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

Marginal note:Lien

51 Unless the by-laws otherwise provide, where a member is indebted to an association, the association has a lien to the extent of the debt on the membership shares and deposits recorded in the name of, and any dividends payable to, the member.

Marginal note:No control

52 No person other than an association may control an association.

PART VOrganization and Commencement

Organization Meetings

Marginal note:First directors’ meeting

• 53 (1) After letters patent incorporating an association are issued, a meeting of the directors of the association shall be held at which the directors may, subject to this Part,

  • (a) adopt forms of certificates for membership shares and shares and of corporate records;

  • (b) authorize the issue of membership shares of the association;

  • (c) admit persons to membership in the association;

  • (d) appoint officers;

  • (e) make banking arrangements; and

  • (f) deal with any other matters necessary to organize the association.

• Marginal note:Calling directors’ meeting

  (2) An incorporator or a director named in the application for letters patent may call the meeting referred to in subsection (1) by giving, subject to subsection 186(2), no fewer than five days notice of the purpose, time and place of the meeting to each director of the association.

Marginal note:Calling members’ meeting

• 54 (1) After the meeting referred to in subsection 53(1), the directors of the association shall forthwith call a meeting of the members of the association.

• Marginal note:Meeting of members

  (2) The members of an association shall, at the meeting called pursuant to subsection (1),

  • (a) make by-laws;

  • (b) elect or appoint directors to hold office for a term expiring not later than the close of the third annual meeting of the association following the election; and

  • (c) appoint an auditor to hold office until the close of the first annual meeting of the association.

Marginal note:Term of first directors

55 A director named in the application for letters patent to incorporate an association holds office until the close of the meeting called pursuant to subsection 54(1).

Commencement and Carrying on of Business

Marginal note:Order to commence and carry on business

• 56 (1) An association shall not carry on any business until the Superintendent has, by order, approved the commencement and carrying on of business by the association.

• Marginal note:Former-Act association

  (2) A certificate or any other authorization that was given to the former-Act association and that is in effect immediately before the coming into force of this Part is deemed to be an order of the Superintendent under subsection (1).

• Marginal note:Continued association

  (3) Except in respect of a body corporate that is continued as an association under this Act for the purpose of immediately amalgamating with one or more bodies corporate and continuing as an association under this Act, if letters patent continuing a body corporate as an association under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the association.

• Marginal note:Amalgamated association

  (4) If letters patent amalgamating and continuing two or more bodies corporate as an association under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the association.

• Marginal note:S. 57(2) and s. 60 do not apply

  (5) For greater certainty, subsection 57(2) and section 60 do not apply in respect of an association referred to in subsection (3) or (4).

Marginal note:Authority to make order

• 57 (1) On application by an association, the Superintendent may make an order approving the commencement and carrying on of business by the association.

• Marginal note:Statement of payments

  (2) An application by an association for an order under subsection (1) must contain a statement setting out the amounts paid or to be paid by the association in connection with its incorporation and organization.

Marginal note:No payments before order

58 Until an order approving the commencement and carrying on of business is made for an association, the association shall not make any payment on account of incorporation or organization expenses out of the paid-in capital of the association and interest thereon, except reasonable sums

• (a) for the remuneration of not more than two officers;

• (b) for the payment of costs related to the issue of membership shares and shares of the association; and

• (c) for the payment of clerical assistance, legal services, accounting services, office accommodation at one location, office expenses, advertising, stationery, postage and travel expenses.

Marginal note:Deposits and investments before order

59 Where an association comes into existence but no order approving the commencement and carrying on of business is made for the association, the association may only

• (a) deposit, in Canada, paid-in capital of the association in another deposit-taking Canadian financial institution; or

• (b) invest paid-in capital of the association in unencumbered securities of the Government of Canada or the government of any province.

Marginal note:Conditions for order

• 60 (1) The Superintendent shall not make an order approving the commencement and carrying on of business by an association until it has been shown to the satisfaction of the Superintendent that

  • (a) the meeting of members of the association referred to in subsection 54(1) has been duly held;

  • (b) the association has paid-in capital of at least five million dollars or such greater amount as the Minister may specify;

  • (c) the expenses of incorporation and organization to be borne by the association are reasonable; and

  • (d) all other relevant requirements of this Act have been complied with.

• Marginal note:Time limit

  (2) The Superintendent shall not make an order approving the commencement and carrying on of business by an association more than one year after the day on which the association comes into existence.

Marginal note:Conditions of order

61 An order approving the commencement and carrying on of business by an association may contain any conditions or limitations that the Superintendent considers appropriate.

