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

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.

Marginal note:Conversion privileges

• 77 (1) An association may issue conversion privileges, options or rights to acquire securities of the association, and shall set out the conditions thereof

  • (a) in the documents that evidence the conversion privileges, options or rights; or

  • (b) in the securities to which the conversion privileges, options or rights are attached.

• Marginal note:Transferable rights

  (2) Conversion privileges, options and rights to acquire securities of an association may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from any securities to which they are attached.

• Marginal note:Reserved shares

  (3) Where an association has granted privileges to convert any securities issued by the association into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, if the by-laws limit the number of authorized shares, the association shall reserve and continue to reserve sufficient authorized shares to meet the exercise of such conversion privileges, options and rights.

Marginal note:Holding of own shares

78 Except as provided in sections 79 to 81, or unless permitted by the regulations, an association shall not

• (a) hold membership shares or shares of the association; or

• (b) permit any of its subsidiaries to hold membership shares greater than the minimum number of membership shares of the association prescribed by a by-law made under subsection 67(1) or any shares of the association.