Cooperative Credit Associations Act (S.C. 1991, c. 48)

Fundamental Changes

Amendments

Marginal note:Incorporating instrument

219 On the application of an association duly authorized by special resolution of the members, the Minister may approve a proposal to add, change or remove any provision that is permitted by this Act to be set out in the association’s incorporating instrument.

Marginal note:Letters patent to amend

• 220 (1) On receipt of an application referred to in section 219, the Minister may issue letters patent to effect the proposal.

• Marginal note:Effect of letters patent

  (2) Letters patent issued pursuant to subsection (1) become effective on the day stated in the letters patent.

Marginal note:By-laws

• 221 (1) The members of an association may, by special resolution, make, amend or repeal any by-laws, in the manner set out in subsection (2) and sections 222 to 225, to

  • (a) change the maximum number, if any, of shares of any class that the association is authorized to issue;

  • (b) create new classes of shares;

  • (c) change the designation of any or all of the association’s shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of any or all of the association’s shares, whether issued or unissued;

  • (d) change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series;

  • (e) divide a class of shares, whether issued or unissued, into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto;

  • (f) authorize the directors to divide any class of unissued shares into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto;

  • (g) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series;

  • (h) revoke, diminish or enlarge any authority conferred under paragraphs (f) and (g);

  • (i) increase or decrease the number of directors or the minimum or maximum number of directors, subject to subsection 169(1);

  • (i.1) change the name of the association; or

  • (j) change the province in which the head office of the association is situated.

• Marginal note:Effective date of by-law

  (2) A by-law respecting a change to the name of the association is not effective until it is approved by the Superintendent.

• Marginal note:Letters patent

  (3) If the name of an association or the province in Canada in which the head office of the association is situated is changed under this section, the Superintendent may issue letters patent to amend the association’s incorporating instrument accordingly.

• Marginal note:Effect of letters patent

  (4) Letters patent issued under subsection (3) become effective on the day stated in the letters patent.

Marginal note:Class vote

• 222 (1) The holders of shares of a class or, subject to subsection (2), of a series are, unless the by-laws otherwise provide in the case of an amendment to the by-laws referred to in paragraph (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the by-laws to

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

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

  • (c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of a class and, without limiting the generality of the foregoing,

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

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

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

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

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

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

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

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

• Marginal note:Right limited

  (2) The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) if that series is affected by an addition or amendment to the by-laws in a manner different from other shares of the same class.

• Marginal note:Right to vote

  (3) Subsections (1) and (2) apply whether or not the shares of a class otherwise carry the right to vote.

Marginal note:Separate resolutions

223 A proposed addition or amendment to the by-laws referred to in subsection 222(1) is adopted when the holders of the shares of each class or series entitled to vote separately thereon as a class or series have approved the addition or amendment by a special resolution.

Marginal note:Proposal to amend

• 224 (1) Subject to subsection (2), a member may, in accordance with sections 152 and 153, make a proposal to make an application referred to in section 219 or to make, amend or repeal the by-laws referred to in subsection 221(1) of the association.

• Marginal note:Notice of amendment

  (2) Notice of a meeting at which a proposal to amend the incorporating instrument or to make, amend or repeal the by-laws of an association is to be considered must set out the proposal.

Marginal note:Rights preserved

225 No amendment to the incorporating instrument or by-laws of an association affects an existing cause of action or claim or liability to prosecution in favour of or against the association or its directors or officers, or any civil, criminal or administrative action or proceeding to which the association or any of its directors or officers are a party.

Amalgamation

Marginal note:Application to amalgamate

226 On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including associations, the Minister may issue letters patent amalgamating and continuing the applicants as one association if the proposed capital and corporate structure of the amalgamated association meets the requirements for an association to be incorporated under this Act.

Marginal note:Amalgamation agreement

• 227 (1) Each applicant proposing to amalgamate shall enter into an amalgamation agreement.

• Marginal note:Contents of agreement

  (2) Every amalgamation agreement shall set out the terms and means of effecting the amalgamation and, in particular,

  • (a) the name of the amalgamated association and the province in which its head office is to be situated;

  • (b) the name and place of ordinary residence of each proposed director of the amalgamated association;

  • (c) the manner in which the membership shares of each association are to be converted into membership shares in the amalgamated association;

  • (d) the manner in which the shares of each applicant are to be converted into shares or other securities of the amalgamated association;

  • (e) if any membership shares of an applicant are not to be converted into membership shares of the amalgamated association the amount of money or securities that the members are to receive in addition to or in lieu of membership shares of the amalgamated association;

  • (f) if any shares of an applicant are not to be converted into shares or other securities of the amalgamated association, the amount of money or securities that the holders of those shares are to receive in addition to or in lieu of shares or other securities of the amalgamated association;

  • (g) the manner of payment of money in lieu of the issue of fractional shares of the amalgamated association or of any other body corporate that are to be issued in the amalgamation;

  • (h) the proposed by-laws of the amalgamated association;

  • (i) details of any other matter necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated association; and

  • (j) the proposed effective date of the amalgamation.

