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

Act current to 2022-09-22 and last amended on 2022-08-31. Previous Versions

PART 14Trust Indentures (continued)

General (continued)

Marginal note:Trustee application

 A trustee, or at least one of the trustees if more than one is appointed, must be a trust company incorporated under the laws of Canada or a province and authorized to carry on business as a trustee.

Marginal note:List of security holders

  •  (1) A holder of debt obligations issued under a trust indenture may, on payment to the trustee of a reasonable fee and on delivery of a statutory declaration to the trustee, require the trustee to provide, no later than fifteen days after the delivery to the trustee of the statutory declaration, a list setting out the following information, as shown on the records maintained by the trustee on the day the statutory declaration is delivered to the trustee:

    • (a) the names and addresses of the registered holders of the outstanding debt obligations;

    • (b) the principal amount of outstanding debt obligations of each such holder; and

    • (c) the total principal amount of debt obligations outstanding.

  • Marginal note:Duty of issuer

    (2) On the demand of a trustee, the issuer must provide the trustee with the information required to enable the trustee to comply with subsection (1).

  • Marginal note:When applicant is entity

    (3) If the person requiring the trustee to provide a list under subsection (1) is an entity, the statutory declaration required under that subsection may be made by a director or an officer of the entity or a person acting in a similar capacity.

  • Marginal note:Contents of statutory declaration

    (4) The statutory declaration must state

    • (a) the name and address of the person requiring the trustee to provide the list and, if the person is an entity, its address for service; and

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

  • Marginal note:Use of list

    (5) No person shall use a list obtained under this section except in connection with

    • (a) an effort to influence the voting of the holders of debt obligations;

    • (b) an offer to acquire debt obligations; or

    • (c) any other matter relating to the debt obligations or the affairs of the issuer or guarantor of them.

Marginal note:Compliance with trust indentures

  •  (1) An issuer or a guarantor of a debt obligation issued or to be issued under a trust indenture must provide the trustee with evidence of compliance with the conditions in the trust indenture before undertaking

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

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

    • (c) the satisfaction and discharge of the trust indenture.

  • Marginal note:Compliance by issuer or guarantor

    (2) On the demand of a trustee, the issuer or guarantor must provide the trustee with evidence of compliance with the conditions in the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

  • Marginal note:Evidence of compliance

    (3) The following documents constitute evidence of compliance for the purposes of subsections (1) and (2):

    • (a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in subsections (1) and (2) have been complied with;

    • (b) an opinion of legal counsel that the conditions of the trust indenture requiring review by legal counsel have been complied with, if the trust indenture requires compliance with conditions that are subject to review by legal counsel; and

    • (c) an opinion or report of the auditors of the issuer or guarantor, or any other accountant that the trustee selects, that the conditions of the trust indenture have been complied with, if the trust indenture requires compliance with conditions that are subject to review by auditors or accountants.

  • Marginal note:Further evidence of compliance

    (4) The evidence of compliance described in subsection (3) must include a statement by the person giving the evidence

    • (a) declaring that the person has read and understands the conditions of the trust indenture referred to in subsections (1) and (2);

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

    • (c) declaring that the person has made any examination or investigation that the person believes necessary to enable the statements to be made or the opinions contained or expressed in the statement to be given.

Marginal note:Trustee may require evidence

  •  (1) On request of a trustee, the issuer or guarantor must provide the trustee with evidence in any form that the trustee requires of compliance with any condition relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

  • Marginal note:Certificate of compliance

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

Marginal note:Notice of default

 A trustee must, no later than thirty days after the trustee becomes aware of the occurrence of an event of default, give to the holders of debt obligations issued under a trust indenture notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee believes on reasonable grounds that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs the issuer and guarantor in writing.

Marginal note:Duty

  •  (1) In exercising powers and discharging duties, the trustee must

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

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

  • Marginal note:Reliance on statements

    (2) Despite subsection (1), a trustee is not liable if the trustee relies in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

Marginal note:No exculpation

 No term of a trust indenture or of an agreement between a trustee and the holders of debt obligations issued under the indenture or agreement or between the trustee and the issuer or guarantor operates to relieve a trustee from the duties imposed on the trustee by this Part.

PART 15Receivers, Receiver-managers and Sequestrators

Marginal note:Functions of receiver or sequestrator

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

  • 1998, c. 1, s. 278
  • 2011, c. 21, s. 102

Marginal note:Functions of receiver-manager

 A receiver-manager of a cooperative may carry on any business of the cooperative to protect the security interest of those on behalf of whom the receiver-manager is appointed.

