 1990,
c. C.38, s. 196 (2).
197. Definition
197. In sections 198 to 204,
"shareholder" includes member and participating policyholder
eligible to vote for a policyholders' director. R.S.O. 1990, c.
C.38, s. 197.
198.(1) Information laid before annual meetings of life insurers
198.(1) The directors of an insurer undertaking and transacting life
insurance shall lay before each annual meeting of shareholders,
(a) a financial statement for the period commencing on the date
of incorporation and ending not more than six months before
such annual meeting or commencing immediately after the period
covered by the previous financial statement and ending not more
than six months before such annual meeting, as the case may be,
made up of,
(i) a statement of revenue and expenditure for such period,
(ii) a statement of surplus for such period,
(iii) a balance sheet made up to the end of such period;
(b) the report of the auditor to the shareholders;
(c) such further information respecting the financial position
of the insurer as the letters patent, supplementary letters
patent or by-laws of the insurer require.
198.(2) Contents of financial statement
198.(2) The statements referred to in the subclauses of clause (1)
(a) shall comply with and be governed by sections 199 to 203, but it
is not necessary to designate them the statement of revenue and
expenditure, statement of surplus and balance sheet.
198.(3) Incorporation of statements
198.(3) The statement of surplus referred to in subclause (1) (a)
(ii) and the information required by subsections 200 (2) and (3) may
be incorporated in and form part of the statement of revenue and
expenditure referred to in subclause (1) (a) (i).
198.(4) Auditor's report to be read
198.(4) The report of the auditor to the shareholders shall be read
at the annual meeting and shall be open to inspection by any
shareholder. R.S.O. 1990, c. C.38, s. 198.
199.(1) Statement of revenue and expenditure
199. 199.(1) The statement of revenue and expenditure to be laid
before an annual meeting shall be drawn up so as to present fairly
the results of the operations of the insurer for the period covered
by the statement and so as to distinguish severally at least,
(a) premium income;
(b) income from invested assets;
(c) profit or loss from sale of invested assets;
(d) amounts by which values of invested assets are increased or
decreased;
(e) payments to policyholders and beneficiaries, other than the
disbursement of money previously left on deposit;
(f) increase or decrease in actuarial liability under insurance
and annuity contracts;
(g) total remuneration of directors as such from the insurer,
including all salaries, bonuses, fees, contributions to pension
funds and other emoluments;
(h) premium taxes;
(i) head office, agency, investment and other operating
expenses;
(j) the amount transferred to or from general surplus.
199.(2) Notes
199.(2) Despite subsection (1), items of the natures described in
clauses (1) (d) and (g) may be shown by way of note to the statement
of revenue and expenditure. R.S.O. 1990, c. C.38, s. 199.
200.(1) Statement of surplus
200.(1) The statement of surplus shall be drawn up so as to present
fairly the transactions reflected in it and shall show separately a
statement of general surplus and a statement of shareholders'
surplus, howsoever designated.
200.(2) General surplus
200.(2) The statement of general surplus shall be drawn up so as to
distinguish at least the following items:
1. The balance of each amount making up the total of general
surplus as shown in the balance sheet at the end of the
preceding financial period.
2. The additions to and deductions from such surplus during the
financial period and, without restricting the generality of the
foregoing, at least the following:
i. The amount shown on the statement of revenue and
expenditure as transferred to or from general surplus.
Ii The amount of surplus arising from the issue of shares
or the reorganization of the insurer's issued capital,
including,
(a) the amount of premiums received on the issue of
shares at a premium;
(b) the amount of surplus realized on the purchase for
cancellation of shares.
Iii Donations of cash or other property by shareholders.
3. The balance of each amount making up such general surplus as
shown in the balance sheet at the end of the financial period.
200.(3) Shareholders' surplus
200.(3) The statement of shareholders' surplus shall be drawn so as
to distinguish at least the following items:
1. The balance of such surplus as shown in the balance sheet at
the end of the preceding financial period.
2. The additions to and deductions from such surplus during the
financial period and, without restricting the generality of the
foregoing, at least the following:
i. The amount transferred to or from general surplus.
Ii Provision for taxes on income.
Iii The amount of dividends declared on each class of
shares.
3. The balance of such surplus as shown in the balance sheet at
the end of the financial period. R.S.O. 1990, c. C.38, s. 200.
201.(1) Balance sheet
201.(1) The balance sheet to be laid before an annual meeting shall
be drawn up so as to present fairly the financial position of the
insurer as at the date to which it is made up and so as to
distinguish severally at least the following:
1. The invested assets of the insurer as described in Part XVII
of the Insurance Act, severally designated as follows:
i. Cash.
Ii Preference and common shares.
Iii Bonds and debentures.
iv. Mortgages.
v. Real estate held for sale.
vi. Real estate held for the production of income.
vii. Head office buildings.
viii. Agreements for sale.
ix. Loans on policies.
x. Other invested assets stating their nature.
2. Other assets of the insurer distinguishing severally at
least the following:
i. Net outstanding premiums due and deferred.
Ii Interest and rents due and accrued.
Iii Debts owing to the insurer from its shareholders except
debts of reasonable amount arising in the ordinary course of
the insurer's business that are not overdue having regard to
the insurer's ordinary terms of credit.
Iv The aggregate amount of any outstanding loans under
clauses 24 (2) (c), (d) and (e).
3. The actuarial liability under insurance and annuity
contracts.
4. Bank loans and overdrafts.
5. Provision for unpaid and unreported claims.
6. All other liabilities to policyholders.
7. Debts owing by the insurer on loans from its directors,
officers or shareholders.
8. Commissions and other debts owing by the insurer segregating
those that arose otherwise than in the ordinary course of
business.
9. Deferred income.
10. Liability for taxes.
11. Dividends on capital stock declared but not paid.
12. The authorized capital, giving the number of each class of
shares and a brief description of each such class and
indicating therein any class of shares which is redeemable and
the redemption price thereof.
13. The issued capital, giving the number of shares of each
class issued and outstanding and the amount received therefor
that is attributable to capital, and showing,
(a) the number of shares of each class issued since the date
of the last balance sheet and the value attributed thereto,
distinguishing shares issued for cash, shares issued for
services and shares issued for other consideration; and
(b) where any shares have not been fully paid,
(i) the number of shares in respect of which calls have
not been made and the aggregate amount that has not been
called, and
(ii) the number of shares in respect of which calls have
been made and not paid and the aggregate amount that has
been called and not paid.
14. Reserves, as described in clauses 204 (1) (a), (b) and (c),
showing the amounts added thereto and the amounts deducted
therefrom during the financial period.
15. The amounts making up the surplus of the insurer severally
designated as follows:
i. General surplus.
Ii Shareholders' surplus.
Iii Other surplus balances indicating their nature.
201.(2) Notes
201.(2) Despite subsection (1), particulars of the items described
in paragraphs 12 and 13 of subsection (1) may be shown by way of
note to the balance sheet.
201.(3) Idem
201.(3) The basis of valuation of the invested assets of the insurer
shall be shown by way of note to the balance sheet. R.S.O. 1990, c.
C.38, s. 201.
202.(1) Notes to financial statement
202.(1) There shall be stated by way of note to the financial
statement particulars of any change in accounting or actuarial
principle or practice or in the method of applying any accounting or
actuarial principle or practice made during the period covered that
affects the comparability of any of the statements with any of those
for the preceding period, and the effect, if material, of any such
change upon the results of operations for the period.
202.(2) Idem
202.(2) Where applicable, the following matters shall be referred to
in the financial statement or by way of note thereto:
1. The basis of conversion of amounts from currencies other
than the currency in which the financial statement is
expressed.
2. Foreign currency restrictions that affect the assets of the
insurer.
3. Contractual obligations that will require abnormal
expenditures in relation to the insurer's normal business
requirements or financial position or that are likely to
involve losses not provided for in the accounts.
4. Contingent liabilities, stating their nature and, where
practicable, the approximate amounts involved.
5. Any liability secured otherwise than by operation of law on
any asset of the insurer, stating the liability so secured, but
it is not necessary to specify the asset on which the liability
is secured.
6. The gross amount of arrears of dividends on any class of
shares and the date to which such dividends were last paid.
7. Where an insurer has contracted to issue shares or has given
an option to purchase shares, the class and number of shares
affected, the price and the date for issue of the shares or
exercise of the option.
8. Any restriction by the letters patent, supplementary letters
patent or by-laws of the insurer or by contract on the payment
of dividends that is significant in the light of the insurer's
financial position.
202.(3) Idem
202.(3) Every note to a financial statement is an integral part of
it. R.S.O. 1990, c. C.38, s. 202.
203. Insignificant circumstances
203. Despite sections 199 to 202, it is not necessary to state in a
financial statement any matter that in all the circumstances is of
relative insignificance. R.S.O. 1990, c. C.38, s. 203.
204.(1) Reserves
204. 204.(1) In a financial statement, the term "reserve" shall be
used to describe only,
(a) amounts appropriated from surplus at the discretion of
management for some purpose other than to meet a liability or
contingency known or admitted or a commitment made as at the
statement date or a decline in value of an asset that has
already occurred;
(b) amounts appropriated from surplus pursuant to the
instrument of incorporation, instrument amending the instrument
of incorporation or by-laws of the insurer for some purpose
other than to meet a liability or contingency known or admitted
or a commitment made as at the statement date or a decline in
value of an asset that has already occurred; and
(c) amounts appropriated from surplus in accordance with the
terms of a contract and which can be restored to the surplus
when the conditions of the contract are fulfilled.
204.(2) Idem
204.(2) Despite subsection (1), the term "reserve" may be used to
describe the actuarial liability under insurance and annuity
contracts. R.S.O. 1990, c. C.38, s. 204.
205. Auditor's report, joint stock insurance companies and cash mutuals
205. The auditor of a joint stock insurance company or a cash mutual
insurance corporation shall in the report required to be made by
subsection 96 (2) also make such statements as the auditor considers
necessary,
(a) if, in the case of corporations transacting other than life
insurance, the provision for unearned premiums is not
calculated as required by the Insurance Act;
(b) if the provision for unpaid claims, in the auditor's
opinion, is not adequate;
(c) if the financial statement includes as assets items
prohibited by the Insurance Act from being shown in the annual
statements required to be filed thereunder; or
(d) if any of the transactions of the corporation that have
come to the auditor's notice have not been within its powers.
R.S.O. 1990, c. C.38, s. 205.
206. Delivery of by-laws to Superintendent
206. Every insurer shall deliver to the Superintendent within one
month after passing thereof, a certified copy of its by-laws and of
every repeal or addition to or amendment or consolidation thereof.
R.S.O. 1990, c. C.38, s. 206.
207. Balance sheets and statements
207. A copy of every balance sheet or other statement published or
circulated by an insurer, purporting to show its financial
condition, shall be mailed or delivered to the Superintendent,
concurrently with its issue to its shareholders or policyholders, or
to the general public. R.S.O. 1990, c. C.38, s. 207.
208. Offence
208. A person who fails to comply with section 205, 206 or 207 shall
be deemed to be guilty of an offence under the Insurance Act. R.S.O.
1990, c. C.38, s. 208.
209. Directors of joint stock insurance company, qualifications
209. Subject to section 210, no person is eligible to become or
shall be elected a director of a joint stock insurance company
unless he or she is eighteen or more years of age and holds in his
or her own name and for his or her own use and absolutely in his or
her own right shares of the capital stock of the company upon which
at least $500 has been paid into the capital account of the
corporation and has paid in cash all calls and instalments due
thereon and all liabilities incurred by him or her to the company.
R.S.O. 1990, c. C.38, s. 209.
210.(1) Shareholders' directors; policyholders' directors
210.(1) A joint stock life insurance company may by by-law provide
that the affairs of the company shall be managed by a board of
directors of whom a specified number, herein called shareholders'
directors, shall be elected by the shareholders of the company, and
a specified number, herein called policyholders' directors, shall be
elected by those persons, herein called participating policyholders,
whose lives are insured under a participating policy or
participating policies of the company for at least $2,000 upon which
no premiums are due, whether or not any such person is a shareholder
of the company.
210.(2) Number of directors; vacancies
210.(2) A by-law passed under subsection (1) shall provide for the
election of not fewer than nine and not more than twenty-one
directors, of whom not fewer than one-third shall be policyholders'
directors, and any vacancy occurring in the board of directors may
be filled for the remainder of the term by the directors.
210.(3) Participating policyholders' right to vote
210.(3) Participating policyholders are entitled to attend and vote
in person and not by proxy at all general meetings of the company,
but as such are not entitled to vote for the election of
shareholders' directors, but this section does not confer rights or
impose liabilities on such participating policyholders in a
liquidation of the company.
210.(4) Policyholders' director, qualifications
210.(4) A holder of a participating policy or participating policies
of the company for at least $4,000 exclusive of bonus additions,
upon which no premiums are due, who is not a shareholder and who has
paid premiums on such policy or policies for at least three full
years is eligible for election as a policyholders' director.
210.(5) Annual meeting
210.(5) Such a life insurance company shall have a fixed time in
each year for its annual meeting and such time shall be printed in
prominent type on each premium notice or each premium receipt issued
by the company, and, in addition to all other notices required to be
given by this Act, it shall give fifteen days notice of such meeting
in two or more daily newspapers published at or as near as may be to
the place where the company has its head office. R.S.O. 1990, c.
C.38, s. 210.
211. Conversion of joint stock life companies into mutual companies
211. Despite anything in the letters patent incorporating the
company or in its by-laws or in this Act, a joint stock life
insurance company may, with the permission of the minister charged
with the administration of the Insurance Act, establish and
implement a plan for the conversion of the company into a mutual
company by the purchase of shares of the capital stock of the
company in accordance with the Schedule to this Act. R.S.O. 1990, c.
C.38, s. 211.
212. Definitions
212. In sections 213 to 224,
"insured person" means a person who enters into a subsisting
contract of insurance with an insurer and includes,
(a) every person insured by a contract whether named or not,
(b) every person to whom or for whose benefit all or part of the
proceeds of a contract of insurance are
payable, and
(c) every person entitled to have insurance money applied
toward satisfaction of the person's judgment in accordance with
section 258 of the Insurance Act; ("assur,")
"loss" includes the happening of an event or contingency by
reason of which a person becomes entitled to a payment under a
contract of insurance of money other than a refund of unearned
premiums; ("sinistre")
"Minister" means the member of the Executive Council charged for
the time being by the Lieutenant Governor in Council with the
administration of the Insurance Act; ("ministre")
"Ontario contract" means a subsisting contract of insurance that,
(a) has for its subject,
(i) property that at the time of the making of the contract
is in Ontario or is in transit to or from Ontario, or
(ii) the life, safety, fidelity or insurable interest of a
person who at the time of the making of the contract is
resident in Ontario or of an incorporated company that has
its head office in Ontario, or
(b) makes provision for payment thereunder primarily to a
resident of Ontario or to an incorporated company that has its
head office in Ontario. ("contrat de l'Ontario") R.S.O. 1990,
c. C.38, s. 212; 1997, c. 19, s. 31 (3).
213.(1) Application of Part VI
213.(1) The provisions of Part VI relating to the winding up of
corporations apply to insurers incorporated under or subject to this
Act except where inconsistent with this Part.
