Canada Cooperatives Act (S.C. 1998, c. 1)

Marginal note:Election of directors

• 133. (1) If the holders of a class or series of investment shares of a cooperative have, under section 124, a right to elect or appoint one or more directors, or have a right to elect or appoint one or more directors by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled, the directors must call the following meetings for the purpose of electing or appointing the director or directors:

  • (a) a special meeting of the holders of the class or series of investment shares, to be called within six months or at any earlier date that may be specified in the articles, after the date on which investment shares of the class or series are first issued or after the event has occurred or the condition has been fulfilled; and

  • (b) an annual meeting of those holders for every subsequent year.

• Marginal note:Cumulative voting

  (2) If the articles so provide, directors who are to be elected by holders of investment shares may be elected by cumulative voting.

• Marginal note:When cumulative voting

  (3) If the articles provide for cumulative voting,

  • (a) the articles must require a fixed number of directors to be elected by the holders of investment shares, and not a minimum and maximum number of directors;

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

  • (c) a separate vote of shareholders must be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting two or more persons to be elected by a single resolution;

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

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

  • (f) each director ceases to hold office at the close of the first annual meeting after their election of the holders of investment shares entitled to elect that director;

  • (g) a director may only be removed from office if the number of votes cast in favour of the director’s removal is greater than the product of the number of directors and the number of votes cast against the motion; and

  • (h) the number of directors required by the articles may only be decreased if the votes cast in favour of the motion to decrease the number of directors is greater than the product of the number of directors and the number of votes cast against the motion.

Marginal note:Amendment of articles

• 134. (1) The holders of investment shares of a class or, subject to subsection (4), of a series are, unless the articles provide otherwise in the case of an amendment referred to in paragraphs (a), (b) and (e), entitled to vote separately as a class or series on a proposal to amend the articles to

  • (a) increase or decrease any maximum number of authorized investment shares of the class, or increase any maximum number of authorized investment shares of a class having rights or privileges equal or superior to the investment shares of the class;

  • (b) effect an exchange, reclassification or cancellation of all or part of the investment shares of the class;

  • (c) add, change or remove the rights, privileges, restrictions or conditions attached to the investment shares of the class, including

    • (i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends,

    • (ii) add, remove or change prejudicially redemption rights,

    • (iii) reduce or remove a dividend preference or a liquidation preference, or

    • (iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of a cooperative, or sinking fund provisions;

  • (d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the investment shares of the class;

  • (e) create a new class of investment shares equal or superior to the investment shares of the class;

  • (f) make any class of investment shares having rights or privileges inferior to the investment shares of the class equal or superior to the investment shares of the class;

  • (g) effect an exchange or create a right of exchange of all or part of the investment shares of another class into the investment shares of the class; or

  • (h) constrain the issue, transfer or ownership of the investment shares of the class or change or remove a constraint.

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of a proposal to amend the articles to add a right or privilege for a holder to convert investment shares of a class or series into investment shares of another class or series that is subject to a constraint permitted under paragraph 130(1)(c) but otherwise equal to the class or series first mentioned.

• Marginal note:Deeming provision

  (3) For the purpose of paragraph (1)(e), a new class of investment shares, the issue, transfer or ownership of which is to be constrained by an amendment to the articles under paragraph 130(1)(c), that is otherwise equal to an existing class of shares is deemed not to be equal or superior to the existing class of shares.

• Marginal note:Limitation

  (4) The holders of a series of investment shares of a class are entitled to vote separately as a series under subsection (1) only if the series is affected by an amendment in a manner different from other investment shares of the same class.

• Marginal note:Right to vote

  (5) Subsection (1) applies whether or not investment shares of a class or series otherwise carry the right to vote.

• Marginal note:Separate resolutions

  (6) A proposed amendment to the articles referred to in subsection (1) is adopted when it is approved by a special resolution of the members and by a separate special resolution of the shareholders of each class.