Trust and Loan Companies Act (S.C. 1991, c. 45)

Marginal note:Definition of reserved name

• 48.1 (1) In this section, reserved name means a name that includes as part thereof the word “assurance”, “assurances”, “insurance”, “lifeco”, “fiduciaire”, “fiduciary”, “fiducie”, “trust”, “trustco”, “loan”, “loanco” or “prêt” or any word or words of import equivalent to any of those words.

• Marginal note:Termination of control required in certain cases

  (2) No person, other than a financial institution, who

  • (a) is carrying on business in Canada under a reserved name, and

  • (b) has control or acquires control of a company,

  shall control the company on the later of

  • (c) one year after this section comes into force, and

  • (d) one year after the date of acquisition of the control.

• Marginal note:Prohibition

  (3) No person, other than a financial institution, who

  • (a) controls an entity that is not a financial institution that carries on business in Canada under a reserved name, and

  • (b) has control or acquires control of a company,

  shall control the company on the later of

  • (c) one year after this section comes into force, and

  • (d) one year after the date of the acquisition of the control.

• Marginal note:Continuing control prohibited

  (4) Notwithstanding subsection (3), where a financial institution controls an entity that

  • (a) is not a financial institution,

  • (b) carries on business in Canada under a reserved name, and

  • (c) has control or acquires control of a company,

  the entity shall not control the company on the later of

  • (d) one year after this section comes into force, and

  • (e) one year after the date on which the entity acquires control of the company.

• Marginal note:Exceptions

  (5) Subsections (2) to (4) do not apply with respect to a person or entity that was carrying on business in Canada under a reserved name on the day immediately preceding the day on which those subsections come into force.

PART IVOrganization and Commencement

Organization Meetings

Marginal note:First directors’ meeting

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

  • (a) make by-laws;

  • (b) adopt forms of share certificates and corporate records;

  • (c) authorize the issue of shares of the company;

  • (d) appoint officers;

  • (e) appoint an auditor to hold office until the first meeting of shareholders;

  • (f) make banking arrangements; and

  • (g) deal with any other matters necessary to organize the company.

• 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 185(2), no fewer than five days notice of the purpose, time and place of the meeting to each director of the company.

Marginal note:Calling shareholders’ meeting

• 50 (1) If at least five million dollars, or any greater amount that the Minister may specify, has been received by a company in respect of which letters patent were issued under section 21 from the issue of its shares, the directors of the company shall without delay call a meeting of the shareholders of the company.

• Marginal note:Meeting of shareholders

  (2) The shareholders of a company shall, by resolution at the meeting of shareholders called pursuant to subsection (1),

  • (a) approve, amend or reject any by-law made by the directors of the company;

  • (b) subject to section 172, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election; and

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

Marginal note:Term of first directors

51 A director named in the application for letters patent to incorporate a company holds office until the election of directors at the meeting of shareholders called pursuant to subsection 50(1).

Commencement and Carrying on of Business

Marginal note:Order to commence and carry on business

• 52 (1) A company shall not carry on any business until the Superintendent has, by order, approved the commencement and carrying on of business by the company.

• Marginal note:Former-Act companies — Loan Companies Act

  (2) A licence that was issued to a company under section 76 of the Loan Companies Act and that is in effect immediately before the coming into force of this Part is deemed to be an order of the Superintendent of indeterminate duration under subsection 53(1) and the company remains subject to any and all other restrictions and conditions in the licence.

• Marginal note:Former-Act companies

  (3) A licence that was issued to a company under section 87 of the Trust Companies Act or under section 112 of the Loan Companies Act and that is in effect immediately before the coming into force of this Part is deemed to be an order of the Superintendent of indeterminate duration under subsection 53(1) containing the authorization referred to in subsection 57(1) or the designation referred to in subsection 57(3), as the case may be, and the company remains subject to any and all other restrictions and conditions contained in the licence.

• Marginal note:Continued company

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

• Marginal note:Amalgamated company

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

• Marginal note:Subsection 53(2) and section 56 do not apply

  (6) For greater certainty, subsection 53(2) and section 56 do not apply in respect of a company referred to in subsections (4) and (5).