213.(2) Definition
213.(2) Where the company, corporation or society is not constituted
exclusively or chiefly for insurance purposes and the insurance
branch and fund are completely severable from every other branch and
fund of the company, corporation or society, the word "insurer" for
the purposes of sections 214 to 227 means only the insurance branch
of the company, corporation or society. R.S.O. 1990, c. C.38, s.
213.
214.(1) Winding up by order of court on application of Superintendent
214.(1) An insurer incorporated in Ontario may also be wound up by
order of the court on the application of the Superintendent, if the
court is satisfied that,
(a) the insurer has failed to exercise its corporate powers
during any continuous period of four years;
(b) the insurer has not commenced business or gone into actual
operation within four years after it was incorporated;
(c) the insurer has discontinued business for one year after it
has undertaken insurance contracts within the meaning of the
Insurance Act;
(d) the insurer's licence has been suspended for one year or
more;
(e) the insurer has carried on business or entered into a
contract or used its funds in a manner or for a purpose
prohibited or not authorized by the Insurance Act or by its Act
of incorporation or by any special Act applicable thereto; or
(f) other sufficient cause has been shown.
214.(2) Approval of Lieutenant Governor in Council
214.(2) No such application shall be made by the Superintendent
without the approval of the Lieutenant Governor in Council.
214.(3) Application of Part VI
214.(3) Upon the making of an order under this section, the
provisions of Part VI relating to the winding up of a corporation,
in so far as they are not inconsistent with this Part, apply. R.S.O.
1990, c. C.38, s. 214.
215.(1) Provisional liquidator appointment
215.(1) In the case of an insurer incorporated in Ontario,
. . . . .
(b) if its licence is cancelled,
the Minister may appoint a provisional liquidator who shall take
charge of the affairs of the company and may direct that it be wound
up forthwith under this Act. R.S.O. 1990, c. C.38, s. 215 (1); 1997,
c. 19, s. 31 (4).
215.(2) Powers
215.(2) Until a permanent liquidator is appointed, the provisional
liquidator shall exercise all the powers of the insurer and none of
the officers or servants of the insurer shall make any contract for,
incur any liability on behalf of, or expend any money of, the
insurer without the approval of the provisional liquidator.
215.(3) Petition by provisional liquidator for winding-up order
215.(3) The provisional liquidator shall petition the court for a
winding-up order, and, if the court is of the opinion that it is
just and equitable so to do, it may make an order winding up the
company and thereupon the provisions of this Act relating to the
winding up of a corporation, in so far as they are not inconsistent
with this Part, apply.
215.(4) Sale of business
215.(4) The provisional liquidator or the liquidator, despite this
Act, but, subject to the approval of the court, may sell the
business and undertaking of the company as a going concern. R.S.O.
1990, c. C.38, s. 215 (2-4).
216.(1) Remuneration of provisional liquidator
216. 216.(1) The remuneration to be paid to a provisional liquidator
appointed under subsection 215 (1) shall be fixed by the Minister.
R.S.O. 1990, c. C.38, s. 216 (1).
216.(2) Payment of costs of provisional liquidator
216.(2) The remuneration and all expenses and outlay in connection
with the appointment of the provisional liquidator, together with
all expenses and outlay of the provisional liquidator while the
provisional liquidator acts in that capacity, shall be borne and
paid by the insurer and form a first lien or charge upon the assets
of the insurer. R.S.O. 1990, c. C.38, s. 216 (2); 1997, c. 19, s. 31
(5).
216.(3)
216.(3) Repealed: 1997, c. 19, s. 31 (6).
217.(1) Notice of intention to cease writing insurance or to consider voluntary
liquidation
217.(1) When an insurer incorporated under or subject to the law of
Ontario proposes to cease writing insurance or to call a general
meeting to consider a resolution for its voluntary liquidation under
this Act, it shall give at least one month's notice in writing
thereof to the Superintendent of Financial Services and the
superintendent of insurance in each province, other than Ontario, in
which the insurer is licensed. R.S.O. 1990, c. C.38, s. 217 (1);
1997, c. 28, s. 50.
217.(2) Notice to Superintendent of voluntary winding up
217.(2) When an insurer has passed a resolution for voluntary
winding up, the insurer shall notify the Superintendent thereof and
of the date on which contracts of insurance will cease to be entered
into by the insurer and of the name and address of its liquidator.
217.(3) Publication of notice
217.(3) The notice under subsection (2) shall also be published by
the insurer in two consecutive issues of The Ontario Gazette and the
official gazette of each other province in which the insurer is
licensed and in such newspapers and other publications as the
Superintendent may require. R.S.O. 1990, c. C.38, s. 217 (2, 3).
218.(1) Reinsurance
218.(1) The provisional liquidator or the liquidator, before the
fixing of a termination date pursuant to section 220, may arrange
for the reinsurance of the subsisting contracts of insurance of the
insurer with some other insurer licensed in Ontario. R.S.O. 1990, c.
C.38, s. 218 (1); 1997, c. 19, s. 31 (7).
218.(2) Funds available for reinsurance
218.(2) For the purpose of securing the reinsurance, the following
funds shall be available:
1. The entire assets of the insurer in Ontario except the
amount reasonably estimated by the provisional liquidator or
the liquidator as being required to pay,
(a) the costs of the liquidation or winding up;
(b) all claims for losses covered by the insurer's contracts
of insurance of which notice has been received by the
insurer or provisional liquidator or liquidator before the
date on which the reinsurance is effected;
(c) the claims of the preferred creditors who are the
persons paid in priority to other creditors under the
winding-up provisions of this Act,
all of which shall be a first charge on the assets of the insurer.
R.S.O. 1990, c. C.38, s. 218 (2); 1997, c. 19, s. 31 (8, 9).
218.(3)
218.(3) Repealed: 1997, c. 19, s. 31 (10).
218.(4) Payments to creditors other than preferred creditors
218.(4) The creditors of the insurer, other than the insured persons
and the said preferred creditors, are entitled to receive a payment
on their claims only if provision has been made for the payments
mentioned in subsection (2) and for the reinsurance. R.S.O. 1990, c.
C.38, s. 218 (4).
218.(5) Reinsurance of part of contracts
218.(5) If, after providing for the payments mentioned in subsection
(2), the balance of the assets of the insurer is insufficient to
secure the reinsurance of the contracts of the insured persons in
full, the reinsurance may be effected for such portion of the full
amount of the contracts as is possible. R.S.O. 1990, c. C.38, s. 218
(5); 1997, c. 19, s. 31 (11).
218.(6) Approval
218.(6) No contract of reinsurance shall be entered into under this
section until it is approved by the court. R.S.O. 1990, c. C.38, s.
218 (6).
219.
219. Repealed: 1997, c. 19, s. 31 (12).
220.(1) Termination date, where reinsurance not arranged
220.(1) If the provisional liquidator or the liquidator fails to
secure reinsurance, or is of the opinion that it is impracticable or
inexpedient to arrange for reinsurance, the provisional liquidator
or the liquidator,
(a) with the approval of the court and subject to such terms as
are prescribed by it; and
(b) for the purpose of securing the payment of existing claims
and avoiding further losses,
may publish a notice fixing a termination date for the subsisting
contracts of insurance of such insurer, and on and after that date
coverage and protection under the Ontario contracts cease and the
insurer is not liable under any such contract for a loss that occurs
after that date.
220.(2) Termination of Ontario contracts, where termination date fixed in
another province
220.(2) Where a provisional liquidator or a liquidator has been
appointed in another province to wind up an insurer incorporated in
that province, and if such provisional liquidator or liquidator
fixed a termination date for the contracts of insurance of the
insurer, on and after that date coverage and protection under the
Ontario contracts cease and determine and the insurer is not liable
under any such contract for a loss that occurs after that date.
R.S.O. 1990, c. C.38, s. 220 (1, 2).
220.(3)
220.(3) Repealed: 1997, c. 19, s. 31 (13).
221. Publication of notice of termination date
221. The provisional liquidator or the liquidator shall cause the
notice,
(a) to be published in The Ontario Gazette and in the official
gazette of each other province in which the insurer is licensed
and in such newspapers as the court directs in order to give
reasonable notice of the termination date so fixed; and
(b) to be mailed to each policyholder at the policyholder's
address as shown on the books and records of the company.
R.S.O. 1990, c. C.38, s. 221.
222.(1) Payment of claims for losses and preferred claims, etc.
222.(1) The liquidator shall pay or set aside from the assets of the
insurer sums in the liquidator's opinion sufficient to pay,
(a) the costs of the liquidation or winding up;
(b) all claims for losses covered by the insurer's contracts of
insurance that occurred before the termination date fixed under
section 220 and of which notice has been received by the
insurer or the liquidator;
(c) the full amount of the legal reserve in respect of each
unmatured life insurance contract; and
(d) the claims of preferred creditors who are the persons paid
in priority to other creditors under the winding-up provisions
of this Act. R.S.O. 1990, c. C.38, s. 222 (1); 1997, c. 19, s.
31 (14).
222.(2) Refund of unearned premiums
222.(2) Except in the case of life insurance, the assets remaining
after payment or making provision for payment of the amounts
mentioned in subsection (1) shall be used to pay the claims of the
insured persons for refunds of unearned premiums on a proportionate
basis in proportion to the periods of their contracts respectively
unexpired on the termination date. 1997, c. 19, s. 31 (15).
222.(3) Calculation of unearned premium claims
222.(3) The claims of the insured persons for refunds of unearned
premiums shall be calculated,
(a) as at the termination date fixed under section 220 of this
Act; or
(b) as at the date the insured person cancelled the contract,
whichever date is the earlier. R.S.O. 1990, c. C.38, s. 222 (3);
1997, c. 19, s. 31 (16).
222.(4) Effect of refund
222.(4) The refund of all or a portion of the premium does not
destroy or defeat any other remedy the insured person may have
against the insurer in respect thereof or for any other cause.
222.(5) Effect of section
222.(5) Nothing in this section prejudices or affects the priority
of any mortgage, lien or charge upon the property of the insurer.
R.S.O. 1990, c. C.38, s. 222 (4, 5).
223. Payment of provincial fees and taxes, etc.
223. The fees, taxes and costs payable by the insurer to each
province shall be paid out of the assets of the insurer remaining
after the reinsurance of the subsisting contracts of insurance of
the insurer or after the payment of the claims of policyholders for
refund of unearned premiums, as the case may be, and the balance
shall be distributed among the creditors of the insurer other than
the insured persons, preferred creditors and the several provinces.
R.S.O. 1990, c. C.38, s. 223.
224.(1) Filing of statements by liquidator
224.(1) Unless otherwise ordered by the court, within seven days
after the close of each period of three months and until the affairs
of the insurer are wound up and the accounts are finally closed, the
liquidator shall file with the court or other authority appointing
him and also with the Superintendent detailed schedules, in such
form as is required, showing,
(a) receipts and expenditures; and
(b) assets and liabilities.
224.(2) Production of books, etc., by liquidator
224.(2) The liquidator, whenever required so to do by the authority
appointing the liquidator or by the Minister, shall exhibit the
office books and vouchers and furnish such other information
respecting the affairs of the insurer as is required.
224.(3) Offence
224.(3) Every liquidator refusing or neglecting to furnish such
information is guilty of an offence and on conviction is liable to a
fine of not less than $50 and not more than $200 and in addition is
liable to be dismissed or removed. R.S.O. 1990, c. C.38, s. 224.
225.(1) Distribution of endowment and expectancy funds
225.(1) Where a fraternal society transacts endowment or expectancy
insurance and has an endowment fund separate and distinct from its
life insurance fund, the society may, by resolution duly passed at a
general meeting, after at least one month's notice of such intended
resolution, determine that the endowment or expectancy shall be
discontinued, and that the endowment or expectancy fund shall be
distributed proportionately among the members then in good standing
who are contributing to such fund according to the total
contribution of such member.
225.(2) Procedure
225.(2) After the resolution has been assented to by the
Superintendent and filed with the Minister, the executive officers
may proceed to ascertain the persons intended to rank upon the fund
and may distribute the fund among those so entitled, and such
distribution discharges the society and all executive officers
thereof from all further or other liability in respect of such fund
and of the endowment or expectancy contracts undertaken by the
society.
225.(3) Merger of funds
225.(3) If all the members interested in the endowment or expectancy
fund are also interested as holders of life insurance contracts, the
general meeting, instead of determining to distribute the endowment
or expectancy fund, may determine to convert it into or merge it in
a life insurance fund, and after the resolution has been assented to
and filed as provided in subsection (2), the endowment or expectancy
fund becomes a life insurance fund. R.S.O. 1990, c. C.38, s. 225.
226.
226. Repealed: 1997, c. 19, s. 31 (17).
227. Books, etc., as evidence
227. The books, accounts and documents of an insurer and the entries
in the books of its officers or liquidators are proof, in the
absence of evidence to the contrary, of the matters to which they
relate as between an alleged debtor or contributory and the insurer.
R.S.O. 1990, c. C.38, s. 227.
PART VI
WINDING UP
228. Definition
228. In this Part,
"contributory" means a person who is liable to contribute to the
property of a corporation in the event of the
corporation being wound up under this Part. R.S.O. 1990, c. C.38,
s. 228.
229. Application
229. Subject to section 2, this Part applies,
(a) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Upper
Canada;
(b) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Canada
that has its head office and carries on business in Ontario and
that was incorporated with objects to which the authority of
the Legislature extends;
(c) to every corporation incorporated by or under a general or
special Act of the Legislature;
(d) to every insurer within the meaning of Part V that is
incorporated under or subject to this Act except where
inconsistent with Part V,
but this Part does not apply to a corporation incorporated for the
construction and working of a railway, incline railway or street
railway, or to a corporation within the meaning of the Loan and
Trust Corporations Act except as provided by that Act. R.S.O. 1990,
c. C.38, s. 229.
230.(1) Voluntary winding up
230.(1) Where the shareholders or members of a corporation by a
majority of the votes cast at a general meeting called for that
purpose pass a resolution requiring the corporation to be wound up,
the corporation may be wound up voluntarily.
230.(2) Appointment of liquidator
230.(2) At such meeting, the shareholders or members shall appoint
one or more persons, who may be directors, officers or employees of
the corporation, as liquidator of the estate and effects of the
corporation for the purpose of winding up its affairs and
distributing its property, and may at that or any subsequent general
meeting fix the liquidator's remuneration and the costs, charges and
expenses of the winding up. R.S.O. 1990, c. C.38, s. 230.
231.(1) Publication of notice of winding up
231.(1) Notice of a resolution requiring the voluntary winding up of
a corporation shall be filed with the Minister and be published in
The Ontario Gazette by the corporation within fourteen days after
the resolution has been passed.
231.(2) Offence
231.(2) A corporation that fails to comply with subsection (1) is
guilty of an offence and on conviction is liable to a fine of not
more than $200 and every director or officer who authorizes, permits
or acquiesces in such failure is guilty of an offence and on
conviction is liable to a like fine. R.S.O. 1990, c. C.38, s. 231.
232. Inspectors
232. A corporation being wound up voluntarily may, in general
meeting, by resolution, delegate to any committee of its
shareholders or members, contributories or creditors hereinafter
referred to as inspectors, the power of appointing the liquidator
and filling any vacancy in the office of liquidator, or may by a
like resolution enter into any arrangement with its creditors with
respect to the powers to be exercised by the liquidator and the
manner in which they are to be exercised. R.S.O. 1990, c. C.38, s.
232.
