Canada Business Corporations Act

This Act may be cited as the Canada Business Corporations Act.

In this Act,

affairs means the relationships among a corporation, its affiliates and the shareholders, directors and officers of such bodies corporate but does not include the business carried on by such bodies corporate; (affaires internes)

affiliate means an affiliated body corporate within the meaning of subsection (2); (groupe)

articles means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution, articles of revival and includes any amendments thereto; (statuts)

associate, in respect of a relationship with a person, means

a body corporate of which that person beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares carrying more than ten per cent of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase such shares or such convertible securities,

a partner of that person acting on behalf of the partnership of which they are partners,

a trust or estate or succession in which that person has a substantial beneficial interest or in respect of which that person serves as a trustee or liquidator of the succession or in a similar capacity,

a spouse of that person or an individual who is cohabiting with that person in a conjugal relationship, having so cohabited for a period of at least one year,

a child of that person or of the spouse or individual referred to in paragraph (d), and

a relative of that person or of the spouse or individual referred to in paragraph (d), if that relative has the same residence as that person; (liens)

auditor includes a partnership of auditors or an auditor that is incorporated; (vérificateur)

beneficial interest means an interest arising out of the beneficial ownership of securities; (véritable propriétaire et propriété effective)

beneficial ownership includes ownership through any trustee, legal representative, agent or mandatary, or other intermediary; (véritable propriétaire et propriété effective)

body corporate includes a company or other body corporate wherever or however incorporated; (personne morale)

call means an option transferable by delivery to demand delivery of a specified number or amount of securities at a fixed price within a specified time but does not include an option or right to acquire securities of the corporation that granted the option or right to acquire; (option d’achat)

corporation means a body corporate incorporated or continued under this Act and not discontinued under this Act; (société par actions ou société)

court means

in the Province of Newfoundland and Labrador, the Trial Division of the Supreme Court of the Province,

in the Province of Ontario, the Superior Court of Justice,

in the Provinces of Nova Scotia, British Columbia and Prince Edward Island, the Supreme Court of the Province,

in the Provinces of Manitoba, Saskatchewan, Alberta and New Brunswick, the Court of Queen’s Bench for the Province,

in the Province of Quebec, the Superior Court of the Province, and

the Supreme Court of Yukon, the Supreme Court of the Northwest Territories and the Nunavut Court of Justice; (tribunal)

court of appeal means the court to which an appeal lies from an order of a court; (Cour d’appel)

debt obligation means a bond, debenture, note or other evidence of indebtedness or guarantee of a corporation, whether secured or unsecured; (titre de créance)

Director means the Director appointed under section 260; (directeur)

director means a person occupying the position of director by whatever name called and directors and board of directors includes a single director; (administrateur et conseil d’administration)

distributing corporation means, subject to subsections (6) and (7), a distributing corporation as defined in the regulations; (société ayant fait appel au public)

entity means a body corporate, a partnership, a trust, a joint venture or an unincorporated association or organization; (entité)

going-private transaction means a going-private transaction as defined in the regulations; (opération de fermeture)

incapable, in respect of an individual, means that the individual is found, under the laws of a province, to be unable, other than by reason of minority, to manage their property or is declared to be incapable by any court in a jurisdiction outside Canada; (incapable)

incorporator means a person who signs articles of incorporation; (fondateur)

individual means a natural person; (particulier)

liability includes a debt of a corporation arising under section 40, subsection 190(25) and paragraphs 241(3)(f) and (g); (passif)

mandatary, in Quebec, includes a successor; (mandataire)

Minister means such member of the Queen’s Privy Council for Canada as is designated by the Governor in Council as the Minister for the purposes of this Act; (ministre)

officer means an individual appointed as an officer under section 121, the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of a corporation, or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any of those offices; (dirigeant)

ordinary resolution means a resolution passed by a majority of the votes cast by the shareholders who voted in respect of that resolution; (résolution ordinaire)

person means an individual, partnership, association, body corporate, or personal representative; (personne)

personal representative means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a liquidator of a succession, an administrator of the property of others, a guardian or tutor, a curator, a receiver or sequestrator, an agent or mandatary or an attorney; (représentant personnel)

prescribed means prescribed by the regulations; (prescrit ou réglementaire)

prior legislation means the various Acts of Parliament that were in force prior to the coming into force of this Act and that applied to the incorporation of federal companies under those Acts, other than any financial institution as defined in section 2 of the Bank Act; (législation antérieure)

put means an option transferable by delivery to deliver a specified number or amount of securities at a fixed price within a specified time; (option de vente)

