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

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.

Marginal note:No automatic rights

• 68 (1) Subject to subsection (2), an association shall not issue any share that confers on the holder thereof the right

  • (a) to vote at meetings of the association otherwise than in accordance with this Act; or

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

• Marginal note:Right to vote

  (2) An association may issue a share that confers on the holder thereof the right to vote at an election of directors by reason of an event that has occurred and is continuing or by a reason of a condition that has been fulfilled.

• Marginal note:Effect of contravening provision

  (3) Any provision in a by-law that purports to confer a right referred to in subsection (1) is of no force and effect.

Marginal note:Shares of former-Act association

• 69 (1) Membership shares and shares with nominal or par value of the former-Act association are deemed to be shares without nominal or par value.

• Marginal note:Deemed share conditions

  (2) Where any right of a holder of a membership share or share with nominal or par value of the former-Act association was stated or expressed in terms of the nominal or par value of the share immediately before the coming into force of this Part, that right is thereafter deemed to be the same right stated or expressed without reference to the nominal or par value of the share.

Marginal note:Classes of shares

• 70 (1) The members of an association may, by by-law, provide for one or more classes of shares and, if they so provide, shall set out

  • (a) the rights, privileges, restrictions and conditions attaching to the shares of each class; and

  • (b) the maximum number, if any, of shares of any class that the association is authorized to issue.

• Marginal note:Approval required

  (2) A by-law referred to in subsection (1) must be approved by special resolution.

Marginal note:Shares issued in series

• 71 (1) The by-laws of an association may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may

  • (a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and

  • (b) authorize the directors to do anything referred to in paragraph (a).

• Marginal note:Series participation

  (2) If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

• Marginal note:Voting rights

  (3) Where voting rights are attached to any series of a class of shares, the shares of every other series of that class shall have the same voting rights.

• Marginal note:Restriction on series

  (4) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section confer on the 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.

• Marginal note:Material to Superintendent

  (5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors.

Marginal note:One share, one vote

72 Where voting rights are attached to a share of an association issued pursuant to a by-law passed under section 70, the by-law may confer only one vote in respect of that share.

Marginal note:Membership shares and shares non-assessable

73 Membership shares and shares issued by an association after the coming into force of this section are non-assessable and the members and shareholders are not liable to the association or to its creditors in respect thereof.

Marginal note:Consideration

• 74 (1) No membership share and no share of any class of shares of an association shall be issued until it is fully paid for in money or, with the approval of the Superintendent, in property.

• Marginal note:Other currencies

  (2) When issuing membership shares or shares, an association may provide that any aspect of the membership shares or shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada.

• Marginal note:When approval not necessary

  (3) The by-laws of an association may, with the approval of the Superintendent, provide for a formula or procedure for valuing a member of the association or any of its assets or liabilities when the member, or the asset or liability, is proposed to be acquired by the association in exchange for membership shares or shares of the association. The approval of the Superintendent under subsection (1) is not necessary when such shares are issued in accordance with such a by-law.

Marginal note:Stated capital account

• 75 (1) An association shall maintain a separate stated capital account for the membership shares and for each class and series of shares it issues.

• Marginal note:Addition to stated capital account

  (2) An association shall record in the appropriate stated capital account the full amount of any consideration it receives for any membership shares or shares it issues.

• Marginal note:Exception

  (2.1) Despite subsection (2), an association may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares

  • (a) in exchange for

    • (i) property of a person who immediately before the exchange did not deal with the association at arm’s length within the meaning of that expression in the Income Tax Act or property of any prescribed person,

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

    • (iii) property of a person who immediately before the exchange dealt with the association at arm’s length within the meaning of that expression in the Income Tax Act if the person, the association and all of the holders of shares in the class or series of shares so issued consent to the exchange;

  • (b) under an agreement referred to in subsection 227(1); or

  • (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated association.

• Marginal note:Limit on addition to a stated capital account

  (2.2) On the issuance of a share, an association shall not add to the stated capital account in respect of the share an amount greater than the amount of the consideration it receives for the share.

• Marginal note:Constraint on addition to a stated capital account

  (2.3) Where an association that has issued any outstanding shares of more than one class or series proposes to add to a stated capital account that it maintains in respect of a class or series of shares an amount that was not received by the association as consideration for the issue of shares, the addition must be approved by special resolution unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 84(4).

• Marginal note:Stated capital of former-Act association

  (3) On the coming into force of this Part, the former-Act association shall record in the stated capital account maintained for membership shares then outstanding an amount that is equal to the aggregate of

  • (a) the aggregate amount paid up on the membership shares immediately before the coming into force of this Part, and

  • (b) the amount of the contributed surplus of the association that is attributable to those membership shares.

• Marginal note:Contributed surplus entry

  (4) The amount of any contributed surplus recorded in the stated capital account pursuant to paragraph (3)(b) shall be deducted from the contributed surplus account of the association.

• Marginal note:Share issued before coming into force

  (5) Any amount unpaid in respect of a membership share issued by the former-Act association before the coming into force of this Part and paid after the coming into force of this Part shall be recorded in the stated capital account maintained by the association for the membership shares.

Marginal note:Pre-emptive right: shareholders

• 76 (1) Where the by-laws of an association so provide, no shares of any class shall be issued unless the shares have first been offered to the persons holding shares of that class, and those persons have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others.

• Marginal note:Exception

  (2) Notwithstanding the existence of a pre-emptive right, a shareholder of an association has no pre-emptive right in respect of shares that are to be issued

  • (a) for a consideration other than money;

  • (b) as a share dividend; or

  • (c) pursuant to the exercise of conversion privileges, options or rights previously granted by the association.

• Marginal note:Idem

  (3) Notwithstanding the existence of a pre-emptive right, a shareholder of an association has no pre-emptive right in respect of shares to be issued

  • (a) where the issue of shares to the shareholder is prohibited by this Act; or

  • (b) where, to the knowledge of the directors of the association, the offer of shares to a shareholder whose recorded address is in a country other than Canada ought not to be made unless the appropriate authority in that country is provided with information in addition to that submitted to the members at the last annual meeting.