233. Vacancy in office of liquidator
233. If in a voluntary winding up a vacancy occurs in the office of
liquidator by death, resignation or otherwise, the shareholders or
members in general meeting may, subject to any arrangement the
corporation may have entered into with its creditors upon the
appointment of inspectors, fill such vacancy, and a general meeting
for that purpose may be convened by the continuing liquidator, if
any, or by any contributory, and shall be deemed to have been duly
held if called in the manner prescribed by the by-laws of the
corporation, or, in default thereof, in the manner prescribed by
this Act for calling general meetings of the shareholders or members
of the corporation. R.S.O. 1990, c. C.38, s. 233.
234. Removal of liquidator
234. The shareholders or members of the corporation may, by a
majority of the votes cast at a general meeting called for that
purpose, remove a liquidator appointed under section 230 or 232, and
in such case shall appoint another liquidator. R.S.O. 1990, c. C.38,
s. 234.
235. Commencement of winding up
235. A voluntary winding up commences at the time of the passing of
the resolution requiring the winding up. R.S.O. 1990, c. C.38, s.
235.
236. Corporation to cease business
236. Where a corporation is being wound up voluntarily, it shall,
from the date of the commencement of its winding up, cease to carry
on its undertaking, except in so far as may be required for the
beneficial winding up thereof, and all transfers of shares, except
transfers made to or with the sanction of the liquidator, or
alterations in the status of the shareholders or members of the
corporation, taking place after the commencement of its winding up,
are void, but its corporate existence and all its corporate powers,
even if it is otherwise provided by its instrument of incorporation
or by-laws, continue until its affairs are wound up. R.S.O. 1990, c.
C.38, s. 236.
237. No proceedings against corporation after voluntary winding up except
by leave
237. After the commencement of a voluntary winding up,
(a) no action or other proceeding shall be commenced against
the corporation; and
(b) no attachment, sequestration, distress or execution shall
be put in force against the estate or effects of the
corporation,
except by leave of the court and subject to such terms as the court
may impose. R.S.O. 1990, c. C.38, s. 237.
238.(1) Settlement of list of contributories
238.(1) Upon a voluntary winding up, the liquidator shall settle the
list of contributories, and any list so settled is proof, in the
absence of evidence to the contrary, of the liability of the persons
named therein to be contributories.
238.(2) Payment from contributories
238.(2) Upon a voluntary winding up, the liquidator may, before
having ascertained the sufficiency of the property of the
corporation, call on all or any of the contributories for the time
being settled on the list of contributories to the extent of their
liability to pay any sum that the liquidator considers necessary to
satisfy the liabilities of the corporation and the costs, charges
and expenses of winding up, and for the adjustment of the rights of
the contributories among themselves, and the liquidator may, in
making a call, take into consideration the probability that some of
the contributories upon whom the call is made may partly or wholly
fail to pay their respective portions of the call. R.S.O. 1990, c.
C.38, s. 238.
239.(1) Meetings of corporation during winding up
239.(1) The liquidator may, during the continuance of the voluntary
winding up, call general meetings of the shareholders or members of
the corporation for the purpose of obtaining its sanction by
resolution, or for any other purpose the liquidator thinks fit.
239.(2) Where winding up continues more than one year
239.(2) In the event of a voluntary winding up continuing for more
than one year, the liquidator shall call a general meeting of the
shareholders or members of the corporation at the end of the first
year and of each succeeding year from the commencement of the
winding up, and shall lay before the meeting an account showing the
liquidator's acts and dealings and the manner in which the winding
up has been conducted during the preceding year. R.S.O. 1990, c.
C.38, s. 239.
240. Arrangements with creditors may be authorized
240. The liquidator, with the sanction of a resolution of the
shareholders or members of the corporation passed in general meeting
or of the inspectors, may make such compromise or other arrangement
as the liquidator considers expedient with any creditor or person
claiming to be a creditor or having or alleging to have a claim,
present or future, certain or contingent, ascertained or sounding
only in damages, against the corporation or whereby the corporation
may be rendered liable. R.S.O. 1990, c. C.38, s. 240.
241. Power to compromise with debtors and contributories
241. The liquidator may, with the like sanction, compromise all
calls and liabilities to call, debts and liabilities capable of
resulting in debts, and all claims, whether present or future,
certain or contingent, ascertained or sounding only in damages,
subsisting or supposed to subsist between the corporation and any
contributory, alleged contributory or other debtor or person
apprehending liability to the corporation and all questions in any
way relating to or affecting the property of the corporation, or the
winding up of the corporation, upon the receipt of such sums payable
at such times and generally upon such terms as are agreed upon, and
the liquidator may take any security for the discharge of such
calls, debts or liabilities and give a complete discharge in respect
thereof. R.S.O. 1990, c. C.38, s. 241.
242.(1) Power to accept shares, etc., as consideration for sale of
property to another company
242.(1) Where a corporation is proposed to be or is in the course of
being wound up voluntarily and the whole or a portion of its
business or property is proposed to be transferred or sold to
another corporation, the liquidator of the first-mentioned
corporation, with the sanction of a resolution of the shareholders
or members passed in general meeting of the corporation by which the
liquidator was appointed conferring either a general authority on
the liquidator or an authority in respect of any particular
arrangement, may receive, in compensation or in part compensation
for such transfer or sale, cash or shares or other like interest in
the purchasing corporation for the purpose of distribution among the
shareholders or members of the corporation that is being wound up in
the manner set forth in the arrangement, or may, in lieu of
receiving cash or shares or other like interest, or in addition
thereto, participate in the profits of or receive any other benefit
from the purchasing corporation.
242.(2) Confirmation of sale or arrangement
242.(2) A sale made or arrangement entered into by the liquidator
under this section is binding on the shareholders or members of the
corporation that is being wound up voluntarily if,
(a) in the case of a company, the shareholders or classes of
shareholders, as the case may be, at a general meeting duly
called for the purpose, by votes representing at least three-
fourths of the shares or of each class of shares represented at
the meeting; or
(b) in the case of a corporation without share capital, the
members or classes of members, as the case may be, at a general
meeting duly called for the purpose, by votes representing at
least three-fourths of the members or of each class of members
represented at the meeting,
approve the sale or arrangement and if the sale or arrangement is
approved by an order made by the court on the application of the
corporation.
242.(3) Where resolution not invalid
242.(3) No resolution shall be deemed invalid for the purposes of
this section because it was passed before or concurrently with a
resolution for winding up the corporation or for appointing the
liquidator. R.S.O. 1990, c. C.38, s. 242.
243. Winding up by court
243. A corporation may be wound up by order of the court,
(a) where the shareholders or members by a majority of the
votes cast at a general meeting called for that purpose pass a
resolution authorizing an application to be made to the court
to wind up the corporation;
(b) where proceedings have been begun to wind up voluntarily
and it appears to the court that it is in the interest of
contributories and creditors that the proceedings should be
continued under the supervision of the court;
(c) where it is proved to the satisfaction of the court that
the corporation, though it may be solvent, cannot by reason of
its liabilities continue its business and that it is advisable
to wind it up; or
(d) where in the opinion of the court it is just and equitable
for some reason, other than the bankruptcy or insolvency of the
corporation, that it should be wound up. R.S.O. 1990, c. C.38,
s. 243.
244.(1) Who may apply
244.(1) The winding-up order may be made upon the application of the
corporation or of a shareholder or of a member or, where the
corporation is being wound up voluntarily, of the liquidator or of a
contributory or of a creditor having a claim of $200 or more.
244.(2) Notice
244.(2) Except where the application is made by the corporation,
four days notice of the application shall be given to the
corporation before the making of the application. R.S.O. 1990, c.
C.38, s. 244.
245. Power of court
245. The court may make the order applied for, may dismiss the
application with or without costs, may adjourn the hearing
conditionally or unconditionally or may make any interim or other
order as is considered just, and upon the making of the order may,
according to its practice and procedure, refer the proceeding for
the winding up and may also delegate any powers of the court
conferred by this Act to any officer of the court. R.S.O. 1990, c.
C.38, s. 245.
246.(1) Appointment of liquidator
246.(1) The court in making the winding-up order may appoint one or
more persons as liquidator of the estate and effects of the
corporation for the purpose of winding up its affairs and
distributing its property.
246.(2) Remuneration
246.(2) The court may at any time fix the remuneration of the
liquidator.
246.(3) Vacancy
246.(3) If a liquidator appointed by the court dies or resigns or
the office becomes vacant for any reason, the court may by order
fill the vacancy.
246.(4) Removal of liquidator
246.(4) The court may by order remove for cause a liquidator
appointed by it, and in such case shall appoint another liquidator.
R.S.O. 1990, c. C.38, s. 246.
247. Costs and expenses
247. The costs, charges and expenses of a winding up by order of the
court shall be assessed by an assessment officer. R.S.O. 1990, c.
C.38, s. 247.
248. Commencement of winding up
248. Where a winding-up order is made by the court without prior
voluntary winding-up proceedings, the winding up shall be deemed to
commence at the time of service of notice of the application, and,
where the application is made by the corporation, at the time the
application is made. R.S.O. 1990, c. C.38, s. 248.
249. Winding up after order
249. Where a winding-up order has been made by the court, the
winding up of the corporation shall be conducted in the same manner
and with the like consequences as provided for a voluntary winding
up, except that the list of contributories shall be settled by the
court unless it has been settled by the liquidator prior to the
winding-up order, in which case the list is subject to review by the
court, and except that all steps in the winding up are subject to
the order and direction of the court. R.S.O. 1990, c. C.38, s. 249.
250.(1) Meeting of members of company may be ordered
250.(1) Where a winding-up order has been made by the court, the
court may direct meetings of the shareholders or members of the
corporation to be called, held and conducted in such manner as the
court deems fit for the purpose of ascertaining their wishes, and
may appoint a person to act as chair of any such meeting and to
report the result of it to the court.
250.(2) Order for delivery by contributories and others of property, etc.
250.(2) Where a winding-up order has been made by the court, the
court may require any contributory for the time being settled on the
list of contributories, or any trustee, receiver, banker or agent or
officer of the corporation to pay, deliver, convey, surrender or
transfer forthwith, or within such time as the court directs, to the
liquidator any sum or balance, books, papers, estate or effects that
are in the person's hands and to which the corporation appears to be
entitled.
250.(3) Inspection of books
250.(3) Where a winding-up order has been made by the court, the
court may make an order for the inspection of the books and papers
of the corporation by its creditors and contributories, and any
books and papers in the possession of the corporation may be
inspected in conformity with such order. R.S.O. 1990, c. C.38, s.
250.
251. No proceedings against corporation after court winding up except by
leave
251. After the commencement of a winding up by order of the court,
(a) no action or other proceeding shall be proceeded with or
commenced against the corporation; and
(b) no attachment, sequestration, distress or execution shall
be put in force against the estate or effects of the
corporation,
except by leave of the court and subject to such terms as the court
may impose. R.S.O. 1990, c. C.38, s. 251.
252. Application of Ss 253-265, 268
252. Sections 253 to 265 and 268 apply to corporations being wound
up voluntarily or by order of the court. R.S.O. 1990, c. C.38, s.
252.
253.(1) Where no liquidator
253.(1) If from any cause there is no liquidator, the court may by
order on the application of a shareholder or member of the
corporation appoint one or more persons as liquidator.
253.(2) Idem
253.(2) Where there is no liquidator, the estate and effects of the
corporation shall be under the control of the court until the
appointment of a liquidator. R.S.O. 1990, c. C.38, s. 253.
254.(1) Consequences of winding up
254.(1) Upon a winding up,
(a) the liquidator shall apply the property of the corporation
in satisfaction of all its liabilities proportionately and,
subject thereto, shall distribute the property rateably among
the shareholders or members according to their rights and
interests in the corporation;
(b) in distributing the property of the corporation, the wages
of all employees, apprentices and other wage earners in the
employment of the corporation due at the date of the
commencement of the winding up or within one month before, not
exceeding three months wages and for vacation pay accrued for
not more than twelve months under the Employment Standards Act
and the regulations thereunder or under a collective agreement
made by the corporation, shall be paid in priority to the
claims of the ordinary creditors, and such persons are entitled
to rank as ordinary creditors for the residue of their claims;
(c) all the powers of the directors cease upon the appointment
of a liquidator, except in so far as the liquidator may
sanction the continuance of such powers. R.S.O. 1990, c. C.38,
s. 254 (1); 1993, c. 27, Sched.
254.(2) Distribution of property
254.(2) Section 53 of the Trustee Act applies with necessary
modifications to liquidators. R.S.O. 1990, c. C.38, s. 254 (2).
255. Payment of costs and expenses
255. The costs, charges and expenses of a winding up, including the
remuneration of the liquidator, are payable out of the property of
the corporation in priority to all other claims. R.S.O. 1990, c.
C.38, s. 255.
256.(1) Powers of liquidators
256.(1) The liquidator may,
(a) bring or defend any action, suit or prosecution, or other
legal proceedings, civil or criminal, in the name and on behalf
of the corporation;
(b) carry on the business of the corporation so far as is
necessary for the beneficial winding up of the corporation;
(c) sell in whole or in parcels the real and personal property,
effects and things in action of the corporation by public
auction or private sale;
(d) do all acts and execute, in the name and on behalf of the
corporation, all deeds, receipts and other documents, and for
that purpose use the seal of the corporation;
(e) draw, accept, make and endorse any bill of exchange or
promissory note in the name and on behalf of the corporation;
(f) raise upon the security of the property of the corporation
any requisite money;
(g) take out in the liquidator's official name letters of
administration to the estate of any deceased contributory and
do in the liquidator's official name any other act that is
necessary for obtaining payment of any money due from a
contributory or from a contributory's estate and which act
cannot be done conveniently in the name of the corporation;
(h) do and execute all such other things as are necessary for
winding up the affairs of the corporation and distributing its
property.
256.(2) Bills of exchange, etc., to be deemed drawn in due course
256.(2) The drawing, accepting, making or endorsing of a bill of
exchange or promissory note by the liquidator on behalf of the
corporation has the same effect with respect to the liability of the
corporation as if such bill or note had been drawn, accepted, made
or endorsed by or on behalf of the corporation in the course of
carrying on its business.
256.(3) Where money deemed to be due to liquidator
256.(3) Where the liquidator takes out letters of administration or
otherwise uses the liquidator's official name for obtaining payment
of any money due from a contributory, such money shall be deemed,
for the purpose of enabling the liquidator to take out such letters
or recover such money, to be due to the liquidator personally.
R.S.O. 1990, c. C.38, s. 256.
257. Nature of liability of contributory
257. The liability of a contributory creates a debt accruing due
from the contributory at the time the liability commenced, but
payable at the time or respective times when calls are made for
enforcing such liability. R.S.O. 1990, c. C.38, s. 257.
258. Who liable in case of death
258. If a contributory dies before or after he or she has been
placed on the list of contributories, the contributory's legal
representatives are liable in due course of administration to
contribute to the property of the corporation in discharge of the
liability of such deceased contributory and shall be contributories
accordingly. R.S.O. 1990, c. C.38, s. 258.
259.(1) Deposit in bank by liquidator
259.(1) The liquidator shall deposit in Ontario in a bank listed in
Schedule I or II of the Bank Act (Canada) all sums of money that the
liquidator has belonging to the corporation if such sums amount to
$100 or more.
259.(2) Approval of bank by inspectors
259.(2) If inspectors have been appointed, the bank shall be one
approved by them.