redeemable share means a share issued by a corporation

that the corporation may purchase or redeem on the demand of the corporation, or

that the corporation is required by its articles to purchase or redeem at a specified time or on the demand of a shareholder; (action rachetable)

resident Canadian means an individual who is

a Canadian citizen ordinarily resident in Canada,

a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons, or

a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which he or she first became eligible to apply for Canadian citizenship; (résident canadien)

security means a share of any class or series of shares or a debt obligation of a corporation and includes a certificate evidencing such a share or debt obligation; (valeur mobilière)

security interest means an interest or right in or charge on property of a corporation to secure payment of a debt or performance of any other obligation of the corporation; (sûreté)

send includes deliver; (envoyer)

series, in relation to shares, means a division of a class of shares; (série)

special resolution means a resolution passed by a majority of not less than two-thirds of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution; (résolution spéciale)

squeeze-out transaction means a transaction by a corporation that is not a distributing corporation that would require an amendment to its articles and would, directly or indirectly, result in the interest of a holder of shares of a class of the corporation being terminated without the consent of the holder, and without substituting an interest of equivalent value in shares issued by the corporation, which shares have equal or greater rights and privileges than the shares of the affected class; (opération d’éviction)

unanimous shareholder agreement means an agreement described in subsection 146(1) or a declaration of a shareholder described in subsection 146(2). (convention unanime des actionnaires)

For the purposes of this Act,

one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and

if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

For the purposes of this Act, a body corporate is controlled by a person or by two or more bodies corporate if

securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those bodies corporate; and

the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate.

A body corporate is the holding body corporate of another if that other body corporate is its subsidiary.

A body corporate is a subsidiary of another body corporate if

it is controlled by

that other body corporate,

that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or

two or more bodies corporate each of which is controlled by that other body corporate; or

it is a subsidiary of a body corporate that is a subsidiary of that other body corporate.

On the application of a corporation, the Director may determine that the corporation is not or was not a distributing corporation if the Director is satisfied that the determination would not be prejudicial to the public interest.

The Director may determine that a class of corporations are not or were not distributing corporations if the Director is satisfied that the determination would not be prejudicial to the public interest.

For the purposes of this Act, the word infant has the same meaning as in the applicable provincial law and, in the absence of any such law, has the same meaning as the word child in the United Nations Convention on the Rights of the Child, adopted in the United Nations General Assembly on November 20, 1989.

For the purposes of this Act, any of the following individuals is an individual with significant control over a corporation:

an individual who has any of the following interests or rights, or any combination of them, in respect of a significant number of shares of the corporation:

the individual is the registered holder of them,

the individual is the beneficial owner of them, or

the individual has direct or indirect control or direction over them;

an individual who has any direct or indirect influence that, if exercised, would result in control in fact of the corporation; or

an individual to whom prescribed circumstances apply.

Two or more individuals are each considered to be an individual with significant control over a corporation if, in respect of a significant number of shares of the corporation,

an interest or right, or a combination of interests or rights, referred to in paragraph (1)(a) is held jointly by those individuals; or

a right, or combination of rights, referred to in paragraph (1)(a) is subject to any agreement or arrangement under which the right or rights are to be exercised jointly or in concert by those individuals.

For the purposes of this section, a significant number of shares of a corporation is

any number of shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares; or

any number of shares that is equal to 25% or more of all of the corporation’s outstanding shares measured by fair market value.

This Act applies to every corporation incorporated and every body corporate continued as a corporation under this Act that has not been discontinued under this Act.

[Repealed, 1991, c. 45, s. 551]

The following do not apply to a corporation:

[Repealed, 2009, c. 23, s. 344]

the Canada Not-for-profit Corporations Act;

the Winding-up and Restructuring Act; and

the provisions of a Special Act, as defined in section 87 of the Canada Transportation Act, that are inconsistent with this Act.

No corporation shall carry on the business of

a bank;

an association to which the Cooperative Credit Associations Act applies;

a company or society to which the Insurance Companies Act applies; or

a company to which the Trust and Loan Companies Act applies.

No corporation shall carry on business as a degree-granting educational institution unless expressly authorized to do so by a federal or provincial agent that by law has the power to confer degree-granting authority on an educational institution.

The purposes of this Act are to revise and reform the law applicable to business corporations incorporated to carry on business throughout Canada, to advance the cause of uniformity of business corporation law in Canada and to provide a means of allowing an orderly transferance of certain federal companies incorporated under various Acts of Parliament to this Act.

