CONSULTATION DRAFT

TABLE OF PROVISIONS

THIRD SERIES OF PROPOSALS TO HARMONIZE FEDERAL LAW WITH THE CIVIL LAW OF THE PROVINCE OF QUEBEC AND TO AMEND CERTAIN ACTS IN ORDER TO ENSURE THAT EACH LANGUAGE VERSION TAKES INTO ACCOUNT THE COMMON LAW AND THE CIVIL LAW

SHORT TITLE

Short title

1. Third series of Federal Law–Civil Law Harmonization Proposals.

R.S., c. C-44; 1994, c. 24, s. 1(F)

CANADA BUSINESS CORPORATIONS ACT

2001, c. 14, s. 1(5)

2. (1) The definitions "call", "personal representative", "put" and "security interest" in subsection 2(1) of the Canada Business Corporations Act are replaced by the following:

"call"

« option d’achat »

"call" means an option negotiable by delivery to demand delivery of a specified number or amount of securities at a fixed price within a specified time but does not include an option or right to acquire securities of the corporation that granted the option or right to acquire;

"personal representative"

« représentant personnel »

"personal representative" means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a liquidator of a succession, an administrator of the property of others, a guardian, a tutor, a curator, a receiver, a sequestrator, an agent, a mandatary or an attorney;

"put"

« option de vente »

"put" means an option negotiable by delivery to deliver a specified number or amount of securities at a fixed price within a specified time;

"security interest"

« sûreté »

"security interest" means an interest or real right in or charge on property of a corporation to secure payment of a debt or performance of any other obligation of the corporation;

Explanatory Notes

Canada Business Corporation Act

Clause 2: (1) Existing text of the definitions:

"call" means an option transferable by delivery to demand delivery of a specified number or amount of securities at a fixed price within a specified time but does not include an option or right to acquire securities of the corporation that granted the option or right to acquire;

"personal representative" means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a receiver, an agent, a liquidator of a succession, a guardian, a tutor, a curator, a mandatary or an attorney;

"put" means an option transferable by delivery to deliver a specified number or amount of securities at a fixed price within a specified time;

"security interest" means an interest in or charge on property of a corporation to secure payment of a debt or performance of any other obligation of the corporation;

2001, c. 14, s. 1(3)

(2) Paragraph (c) of the definition "associate" in subsection 2(1) of the English version of the Act is replaced by the following:

(c) a trust or estate or succession in which that person has a substantial beneficial interest or in respect of which that person serves as a trustee or liquidator of the succession or in a similar capacity,

Explanatory Notes

(2) Relevant portion of the definition:

... 

"associate", in respect of a relationship with a person, means

(c) a trust or estate in which that person has a substantial beneficial interest or in respect of which that person serves as a trustee or liquidator of the succession or in a similar capacity,

(3) The definition "beneficial ownership" in subsection 2(1) of the English version of the Act is replaced by the following:

"beneficial ownership"

« véritable propriétaire » et « propriété effective »

"beneficial ownership" includes ownership through any trustee, legal representative, agent or mandatary, or other intermediary;

2001, c. 14, s. 1(2)(F)

(4) The definitions "affaires internes" and "mandataire" in subsection 2(1) of the French version of the Act are replaced by the following:

« affaires internes »

"affairs"

« affaires internes » Les relations, autre que celles découlant d’activités commerciales, entre la société et les personnes morales appartenant au même groupe et leurs actionnaires, administrateurs et dirigeants.

« mandataire »

"mandatary"

« mandataire » Dans la province de Québec, s’entend notamment de l’ayant cause.

Explanatory Notes

(3) and (4) Existing text of the definitions:

"affairs" means the relationships among a corporation, its affiliates and the shareholders, directors and officers of such bodies corporate but does not include the business carried on by such bodies corporate;

"beneficial ownership" includes ownership through any trustee, legal representative, agent or other intermediary;

(5) Subsection 2(1) of the English version of the Act is amended by adding the following in alphabetical order:

"mandatary"

« mandataire »

"mandatary" in the Province of Quebec, includes a successor;

Explanatory Notes

(5) New.

3. Paragraph 5(1)(b) of the Act is replaced by the following:

(b) is declared incapable by a court in Canada or in another country, or

Explanatory Notes

Clause 3: Relevant portion of subsection 5(1):

5. (1) One or more individuals not one of whom

  • ... 