259.(3) Separate deposit account to be kept; withdrawal from account
259.(3) Such deposit shall not be made in the name of the liquidator
individually, but a separate deposit account shall be kept of the
money belonging to the corporation in the liquidator's name as
liquidator of the corporation and in the name of the inspectors, if
any, and such money shall be withdrawn only on the joint cheque of
the liquidator and one of the inspectors, if any.
259.(4) Liquidators to produce bank pass-book
259.(4) At every meeting of the shareholders or members of the
corporation the liquidator shall produce a passbook or statement of
account showing the amount of the deposits, the dates at which they
were made, the amounts withdrawn and the dates of withdrawal, and
mention of such production shall be made in the minutes of the
meeting, and the absence of such mention is admissible in evidence
as proof, in the absence of evidence to the contrary, that the pass-
book or statement of account was not produced at the meeting.
259.(5) Idem
259.(5) The liquidator shall also produce the passbook or statement
of account whenever so ordered by the court upon the application of
the inspectors, if any, or of a shareholder or member of the
corporation. R.S.O. 1990, c. C.38, s. 259.
260. Proving claim
260. For the purpose of proving claims, sections 25, 26 and 27 of
the Assignments and Preferences Act apply with necessary
modifications, except that, where the word "judge" is used therein,
the word "court" as used in this Act shall be substituted. R.S.O.
1990, c. C.38, s. 260.
261. Application or motion for direction
261. Upon the application or motion of the liquidator or of the
inspectors, if any, or of any creditors, the court, after hearing
such parties as it directs to be notified or after such steps as it
prescribes have been taken, may by order give its direction in any
matter arising in the winding up. R.S.O. 1990, c. C.38, s. 261.
262.(1) Examination of persons as to estate
262.(1) The court may at any time after the commencement of the
winding up summon to appear before the court or liquidator any
director or officer of the corporation or any other person known or
suspected to possess any of the estate or effects of the
corporation, or alleged to be indebted to it, or any person whom the
court considers capable of giving information concerning its trade,
dealings, estate or effects.
262.(2) Damages against delinquent directors, etc.
262.(2) Where in the course of the winding up it appears that a
person who has taken part in the formation or promotion of the
corporation or that a past or present director or officer, employee,
liquidator or receiver of the corporation has misapplied or retained
in the person's own hands, or become liable or accountable for,
money of the corporation, or has committed any misfeasance or breach
of trust in relation to it, the court may, on the application or
motion of the liquidator or of any creditor or contributory, examine
into the conduct of such person and order the person to repay the
money so misapplied or retained, or for which the person has become
liable or accountable, together with interest at such rate as the
court considers just, or to contribute such sum to the property of
the corporation by way of compensation in respect of such
misapplication, retention, misfeasance or breach of trust as the
court considers just. R.S.O. 1990, c. C.38, s. 262.
263.(1) Proceedings by shareholders
263.(1) If a shareholder or member of the corporation desires to
cause any proceeding to be taken that, in the shareholder's or
member's opinion, would be for the benefit of the corporation, and
the liquidator, under the authority of the shareholders or members,
or of the inspectors, if any, refuses or neglects to take such
proceeding after being required so to do, the shareholder or member
may obtain an order of the court authorizing the shareholder or
member to take such proceeding in the name of the liquidator or
corporation, but at the shareholder's or member's own expense and
risk, upon such terms and conditions as to indemnity to the
liquidator or corporation as the court prescribes.
263.(2) Benefits, when for shareholders
263.(2) Thereupon any benefit derived from such proceeding belongs
exclusively to the shareholder or member instituting the proceeding
for that person's benefit and that of any other shareholder or
member who has joined the shareholder or member in causing the
institution of the proceeding.
263.(3) When for corporation
263.(3) If before such order is granted, the liquidator signifies to
the court the liquidator's readiness to institute such proceeding
for the benefit of the corporation, an order shall be made
prescribing the time within which the liquidator is to do so, and in
that case the advantage derived from the proceeding, if instituted
within such time, belongs to the corporation. R.S.O. 1990, c. C.38,
s. 263.
264. Rights conferred by Act to be in addition to other powers
264. The rights conferred by this Act are in addition to any other
right of instituting proceedings against any contributory, or
against any debtor of the corporation, for the recovery of any call
or other sum due from such contributory or debtor or such person's
estate. R.S.O. 1990, c. C.38, s. 264.
265. Stay of winding-up proceedings
265. At any time during a winding up, the court, upon the
application or motion of a shareholder or member or creditor or
contributory and upon proof to its satisfaction that all proceedings
in relation to the winding up ought to be stayed, may make an order
staying the proceedings altogether or for a limited time on such
terms and subject to such conditions as the court considers fit.
R.S.O. 1990, c. C.38, s. 265.
266.(1) Account of voluntary winding up to be made by liquidator to a
general meeting
266.(1) Where the affairs of the corporation have been fully wound
up voluntarily, the liquidator shall make up an account showing the
manner in which the winding up has been conducted, and the property
of the corporation disposed of, and thereupon shall call a general
meeting of the shareholders or members of the corporation for the
purpose of having the account laid before them and hearing any
explanation that may be given by the liquidator, and the meeting
shall be called in the manner provided by the by-laws for calling
general meetings.
266.(2) Notice of holding of meeting
266.(2) The liquidator shall within ten days after the holding of
the meeting file a notice with the Minister stating that the meeting
was held and the date thereof.
266.(3) Dissolution
266.(3) On the expiration of three months from the date of the
filing of the notice, the corporation is dissolved.
266.(4) Extension
266.(4) At any time during the three-month period mentioned in
subsection (3), the court may, on the application of the liquidator
or any other person interested, make an order deferring the date on
which the dissolution of the corporation is to take effect to a date
fixed in the order, and in such event the corporation is dissolved
on the date so fixed.
266.(5) Copy of extension order to be filed
266.(5) The person on whose application the order was made shall
within ten days after it was made file with the Minister a copy of
it certified under the seal of the court.
266.(6) Offence
266.(6) A person who fails to comply with any requirement of this
section is guilty of an offence and on conviction is liable to a
fine of not more than $200. R.S.O. 1990, c. C.38, s. 266.
267.(1) Order for dissolution
267.(1) Despite section 266, in the case of a voluntary winding up
or in the case of a winding up by order of the court, the court at
any time after the affairs of the corporation have been fully wound
up may, upon the application or motion of the liquidator or any
other person interested, make an order dissolving it, and it is
dissolved at and from the date of the order.
267.(2) Copy of dissolution order to be filed
267.(2) The person on whose application the order was made shall
within ten days after it was made file with the Minister a copy of
it certified under the seal of the court.
267.(3) Offence
267.(3) A person who fails to comply with any requirement of this
section is guilty of an offence and on conviction is liable to a
fine of not more than $200. R.S.O. 1990, c. C.38, s. 267.
268.(1) Where shareholder unknown
268.(1) Where the liquidator is unable to distribute rateably the
property of the corporation among the shareholders or members
because a shareholder or member is unknown or the person's
whereabouts is unknown, the share of the property of the corporation
of such shareholder or member may, by agreement with the Public
Trustee, be delivered or conveyed by the liquidator to the Public
Trustee to be held in trust for the shareholder or member, and
thereupon subsections 319 (5) and (6) apply thereto.
268.(2) Idem
268.(2) A delivery or conveyance under subsection (1) shall be
deemed to be a rateable distribution among the shareholders or
members for the purposes of clause 254 (1) (a).
268.(3) Where creditor unknown
268.(3) Where the liquidator is unable to pay all the debts of the
corporation because a creditor is unknown or the creditor's
whereabouts is unknown, the liquidator may, by agreement with the
Public Trustee, pay to the Public Trustee an amount equal to the
amount of the debt due to the creditor to be held in trust for the
creditor and thereupon subsections 319 (5) and (6) apply thereto.
268.(4) Idem
268.(4) A payment under subsection (3) shall be deemed to be in
satisfaction of the debt for the purposes of clause 254 (1) (a).
R.S.O. 1990, c. C.38, s. 268.
269.(1) Disposal of books, etc., after winding up
269.(1) Where a corporation has been wound up under this Act and is
about to be dissolved, its books, accounts and documents and those
of the liquidator may be disposed of as it by resolution directs in
case of voluntary winding up, or as the court directs in case of
winding up under order.
269.(2) Where responsibility as to custody of books, etc., to cease
269.(2) After the lapse of five years from the date of the
dissolution of the corporation, no responsibility rests on it or the
liquidator, or anyone to whom the custody of such books, accounts
and documents has been committed by reason that the same or any of
them are not forthcoming to any person claiming to be interested
therein. R.S.O. 1990, c. C.38, s. 269.
270.(1) Provision for discharge of liquidator and distribution by the court
270.(1) Where a corporation is being wound up under an order of the
court and the realization and distribution of its property has
proceeded so far that in the opinion of the court it is expedient
that the liquidator should be discharged and that the property of
the corporation remaining in the liquidator's hands can be better
realized and distributed by the court, the court may make an order
discharging the liquidator and for payment, delivery and transfer
into court, or to such officer or person as the court may direct, of
such property, and it shall be realized and distributed by or under
the direction of the court among the persons entitled thereto in the
same way as nearly as may be as if the distribution were being made
by the liquidator.
270.(2) Disposal of books and documents
270.(2) In such case, the court may make an order directing how the
books, accounts and documents of the corporation and of the
liquidator are to be disposed of, and may order that they be
deposited in court or otherwise dealt with as it thinks fit. R.S.O.
1990, c. C.38, s. 270.
271. Rules of procedure
271. The Lieutenant Governor in Council may make rules for the due
carrying out of this Part, and, except as otherwise provided by this
Act or by such rules, the practice and procedure in a winding up
under the Winding-up Act (Canada) apply. R.S.O. 1990, c. C.38, s.
271.
PART VII
CORPORATIONS, GENERAL
272. Application
272. Subject to section 2, this Part, except where it is otherwise
expressly provided, applies,
(a) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Upper
Canada;
(b) to every corporation incorporated by or under a general or
special Act of the Parliament of the late Province of Canada
that has its head office and carries on business in Ontario and
that was incorporated with objects to which the authority of
the Legislature extends; and
(c) to every corporation incorporated by or under a general or
special Act of the Legislature,
but this Part does not apply to a corporation incorporated for the
construction and working of a railway, incline railway or street
railway, or to a corporation within the meaning of the Loan and
Trust Corporations Act except as provided by that Act. R.S.O. 1990,
c. C.38, s. 272.
273. Incorporation subject to trusts
273. A corporation is, upon its incorporation, invested with all the
property and rights, real and personal, theretofore held by or for
it under any trust created with a view to its incorporation. R.S.O.
1990, c. C.38, s. 273.
274. General corporate powers
274. A corporation, unless otherwise expressly provided in the Act
or instrument creating it, has and shall be deemed to have had from
its creation the capacity of a natural person and may exercise its
powers beyond the boundaries of Ontario to the extent to which the
laws in force where the powers are sought to be exercised permit,
and may accept extra-provincial powers and rights. R.S.O. 1990, c.
C.38, s. 274.
275. Incidental powers
275. A corporation has power,
(a) to construct, maintain and alter any buildings or works
necessary or convenient for its objects;
(b) to acquire by purchase, lease or otherwise and to hold any
land or interest therein. R.S.O. 1990, c. C.38, s. 275; 1994,
c. 27, s. 78 (8).
276.
276. REPEALED: 1994, c. 27, s. 78 (9).
277.(1) Head office
277.(1) Subject to subsection (2), a corporation shall at all times
have its head office in the place in Ontario where the letters
patent provide that the head office is to be situate.
277.(2) Change of head office
277.(2) A corporation may by special resolution change the location
of its head office to another place in Ontario.
277.(3) Where municipality annexed or amalgamated
277.(3) Where the location of the head office of a corporation is
changed by reason only of the annexation or amalgamation of the
place in which the head office is situate to or with another
municipality, such change does not constitute and has never
constituted a change within the meaning of subsection (2). R.S.O.
1990, c. C.38, s. 277 (1-3).
277.(4)
277.(4) , (5) Repealed: 1998, c. 18, Sched. E, s. 72.
278.
278. REPEALED: 1994, c. 27, s. 78 (9).
279. Seal
279. A corporation may, but need not, have a corporate seal. 1998,
c. 18, Sched. E, s. 73.
280.(1) Contracts in writing under seal
280.(1) A contract that if made between individual persons would be
by law required to be in writing and under seal may be made on
behalf of a corporation in writing under the seal of the
corporation.
280.(2) Contracts in writing not under seal
280.(2) A contract that if made between individual persons would be
by law required to be in writing signed by the parties to be charged
therewith may be made on behalf of a corporation in writing signed
by any person acting under its authority, express or implied.
280.(3) Parol contracts
280.(3) A contract that if made between individual persons would be
by law valid although made by parol only and not reduced into
writing may be made by parol on behalf of a corporation by any
person acting under its authority, express or implied. R.S.O. 1990,
c. C.38, s. 280.
281. Power of attorney by corporation
281. A corporation may, by writing under seal, empower any person,
either generally or in respect of any specified matters, as its
attorney to execute on its behalf deeds to which it is a party in
any capacity in any place situate in or outside Ontario, and every
deed signed by such attorney on behalf of the corporation and under
the attorney's seal binds the corporation and has the same effect as
if it were under the seal of the corporation. R.S.O. 1990, c. C.38,
s. 281.
282. Authentication of documents, etc.
282. A document requiring authentication by a corporation may be
signed by any director or by any authorized person and need not be
under seal. R.S.O. 1990, c. C.38, s. 282.
283.(1) Directors
283.(1) The affairs of every corporation shall be managed by a board
of directors howsoever designated.
283.(2) Number
283.(2) The board of directors of a corporation shall consist of a
fixed number of directors not fewer than three. R.S.O. 1990, c.
C.38, s. 283 (1, 2).
283.(3) Conduct of business
283.(3) Subject to subsection 298 (1) and subsection (3.1), no
business of a corporation shall be transacted by its directors
except at a meeting of directors at which a quorum of the board is
present. R.S.O. 1990, c. C.38, s. 283 (3); 1998, c. 18, Sched. E, s.
74 (1).
283.(3.1) Means of meetings
283.(3.1) Unless the by-laws otherwise provide, if all the directors
of a corporation present at or participating in the meeting consent,
a meeting of directors or of a committee of directors may be held by
such telephone, electronic or other communication facilities as
permit all persons participating in the meeting to communicate with
each other simultaneously and instantaneously, and a director
participating in the meeting by those means is deemed for the
purposes of this Act to be present at the meeting. 1998, c. 18,
Sched. E, s. 74 (2).
283.(4) Idem
283.(4) Where there is a vacancy or vacancies in the board of
directors, the remaining directors may exercise all the powers of
the board so long as a quorum of the board remains in office. R.S.O.
1990, c. C.38, s. 283 (4).
283.(5) Purchase of liability insurance
283.(5) Subject to subsection (6), a corporation may purchase and
maintain insurance for a director or officer of the corporation
against any liability incurred by the director or officer, in the
capacity as a director or officer of the corporation, except where
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.
283.(6) Charitable corporation
283.(6) A corporation referred to in subsection 1 (2) of the
Charities Accounting Act may not purchase insurance described in
subsection (5) unless,
(a) the corporation complies with the Charities Accounting Act
or a regulation made under that Act that permits the purchase;
or
(b) the corporation or a director or officer of the corporation
obtains a court order authorizing the purchase. 1998, c. 18,
Sched. E, s. 74 (2).