  • 1998, c. 1, s. 279
  • 2011, c. 21, s. 102

Marginal note:Directors’ powers cease

 If a receiver, receiver-manager or sequestrator is appointed by a court or under an instrument or act, no director shall exercise the directors’ powers that the receiver, receiver-manager or sequestrator is authorized to exercise until the receiver, receiver-manager or sequestrator is discharged.

  • 1998, c. 1, s. 280
  • 2011, c. 21, s. 103(E)

Marginal note:Appointment by court

  •  (1) A receiver, receiver-manager or sequestrator appointed by a court must act in accordance with any directions of the court.

  • Marginal note:Appointment under instrument or act

    (2) A receiver, receiver-manager or sequestrator appointed under an instrument or act must act in accordance with the instrument or act and any direction that the court may make under section 282.

  • Marginal note:Duty

    (3) A receiver, receiver-manager or sequestrator must

    • (a) act honestly and in good faith; and

    • (b) deal with any property of the cooperative in their possession or control in a commercially reasonable manner.

  • 1998, c. 1, s. 281
  • 2011, c. 21, s. 104(E)

Marginal note:Directions given by court

 A court may, on the application of a receiver, receiver-manager or sequestrator appointed by a court or under an instrument or act, or any other interested person, make any order giving directions on any matter relating to the duties of the receiver, receiver-manager or sequestrator that it considers appropriate, including an order

  • (a) appointing, replacing or discharging a receiver, receiver-manager or sequestrator and approving their accounts;

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

  • (c) fixing the remuneration of the receiver, receiver-manager or sequestrator;

  • (d) requiring the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom they were appointed, to make good any default in connection with their custody or management of the property and business of the cooperative, or relieving them, or a person by or on behalf of whom they were appointed, from any default on any terms that the court considers appropriate;

  • (e) confirming any act of the receiver, receiver-manager or sequestrator; and

  • (f) giving directions on any other matter relating to the duties of the receiver, receiver-manager or sequestrator.

  • 1998, c. 1, s. 282
  • 2011, c. 21, s. 105(E)

Marginal note:Required action

 A receiver, receiver-manager or sequestrator must

  • (a) take the property of the cooperative into custody and control in accordance with the court order, instrument or act under which the receiver, receiver-manager or sequestrator is appointed;

  • (b) open and maintain a bank account as receiver, receiver-manager or sequestrator of the cooperative for the money of the cooperative coming under their control;

  • (c) keep detailed accounts of all transactions carried out as receiver, receiver-manager or sequestrator;

  • (d) keep accounts of the administration as receiver, receiver-manager or sequestrator and cause them to be made available during usual business hours for inspection by the directors;

  • (e) prepare, at least once in every six month period after the day of appointment, financial statements of the administration, as far as is feasible, in the form required by section 247;

  • (f) on completion of their duties, render a final account of the administration in the form that the receiver, receiver-manager or sequestrator has adopted for preparation of interim accounts under paragraph (e); and

  • (g) if section 252 would otherwise apply, file with the Director a copy of any financial statement mentioned in paragraph (e) and any final account mentioned in paragraph (f) not later than fifteen days after it is prepared or rendered.

  • 1998, c. 1, s. 283
  • 2011, c. 21, s. 106(E)

PART 16Fundamental Changes

Marginal note:Definition of common share

 For the purposes of this Part, common share means a share in a body corporate, the rights of the holders of which are equal in all respects, including equal rights to

  • (a) receive dividends declared by the body corporate on the shares; and

  • (b) receive the remaining property of the body corporate on dissolution.

Marginal note:Continuance

  •  (1) A body corporate incorporated or continued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Director for a certificate of continuance under this Act if the body corporate

    • (a) satisfies, or by its articles of continuance would satisfy, the requirements for incorporation as a cooperative under this Act;

    • (b) is organized and operated and carries on its business on a cooperative basis or, by its articles of continuance, causes the body corporate to be organized and operated and to carry on its business on a cooperative basis; and

    • (c) has a capital and corporate structure that, if set out in its articles and by-laws, would meet the requirements of this Act.

  • Marginal note:Continuance for the purpose of amalgamation

    (2) A body corporate incorporated or continued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Director for a certificate of continuance and a certificate of amalgamation under this Act if the body corporate

    • (a) proposes to be continued under this section for the purpose of amalgamating with another body corporate in compliance with this Act and does, or will after the amalgamation, satisfy the requirements for incorporation as a cooperative under this Act;

    • (b) is organized and operated and carries on its business on a cooperative basis or, after the amalgamation, will be organized and operated and will carry on its business on a cooperative basis; and

    • (c) has a capital and corporate structure — or after the amalgamation will have a capital and corporate structure — that, if set out in its articles and by-laws, would meet the requirements of this Act.

  • Marginal note:Amendments in articles of continuance

    (3) A body corporate that applies for continuance under subsection (1) or (2) may, without so stating in its articles of continuance, effect by those articles any amendment to its constating documents if the amendment is one that a cooperative incorporated under this Act may make to its articles.

  • Marginal note:Articles of continuance

    (4) If a body corporate wishes to apply for continuance under subsection (1), articles of continuance in the form that the Director fixes must be sent to the Director, together with any information that the Director may require.

  • Marginal note:Articles of continuance and of amalgamation

    (5) If a body corporate wishes to apply for continuance under subsection (2), articles of continuance and articles of amalgamation in the form that the Director fixes must be sent to the Director, together with any information that the Director may require.

  • Marginal note:Certificate of continuance

    (6) The Director must issue

    • (a) a certificate of continuance, on receipt of the articles of continuance, if the Director is satisfied that the requirements for incorporation have been met; or

    • (b) a certificate of continuance and a certificate of amalgamation, on receipt of the articles of continuance and the articles of amalgamation, if the Director is satisfied that the requirements for incorporation and the requirements for amalgamation have been met.

  • Marginal note:Reliance on articles

    (7) For the purpose of subsection (6), the Director may rely on the articles.

  • Marginal note:Effect of certificate

    (8) On the date shown in the certificate of continuance,

    • (a) the body corporate becomes a cooperative to which this Act applies as if it had been incorporated under this Act;

    • (b) the articles of continuance are deemed to be the articles of incorporation of the continued cooperative; and

    • (c) the certificate of continuance is deemed to be the certificate of incorporation of the continued cooperative.

  • Marginal note:Copy of certificate

    (9) The Director must send, without delay after the certificate of continuance is issued, a copy of that certificate to the appropriate official or public body charged with the administration of the legislation under which continuance under this Act was authorized.

  • Marginal note:Rights preserved

    (10) When a body corporate is continued as a cooperative under this Act,

    • (a) the property of the body corporate continues to be the property of the cooperative;

    • (b) the cooperative continues to be liable for the obligations of the body corporate;

    • (c) an existing cause of action, claim or liability to prosecution is unaffected;

    • (d) a civil, criminal, administrative, investigative or other action or proceeding pending by or against the body corporate may be continued to be prosecuted by or against the cooperative; and

    • (e) a conviction against, or ruling, order or judgment in favour of or against, the body corporate may be enforced by or against the cooperative.

  • Marginal note:Membership shares

    (11) When a body corporate is continued as a cooperative under this Act,

    • (a) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act and the articles;

    • (b) the holders of the common shares of the body corporate are deemed to be the members of the cooperative; and

    • (c) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect.

  • Marginal note:Federal credit union

    (11.1) If a federal credit union, within the meaning of section 2 of the Bank Act, is continued as a cooperative under this Act,

    • (a) its membership shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act and the articles;

    • (b) the members of the federal credit union are deemed to be the members of the cooperative; and

    • (c) any agreement made before continuance under which the members of the federal credit union have agreed to vote in a manner provided in the agreement is of no effect.

  • Marginal note:Issued shares

    (12) Subject to section 182 and subsection (13),

    • (a) a share of a body corporate issued before it was continued under this Act is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance, irrespective of whether the share is fully paid and of any designation, right, privilege, restriction or condition set out on or referred to in the certificate representing the share;

    • (b) continuance under this Act does not deprive a holder of any right or privilege that the holder claims under, or relieve the holder of any liability in respect of, an issued share; and

    • (c) shares carry voting rights only to the extent permitted by this Act.

  • Marginal note:Conversion privilege

    (13) If a cooperative continued under this Act had, before it was so continued, issued a share certificate in registered form that is convertible to bearer form, the cooperative must not, if a holder of such a share certificate exercises the conversion privilege attached to the certificate, issue a share certificate in bearer form.

  • Marginal note:Definition of share

    (14) For the purposes of subsections (12) and (13), share includes a document referred to in any of subsections 142(1) to (3), a share warrant within the meaning of the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, or a like instrument.

  • 1998, c. 1, s. 285
  • 2010, c. 12, s. 2113
  • 2018, c. 8, s. 72
 
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