Canada Cooperatives Act

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Sections2,817

• 1Short title

  This Act may be cited as the Canada Cooperatives Act.

• 2Definitions
• 2(1)

  The definitions in this subsection apply in this Act.

• 2(1)[p3]

  affairs means the relationship between a cooperative and its affiliates and their members, shareholders, directors and officers, but does not include the business carried on by those bodies corporate. (affaires internes)

• 2(1)[p4]

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

• 2(1)[p5]

  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 articles of correction, and includes any amendments to any of them. (statuts)

• 2(1)[p6]

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

• 2(1)[p6](a)

  a body corporate of which the 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;

• 2(1)[p6](b)

  a cooperative entity of which the person beneficially owns more than ten per cent of the voting rights that can be cast at a meeting of the cooperative entity;

• 2(1)[p6](c)

  an unincorporated entity of which the person beneficially owns more than ten per cent of the ownership interests;

• 2(1)[p6](d)

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

• 2(1)[p6](e)

  a trust or an estate or succession in which the person has a substantial beneficial interest or serves as a trustee, administrator, executor or liquidator of a succession or in a similar capacity;

• 2(1)[p6](f)

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

• 2(1)[p6](g)

  a child of the person or of the spouse or individual referred to in paragraph (f); and

• 2(1)[p6](h)

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

• 2(1)[p15]

  auditor includes a firm of accountants. (vérificateur)

• 2(1)[p16]

  bearer, in respect of a security, means the person who is in possession of a security that is payable to bearer or endorsed in blank. (porteur)

• 2(1)[p17]

  beneficial ownership includes

• 2(1)[p17](a)

  in Quebec, the rights of a beneficiary of a trust that owns property, and ownership of property through one or more administrators of the property of others, mandataries or other legal representatives; and

• 2(1)[p17](b)

  in the rest of Canada, ownership of property through one or more trustees, legal representatives, agents or other intermediaries. (véritable propriétaire)

• 2(1)[p20]

  body corporate includes a cooperative, a cooperative entity, a company or any other body corporate wherever or however incorporated. (personne morale)

• 2(1)[p21]

  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 cooperative that granted the option or right to acquire. (option d’achat)

• 2(1)[p22]

  cooperative means a body corporate that is incorporated under this Act and not discontinued under this Act. (coopérative)

• 2(1)[p23]

  cooperative entity means a body corporate that, by the law under which it is organized and operated, must be organized and operated on — and is organized and operated on — cooperative principles. (entité coopérative)

• 2(1)[p24]

  court means the court of first instance of superior jurisdiction of a province. (tribunal)

• 2(1)[p25]

  debt obligation means a bond, debenture, note or other evidence of indebtedness of an entity, whether secured or unsecured. (titre de créance)

• 2(1)[p26]

  delegate means an individual who is appointed or elected to represent a member at a meeting of members. (délégué)

• 2(1)[p27]

  Director means the Director appointed under section 371. (directeur)

• 2(1)[p28]

  director means an individual occupying the position of director, by whatever name called, of a cooperative, and “board of directors” or “directors” refers to the directors as a body. (administrateur)

• 2(1)[p29]

  distributing cooperative means, subject to subsections 4(4) and (5), a distributing cooperative as defined in the regulations. (coopérative ayant fait appel au public)

• 2(1)[p30]

  entity means a body corporate, a trust, a partnership, a fund or an unincorporated organization. (entité)

• 2(1)[p31]

  federation means a cooperative whose membership is composed substantially of other cooperative entities, federations or leagues of cooperative entities. (fédération)

• 2(1)[p32]

  firm of accountants means a partnership whose partners and accountant employees are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting. (cabinet de comptables)

• 2(1)[p33]

  former Act cooperative means a cooperative that was incorporated under the Canada Cooperative Associations Act. (coopérative sous le régime de l’ancienne loi)

• 2(1)[p34]

  holder means

• 2(1)[p34](a)

  in respect of a security certificate, the person in possession of the certificate issued or endorsed to the person or to bearer or in blank;

• 2(1)[p34](b)

  in respect of the ownership of a membership share, the person referred to in section 5; and

• 2(1)[p34](c)

  in respect of the ownership of an investment share, the person referred to in section 6. (détenteur)

• 2(1)[p38]

  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)

• 2(1)[p39]

  incorporated, when used with reference to a body corporate that is incorporated by or under an Act of Parliament or of the legislature of a province, includes a body corporate that is continued by or under any such Act. (constitué)

• 2(1)[p40]

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

• 2(1)[p41]

  individual means a natural person. (particulier)

• 2(1)[p42]

  issuer, in respect of a security, means the entity that issues the security. (émetteur)

• 2(1)[p43]

  investment share means a share in the capital of a cooperative that is not a membership share. (part de placement)

• 2(1)[p44]

  meeting of a cooperative means as the context permits. (assemblée d’une coopérative)

• 2(1)[p44](a)

  a meeting of members of a cooperative, or of a class of members of a cooperative, or

• 2(1)[p44](b)

  a meeting of the holders of investment shares of a cooperative, or a class or series of investment shares,

• 2(1)[p47]

  member means a member of a cooperative, but does not include an auxiliary member. (membre)

• 2(1)[p48]

  member loan means a loan required by the cooperative from its members as a condition of membership or to continue membership in the cooperative, and, for the purpose of Parts 8, 16, 17, 18.1 and 19 and subsection 163(2), a member loan is deemed to be a membership share issued at par value. (prêt de membre)

• 2(1)[p49]

  membership share means a share described in section 118. (part de membre)

• 2(1)[p50]

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

• 2(1)[p51]

  officer includes the chairperson of the board of directors, a vice-chairperson of the board of directors, the president, a vice-president, the secretary, an assistant secretary, the treasurer, an assistant treasurer and the general manager of a cooperative, and any other individual designated as an officer of the cooperative by by-law or by resolution of the directors, or any other individual who performs functions for the cooperative similar to those normally performed by an individual occupying any such office. (dirigeant)

• 2(1)[p52]

  ordinary resolution means a resolution passed by a majority — or any greater number set out in the articles or a unanimous agreement — of the votes cast by or on behalf of the persons who are entitled to vote in respect of the resolution. (résolution ordinaire)

• 2(1)[p53]

  patronage return means an amount that the cooperative allocates among and credits or pays to its members or to its member and non-member patrons based on the business done by them with or through the cooperative. (ristourne)

• 2(1)[p54]

  person means an individual or an entity, and includes a personal representative. (personne)

• 2(1)[p55]

  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)

• 2(1)[p56]

  prescribed means prescribed by regulation. (Version anglaise seulement)

• 2(1)[p57]

  prior legislation means the Canada Cooperative Associations Act, chapter 6 of the Statutes of Canada, 1970-71-72. (législation antérieure)

• 2(1)[p58]

  proxy means a completed and executed or, in Quebec, signed form of proxy by means of which a shareholder appoints a proxyholder to attend and act on the shareholder’s behalf at a meeting of the shareholders. (procuration)

• 2(1)[p59]

  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)

• 2(1)[p60]

  redeemable, with respect to an investment share issued by a cooperative, means that the share is one

• 2(1)[p60](a)

  that the cooperative may acquire or redeem on the demand of the cooperative; or

• 2(1)[p60](b)

  that the cooperative is required by its articles to acquire or redeem at a specified time or on the demand of the holder. (rachetable)

• 2(1)[p63]

  security includes an investment share, a debt obligation of a cooperative and a certificate evidencing such a share or debt obligation and, for the purposes of section 173 and Parts 18.1 and 19, includes a membership share. (valeur mobilière)

• 2(1)[p64]

  security interest means an interest or right in or charge on property of a cooperative to secure payment of a debt or the performance of an obligation of the cooperative. (sûreté)

• 2(1)[p65]

  send includes deliver. (envoyer)

• 2(1)[p66]

  series, in respect of investment shares, means a division of a class of those shares. (série)

• 2(1)[p67]

  share means a membership share or an investment share. (part)

• 2(1)[p68]

  shareholder means a person described in section 6. (détenteur de parts de placement)

• 2(1)[p69]

  special resolution means a resolution passed by not less than two thirds — or any greater number set out in the articles or a unanimous agreement — of the votes cast by or on behalf of the persons who are entitled to vote in respect of the resolution. (résolution spéciale)

• 2(1)[p70]

  unanimous agreement means an agreement in writing among all members and all shareholders, if any, that contains a provision referred to in subsection 115(1). (convention unanime)

• 2(2)Affiliates

  For the purposes of this Act,

• 2(2)(a)

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

• 2(2)(b)

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

• 2(3)Minors

  For the purposes of this Act, the word minor 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.

• 3Purposes of Act
• 3(1)

  The purposes of this Act are

• 3(1)(a)

  to set out the law applicable to the business endeavours of persons who have associated themselves in a democratic manner to carry on a common purpose; and

• 3(1)(b)

  to advance the cause of uniformity of cooperative business law in Canada.

• 3(2)Carrying on business in more than one place

  No cooperative may be incorporated under this Act unless

• 3(2)(a)

  it will carry on its undertaking in two or more provinces; and

• 3(2)(b)

  it will have a fixed place of business in more than one province.

• 3(3)Application

  This Act applies to cooperatives incorporated under this Act that have not been discontinued.

• 3(4)Non-application of certain Acts

  No provision of the Canada Business Corporations Act, the Canada Not-for-profit Corporations Act or the Winding-up and Restructuring Act applies to a cooperative.

• 3(5)Limitation on business that can be carried on

  No cooperative may carry on the business of

• 3(5)(a)

  a bank;

• 3(5)(b)

  a company to which the Insurance Companies Act applies;

• 3(5)(c)

  a company to which the Trust and Loan Companies Act applies; or

• 3(5)(d)

  an association to which the Cooperative Credit Associations Act applies.

• 3(6)Prohibition on granting degrees

  No cooperative may 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.

• 4Control
• 4(1)

  For the purposes of this Act,

• 4(1)(a)

  a person controls a body 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 beneficially owned by the person and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate; and

• 4(1)(b)

  a person controls a cooperative entity if the person has the right to exercise more than fifty per cent of the votes that may be cast at an annual meeting or to appoint or elect a majority of the directors.

• 4(2)Holding body corporate

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

• 4(3)Subsidiary

  A body corporate is a subsidiary of another body corporate if

• 4(3)(a)

  it is controlled by

• 4(3)(a)(i)

  that other body corporate,

• 4(3)(a)(ii)

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

• 4(3)(a)(iii)

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

• 4(3)(b)

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

• 4(4)Exemptions — on application by cooperative

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

• 4(5)Exemptions — classes of cooperatives

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

• 4(6)Repealed

  [Repealed, 2001, c. 14, s. 138]

• 5Membership share ownership

  A member is a holder of a membership share of a cooperative when, according to the members’ register of the cooperative, the member is the owner of the membership share or is entitled to be entered in the members’ register or like record of the cooperative as the owner of the membership share.

• 6Investment share ownership

  A person is a shareholder of a cooperative when, according to the securities register of the cooperative, the person is the owner of an investment share or is entitled to be entered in the securities register or like record of the cooperative as the owner of the investment share.

• 7Cooperative basis
• 7(1)

  For the purposes of this Act, a cooperative is organized and operated, and carries on business, on a cooperative basis if

• 7(1)(a)

  membership in the cooperative is open, in a non-discriminatory manner, to persons who can use the services of the cooperative and who are willing and able to accept the responsibilities of membership;

• 7(1)(b)

  each member or delegate has only one vote;

• 7(1)(c)

  no member or delegate may vote by proxy;

• 7(1)(d)

  interest on any member loan is limited to a maximum percentage fixed in the articles;

• 7(1)(e)

  dividends on any membership share are limited to the maximum percentage fixed in the articles;

• 7(1)(f)

  to the extent feasible, members provide the capital required by the cooperative, with the return paid on member capital not to exceed the maximum percentage specified in the articles;

• 7(1)(g)

  surplus funds arising from the cooperative’s operations are used

• 7(1)(g)(i)

  to develop its business,

• 7(1)(g)(ii)

  to provide or improve common services to members,

• 7(1)(g)(iii)

  to provide for reserves or the payment of interest on member loans or dividends on membership shares and investment shares,

• 7(1)(g)(iv)

  for community welfare or the propagation of cooperative enterprises, or

• 7(1)(g)(v)

  as a distribution among its members as a patronage return; and

• 7(1)(h)

  it educates its members, officers, employees and the public on the principles and techniques of cooperative enterprise.

• 7(2)Restrictions

  Paragraph (1)(a) is subject to any restrictions on the classes of persons to which membership may be available that may reasonably relate to any business restriction set out in the articles of the cooperative and to the reasonable commercial ability of the cooperative to provide services to prospective members, as long as the restrictions are consistent with applicable laws with respect to human rights.

• 7(3)Exception

  Despite paragraph (1)(b),

• 7(3)(a)

  the articles of a federation may provide that the members or delegates of the federation have more than one vote;

• 7(3)(b)

  if, before the coming into force of this subsection, the articles of association or charter by-laws of a former Act cooperative provide that a member or delegate of the former Act cooperative has more than one vote, the articles filed under subsection 379(2) may contain the same provisions with respect to voting rights of members or delegates;

• 7(3)(c)

  any provision referred to in paragraph (b) is deemed to be contained in the articles of the cooperative until it complies with subsection 379(2); and

• 7(3)(d)

  the articles of a cooperative may provide that subject to the conditions stated in the articles, a cooperative entity may have more than one vote in a cooperative.

• 8Incorporators
• 8(1)

  An application for incorporation of a cooperative may be made by a minimum of three persons, or by one or more cooperative entities, who intend to be members of the cooperative.

• 8(2)Persons not to be incorporators

  An application under subsection (1) is not to be made by

• 8(2)(a)

  an individual who is less than eighteen years of age;

• 8(2)(b)

  an individual who is incapable; or

• 8(2)(c)

  an individual or body corporate that has the status of bankrupt.

• 9Capital structure

  A cooperative may be incorporated with or without membership shares and with or without the power to issue investment shares.

• 10Application

  An application for incorporation is made by sending the following to the Director:

• 10(a)

  articles of incorporation;

• 10(b)

  a notice of registered office in accordance with section 30;

• 10(c)

  a notice of directors in accordance with section 81; and

• 10(d) and (e)Repealed

  [Repealed, 2018, c. 8, s. 49]

• 10(f)

  any other information that the Director may require to make a decision under section 12.

• 11Articles
• 11(1)

  Articles of incorporation must be in the form fixed by the Director and contain the following particulars:

• 11(1)(a)

  the name of the cooperative;

• 11(1)(b)

  the place in Canada where its proposed registered office will be located;

• 11(1)(c)Repealed

  [Repealed, 2018, c. 8, s. 50]

• 11(1)(d)

  the number of directors or the minimum and maximum number of directors;

• 11(1)(e)

  any restriction on the businesses that the cooperative may carry on;

• 11(1)(f)

  any restriction on the class of membership in the cooperative;

• 11(1)(g)

  a statement that the cooperative will be organized and operated and will carry on business on a cooperative basis;

• 11(1)(h)

  a statement that the cooperative will carry on its undertaking in two or more provinces and will have a fixed place of business in more than one province;

• 11(1)(i)

  whether the cooperative is to be incorporated with or without membership share capital, and, if there is to be no membership share capital, a statement that the interest or right of each member as member is, subject to subsection 7(3), the same as that of every other member;

• 11(1)(j)

  if there is to be membership share capital, whether the number of membership shares to be issued is unlimited or limited, and if limited, the maximum number of membership shares that may be issued, and, if the membership shares are to have a par value, their par value and, if they are not to have par value, whether the membership shares are to be issued, purchased, redeemed or otherwise acquired at a fixed price or at a price determined in accordance with a formula, and if so, the particulars of the formula;

• 11(1)(k)

  any provision for a maximum rate of return that may be paid on member loans or membership shares;

• 11(1)(l)

  whether there is to be investment share capital and, if so, the particulars of it;

• 11(1)(m)

  any provisions for the distribution of the property of the cooperative on its dissolution and, in the case of a cooperative to which Part 20 or 21 applies, the provisions for that distribution of property in accordance with the applicable Part; and

• 11(1)(n)

  any provision by which the members, other than by means of a unanimous agreement, restrict, in whole or in part, the powers of the directors to manage the business of the cooperative.

• 11(2)Additional provisions

  The articles may set out any provisions that could be set out in the by-laws of the cooperative and if they do, any reference in this Act to the by-laws of the cooperative is also a reference to those provisions of the articles.

• 11(3)Special majorities

  Subject to subsection (4), the articles or a unanimous agreement may require a greater number of votes of directors, members or shareholders than is required by this Act to effect an action.

• 11(4)Voting number

  Neither the articles nor a unanimous agreement may require, in order to remove a director or delegate, that more than a majority of the votes cast by or on behalf of the persons who are entitled to vote be so cast.

• 11(5)Repealed

  [Repealed, 2018, c. 8, s. 50]

• 12Issuance of certificate of incorporation
• 12(1)

  The Director must issue a certificate of incorporation for a cooperative if the Director is satisfied that

• 12(1)(a)

  the articles are in accordance with section 11 and, if applicable, section 353 and subsection 359(2);

• 12(1)(b)

  the cooperative will be organized and operated and will carry on business on a cooperative basis;

• 12(1)(c)

  the cooperative will comply with Part 20 or 21, if applicable; and

• 12(1)(d)

  a notice that is required to be given under subsection 30(2) or 81(1) indicates that the cooperative, if it came into existence, would be in compliance with the Act.

• 12(2)Reliance on articles

  For the purposes of paragraphs (1)(b) and (c), the Director may rely on the articles required by section 10.

• 13Date of existence and effect

  On the day set out in its certificate of incorporation, a cooperative comes into existence and the incorporators become members of the cooperative.

• 14Adoption of by-laws

  Without delay after the issuance of the certificate of incorporation, a meeting of the members must be held to make by-laws for the cooperative.

• 15By-laws — mandatory provisions
• 15(1)

  The by-laws of a cooperative must provide for

• 15(1)(a)

  the qualifications of members and the procedures for acceptance of members;

• 15(1)(b)

  the rights of joint members, if any;

• 15(1)(c)

  the membership obligations of members, including any obligation to use the services of the cooperative and any fees to be paid by members;

• 15(1)(d)

  if the cooperative has auxiliary members, the rights and obligations of auxiliary members and the conditions for their acceptance by the cooperative as auxiliary members, including

• 15(1)(d)(i)

  the relationship an individual must have with the cooperative in order to be an auxiliary member, and

• 15(1)(d)(ii)

  the services of the cooperative that may be available to auxiliary members;

• 15(1)(e)

  whether the interest or right of a member in the cooperative may, subject to section 46, be transferred or assigned, and any conditions or restrictions that apply to such a transfer or assignment;

• 15(1)(f)

  the selection, qualifications, term of office and removal of directors and members of committees of directors;

• 15(1)(g)

  the distribution of any surplus earnings arising from the operations of the cooperative;

• 15(1)(h)

  if the cooperative is to act as an agent or mandatary for its members, a definition of that relationship;

• 15(1)(i)

  subject to sections 39 and 40 and Parts 20 and 21, the conditions on which membership is terminated, whether by withdrawal or by involuntary termination, if it may be terminated otherwise than as provided for in this Act, and the determination of the value and disposition of the member’s interest or right in the cooperative on termination; and

• 15(1)(j)

  if the cooperative wishes to permit members or shareholders to attend a meeting of the cooperative by means of a communication facility referred to in subsection 48(3), the ways in which votes must be held.

• 15(2)By-laws — other provisions

  The by-laws of a cooperative may provide for

• 15(2)(a)

  the representation of members by delegates and, if so,

• 15(2)(a)(i)

  the designation of the classes or regional groups of members, if any, who may be represented by delegates,

• 15(2)(a)(ii)

  the procedure for altering classes or regional groups of members, if applicable, and

• 15(2)(a)(iii)

  the powers, duties, selection, voting rights and procedures for the removal of delegates;

• 15(2)(b)

  the division of members into classes or regional groups and, if so,

• 15(2)(b)(i)

  the qualifications for membership in each class or regional group,

• 15(2)(b)(ii)

  the conditions precedent to membership in each class or regional group,

• 15(2)(b)(iii)

  the method, time and manner of withdrawing from a class or regional group or transferring membership from one class or regional group to another and any applicable conditions on a transfer, and

• 15(2)(b)(iv)

  the conditions on which membership in a class or regional group ends;

• 15(2)(c)

  the referral of disputes between a member and the cooperative to a process of dispute resolution; and

• 15(2)(d)

  any other matter that the members consider necessary or desirable.

• 16Binding effect of by-laws and articles

  The articles and by-laws of a cooperative bind it and its members to the same extent as if they

• 16(a)

  had been signed by the cooperative and every member; and

• 16(b)

  contained undertakings by every member and the successors, assigns and personal representatives of every member to observe all the provisions of the articles and by-laws.

• 17Copies
• 17(1)

  Each member and shareholder may on request, not more than once in each calendar year, receive free of charge one copy of the articles, the by-laws and any unanimous agreement, and one copy of any amendments to the articles, the by-laws and any unanimous agreement, of the cooperative.