284.(1) First directors
284.(1) The persons named as first directors in the Act or
instrument creating the corporation are the directors of the
corporation until replaced by the same number of others duly elected
or appointed in their stead.
284.(2) Idem
284.(2) The first directors of the corporation have all the powers
and duties and are subject to all the liabilities of directors.
284.(3) Definition
284.(3) In the case of corporations incorporated before the 30th day
of April, 1954, "first directors" in this section means provisional
directors. R.S.O. 1990, c. C.38, s. 284.
285.(1) Change in number of directors
285.(1) A corporation may by special resolution increase or decrease
the number of its directors. R.S.O. 1990, c. C.38, s. 285 (1).
285.(2)
285.(2) , (3) Repealed: 1998, c. 18, Sched. E, s. 75.
286.(1) Qualification of directors, must be shareholders
286.(1) Subject to subsections (2) and (3), no person shall be a
director of a corporation unless he or she is a shareholder or
member of the corporation, and, if the person ceases to be a
shareholder or member, he or she thereupon ceases to be a director.
286.(2) Exception
286.(2) A person may be a director of a corporation if he or she
becomes a shareholder or member of the corporation within ten days
after his or her election or appointment as a director, but, if the
person fails to become a shareholder or member within such ten days,
the person thereupon ceases to be a director and shall not be
re-elected or reappointed unless he or she is a shareholder or member
of the corporation.
286.(3) Exception, hospitals and stock exchanges
286.(3) A corporation,
(a) operating a hospital within the meaning of the Public
Hospitals Act; or
(b) operating a recognized stock exchange,
may by by-law provide that a person may, with his or her consent in
writing, be a director of the corporation even though the person is
not a shareholder or member of the corporation.
286.(4) Age
286.(4) A director shall be eighteen or more years of age.
286.(5) Bankrupts
286.(5) No undischarged bankrupt shall be a director, and, if a
director becomes a bankrupt, he or she thereupon ceases to be a
director. R.S.O. 1990, c. C.38, s. 286.
287.(1) Election of directors
287.(1) The directors shall be elected by the shareholders or
members in general meeting and the election shall be by ballot or in
such other manner as the by-laws of the corporation prescribe.
R.S.O. 1990, c. C.38, s. 287 (1).
287.(2) Idem
287.(2) Unless the by-laws otherwise provide, the election of
directors shall take place yearly and all the directors then in
office shall retire, but, if qualified, are eligible for re-
election. R.S.O. 1990, c. C.38, s. 287 (2); 1998, c. 18, Sched. E,
s. 76 (1).
287.(3) Exception
287.(3) Subsection (2) does not affect the operation of any by-law
passed before the 30th day of April, 1954, that provides that the
election of directors shall take place otherwise than yearly.
287.(4) Continuance in office
287.(4) If an election of directors is not held at the proper time,
the directors continue in office until their successors are elected.
R.S.O. 1990, c. C.38, s. 287 (3, 4).
287.(5) Rotation of directors
287.(5) The by-laws may provide for the election and retirement of
directors in rotation, but in that case no director shall be elected
for a term of more than five years and at least three directors
shall retire from office in each year. R.S.O. 1990, c. C.38, s. 287
(5); 1998, c. 18, Sched. E, s. 76 (2).
288.(1) Quorum of directors
288.(1) Unless the letters patent, supplementary letters patent or a
special resolution otherwise provides, a majority of the board of
directors constitutes a quorum, but in no case shall a quorum be
less than two-fifths of the board of directors.
288.(2) Vacancies
288.(2) As long as there is a quorum of directors in office, any
vacancy occurring in the board of directors may be filled for the
remainder of the term by the directors then in office.
288.(3) Idem
288.(3) Whenever there is not a quorum of directors in office, the
director or directors then in office shall forthwith call a general
meeting of the shareholders or members to fill the vacancies, and,
in default or if there are no directors then in office, the meeting
may be called by any shareholder or member. R.S.O. 1990, c. C.38, s.
288.
289.(1) President
289.(1) The directors shall elect a president from among themselves.
289.(2) Other officers
289.(2) The directors shall appoint a secretary and may appoint one
or more vice-presidents and other officers.
289.(3) Corporations without share capital
289.(3) Despite subsections (1) and (2), in the case of a
corporation without share capital, if the letters patent,
supplementary letters patent or by-laws so provide, the officers of
the corporation or any of them may be elected or appointed at a
general meeting of the members duly called for that purpose.
289.(4) Acting secretary
289.(4) If the office of secretary is vacant or if for any reason
the secretary is unable to act, anything required or authorized to
be done by the secretary may be done by an assistant secretary or,
if there is no assistant secretary able to act, by any other officer
of the corporation authorized generally or specifically in that
behalf by the directors. R.S.O. 1990, c. C.38, s. 289.
290. Chair of the board
290. A corporation may by special resolution provide for the
election by the directors from among themselves of a chair of the
board of directors and define his or her duties, and may assign to
the chair of the board of directors any or all of the duties of the
president or other officer of the corporation, and in that case the
special resolution shall fix and prescribe the duties of the
president. R.S.O. 1990, c. C.38, s. 290.
291.(1) Qualification of officers
291.(1) Except in the case of the president and the chair of the
board of directors, no officer of the corporation need be a director
or a shareholder or member of the corporation unless the by-laws so
provide.
291.(2) Application of subs. (1)
291.(2) Subsection (1) does not apply to a corporation operating a
recognized stock exchange. R.S.O. 1990, c. C.38, s. 291.
292. Validity of acts of directors, etc.
292. The acts of a director or of an officer are valid despite any
defect that may afterwards be discovered in his or her appointment
or qualification. R.S.O. 1990, c. C.38, s. 292.
293. Annual meetings
293. A corporation shall hold an annual meeting of its shareholders
or members not later than eighteen months after its incorporation
and subsequently not more than fifteen months after the holding of
the last preceding annual meeting. R.S.O. 1990, c. C.38, s. 293.
294. General meetings
294. The directors may at any time call a general meeting of the
shareholders or members for the transaction of any business, the
general nature of which is specified in the notice calling the
meeting. R.S.O. 1990, c. C.38, s. 294.
295.(1) Requisition for meeting
295.(1) Shareholders of a company holding not less than one-tenth of
the issued shares of the company that carry the right to vote at the
meeting proposed to be held, or not less than one-tenth of the
members of a corporation without share capital entitled to vote at
the meeting proposed to be held, as the case may be, may request the
directors to call a general meeting of the shareholders or members
for any purpose connected with the affairs of the corporation that
is not inconsistent with this Act.
295.(2) Requisition
295.(2) The requisition shall state the general nature of the
business to be presented at the meeting and shall be signed by the
requisitionists and deposited at the head office of the corporation
and may consist of several documents in like form signed by one or
more requisitionists.
295.(3) Duty of directors to call meeting
295.(3) Upon deposit of the requisition, the directors shall call
forthwith a general meeting of the shareholders or members for the
transaction of the business stated in the requisition.
295.(4) Where requisitionists may call meeting
295.(4) If the directors do not within twenty-one days from the date
of the deposit of the requisition call and hold such meeting, any of
the requisitionists may call such meeting which shall be held within
sixty days from the date of the deposit of the requisition.
295.(5) Calling of meeting
295.(5) A meeting called under this section shall be called as
nearly as possible in the same manner as meetings of shareholders or
members are called under the by-laws, but, if the by-laws provide
for more than twenty-one days notice of meetings, twenty-one days
notice is sufficient for the calling of such meeting.
295.(6) Repayment of expenses
295.(6) Any reasonable expenses incurred by the requisitionists by
reason of the failure of the directors to call such meeting shall be
repaid to the requisitionists by the corporation and any amount so
repaid shall be retained by the corporation out of any money due or
to become due from the corporation by way of fees or other
remuneration in respect of their services to such of the directors
as were in default, unless at such meeting the shareholders or
members by a majority of the votes cast reject the repayment to the
requisitionists. R.S.O. 1990, c. C.38, s. 295.
296.(1) Circulation of shareholders' resolutions, etc.
296.(1) On the requisition in writing of shareholders of a company
holding not less than one-twentieth of the issued shares of the
company that carry the right to vote at the meeting to which the
requisition relates or not less than one-twentieth of the members of
a corporation without share capital entitled to vote at the meeting
to which the requisition relates, as the case may be, the directors
shall,
(a) give to the shareholders or members entitled to notice of
the next meeting of shareholders or members notice of any
resolution that may properly be moved and is intended to be
moved at that meeting; or
(b) circulate to the shareholders or members entitled to vote
at the next meeting of shareholders or members a statement of
not more than 1,000 words with respect to the matter referred
to in any proposed resolution or with respect to the business
to be dealt with at that meeting.
296.(2) Notice
296.(2) The notice or statement or both, as the case may be, shall
be given or circulated by sending a copy thereof to each shareholder
or member entitled thereto in the same manner and at the same time
as that prescribed by this Act for the sending of notice of meetings
of shareholders or members.
296.(3) Idem
296.(3) Where it is not practicable to send the notice or statement
or both at the same time as the notice of the meeting is sent, the
notice or statement or both shall be sent as soon as practicable
thereafter.
296.(4) Deposit of requisition, etc.
296.(4) The directors are not bound under this section to give
notice of any resolution or to circulate any statement unless,
(a) the requisition, signed by the requisitionists, is
deposited at the head office of the corporation,
(i)in the case of a requisition requiring notice of a
resolution to be given, not less than ten days before the
meeting,
(ii)in the case of a requisition requiring a statement to be
circulated, not less than seven days before the meeting; and
(b) there is deposited with the requisition a sum reasonably
sufficient to meet the corporation's expenses in giving effect
thereto.
296.(5) Where directors not bound to circulate statement
296.(5) The directors are not bound under this section to circulate
any statement if, on the application of the corporation or any other
person who claims to be aggrieved, the court is satisfied that the
rights conferred by this section are being abused to secure needless
publicity for defamatory matter, and on any such application the
court may order the costs of the corporation to be paid in whole or
in part by the requisitionists even though they are not parties to
the application.
296.(6) Where no liability
296.(6) A corporation and a director, officer, employee or person
acting on its behalf, except a requisitionist, is not liable in
damages or otherwise by reason only of the circulation of a notice
or statement or both in compliance with this section.
296.(7) Duty to deal with requisitioned matter
296.(7) Despite anything in the by-laws of the corporation, where
the requisitionists have complied with this section, the resolution,
if any, mentioned in the requisition shall be dealt with at the
meeting to which the requisition relates.
296.(8) Repayment of expenses
296.(8) The sum deposited under clause (4) (b) shall be repaid to
the requisitionists by the corporation unless at the meeting to
which the requisition relates the shareholders or members by a
majority of the votes cast reject the repayment to the
requisitionists.
296.(9) Offence
296.(9) A director of a corporation who authorizes, permits or
acquiesces in any contravention of any requirement of this section
is guilty of an offence and on conviction is liable to a fine of not
more than $200. R.S.O. 1990, c. C.38, s. 296.
297. Court may direct method of holding meetings
297. If for any reason it is impracticable to call a meeting of
shareholders or members of the corporation in any manner in which
meetings of shareholders or members may be called or to conduct the
meeting in the manner prescribed by this Act, the letters patent,
supplementary letters patent or by-laws, the court may, on the
application of a director or a shareholder or member who would be
entitled to vote at the meeting, order a meeting to be called, held
and conducted in such manner as the court thinks fit, and any
meeting called, held and conducted in accordance with such an order
shall for all purposes be deemed to be a meeting of shareholders or
members of the corporation duly called, held and conducted. R.S.O.
1990, c. C.38, s. 297.
298.(1) By-laws and resolutions
298.(1) Any by-law or resolution signed by all the directors is as
valid and effective as if passed at a meeting of the directors duly
called, constituted and held for that purpose. R.S.O. 1990, c. C.38,
s. 298 (1); 1998, c. 18, Sched. E, s. 77 (1).
298.(2) Idem
298.(2) Any resolution signed by all the shareholders or members is
as valid and effective as if passed at a meeting of the shareholders
or members duly called, constituted and held for that purpose.
R.S.O. 1990, c. C.38, s. 298 (2); 1998, c. 18, Sched. E, s. 77 (2).
298.(3) Alternative method of confirming by-laws
298.(3) Any by-law passed at any time during a corporation's
existence may, in lieu of confirmation at a general meeting, be
confirmed in writing by all the shareholders or members entitled to
vote at such meeting.
298.(4) Evidentiary value of signatures
298.(4) Where a by-law or resolution purports to have been passed or
confirmed under this section by the signatures of all the directors,
shareholders or members, as the case may be, of the corporation, the
signatures to such by-law or resolution are admissible in evidence
as proof, in the absence of evidence to the contrary, of the
signatures of all the directors, shareholders or members, as the
case may be, and are admissible in evidence as proof, in the absence
of evidence to the contrary, that the signatories to the by-law or
resolution were all the directors, shareholders or members, as the
case may be, at the date that the by-law or resolution purports so
to have been passed or confirmed. R.S.O. 1990, c. C.38, s. 298 (3, 4).
299.(1) Minute books
299.(1) A corporation shall cause minutes of all proceedings at
meetings of the shareholders or members and of the directors and of
any executive committee to be entered in books kept for that
purpose.
299.(2) Evidence
299.(2) Any such minutes, if purporting to be signed by the chair of
the meeting at which the proceedings were had or by the chair of the
next succeeding meeting, are admissible in evidence as proof, in the
absence of evidence to the contrary, of the proceedings.
299.(3) Validity
299.(3) Where minutes in accordance with this section have been made
of the proceedings of a meeting of the shareholders or members or of
the directors or any executive committee, then, until the contrary
is proved, the meeting shall be deemed to have been duly called,
constituted and held and all proceedings had thereat to have been
duly had and all appointments of directors, officers or liquidators
made thereat shall be deemed to have been duly made. R.S.O. 1990, c.
C.38, s. 299.
300. Documents and registers
300. A corporation shall cause the following documents and registers
to be kept:
1. A copy of the letters patent and of any supplementary
letters patent issued to the corporation and of the memorandum
of agreement, if any, or, if incorporated by special Act, a
copy of the Act.
2. All by-laws and special resolutions of the corporation.
3. A register of shareholders or members in which are set out
the names alphabetically arranged of all persons who are
shareholders or members or have been within ten years
shareholders or members of the corporation and the address of
every such person while a shareholder or member and, in the
case of a company, in which are set out also the number and
class of shares held by each shareholder and the amounts paid
up and remaining unpaid on their respective shares.
4. A register of directors in which are set out the names,
addresses and callings of all persons who are or have been
directors of the corporation with the several dates on which
each became or ceased to be a director. R.S.O. 1990, c. C.38,
s. 300.
301. Documents evidence
301. The documents and registers mentioned in sections 41 and 300
are admissible in evidence as proof, in the absence of evidence to
the contrary, before and after dissolution of the corporation, of
all facts purporting to be stated therein. R.S.O. 1990, c. C.38, s. 301.
302. Books of account
302. A corporation shall cause to be kept proper books of account
and accounting records with respect to all financial and other
transactions of the corporation and, without derogating from the
generality of the foregoing, records of,
(a) all sums of money received and disbursed by the corporation
and the matters with respect to which receipt and disbursement
took place;
(b) all sales and purchases of the corporation;
(c) the assets and liabilities of the corporation; and
(d) all other transactions affecting the financial position of
the corporation. R.S.O. 1990, c. C.38, s. 302.