One or more individuals or bodies corporate may incorporate a corporation by signing articles of incorporation and complying with section 7.

An individual may incorporate a corporation only if that individual

is not less than 18 years of age;

is not incapable; or

does not have the status of bankrupt.

Articles of incorporation shall follow the form that the Director fixes and shall set out, in respect of the proposed corporation,

the name of the corporation;

the province in Canada where the registered office is to be situated;

the classes and any maximum number of shares that the corporation is authorized to issue, and

if there will be two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares, and

if a class of shares may be issued in series, the authority given to the directors to fix the number of shares in, and to determine the designation of, and the rights, privileges, restrictions and conditions attaching to, the shares of each series;

if the issue, transfer or ownership of shares of the corporation is to be restricted, a statement to that effect and a statement as to the nature of such restrictions;

the number of directors or, subject to paragraph 107(a), the minimum and maximum number of directors of the corporation; and

any restrictions on the businesses that the corporation may carry on.

The articles may set out any provisions permitted by this Act or by law to be set out in the by-laws of the corporation.

Subject to subsection (4), if the articles or a unanimous shareholder agreement require a greater number of votes of directors or shareholders than that required by this Act to effect any action, the provisions of the articles or of the unanimous shareholder agreement prevail.

The articles may not require a greater number of votes of shareholders to remove a director than the number required by section 109.

An incorporator shall send to the Director articles of incorporation and the documents required by sections 19 and 106.

Subject to subsection (2), on receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 262.

The Director may refuse to issue the certificate if a notice that is required to be sent under subsection 19(2) or 106(1) indicates that the corporation, if it came into existence, would not be in compliance with this Act.

A corporation comes into existence on the date shown in the certificate of incorporation.

The word or expression “Limited”, “Limitée”, “Incorporated”, “Incorporée”, “Corporation” or “Société par actions de régime fédéral” or the corresponding abbreviation “Ltd.”, “Ltée”, “Inc.”, “Corp.” or “S.A.R.F.” shall be part, other than only in a figurative or descriptive sense, of the name of every corporation, but a corporation may use and be legally designated by either the full or the corresponding abbreviated form.

Subsection (1) does not apply to a corporation that has a corporate name that, immediately before the day on which this subsection comes into force, included, other than only in a figurative or descriptive sense, the expression “Société commerciale canadienne” or the abbreviation “S.C.C.”, and any such corporation may use and be legally designated by either that expression or that abbreviation.

The Director may exempt a body corporate continued as a corporation under this Act from the provisions of subsection (1).

Subject to subsection 12(1), the name of a corporation may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The corporation may use and may be legally designated by any such form.

Subject to subsection 12(1), a corporation may, for use outside Canada, set out its name in its articles in any language form and it may use and may be legally designated by any such form outside Canada.

A corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the corporation.

Subject to subsections (5) and 12(1), a corporation may carry on business under or identify itself by a name other than its corporate name if that other name does not contain, other than in a figurative or descriptive sense, either the word or expression “Limited”, “Limitée”, “Incorporated”, “Incorporée”, “Corporation” or “Société par actions de régime fédéral” or the corresponding abbreviation.

The Director may, on request, reserve for a prescribed period a name for an intended corporation or for a corporation that intends to change its name.

If requested to do so by the incorporators or a corporation, the Director shall assign to the corporation as its name a designating number followed by the word “Canada” and a word or expression, or the corresponding abbreviation, referred to in subsection 10(1).

A corporation shall not be incorporated or continued as a corporation under this Act with, change its name to, or have, carry on business under or identify itself by a name that is prohibited by the regulations or that does not meet the prescribed requirements.

The Director may direct a corporation to change its name in accordance with section 173 if, through inadvertence or otherwise, the corporation acquires a name that is prohibited by the regulations or that does not meet the prescribed requirements.

[Repealed, 1994, c. 24, s. 7]

If a corporation has a designating number as its name, the Director may direct the corporation to change its name to a name other than a designating number in accordance with section 173.

Where a corporation acquires a name as a result of a person undertaking to dissolve or to change names, and the undertaking is not honoured, the Director may direct the corporation to change its name in accordance with section 173, unless the undertaking is honoured within the period specified in subsection (5).

If a corporation has not followed a directive under subsection (2), (4) or (4.1) within the prescribed period, the Director may revoke the name of the corporation and assign a name to it and, until changed in accordance with section 173, the name of the corporation is the name assigned by the Director.

When a corporation has had its name revoked and a name assigned to it under subsection 12(5), the Director shall issue a certificate of amendment showing the new name of the corporation and shall give notice of the change of name as soon as practicable in a publication generally available to the public.