Marginal note:Authority to make order

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

• Marginal note:Statement of payments

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

Marginal note:No payments before order

54 Until an order approving the commencement and carrying on of business is made for a company, the company shall not make any payment on account of incorporation or organization expenses out of moneys received from the issue of the shares of the company 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 shares of the company; 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

55 Where a company comes into existence but no order approving the commencement and carrying on of business is made for the company, the company may only

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

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

Marginal note:Conditions for order

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

  • (a) the meeting of shareholders of the company referred to in subsection 50(1) has been duly held;

  • (b) the company has paid-in capital of at least five million dollars or any greater amount that is specified by the Minister under subsection 50(1);

  • (c) the expenses of incorporation and organization to be borne by the company 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 a company more than one year after the day on which the company comes into existence.

Marginal note:Authorization in order

• 57 (1) An order approving the commencement and carrying on of business by a company may, at the discretion of the Superintendent, contain the authorization for the company to carry on the activities referred to in section 412.

• Marginal note:Trust company

  (2) Where an order approving the commencement and carrying on of business by a company contains the authorization referred to in subsection (1), subsection 52(3) or paragraph 58(1)(a), the company is a trust company under this Act.

• Marginal note:Mortgage investment company

  (3) An order approving the commencement and carrying on of business by a company, other than a company that is a trust company pursuant to subsection (2), may, at the discretion of the Superintendent, contain a designation that the company is a mortgage investment company under this Act.

• Marginal note:Conditions of order

  (4) An order approving the commencement and carrying on of business by a company may contain such conditions or limitations that are consistent with this Act and relate to the business of the company as the Superintendent deems expedient and necessary.

Marginal note:Variations

• 58 (1) In respect of the order approving the commencement and carrying on of business by a company, the Superintendent may at any time, by further order,

  • (a) add to the order the authorization for the company to carry on the activities referred to in section 412, or the designation referred to in subsection 57(3),

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

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

  • (d) revoke any designation contained in the order,

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

• (2) to (6) [Repealed, 1996, c. 6, s. 116]

Marginal note:Public notice

• 59 (1) On the making of an order approving the commencement and carrying on of business by a company, the company 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 company 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 a company.

• Marginal note:Non-application to former-Act company

  (3) For greater certainty, this section does not apply to a company referred to in subsections 52(2) and (3).

Marginal note:Cessation of existence

60 Except for the sole purpose of winding up the company’s affairs, a company 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

• 61 (1) Where an order approving the commencement and carrying on of business is not made for a company, no part of the moneys of the company shall be used for the payment of incorporation and organization expenses, other than remuneration and costs referred to in section 54, 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 company is situated to settle and determine the amounts to be paid out of any moneys of the company before distribution of the balance to the shareholders or, where there are no shareholders, to the incorporators.

• 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 shareholders 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 shareholders 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 shareholder or incorporator as the ratio of the amount paid in by the shareholder or incorporator to the aggregate of all the amounts paid in by the shareholders 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 shareholders or incorporators, the respective balances of the moneys paid in by them, less the amount chargeable to each shareholder or incorporator under subsection (4).

PART VCapital Structure

Share Capital

Marginal note:Power to issue shares

• 62 (1) Subject to this Act and the by-laws of the company, shares of a company may be issued at such times and to such persons and for such consideration as the directors of the company may determine.

• Marginal note:Shares

  (2) Shares of a company shall be in registered form and shall be without nominal or par value.

• Marginal note:Shares of former-Act company

  (3) Shares with nominal or par value of a former-Act company are deemed to be shares without nominal or par value.

• Marginal note:Shares of continued company

  (4) Where a body corporate is continued as a company under this Act, shares with nominal or par value issued by the body corporate before it was so continued are deemed to be shares without nominal or par value.

• Marginal note:Deemed share conditions

  (5) Where any right of a holder of a share with nominal or par value of a former-Act company or a body corporate continued as a company under this Act, other than a voting right, was stated or expressed in terms of the nominal or par value of the share immediately before the coming into force of this Part or the continuance under this Act, as the case may be, that right is thereafter deemed to be the same right stated or expressed without reference to the nominal or par value of the share.