303. Untrue entries
303. A director, officer or employee of a corporation who makes or
assists in making any entry in the minutes of proceedings mentioned
in section 299, in the documents and registers mentioned in sections
41 and 300 or in the books of account or accounting records
mentioned in section 302, knowing it to be untrue, is guilty of an
offence and on conviction is liable to a fine of not more than
$1,000 or to imprisonment for a term of not more than three months,
or both. R.S.O. 1990, c. C.38, s. 303.
304.(1) Records to be kept at head office
304.(1) The minutes of proceedings mentioned in section 299, the
documents and registers mentioned in sections 41 and 300 and the
books of account and accounting records mentioned in section 302
shall, during the normal business hours of the corporation, be open
to inspection by any director and shall, except as provided in
section 43 and in subsections (2) and (3) of this section, be kept
at the head office of the corporation.
304.(2) Records of account at branch
304.(2) A corporation may keep at any place where it carries on
business such parts of the accounting records as relate to the
operations and assets and liabilities thereof or to such business of
the corporation as was carried on or supervised or accounted for at
such place, but there shall be kept at the head office of the
corporation or such other place as is authorized under subsection
(3) such records as will enable the directors to ascertain quarterly
with reasonable accuracy the financial position of the corporation.
R.S.O. 1990, c. C.38, s. 304 (1, 2).
304.(3)Exemption
304.(3) A corporation may keep any of the records mentioned in
subsection (1) at a place other than the head office of the
corporation if the records are available for inspection during
regular office hours at the head office by means of a computer
terminal or other electronic technology. 1998, c. 18, Sched. E, s.78.
304.(4) Offence
304.(4) A director, officer or employee of a corporation who
contravenes subsection (1) is guilty of an offence and on conviction
is liable to a fine of not more than $200.
304.(5) Rescission of orders made under subs. (3)
304.(5) The Minister may by order upon such terms as the Minister
sees fit rescind any order made under subsection (3) or any order
made by the Lieutenant Governor in Council under a predecessor of
that subsection. R.S.O. 1990, c. C.38, s. 304 (4, 5).
305.(1) Records to be open for inspection
305.(1) The minutes of proceedings at meetings of shareholders or
members mentioned in section 299 and the documents and registers
mentioned in sections 41 and 300, during the normal business hours
of the corporation, shall, at the place or places where they are
kept, be open to inspection by the shareholders or members and
creditors of the corporation or their agents or legal
representatives, and any of them may make extracts therefrom.
305.(2) Offence
305.(2) Every person who refuses to permit a person entitled thereto
to inspect such minutes, documents or registers, or to make extracts
therefrom, is guilty of an offence and on conviction is liable to a
fine of not more than $200. R.S.O. 1990, c. C.38, s. 305.
306.(1) List of shareholders
306.(1) No shareholder or member or creditor or the agent or legal
representative of any of them shall make or cause to be made a list
of all or any of the shareholders or members of the corporation,
unless the person has filed with the corporation or its agent an
affidavit of such shareholder, member or creditor in the following
form in English or French, and, where the shareholder, member or
creditor is a corporation, the affidavit shall be made by the
president or other officer authorized by resolution of the board of
directors of such corporation:
Form of Affidavit
Province of Ontario In the matter of
County of(Insert name of corporation)
I, ......................... of the .................. of
..................... in the ..................................
of ....................................... make oath and say (or
affirm):
1. I am a shareholder ( or member or creditor) of the above-named
corporation. ( Where the shareholder, member or creditor is a
corporation, indicate office and authority of deponent in
paragraph 1.)
2. I am applying to make a list of the shareholders ( or members)
of the above-named corporation.
3. I require the list of shareholders ( or members) only for
purposes connected with the above-named corporation.
4. The list of shareholders ( or members) and the information
contained therein will be used only for purposes connected with
the above-named corporation.
SWORN, etc.
306.(2) Offence
306.(2) Every person, other than a corporation or its agent, who
uses a list of all or any of the shareholders or members of the
corporation for the purpose of delivering or sending to all or any
of such shareholders or members advertising or other printed matter
relating to shares or securities, other than the shares or
securities of the corporation, or for purposes not connected with
the corporation is guilty of an offence and on conviction is liable
to a fine of not more than $1,000.
306.(3) Purposes connected with the corporation, defined
306.(3) Purposes connected with the corporation include any effort
to influence the voting of shareholders or members at any meeting of
the corporation and include the acquisition or offering of shares to
acquire control or to effect an amalgamation or reorganization and
any other purpose approved by the Minister. R.S.O. 1990, c. C.38, s.
306.
307.(1) Where list of shareholders to be furnished
307.(1) Any person, upon payment of a reasonable charge therefor and
upon filing with the corporation or its agent the affidavit referred
to in subsection (2), may require a corporation, other than a
private company, or its transfer agent to furnish within ten days
from the filing of such affidavit a list setting out the names
alphabetically arranged of all persons who are shareholders or
members of the corporation, the number of shares owned by each such
person and the address of each such person as shown on the books of
the corporation made up to a date not more than ten days prior to
the date of filing the affidavit.
307.(2) Affidavit
307.(2) The affidavit referred to in subsection (1) shall be made by
the applicant and shall be in the following form in English or
French:
Form of Affidavit
Province of Ontario ln the matter of
County of(Insert name of corporation)
I, ......................... of the .................. of
..................... in the ..................................
of ....................................... make oath and say (or
affirm): ( Where the applicant is a corporation, indicate office
and authority of deponent.)
1. I hereby apply for a list of the shareholders ( or members) of
the above-named corporation.
2. I require the list of shareholders ( or members) only for
purposes connected with the above-named corporation.
3. The list of shareholders ( or members) and the information
contained therein will be used only for purposes connected with
the above-named corporation.
SWORN, etc.
307.(3) Idem, where applicant a corporation
307.(3) Where the applicant is a corporation, the affidavit shall be
made by the president or other officer authorized by resolution of
the board of directors of such corporation.
307.(4) Offence
307.(4) Every person who uses a list of shareholders or members of a
corporation obtained under this section,
(a) for the purpose of delivering or sending to all or any of
such shareholders or members advertising or other printed
matter relating to shares or securities other than the shares
or securities of the corporation; or
(b) for any purpose not connected with the corporation,
is guilty of an offence and on conviction is liable to a fine of not
more than $1,000.
307.(5) Offence
307.(5) Every corporation or transfer agent that fails to furnish a
list in accordance with subsection (1) when so required is guilty of
an offence and on conviction is liable to a fine of not more than
$1,000, and every director or officer of such corporation or
transfer agent who authorized, permitted or acquiesced in such
offence is also guilty of an offence and on conviction is liable to
a like fine.
307.(6) Interpretation
307.(6) Purposes connected with the corporation include any effort
to influence the voting of shareholders or members at any meeting of
the corporation, any offer to acquire shares in the corporation or
any effort to effect an amalgamation or reorganization and any other
purpose approved by the Minister. R.S.O. 1990, c. C.38, s. 307.
308. Offence
308. Every person who offers for sale or sells or purchases or
otherwise traffics in a list or a copy of a list of all or any of
the shareholders or members of a corporation is guilty of an offence
and on conviction is liable to a fine of not more than $1,000, and,
where such person is a corporation, every director or officer of
such corporation who authorized, permitted or acquiesced in such
offence is also guilty of an offence and on conviction is liable to
a like fine. R.S.O. 1990, c. C.38, s. 308.
309.(1) Power of court to correct
309.(1) If the name of a person is, without sufficient cause,
entered in or omitted from the minutes of proceedings mentioned in
section 299 or from the documents or registers mentioned in sections
41 and 300, or if default is made or unnecessary delay takes place
in entering therein the fact of any person having ceased to be a
shareholder or member of the corporation, the person or shareholder
or member aggrieved, or any shareholder or member of the
corporation, or the corporation itself, may apply to the court for
an order that the minutes, documents or registers be rectified, and
the court may dismiss such application or make an order for the
rectification of the minutes, documents or registers, and may direct
the corporation to compensate the party aggrieved for any damage the
party has sustained.
309.(2) Decision as to title
309.(2) The court may, in any proceeding under this section, decide
any question relating to the entitlement of a person who is a party
to such proceeding to have the person's name entered in or omitted
from such minutes, documents or registers, whether such question
arises between two or more shareholders or members or alleged
shareholders or members, or between any shareholder or member or
alleged shareholder or member and the corporation.
309.(3) Trial of issue
309.(3) The court may direct an issue to be tried.
309.(4) Appeal
309.(4) An appeal lies from the decision of the court as if it had
been given in an action.
309.(5) Jurisdiction of courts not affected
309.(5) This section does not deprive any court of any jurisdiction
it otherwise has.
309.(6) Costs
309.(6) The costs of any proceeding under this section are in the
discretion of the court. R.S.O. 1990, c. C.38, s. 309.
310.(1) Investigations and audits
310.(1) Upon an application by the shareholders of a company holding
shares representing not less than one-tenth of the issued capital of
the company, or upon an application of at least one-tenth of the
members of a corporation without share capital, the court may
appoint an inspector to investigate the affairs and management of
the corporation or may appoint a person to audit its books.
310.(2) Evidence
310.(2) The application shall be supported by such evidence as the
court requires for the purpose of showing that the applicants have
good reason for requiring the investigation or audit, as the case
may be.
310.(3) Security for costs
310.(3) The court may require the applicants to give security to
cover the probable cost of the investigation or audit and may make
rules and prescribe the manner in which and the extent to which the
investigation or audit is to be conducted.
310.(4) Report on and expense of investigation or audit
310.(4) Such inspector or auditor shall report thereon to the court
and the expense of the investigation shall, in the discretion of the
court, be defrayed by the corporation or by the applicants or partly
by the corporation and partly by the applicants.
310.(5) Corporation may appoint inspector for same purpose
310.(5) A corporation may, by resolution passed at an annual meeting
or at a general meeting called for that purpose, appoint an
inspector to investigate its affairs and management.
310.(6) Powers and duties of inspector
310.(6) The inspector appointed under subsection (5) has the same
powers and shall perform the same duties as an inspector appointed
under subsection (1) and the inspector shall make his or her report
in such manner and to such persons as the corporation by resolution
directs.
310.(7) Production of books and documents
310.(7) All officers and agents of the corporation shall produce for
the examination of any inspector or auditor appointed under this
section all books and records in their custody or power.
310.(8) Examination on oath
310.(8) Any such inspector or auditor may examine upon oath the
officers, agents and employees of the corporation in relation to its
affairs and management.
310.(9) Offence
310.(9) Every officer or agent who refuses to produce any book or
record referred to in subsection (7) and every person so examined
who refuses to answer any question relating to the affairs and
management of the corporation is guilty of an offence and on
conviction is liable to a fine of not more than $200.
310.(10) Report admissible in proceedings
310.(10) A copy of the report of the inspector or auditor, as the
case may be, authenticated by the court or under the seal of the
corporation whose affairs and management the inspector or auditor
has investigated, is admissible in any legal proceeding as evidence
of the opinion of the inspector or auditor in relation to any matter
contained in the report. R.S.O. 1990, c. C.38, s. 310.
311.(1) Corporation with fewer than three shareholders or members
exercising corporate powers
311.(1) If a corporation exercises its corporate powers when its
shareholders or members are fewer than three for a period of more
than six months after the number has been so reduced, every person
who was a shareholder or member of the corporation during the time
that it so exercised its corporate powers after such period of six
months and is aware of the fact that it so exercised its corporate
powers is severally liable for the payment of the whole of the debts
of the corporation contracted during such time and may be sued for
the debts without the joinder in the action of the corporation or of
any other shareholder or member.
311.(2) Shareholder or member may avoid liability
311.(2) A shareholder or member who has become aware that the
corporation is so exercising its corporate powers may serve a
protest in writing on the corporation and may by registered letter
notify the Minister of such protest having been served and of the
facts upon which it is based, and such shareholder or member may
thereby and not otherwise, from the date of the protest and
notification, exonerate himself, herself or itself from liability.
311.(3) Revocation of charter
311.(3) If after notice from the Minister the corporation refuses or
neglects to bring the number of its shareholders or members up to
three, such refusal or neglect may be regarded by the Lieutenant
Governor as sufficient cause for the making of an order under
subsection 317 (1). R.S.O. 1990, c. C.38, s. 311.
312.(1) Bringing corporations under this Act
312.(1) A corporation incorporated otherwise than by letters patent
and being at the time of its application a subsisting corporation
may apply for letters patent under this Act, and the Lieutenant
Governor may issue letters patent continuing it as if it had been
incorporated under this Act.
312.(2) Change of powers, etc.
312.(2) Where a corporation applies for the issue of letters patent
under subsection (1), the Lieutenant Governor may, by the letters
patent, limit or extend the powers of the corporation, name its
directors and change its corporate name, as the applicant desires.
312.(3) Transfer of foreign corporations
312.(3) A corporation incorporated under the laws of any
jurisdiction other than Ontario may, if it appears to the Lieutenant
Governor to be thereunto authorized by the laws of the jurisdiction
in which it was incorporated, apply to the Lieutenant Governor for
letters patent continuing it as if it had been incorporated under
this Act, and the Lieutenant Governor may issue such letters patent
on application supported by such material as appears satisfactory
and such letters patent may be issued on such terms and subject to
such limitations and conditions and contain such provisions as
appear to the Lieutenant Governor to be fit and proper. R.S.O. 1990,
c. C.38, s. 312.
313.(1) Transfer of Ontario corporations
313.(1) A corporation incorporated under the laws of Ontario may, if
authorized by a special resolution, by the Minister and by the laws
of any other jurisdiction in Canada, apply to the proper officer of
that other jurisdiction for an instrument of continuation continuing
the corporation as if it had been incorporated under the laws of
that other jurisdiction.
313.(2) Notice
313.(2) The corporation shall file with the Minister a notice of the
issue of the instrument of continuation and on and after the date of
the filing of such instrument this Act ceases to apply to that
corporation.
313.(3) Application
313.(3) This section applies only to a jurisdiction that has
legislation in force that permits corporations incorporated under
its laws to apply for an instrument of continuation under the laws
of Ontario. R.S.O. 1990, c. C.38, s. 313.
313.1.(1) Continuance as cooperative corporation
313.1.(1) A corporation incorporated under this Act may, if
authorized by a special resolution and by the Minister, apply under
the Cooperative Corporations Act to be continued as a cooperative
corporation.
313.1.(2) Certificate to be filed with Minister
313.1.(2) The corporation must file with the Minister a copy of the
certificate of continuance issued under the Cooperative
Corporations Act within 60 days after the date of issuance.
313.1.(3) Act ceases to apply
313.1.(3) This Act ceases to apply to the corporation on the date
upon which the corporation is continued under the Cooperative
Corporations Act. 1994, c. 17, s. 31.
314. Rights of creditors preserved
314. All rights of creditors against the property, rights and assets
of a corporation amalgamated under section 113 or continued under
section 312, and all liens upon its property, rights and assets are
unimpaired by such amalgamation or continuation, and all debts,
contracts, liabilities and duties of the corporation thenceforth
attach to the amalgamated or continued corporation and may be
enforced against it. R.S.O. 1990, c. C.38, s. 314.
315.(1) Forfeiture for nonuser
315.(1) If a corporation incorporated by letters patent does not go
into actual operation within two years after incorporation or for
any two consecutive years does not use its corporate powers, the
Lieutenant Governor, after having given the corporation such notice
as he or she considers proper, may by order declare such powers
forfeited, except so far as is necessary for the winding up of the
corporation.
315.(2) Rights of creditors not affected
315.(2) No such forfeiture affects prejudicially the rights of
creditors as they exist at the date of the forfeiture.
315.(3) Revival
315.(3) Where the powers of a corporation have been forfeited under
subsection (1) or a predecessor of subsection (1), the Lieutenant
Governor on the application of the corporation may by order, on such
terms and conditions as he or she sees fit to impose, revive the
corporate powers. R.S.O. 1990, c. C.38, s. 315.
316. Social clubs cause for cancellation
316. Despite anything to the contrary in any Act, in any letters
patent or in any supplementary letters patent, if it is made to
appear to the satisfaction of the Minister that a corporation that
has objects in whole or in part of a social nature,
(a) occupies and uses a house, room or place as a club that,
except for paragraph 197 (2) (a) of the Criminal Code (Canada),
would be a common gaming house as defined in subsection (1)
thereof; or
(b) occupies premises that are equipped, guarded, constructed
or operated so as to hinder or prevent lawful access to and
inspection by police or fire officers, or are found fitted or
provided with any means or contrivance for playing any game of
chance or any mixed game of chance and skill, gaming or betting
or with any device for concealing, removing or destroying such
means or contrivance,
the Lieutenant Governor may make an order under subsection 317 (1).
R.S.O. 1990, c. C.38, s. 316.
317.(1) Termination of existence for cause
317.(1) Where sufficient cause is shown, the Lieutenant Governor may
by order, upon such terms and conditions as he or she considers fit,
(a) cancel the letters patent of a corporation and declare it
to be dissolved on such date as the order may fix;
(b) declare the corporate existence of a corporation
incorporated otherwise than by letters patent to be terminated
and the corporation to be dissolved on such date as the order
may fix; or
(c) cancel any supplementary letters patent issued to a
corporation.
317.(2) Inquiry
317.(2) The Minister, under such circumstances and at any time as
the Minister in his or her discretion thinks advisable, may
authorize any officer of the Ministry of the Minister to conduct an
inquiry for the purpose of determining whether or not there is
sufficient cause for the making of an order under subsection (1).
317.(3) Powers of inquiring officer
317.(3) Every officer so authorized has the power to summon any
person to appear before him or her as a witness in such inquiry and
to require such person to give evidence on oath, touching any matter
relevant to the purpose of the inquiry, and to produce such
documents and things as such officer considers requisite for that
purpose.
317.(4) Witnesses
317.(4) Every such officer has the same power to enforce the
attendance of witnesses and to compel them to give evidence and to
produce documents and things as is vested in any court in civil
cases.
317.(5) Witness may be required to answer
317.(5) Section 9 of the Evidence Act applies to any witness and to
the evidence given by him or her before any such officer in any such
inquiry.
317.(6) Appeal
317.(6) An appeal lies from an order made under subsection (1) to
the Divisional Court upon a question of law only.
317.(7) Minister to be heard
317.(7) The Minister is entitled to be heard, by counsel or
otherwise, upon the argument of any such appeal.
317.(8) No costs
317.(8) No costs are payable by or to any person by reason of or in
respect of any such appeal. R.S.O. 1990, c. C.38, s. 317 (1-8).
317.(9) Order for dissolution
317.(9) Where it appears that a corporation is in default of a
filing requirement under the Corporations Information Act and that
notice of such default has been sent in accordance with section 324
to the corporation or has been published once in The Ontario
Gazette, the Lieutenant Governor may by order, after ninety days
after the notice has been sent or published,
(a) cancel the letters patent of the corporation and declare it
to be dissolved on such date as the order may fix; or
(b) declare the corporate existence of the corporation, if it
was incorporated otherwise than by letters patent, to be
terminated and the corporation to be dissolved on such date as
the order may fix. R.S.O. 1990, c. C.38, s. 317 (9); 1994, c.
27, s. 78 (10).
317.(10) Revival
317.(10) Where a corporation has been dissolved under subsection (9)
or any predecessor thereof, the Lieutenant Governor, on the
application of any interested person, may in his or her discretion
by order, on such terms and conditions as he or she sees fit to
impose, revive the corporation, and thereupon the corporation shall,
subject to the terms and conditions of the order and to any rights
acquired by any person after its dissolution, be restored to its
legal position, including all its property, rights, privileges and
franchises, and be subject to all its liabilities, contracts,
disabilities and debts, as at the date of its dissolution, in the
same manner and to the same extent as if it had not been dissolved.
R.S.O. 1990, c. C.38, s. 317 (10); 1994, c. 27, s. 78 (11).
318.(1) Continuation of existence for particular purpose
318. 318.(1) Despite the dissolution of a corporation under this
Act,
(a) a civil, criminal or administrative action or proceeding
commenced by or against the corporation before its dissolution
may be continued as if the corporation had not been dissolved;
(b) a civil, criminal or administrative action or proceeding
may be brought against the corporation as if the corporation
had not been dissolved;
(c) any property that would have been available to satisfy any
judgment or order if the corporation had not been dissolved
remains available for such purpose; and
(d) title to land belonging to the corporation immediately
before its dissolution remains available to be sold in power of
sale proceedings.
318.(2) Interpretation
318.(2) In this section and section 322,
"proceeding" includes a power of sale proceeding relating to land
commenced pursuant to a mortgage.
318.(3) Service of process
318.(3) For the purposes of this section, the service of any process
on a corporation after its dissolution shall be deemed to be
sufficiently made if it is made upon any person shown on the records
of the Ministry as being a director or officer of the corporation
immediately before the dissolution.
318.(4) Notice of action
318.(4) A person who commences an action, suit or proceeding against
a corporation after its dissolution, shall serve the writ or other
document commencing the action, suit or proceeding, on the Public
Guardian and Trustee in accordance with the rules that apply
generally to service on a party to an action, suit or proceeding.
318.(5) Notice of power of sale proceeding
318.(5) A person who commences a power of sale proceeding relating
to land against a corporation after its dissolution shall serve a
notice of the proceeding on the Public Guardian and Trustee in
accordance with the notice requirements in the Mortgages Act that
apply with respect to a person with an interest in the land recorded
in the records of the appropriate land registry office. 1998, c. 18,
Sched. E, s. 79.
319.(1) Surrender of charter
319.(1) The charter of a corporation incorporated by letters patent
may be surrendered if the corporation proves to the satisfaction of
the Lieutenant Governor,
(a) that the surrender of its charter has been authorized,
(i) by a majority of the votes cast at a meeting of its
shareholders or members duly called for that purpose or by
such other vote as the letters patent or supplementary
letters patent of the corporation provide, or
(ii) by the consent in writing of all the shareholders or
members entitled to vote at such meeting;
(b) that it has parted with its property by distributing it
rateably among its shareholders or members according to their
rights and interests in the corporation;
(c) that it has no debts, obligations or liabilities or its
debts, obligations or liabilities have been duly provided for
or protected or its creditors or other persons having interests
in its debts, obligations or liabilities consent; and
(d) that there are no proceedings pending in any court against
it. R.S.O. 1990, c. C.38, s. 319 (1); 1994, c. 27, s. 78 (12).
319.(2) Acceptance of surrender and dissolution of corporation
319.(2) The Lieutenant Governor, upon due compliance with this
section, may by order accept the surrender of the charter and
declare the corporation to be dissolved on such date as the order
may fix.
319.(3) Where shareholder unknown
319.(3) When a corporation surrenders its charter and a shareholder
or member is unknown or the whereabouts of a shareholder or member
is unknown, it may, by agreement with the Public Trustee, deliver or
convey the person's share of the property to the Public Trustee to
be held in trust for the person, and such delivery or conveyance
shall be deemed to be a rateable distribution among the shareholders
or members for the purposes of clause (1) (b).
319.(4) Where creditor unknown
319.(4) When a corporation surrenders its charter and a creditor is
unknown or the whereabouts of a creditor is unknown, it may, by
agreement with the Public Trustee, pay to the Public Trustee an
amount equal to the amount of the debt due to the creditor to be
held in trust for the creditor, and such payment shall be deemed to
be due protection of the debt for the purposes of clause (1) (c).
319.(5) Power to convert
319.(5) If the share of the property so delivered or conveyed to the
Public Trustee under subsection (3) is in a form other than money,
the Public Trustee may at any time, and within ten years after such
delivery or conveyance shall, convert it into money.
319.(6) Payment to person entitled
319.(6) If the share of the property delivered or conveyed under
subsection (3) or its equivalent in money, or the amount paid under
subsection (4), as the case may be, is claimed by the person
beneficially entitled thereto within ten years after it was so
delivered, conveyed or paid, it shall be delivered, conveyed or paid
to the person, but, if not so claimed, it vests in the Public
Trustee for the use of Ontario, and, if the person beneficially
entitled thereto at any time thereafter establishes the person's
right thereto to the satisfaction of the Lieutenant Governor in
Council, an amount equal to the amount so vested in the Public
Trustee shall be paid to the person.
319.(7) Property now held by Public Trustee
319.(7) Where an order has been made before the 30th day of April,
1954, accepting the surrender of the charter of a corporation and
the Public Trustee is holding property of the corporation in trust
for its shareholders, members or creditors, subsections (5) and (6)
apply to the property so held, except that the ten-year period
mentioned in subsection (6) commences on the 30th day of April,
1954. R.S.O. 1990, c. C.38, s. 319 (2-7).
320. Termination of existence of corporation not incorporated by letters patent
320. The corporate existence of a corporation incorporated otherwise
than by letters patent may be terminated by order of the Lieutenant
Governor upon application therefor by such corporation under like
circumstances, in like manner and with like effect as a corporation
incorporated by letters patent may surrender its charter. R.S.O.
1990, c. C.38, s. 320.
321.(1) Liability of shareholders to creditors
321.(1) Despite the dissolution of a corporation, the shareholders
or members among whom its property has been distributed remain
liable to its creditors to the amount received by them respectively
upon such distribution, and an action may be brought within one year
from the date of such dissolution in a court of competent
jurisdiction to enforce such liability.
321.(2) Action against one shareholder as representing class
321.(2) Where there are numerous shareholders or members, such court
may permit an action to be brought against one or more shareholders
or members as representatives of the class and, if the plaintiff
establishes the plaintiff's claim as creditor, may make an order of
reference and add as parties on the reference all such shareholders
or members as are found and the referee shall determine the amount
that each should contribute towards the plaintiff's claim and may
direct payment of the sums so determined. R.S.O. 1990, c. C.38, s.
321.
322.(1) Forfeiture of undisposed property
322.(1) Any property of a corporation that has not been disposed of
at the date of its dissolution is immediately on the dissolution
forfeit to and vests in the Crown.
322.(2) Exception
322.(2) Despite subsection (1), if a judgment is given or an order
or decision is made or land is sold in an action, suit or proceeding
commenced in accordance with section 318 and the judgment, order,
decision or sale affects property belonging to the corporation
before its dissolution, unless the plaintiff, applicant or mortgagee
has not complied with subsection 318 (4) or (5),
(a) the property shall be available to satisfy the judgment,
order or other decision; and
(b) title to the land shall be transferred to a purchaser free
of the Crown's interest, in the case of a power of sale
proceeding.
322.(3) No notice
322.(3) Despite clause (2) (b), a person who commences a power of
sale proceeding relating to land before the dissolution of a
corporation but the sale of the land was not completed until after
the dissolution, is not required to serve the notice mentioned in
subsection 318 (5) and title to the land may be transferred to a
purchaser free of the Crown's interest. 1998, c. 18, Sched. E, s.80.
323. Evidence of by-laws
323. A copy of any by-law of a corporation under its seal and
purporting to be signed by an officer of the corporation, or a
certificate similarly authenticated to the effect that a person is a
shareholder or member of the corporation and that dues or other sums
payable are due and have not been paid, or that a call or assessment
that has been made is due and has not been paid, shall be received
in all courts as proof, in the absence of evidence to the contrary,
of the by-law or of the statements contained in such certificate.
R.S.O. 1990, c. C.38, s. 323.
324.(1) Service of notice
324.(1) Subject to the letters patent, supplementary letters patent
or by-laws, a notice or demand to be served or made by a corporation
upon a shareholder or member may be served or made personally or
sent by registered letter addressed to the shareholder or member at
the person's last address as shown on the books of the corporation.
324.(2) Time of service
324.(2) Subject to the letters patent, supplementary letters patent
or by-laws, a notice or other document served by mail by a
corporation on a shareholder or member shall be deemed to be served
at the time when it would be delivered in the ordinary course of
mail. R.S.O. 1990, c. C.38, s. 324.
324.(3) Delivery of notices, etc.
324.(3) A notice or other document that is required or permitted by
this Act or the regulations to be sent by the Lieutenant Governor or
the Minister may be sent by ordinary mail or by any method,
including registered mail, certified mail or prepaid courier, where
there is a record by the person who has delivered it that the notice
or document has been sent.
324.(4) Same
324.(4) A notice or other document referred to in subsection (3) may
be sent by telephone transmission of a facsimile of the notice or
other document or by another form of electronic transmission where
there is a record that the notice or other document has been sent.
324.(5) Deemed delivery
324.(5) A notice or other document sent by mail by the Lieutenant
Governor or Minister shall be deemed to have been received by the
intended recipient on the earlier of,
(a) the day the intended recipient actually receives it; or
(b) the fifth business day after the day it is mailed.
324.(6) Same
324.(6) A notice or other document sent by a method referred to in
subsection (4) shall be deemed to have been received by the intended
recipient on the earlier of,
(a) the day the intended recipient actually receives it; or
(b) the first business day after the day the transmission is
sent by the Lieutenant Governor or Minister. 1994, c. 27, s. 78
(13).
325. Proof of matters under this Act
325. Proof of any matter that is necessary to be made under this Act
may be made by certificate. R.S.O. 1990, c. C.38, s. 325.
326. Reciprocal insurance
326. A corporation that insures property with or insures the
property of other persons, where such insurance is reciprocal and
for protection only and not for profit, shall not be deemed to be an
insurer or an insurance corporation within the meaning of this Act.
R.S.O. 1990, c. C.38, s. 326.
326.1.(1) Powers of Minister
326.1.(1) The Minister may make regulations prescribing the form and
content of letters patent, supplementary
letters patent, or other documents or notices that this Act requires
to be filed.
326.1.(2) Fees
326.1.(2) The Minister may by order require the payment of fees and
approve the amount of the fees to be paid under this Act for,
(a) the filing of letters patent, supplementary letters patent
and other documents or other services; and
(b) search reports, copies of documents and information, or
other services. 1998, c. 18, Sched. E, s. 81.
327. Regulations
327. The Lieutenant Governor in Council may make regulations,
. . . . .
Note: Despite the repeal of clause (a) by the Statutes of Ontario, 1998,
chapter 18, Schedule E, subsection 82 (1), regulations made under clause
(a), as that clause read immediately before March 1, 1999, continue until
the Minister makes an order under subsection 326.1 (2), as enacted by the
Statutes of Ontario, 1998, chapter 18, Schedule E, section 81, that is
inconsistent with those regulations. See: 1998, c. 18, Sched. E, s. 82
(2). Note: Despite the repeal of clause (a) by the Statutes of Ontario,
1998, chapter 18, Schedule E, subsection 82 (1), the Lieutenant Governor
in Council may by regulation revoke regulations made under clause
(a), as that clause read immediately before March 1, 1999, if the
Minister makes an order under subsection 326.1 (2), as enacted by
the Statutes of Ontario, 1998, chapter 18, Schedule E, section 81,
that is inconsistent with those regulations. See: 1998, c. 18,
Sched. E, s. 82 (3).