  • (b) is of unsound mind and has been so found by a court in Canada or elsewhere, or

4. (1) The portion of subsection 14(2) of the English version of the Act before paragraph (a) is replaced by the following:

Pre-incorporation and pre-amalgamation contracts

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

Explanatory Notes

Clause 4: (1) Relevant portion of subsection 14(2):

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

2001, c. 14, s. 7(2)

(2) Subsection 14(3) of the English version of the Act is replaced by the following:

Application to court

(3) Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted or, in the Province of Quebec, ratified by the corporation, a party to the contract may apply to a court for an order respecting the nature and extent of the obligations and liability under the contract of the corporation and the person who entered into, or purported to enter into, the contract in the name of or on behalf of the corporation. On the application, the court may make any order it thinks fit.

Explanatory Notes

(2) Existing text of subsection 14(3):

(3) Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order respecting the nature and extent of the obligations and liability under the contract of the corporation and the person who entered into, or purported to enter into, the contract in the name of or on behalf of the corporation. On the application, the court may make any order it thinks fit.

5. Subsection 15(1) of the Act is replaced by the following:

Capacity of a corporation

15. (1) A corporation has the capacity of a natural person and, subject to this Act and in a province other than Quebec, the rights, powers and privileges of a natural person.

Explanatory Notes

Clause 5: Existing text of subsection 15(1):

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

2001, c. 14, s. 8

6. (1) The portion of subsection 18(1) of the Act before paragraph (a) is replaced by the following:

Authority of directors, officers and agents

18. (1) No corporation, no guarantor of an obligation of a corporation and, in the Province of Quebec, no surety may assert against a person dealing with the corporation or against a person who acquired rights from the corporation that

2001, c. 14, s. 8

(2) Paragraphs 18(1)(d) and (e) of the English version of the Act are replaced by the following:

  • (d) a person held out by a corporation as a director, officer, agent or mandatary of the corporation has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the corporation or usual for a director, officer, agent or mandatary;

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

Explanatory Notes

Clause 6: (1) and (2) Relevant portions of subsection 18(1):

18. (1) No corporation and no guarantor of an obligation of a corporation may assert against a person dealing with the corporation or against a person who acquired rights from the corporation that

  • ... 

  • (d) a person held out by a corporation as a director, an officer or an agent of the corporation has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the corporation or usual for a director, officer or agent;

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

2001, c. 14, s. 11(1)

7. (1) Subsection 21(1.1) of the English version of the Act is replaced by the following:

Requirement for affidavit — securities register

(1.1) Any person described in subsection (1) who wishes to examine the securities register of a distributing corporation must first make a request to the corporation, its agent or mandatary, accompanied by an affidavit referred to in subsection (7). On receipt of the affidavit, the corporation, its agent or mandatary shall allow the applicant access to the securities register during the corporation’s usual business hours, and, on payment of a reasonable fee, provide the applicant with an extract from the securities register.

Explanatory Notes

Clause 7: (1) Existing text of subsection 21(1.1):

(1.1) Any person described in subsection (1) who wishes to examine the securities register of a distributing corporation must first make a request to the corporation or its agent, accompanied by an affidavit referred to in subsection (7). On receipt of the affidavit, the corporation or its agent shall allow the applicant access to the securities register during the corporation’s usual business hours, and, on payment of a reasonable fee, provide the applicant with an extract from the securities register.

2001, c. 14, s. 11(2), s. 135 (Sch., s. 2) (E)

(2) Subsections 21(3) and (4) of the English version of the Act are replaced by the following:

Shareholder lists

(3) Shareholders and creditors of a corporation, their personal representatives, the Director and, if the corporation is a distributing corporation, any other person, on payment of a reasonable fee and on sending to a corporation, its agent or mandatary the affidavit referred to in subsection (7), may on application require the corporation, its agent or mandatary to provide within 10 days after the receipt of the affidavit a list (in this section referred to as the "basic list") made up to a date not more than 10 days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

Supplemental lists

(4) A person requiring a corporation to provide a basic list may, by stating in the affidavit referred to in subsection (3) that they require supplemental lists, require the corporation, its agent or mandatary on payment of a reasonable fee to provide supplemental lists setting out any changes from the basic list in the names or addresses of the shareholders and the number of shares owned by each shareholder for each business day following the date the basic list is made up to.