• Marginal note:Cross ownership of shares

  (3) If membership shares or shares of one of the applicants are held by or on behalf of another of the applicants, other than membership shares or shares held in the capacity of a personal representative or by way of security, the amalgamation agreement must provide for the cancellation of those membership shares or shares when the amalgamation becomes effective without any repayment of capital in respect thereof, and no provision shall be made in the agreement for the conversion of those membership shares or shares into membership shares or shares of the amalgamated association.

Marginal note:Approval of agreement by Superintendent

228 An amalgamation agreement must be submitted to the Superintendent for approval and any approval of the agreement under subsection 229(4) by the members and the holders of any class or series of shares of an applicant is invalid unless, before the date of the approval, the Superintendent has approved the agreement in writing.

Marginal note:Approval

• 229 (1) The directors of each applicant shall submit an amalgamation agreement for approval to a meeting of the members or shareholders of the applicant association or subsidiary of which they are directors and, subject to subsection (3), to the holders of each class or series of such shares.

• Marginal note:Right to vote

  (2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.

• Marginal note:Separate vote for class or series

  (3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.

• Marginal note:Special resolution

  (4) Subject to subsection (3), an amalgamation agreement is approved when the members or shareholders of each applicant association or subsidiary have approved the amalgamation by special resolution.

• Marginal note:Termination

  (5) An amalgamation agreement may provide that, at any time before the issue of letters patent of amalgamation, the agreement may be terminated by the directors of an applicant notwithstanding that the agreement has been approved by the members or shareholders of all or any of the applicant associations or subsidiaries.

Marginal note:Vertical short-form amalgamation

• 230 (1) An association may, without complying with sections 227 to 229, amalgamate with one or more bodies corporate that are incorporated by or under an Act of Parliament if the body or bodies corporate, as the case may be, are wholly-owned subsidiaries of the association and

  • (a) the amalgamation is approved by a resolution of the directors of the association and of each amalgamating subsidiary; and

  • (b) the resolutions provide that

    • (i) the shares of each amalgamating subsidiary will be cancelled without any repayment of capital in respect thereof,

    • (ii) the letters patent of amalgamation and the by-laws of the amalgamated association will be the same as the incorporating instrument and the by-laws of the amalgamating association that is the holding body corporate, and

    • (iii) no securities will be issued by the amalgamated association in connection with the amalgamation.

• Marginal note:Horizontal short-form amalgamation

  (2) Two or more bodies corporate incorporated by or under an Act of Parliament may amalgamate and continue as an association without complying with sections 227 to 229 if

  • (a) at least one of the applicants is an association;

  • (b) the applicants are all wholly-owned subsidiaries of the same holding body corporate;

  • (c) the amalgamation is approved by a resolution of the directors of each of the applicants; and

  • (d) the resolutions provide that

    • (i) the shares of all applicants, except those of one of the applicants that is an association, will be cancelled without any repayment of capital in respect of those shares,

    • (ii) the letters patent of amalgamation and the by-laws of the amalgamated association will be the same as the incorporating instrument and the by-laws of the amalgamating association whose shares are not cancelled, and

    • (iii) the stated capital of the amalgamating association and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating association whose shares are not cancelled.

Marginal note:Joint application to Minister

• 231 (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 229(5), the applicants shall, within three months after the approval of the agreement in accordance with subsection 229(4) or the approval of the directors in accordance with section 230, jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one association.

• Marginal note:Conditions precedent to application

  (2) No application for the issue of letters patent under subsection (1) may be made unless

  • (a) notice of intention to make such an application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of each applicant is situated; and

  • (b) the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Part relating to amalgamations.

• Marginal note:Application of sections 24 to 26

  (3) If two or more bodies corporate, none of which is an association, apply for letters patent under subsection (1), sections 24 to 26 apply in respect of the application with any modifications that the circumstances require.

• Marginal note:Matters for consideration

  (4) Before issuing letters patent of amalgamation continuing the applicants as one association, the Minister shall take into account all matters that the Minister considers relevant to the application, including

  • (a) the sources of continuing financial support for the amalgamated association;

  • (b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of the amalgamated association;

  • (c) the business record and experience of the applicants;

  • (d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity;

  • (e) whether the amalgamated association will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

  • (f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses;

  • (g) whether the association is to be operated in accordance with cooperative principles; and

  • (h) the best interests of the financial system in Canada and, in particular, the cooperative financial system in Canada.