(b) respecting any matter that the Lieutenant Governor in Council
considers requisite for carrying out the objects of this Act, and,
without limiting the generality of the foregoing, respecting names
of corporations or classes thereof, objects of corporations,
authorized capital of companies, the preferences, rights,
conditions, restrictions, limitations or prohibitions attaching to
shares or classes of shares of companies, or any other matter
pertaining to letters patent, supplementary letters patent or orders
or the applications therefor. R.S.O. 1990, c. C.38, s. 327; 1998, c.
18, Sched. E, s. 82 (1).
328. Fees to be paid in advance
328. No letters patent and no supplementary letters patent shall be
issued and no order shall be made and no document shall be accepted
for filing under this Act until all fees therefor have been paid.
R.S.O. 1990, c. C.38, s. 328.
329. Appeal
329. An appeal lies to the Divisional Court from any order made by a
court under this Act. R.S.O. 1990, c. C.38, s. 329.
330.(1) Untrue statements
330. 330.(1) Every person who makes or assists in making a statement
in any return, certificate, financial statement or other document
required by or for the purposes of this Act or the regulations made
under this Act, knowing it to be untrue, is guilty of an offence and
on conviction is liable to a fine of not more than $1,000 or to
imprisonment for a term of not more than three months, or to both.
330.(2) Limitation of action
330.(2) No prosecution under subsection (1) shall be commenced more
than one year after the facts upon which the prosecution is based
first came to the personal knowledge of the Minister or Deputy
Minister. R.S.O. 1990, c. C.38, s. 330.
331. General penalty
331. Every corporation that, and every person who, being a director
or officer of the corporation, or acting on its behalf, commits any
act contrary to this Act, or fails or neglects to comply with any
such provision, is guilty of an offence and on conviction, if no
penalty for such act, failure or neglect is expressly provided by
this Act, is liable to a fine of not more than $200. R.S.O. 1990, c.
C.38, s. 331.
332. Aggrieved shareholders
332. Where a shareholder or member or creditor of a corporation is
aggrieved by the failure of the corporation or a director, officer
or employee of the corporation to perform any duty imposed by this
Act, the shareholder, member or creditor, despite the imposition of
any penalty and in addition to any other rights that he, she or it
may have, may apply to the court for an order directing the
corporation, director, officer or employee, as the case may be, to
perform such duty, and upon such application the court may make such
order or such other order as the court thinks fit. R.S.O. 1990, c.
C.38, s. 332.
333.(1) Order for compliance
333.(1) Where it appears to the Commission that any person or
company to which section 73, subsection 85 (1) or subsection 86 (1)
applies has failed to comply with or is contravening any such
provision, despite the imposition of any penalty in respect of such
non-compliance or contravention, the Commission may apply to the
court for an order directing such person or company to comply with
such provision or for an order restraining such person or company
from contravening such provision, and upon the application, the
court may make such order or such other order as the court thinks
fit.
333.(2) Appeal
333.(2) An appeal lies to the Divisional Court from an order made
under subsection (1). R.S.O. 1990, c. C.38, s. 333.
334. Relief from compliance with Act
334. The Lieutenant Governor in Council may relieve a corporation
incorporated before the 30th day of April, 1954, from compliance
with any provision of this Act. R.S.O. 1990, c. C.38, s. 334.
SCHEDULE
CONVERSION OF JOINT STOCK LIFE
COMPANIES INTO MUTUAL COMPANIES
Details of plan to be set forth in by-law
1. The terms and provisions of any plan referred to in section
211 of the Corporations Act shall be set forth in detail in a by-law
made by the directors and confirmed at a special general meeting of
the company duly called for the purpose of considering the by-law,
and there shall be recorded in the minutes of the meeting the number
of votes for and the number of votes against confirmation of the by-
law, the votes of shareholders and the votes of policyholders being
recorded separately.
Sanction of by-law by Lieutenant Governor in Council
2. No such by-law becomes effective until sanctioned by the
Lieutenant Governor in Council, and in no case shall any such by-law
be sanctioned unless the Lieutenant Governor in Council is satisfied
that,
(a) the conversion of the company into a mutual company may
reasonably be expected to be achieved under the terms of the
by-law and in accordance with this paragraph;
(b) the paid-up capital of the company has ceased to be an
important factor in safeguarding the interests of the
policyholders of the company, having regard to the quality and
amount of assets of the company, the surplus of the company
relative to its liabilities, the nature of the business carried
on by the company and any other considerations deemed by the
Lieutenant Governor in Council to be relevant;
(c) the majority of the votes cast by shareholders and the
majority of the votes cast by policyholders at the special
general meeting referred to in paragraph 1, whether in person
or by proxy, were in favour of confirmation of the by-law;
(d) the company holds offers from shareholders, in such terms
as to preclude the withdrawal thereof prior to notice by the
company in accordance with paragraph 13, to sell to the
company, at a price fixed by the directors, not less than 25
per cent of all issued and outstanding shares of the capital
stock of the company immediately upon the sanction of the by-
law by the Lieutenant Governor in Council, or not less than 50
per cent of all issued and outstanding shares of the capital
stock of the company within such period, commencing immediately
upon the sanction of the by-law by the Lieutenant Governor in
Council, as is specified in the by-law;
(e) the amount required to purchase 25 per cent of the issued
and outstanding shares of the capital stock of the company at
the price fixed by the directors for the purposes of clause (d)
does not exceed the maximum amount, determined in accordance
with paragraph 9, that may be applied by the company,
immediately upon the sanction of the by-law by the Lieutenant
Governor in Council, in payment for shares purchased under the
terms of the by-law; and
(f) the price fixed by the directors for the purposes of clause
(d) is fair and reasonable in the circumstances.
Prices to be paid for shares purchased under by-law
3. Upon the sanction of the by-law by the Lieutenant Governor in
Council, the price fixed for the purposes of clause (d) of paragraph
2 shall continue to be the price that may be paid for shares
purchased under the terms of the by-law until such price is changed
by the directors in accordance with paragraph 4.
Change in price, when effective
4. The directors may from time to time change the price to be
paid for shares purchased under the terms of the by-law, but no such
change becomes effective until approved by the Minister on the
report of the Superintendent.
Period for which price to remain in effect
5. The price fixed for the purposes of clause (d) of paragraph 2
and any subsequent change in price approved in accordance with
paragraph 4 shall remain in effect for a period of not less than six
months from the date of sanction of the by-law or the date of
approval by the Minister, as the case may be.
Payment
6. All shares purchased under the terms of the by-law shall be
paid for by the company in full at the time of the purchase thereof,
but nothing in this paragraph shall be construed as prohibiting the
company from applying, in payment for any shares so purchased, the
full amount of the purchase price thereof by promissory note,
payable at a fixed or determinable future time not later than ten
years from the date of the making thereof and bearing a rate of
interest fixed by the directors and approved by the Minister on the
report of the Superintendent.
Date for commencement of purchase of shares
7. The by-law shall fix a day for the commencement of purchase of
shares under the terms of the by-law, which day shall be not sooner
than the day following the day the by-law is sanctioned by the
Lieutenant Governor in Council.
Purchase of shares offered for sale
8. Subject to paragraph 9, the company shall purchase all shares
offered for sale under the terms of the by-law on the day or days
fixed by the terms of the offer in each case for the sale of those
shares and at the price in effect on the day the offer was received
or the day fixed by the by-law for the purposes of paragraph 7,
whichever is the later, except that no such purchase shall be made
prior to the day so fixed by the by-law.
Limitation
9. Despite anything in this Schedule, the maximum amount that may
be applied by the company at any particular time in payment for
shares purchased under the terms of the by-law is the amount by
which,
(a) the aggregate of the surplus and general or contingency
reserves of the company, after deducting the excess of the book
value over the par value of any shares purchased under the
terms of the by-law on or before the date as of which the
condition and affairs of the company are required to be shown
in the most recent annual statement as required by the
Corporations Act,
exceeds the aggregate of,
(b) 6 per cent of the total assets of the company, or such
lesser percentage of the total assets of the company as may be
approved by the Lieutenant Governor in Council, upon
application by the company, as safe and reasonable in the
circumstances having regard to the bases and methods used in
the computation of the policy reserves of the company, the
quality of its assets, the nature of the business transacted by
the company, the earnings of the company and any other matters
deemed by the Lieutenant Governor in Council to be relevant
thereto; and
(c) the total amount applied by the company before that
particular time in payment for any shares purchased under the
terms of the by-law after the date referred to in clause (a).
Idem
10. For the purposes of paragraph 9, the assets, surplus and
general or contingency reserves of the company and the book value of
any shares purchased under the terms of the by-law shall be taken as
shown in the annual statement referred to in clause (a) of paragraph
9.
Number of shares to be purchased from each shareholder offering shares
11. Where, by reason of paragraph 9, the company may, at any
particular time, purchase some but not all of the shares in respect
of which offers for sale at that time have been received, the amount
that may be applied by the company at that time in payment for
shares purchased under the terms of the by-law shall be applied by
the company by apportionment among all of the shares so offered for
sale at that time, or any of them, in such manner as is specified in
the by-law.
Register to be kept
12. The company shall cause a register to be kept in which shall
be recorded the offers for sale of shares under the terms of the by-
law in the order in which such offers are received by the company,
showing, in respect of each such offer,
(a) the date of receipt by the company of the offer;
(b) the name and address of the shareholder making the offer;
(c) the number of shares so offered by the shareholder making
the offer and the day or days fixed by the terms of the offer
for the sale of those shares;
(d) the price at which each of the shares so offered may be
purchased;
(e) the date of purchase, if any, of each of the shares so
offered and the number of shares purchased; and
(f) the date of withdrawal, if any, of the offer and the number
of shares affected thereby.
Notice to shareholders of discontinuation of purchases
13. Where, by reason of paragraph 9, the company is required to
discontinue the purchase of shares under the terms of the by-law,
the company shall give notice of such discontinuation to each
shareholder on the register whose offer for the sale of shares has
not been fully taken up by the company, but any such offer as
regards shares not so purchased shall continue to be effective and
shall maintain its place on the register until withdrawn by the
shareholder by notice in writing to the company.
Shares purchased: general
14. Where the company has purchased any shares of the capital
stock of the company under the terms of the by-law,
(a) the number of policyholders' directors of the company shall
at all times thereafter be not less than,
(i) one-third of the total number of directors, or
(ii) that proportion of the total number of directors, as
nearly as may be, that the total number of shares purchased
under the terms of the by-law is of the total number of
shares outstanding immediately prior to the sanction of the
by-law by the Lieutenant Governor in Council,
whichever is the greater, except that nothing in this clause
shall be held to require an increase in the number of
policyholders' directors except as vacancies occur among the
shareholders' directors;
(b) the company shall not thereafter sell any of the shares so
purchased, issue any new capital stock or make any calls on
shares of the capital stock subscribed;
(c) any dividends thereafter payable to shareholders shall be
at a rate not less than the average rate paid in the three
years immediately preceding the sanction of the by-law by the
Lieutenant Governor in Council, unless the company establishes
to the satisfaction of the Minister that a reduction therein is
justified by reason of the earnings and general financial
condition of the company; and
(d) shares purchased under the terms of the by-law rank equally
with other shares in the declaration of dividends to
shareholders, but any dividends that may be payable in respect
of shares so purchased shall be paid by transfer of the
applicable amount from the shareholders' account to the
insurance funds of the company.
Idem
15. In respect of each share purchased under the terms of the by-law,
until the capital stock of the company has
been cancelled in accordance with paragraph 20,
(a) the company may include in its assets shown in the annual
statement required by the Corporations Act an amount not
exceeding the purchase price of the share, minus one-fifth of
the excess of the purchase price over the par value thereof for
each complete year that has elapsed since the date of purchase
of the share; and
(b) the policyholders' directors shall have additional voting
rights corresponding to the voting rights that might have been
exercised by the holder of the share if the holder had not sold
it, and, unless the by-law otherwise provides, such additional
voting rights shall be divided as nearly as may be equally
among the policyholders' directors, and the remainder, if any,
shall be exercised by such one of the policyholders' directors
as is designated for the purpose by resolution of all of the
directors.
Notice where 90 per cent or more of shares acquired by company
16. At such time as the company first acquires 90 per cent or
more of the shares of its capital stock, it shall notify the
Minister and each of the remaining shareholders of the company to
that effect, and, for the purposes of this paragraph, notice to any
shareholder shall be deemed to have been given by the company if the
company has forwarded to the shareholder by registered mail, at the
shareholder's address shown in the book or books in which the names
of the shareholders of the company are recorded, the notice required
by this paragraph.
Contents of notice
17. The notice required by paragraph 16 to be given to each of
the remaining shareholders of the company shall request each such
shareholder to offer the shareholder's shares for sale forthwith to
the company, and shall state therein the substance of paragraph 18.
Acquisition of remaining shares by company
18. All shares of a shareholder remaining outstanding at the
expiration of six months from the date of the notice required by
paragraph 16, or at the expiration of such further period as may be
required by reason of paragraph 9, shall, upon tender by the company
to the shareholder of an amount equal to the price in effect,
(a) in the case of shares in respect of which any offer for
sale was received by the company prior to the date of the
notice, on the day the offer was received; or
(b) in the case of any other shares, on the date of the notice,
be deemed to have been purchased by the company, and, for the
purposes of this paragraph, tender shall be deemed to have been made
to a shareholder by the company if made to the shareholder in person
or by registered mail forwarded to the shareholder at the
shareholder's address shown in the book or books referred to in
paragraph 16.
Amount tendered to be retained for payment
19. Where tender of an amount in accordance with paragraph 18 has
been made and the amount so tendered has not been accepted, the
amount so tendered shall be retained by the company for payment to
the person entitled thereto, and until so paid shall be shown on the
books of the company as a liability.
Retirement and cancellation of capital stock
20. Where the company has purchased or is deemed by paragraph 18
to have purchased all of the shares of the capital stock of the
company and the shares have been written down in the books of the
company to their par value, the capital stock of the company shall
thereupon be retired and cancelled by resolution of the board of
directors, and the company shall then become a mutual company
without capital stock, having for its members the participating
policyholders and such other policyholders, if any, as may be
authorized by by-law, and the directors shall take all necessary
steps to reorganize the affairs of the company accordingly.
No change in by-law except with sanction of Lieutenant Governor in Council
21. No change in any by-law of a company described in paragraph 1
shall be made after the sanction of the by-law by the Lieutenant
Governor in Council, except by a subsequent by-law of the company
made by the directors and confirmed at a special general meeting of
the company duly called for that purpose, and no such subsequent by-
law becomes effective until sanctioned by the Lieutenant Governor in
Council.
Definitions
22. In this Schedule,
"Minister" means the member of the Executive Council charged for
the time being by the Lieutenant Governor in Council with the
administration of the Insurance Act;
"Superintendent" means the Superintendent of Financial Services.
R.S.O. 1990, c. C.38, Scheers 1997, c. 28, s. 51.
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