Explanatory Notes

(2) Existing text of subsections 21(3) and (4):

(3) Shareholders and creditors of a corporation, their personal representatives, the Director and, if the corporation is a distributing corporation, any other person, on payment of a reasonable fee and on sending to a corporation or its agent the affidavit referred to in subsection (7), may on application require the corporation or its agent to furnish within ten days after the receipt of the affidavit a list (in this section referred to as the "basic list") made up to a date not more than ten days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

(4) A person requiring a corporation to furnish a basic list may, by stating in the affidavit referred to in subsection (3) that they require supplemental lists, require the corporation or its agent on payment of a reasonable fee to furnish supplemental lists setting out any changes from the basic list in the names or addresses of the shareholders and the number of shares owned by each shareholder for each business day following the date the basic list is made up to.

(3) The portion of subsection 21(5) of the English version of the Act before paragraph (a) is replaced by the following:

When supplemental lists to be provided

(5) The corporation, its agent or mandatary shall provide a supplemental list required under subsection (4)

Explanatory Notes

(3) Relevant portion of subsection 21(5):

(5) The corporation or its agent shall furnish a supplemental list required under subsection (4)

8. The portion of subsection 22(2) of the English version of the Act before paragraph (a) is replaced by the following:

Precautions

(2) A corporation, its agents or mandataries shall take reasonable precautions to

Explanatory Notes

Clause 8: Relevant portion of subsection 22(2):

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

2001, c. 14, s. 12

9. Subsection 23(2) of the English version of the Act is replaced by the following:

Validity of unsealed documents

(2) A document executed or, in the Province of Quebec, signed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.

Explanatory Notes

Clause 9: Existing text of subsection 23(2):

(2) A document executed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.

2001, c. 14, s. 14(1)

10. Subparagraph 26(3)(a)(ii) of the English version of the Act is replaced by the following:

(ii) shares of, or another interest or right in, a body corporate that immediately before the exchange, or that because of the exchange, did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, or

Explanatory Notes

Clause 10: Relevant portion of subsection 26(3):

(3) Despite subsection (2), a corporation may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the consideration that it receives in an exchange if the corporation issues shares

  • (a) in exchange for

  • ... 

    (ii) shares of, or another interest in, a body corporate that immediately before the exchange, or that because of the exchange, did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, or

11. Subsection 27(3) of the French version of the Act is replaced by the following:

Limites relatives aux séries

(3) Les droits, privilèges, conditions ou restrictions attachés à une série d’actions dont l’émission est autorisée en vertu du présent article ne peuvent lui conférer, en matière de dividendes ou de remboursement de capital, un rang préférentiel par rapport aux séries de la même catégorie déjà en circulation.

Explanatory Notes

Clause 11: Existing text of subsection 27(3):

(3) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section shall confer on a series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding.

12. Subsection 29(2) of the French version of the Act is replaced by the following:

Droits transférables

(2) Les privilèges de conversion sont transférables ou non transférables, ainsi que l’option et le droit d’acquérir des valeurs mobilières d’une société, qui peuvent être séparés ou non séparés des valeurs mobilières auxquelles ils sont attachés.

Explanatory Notes

Clause 12: Existing text of subsection 29(2):

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

2001, c. 14, s. 17(2)

13. The portion of subsection 30(2) of the French version of the Act before paragraph (a) is replaced by the following:

Détention par la filiale des actions d’une société

(2) Sous réserve de l’article 31, au cas où une personne morale, filiale d’une société, détient des actions de la société, celle-ci doit l’obliger à disposer de ces actions, notamment par vente, au cours des cinq ans suivant la date, selon le cas :

Explanatory Notes

Clause 13: Relevant portion of subsection 30(2):

(2) Subject to section 31, a corporation shall cause a subsidiary body corporate of the corporation that holds shares of the corporation to sell or otherwise dispose of those shares within five years from the date

2001, c. 14, s. 18(1) (F)

14. (1) Subsection 31(1) of the Act is replaced by the following:

Exception

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

Explanatory Notes

Clause 14: (1) Relevant portion of subsection 31(1):

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