Marginal note:Variations

• 62 (1) In respect of the order approving the commencement and carrying on of business by an association, the Superintendent may at any time, by further order,

  • (a) make the order subject to such conditions or limitations that are consistent with this Act and that relate to the business of the association as the Superintendent deems expedient and necessary, or

  • (b) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject,

  but before making any such further order the Superintendent shall provide the association with an opportunity to make representations regarding that further order.

• (2) to (6) [Repealed, 1996, c. 6, s. 53]

Marginal note:Public notice

• 63 (1) On the making of an order approving the commencement and carrying on of business by an association, the association shall publish a notice of the making of the order in a newspaper in general circulation at or near the place where the head office of the association is located.

• Marginal note:Notice in Canada Gazette

  (2) The Superintendent shall cause to be published in the Canada Gazette a notice of the making of an order approving the commencement and carrying on of business by an association.

Marginal note:Cessation of existence

64 Except for the sole purpose of winding up the association’s affairs, an association ceases to exist one year after the day on which its incorporating instrument became effective if it does not obtain an order approving the commencement and carrying on of business within that year.

Marginal note:Allowed disbursements

• 65 (1) Where an order approving the commencement and carrying on of business is not made for an association, no part of the moneys of the association shall be used for the payment of incorporation and organization expenses, other than remuneration and costs referred to in section 58, unless the payment has been approved by a special resolution.

• Marginal note:Application to court to settle disbursements

  (2) If the amount allowed by a special resolution for the payment of any incorporation and organization expenses referred to in subsection (1) is considered insufficient by the directors or if no special resolution for the payment of such expenses is passed, the directors may apply to any court having jurisdiction in the place where the head office of the association is situated to settle and determine the amounts to be paid out of any moneys of the association.

• Marginal note:Notice of application to court

  (3) The directors shall, at least twenty-one days prior to the date fixed for the hearing of the application referred to in subsection (2), send to the members or incorporators, as the case may be, a notice of the application, which notice shall contain a statement of the amounts that are proposed to be settled and determined by the court.

• Marginal note:Ratio payable

  (4) In order that the amounts paid and payable under this section may be equitably borne by the members or incorporators, as the case may be, the directors shall, after the amounts of the payments have been approved by special resolution or settled and determined by a court, fix the proportionate part thereof chargeable to each member or incorporator as the ratio of the amount paid in by the member or incorporator to the aggregate of all the amounts paid in by the members or incorporators.

• Marginal note:Return of excess

  (5) After the amounts referred to in this section have been paid, the directors shall pay, with any interest earned thereon, to the members or incorporators, the respective balances of the moneys paid in by them, less the amount chargeable to each member or incorporator under subsection (4).

PART VICapital Structure

Share Capital

Marginal note:Power to issue membership shares and shares

• 66 (1) Subject to this Act and the incorporating instrument and by-laws of the association,

  • (a) membership shares of an association may be issued at such times and to such members and for such consideration as the directors of the association may determine; and

  • (b) shares of an association may be issued at such times and to such persons and for such consideration as the directors of the association may determine.

• Marginal note:Form

  (2) Shares of an association shall be in registered form and membership shares and shares shall be without nominal or par value.

Marginal note:Holding membership shares

• 67 (1) Members shall hold the minimum number of membership shares prescribed by the by-laws.

• Marginal note:Rights

  (2) The membership shares of an association confer on the holders thereof equal rights, including equal rights to

  • (a) receive dividends declared on the membership shares; and

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

• Marginal note:Designation of shares

  (3) No association shall designate a class of its shares as “membership shares” or any variation thereof.

• Marginal note:Redemption

  (4) The by-laws of an association shall set the terms and conditions under which membership shares may be redeemed, including the manner and time of payment for the redeemed membership shares.

• Marginal note:Certificates not mandatory

  (5) The by-laws of an association may provide that no membership share certificates need be issued but if this is the case, the association shall issue to each member who so requests, a statement of the number of membership shares held by the member.

• Marginal note:Certificates

  (6) If an association issues membership share certificates, there shall be stated on the face of each certificate for a membership share issued by the association after the coming into force of this section

  • (a) the name of the association;

  • (b) a statement that the association is subject to the Cooperative Credit Associations Act;

  • (c) the name of the person to whom it is issued;

  • (d) a statement that the certificate represents membership shares in the association, and the number of such membership shares;

  • (e) a statement that the certificate is not transferable without the approval of the Board of Directors of the association; and

  • (f) that there may be a lien on the membership shares represented by the certificate in favour of the association for indebtedness to the association.