The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.

Subject to this section, a person who enters into, or purports to enter into, a written contract in the name of or on behalf of a corporation before it comes into existence is personally bound by the contract and is entitled to its benefits.

A corporation may, within a reasonable time after it comes into existence, by any action or conduct signifying its intention to be bound thereby, adopt a written contract made before it came into existence in its name or on its behalf, and on such adoption

the corporation is bound by the contract and is entitled to the benefits thereof as if the corporation had been in existence at the date of the contract and had been a party thereto; and

a person who purported to act in the name of or on behalf of the corporation ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.

Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order respecting the nature and extent of the obligations and liability under the contract of the corporation and the person who entered into, or purported to enter into, the contract in the name of or on behalf of the corporation. On the application, the court may make any order it thinks fit.

If expressly so provided in the written contract, a person who purported to act in the name of or on behalf of the corporation before it came into existence is not in any event bound by the contract or entitled to the benefits thereof.

A corporation has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

A corporation may carry on business throughout Canada.

A corporation has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Canada to the extent that the laws of such jurisdiction permit.

It is not necessary for a by-law to be passed in order to confer any particular power on the corporation or its directors.

A corporation shall not carry on any business or exercise any power that it is restricted by its articles from carrying on or exercising, nor shall the corporation exercise any of its powers in a manner contrary to its articles.

No act of a corporation, including any transfer of property to or by a corporation, is invalid by reason only that the act or transfer is contrary to its articles or this Act.

No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a corporation by reason only that the document has been filed by the Director or is available for inspection at an office of the corporation.

No corporation and no guarantor of an obligation of a corporation may assert against a person dealing with the corporation or against a person who acquired rights from the corporation that

the articles, by-laws and any unanimous shareholder agreement have not been complied with;

the persons named in the most recent notice sent to the Director under section 106 or 113 are not the directors of the corporation;

the place named in the most recent notice sent to the Director under section 19 is not the registered office of the corporation;

a person held out by a corporation as a director, officer, agent or mandatary of the corporation has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the corporation or usual for a director, officer, agent or mandatary;

a document issued by any director, officer, agent or mandatary of a corporation with actual or usual authority to issue the document is not valid or genuine; or

a sale, lease or exchange of property referred to in subsection 189(3) was not authorized.

Subsection (1) does not apply in respect of a person who has, or ought to have, knowledge of a situation described in that subsection by virtue of their relationship to the corporation.

A corporation shall at all times have a registered office in the province in Canada specified in its articles.

A notice of registered office in the form that the Director fixes shall be sent to the Director together with any articles that designate or change the province where the registered office of the corporation is located.

The directors of a corporation may change the place and address of the registered office within the province specified in the articles.

A corporation shall send to the Director, within fifteen days of any change of address of its registered office, a notice in the form that the Director fixes and the Director shall file it.

A corporation shall prepare and maintain, at its registered office or at any other place in Canada designated by the directors, records containing

the articles and the by-laws, and all amendments thereto, and a copy of any unanimous shareholder agreement;

minutes of meetings and resolutions of shareholders;

copies of all notices required by section 106 or 113; and

a securities register that complies with section 50.

In addition to the records described in subsection (1), a corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committee thereof.

Subject to any other Act of Parliament and to any Act of the legislature of a province that provides for a longer retention period, a corporation shall retain the accounting records referred to in subsection (2) for a period of six years after the end of the financial year to which the records relate.

For the purposes of paragraph (1)(b) and subsection (2), where a body corporate is continued under this Act, “records” includes similar records required by law to be maintained by the body corporate before it was so continued.

The records described in subsection (2) shall be kept at the registered office of the corporation or at such other place as the directors think fit and shall at all reasonable times be open to inspection by the directors.

If accounting records of a corporation are kept outside Canada, accounting records adequate to enable the directors to ascertain the financial position of the corporation with reasonable accuracy on a quarterly basis shall be kept at the registered office or any other place in Canada designated by the directors.

Despite subsections (1) and (5), but subject to the Income Tax Act, the Excise Tax Act, the Customs Act and any other Act administered by the Minister of National Revenue, a corporation may keep all or any of its corporate records and accounting records referred to in subsection (1) or (2) at a place outside Canada, if

the records are available for inspection, by means of a computer terminal or other technology, during regular office hours at the registered office or any other place in Canada designated by the directors; and

the corporation provides the technical assistance to facilitate an inspection referred to in paragraph (a).

A corporation that, without reasonable cause, fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars.