Co-operative Corporations Act

1 (1) In this Act, “articles of incorporation” or “articles” means the original or restated articles of incorporation, articles of amalgamation, letters patent, supplementary letters patent, a special Act and any other instrument by which a co-operative is incorporated, and includes any amendments thereto; (“statuts constitutifs”, “statuts”) “authorized capital” means the authorized capital as determined under section 25; (“capital social autorisé”) “certificate of incorporation” includes letters patent, a special Act or any other instrument by which a co-operative is incorporated; (“certificat de constitution”) “certified copy” means, (a) in relation to a document of a co-operative, a copy of the document certified to be a true copy signed by an officer, (b) in relation to a document issued by a court, a copy of the document certified to be a true copy under the seal of the court and si…

1.1 (1) The Minister may delegate in writing any or all of the Minister’s duties and powers under this Act to any person, subject to any restrictions set out in the delegation. 2017, c. 34, Sched. 9, s. 2. Same, Director (2) The Director may delegate in writing any or all of the Director’s duties and powers under this Act to any person, subject to any restrictions set out in the delegation. 2020, c. 7, Sched. 6, s. 2. Section Amendments with date in force (d/m/y) 2017, c. 34, Sched. 9, s. 2 - 29/10/2018 2020, c. 7, Sched. 6, s. 2 - 12/05/2020

1.2 The Lieutenant Governor in Council may designate a person to exercise any powers or perform any duties of the Minister under this Act, subject to any restrictions set out in the designation. 2018, c. 17, Sched. 9, s. 1. Section Amendments with date in force (d/m/y) 2018, c. 17, Sched. 9, s. 1 - 08/06/2019

2 (1) For the purposes of this Act, a renewable energy co-operative is a co-operative whose articles restrict the business of the co-operative to, (a) generating, within the meaning of the Electricity Act, 1998, electricity produced from one or more sources that are renewable energy sources for the purposes of that Act; and (b) selling, as a generator within the meaning of that Act, electricity it produces from one or more renewable energy sources. 2009, c. 12, Sched. I, s. 2. Ancillary powers (2) As part of its business of generating and selling electricity produced from one or more renewable energy sources, a renewable energy co-operative, (a) may establish or develop one or more generation facilities, within the meaning of the Electricity Act, 1998, to generate electricity produced from one or more renewable energy sources; and (b) may promote the purchase by electricity users of elec…

3 This Act, except where it is otherwise expressly provided, applies, (a) to every corporation incorporated as a co-operative by or under a general or special Act of the Parliament of the former Province of Upper Canada; (b) to every corporation incorporated as a co-operative by or under a general or special Act of the Parliament of the former Province of Canada that has its head office and carries on business in Ontario and that was incorporated with objects to which the authority of the Legislature extends; and (c) to every corporation incorporated as a co-operative by or under a general or special Act of the Legislature,

but this Act does not apply to a corporation to which the Credit Unions and Caisses Populaires Act, 2020 applies. R.S.O. 1990, c. C.35, s. 3; 2015, c. 20, Sched. 7, s. 1; 2020, c. 36, Sched. 7, s. 304 (1). Section Amendments with date in force (d/m/y) 2020, c. 36, Sched. 7, s. 304 (1) - 01/03/2022

Incorporation

4 (1) A co-operative may be incorporated under this Act for any lawful objects to which the authority of the Legislature extends, except those of a corporation the incorporation of which is provided for in any other Act. Professions (2) Where the practice of a profession is governed by an Act, a co-operative may be incorporated to practise the profession only if such Act expressly permits the practice of the profession by a corporation and subject to the provisions of such Act. R.S.O. 1990, c. C.35, s. 4.

5 (1) Five or more persons, being, (a) corporations; or (b) natural persons who are of the age of eighteen years or more,

and who intend to be members of the co-operative, may incorporate a co-operative with or without share capital by signing and delivering to the Minister in duplicate articles of incorporation and such other information as may be prescribed. R.S.O. 1990, c. C.35, s. 5 (1); 1994, c. 17, s. 3 (1). Articles for worker co-operatives (1.1) Three or more natural persons who are of the age of eighteen years or more and who intend to be members of a worker co-operative may incorporate such a co-operative with or without share capital by signing and delivering articles of incorporation to the Minister in duplicate. 1992, c. 19, s. 2 (1). Contents of articles (2) Subject to subsection (3), articles of incorporation shall set out the following particulars: 1. The name of the co-operative to be incorporated. 2. All restrictions on the business that the co-operative may carry on or on the powers that …

6 (1) If the articles conform to law, the approvals to incorporate that are required by statute have been given, all prescribed information has been delivered to the Minister and all fees established by the Minister have been paid, the Minister shall, (a) endorse on each duplicate of the articles the words “Filed/déposé” and the day, month and year of the filing thereof; (b) file one of the duplicates in the Minister’s office; and (c) issue to the incorporators or their agent a certificate of incorporation to which the Minister shall affix the other duplicate. R.S.O. 1990, c. C.35, s. 6 (1); 1994, c. 17, s. 4; 1997, c. 19, s. 3 (2). Idem (2) A co-operative comes into existence upon the date set forth in its certificate of incorporation. Idem (3) A certificate of incorporation is conclusive proof that all conditions precedent required to be performed by the incorporators have been complie…

Name

7 (1) The corporate name of a co-operative shall include the word “co-operative” in English or “coopérative” in French as part thereof. R.S.O. 1990, c. C.35, s. 7 (1). Idem (2) Where a co-operative or any director, officer, employee or member uses the name of the co-operative, the word “co-operative” or «coopérative» may be abbreviated to “co-op” in English or “coop” in French. R.S.O. 1990, c. C.35, s. 7 (2). Idem (3) No corporation, association, partnership or individual not being a co-operative to which this Act applies shall use in Ontario a name that includes the word “co-operative” or “coopérative” or any abbreviation or derivation thereof whether or not the word, abbreviation or derivation is used in or in connection with the name. R.S.O. 1990, c. C.35, s. 7 (3). Idem (4) Subsection (3) does not apply to a corporation incorporated by or under the authority of the Parliament of Cana…

8 Despite section 7, a co-operative may use its name in such form and in such language as the articles provide and as the Minister approves. R.S.O. 1990, c. C.35, s. 8.

9 (1) The name of a co-operative shall not, (a) be the same as or similar to the name of a known corporation, association, partnership or individual whether in existence or not if its use would be likely to deceive, except where the corporation, association, partnership or individual signifies its, his or her consent in writing to the use of the name in whole or in part, and, if required by the Minister, (i) in the case of a corporation, undertakes to dissolve or change its name to a dissimilar name within six months after the filing of the articles or amendment by which the name is acquired, or (ii) in the case of an association, partnership or individual, undertakes to cease to carry on its, his or her business or activities, or change its, his or her name to a dissimilar name, within six months after the filing of the articles or amendment by which the name is acquired; (b) suggest or…

10 A change in the name of a co-operative does not affect its rights or obligations. R.S.O. 1990, c. C.35, s. 10.

11 Where a co-operative carries on business or identifies itself to the public in a name or style other than as provided in the articles, such name or style shall not include the word “Limited”, “Limitée”, “Incorporated”, “Incorporée” or “Corporation” or any abbreviation thereof. R.S.O. 1990, c. C.35, s. 11.

12 (1) Any person may, on application in writing and on the payment of the fee established by the Minister, reserve a corporate name for the use and benefit of the applicant or the applicant’s nominee for a period of ninety days or such lesser period as the applicant specifies, if the name is at the time not contrary to section 9. R.S.O. 1990, c. C.35, s. 12 (1); 1997, c. 19, s. 3 (3). Idem (2) During the period for which the name has been reserved, no corporation shall acquire the name or a similar name without the consent in writing of the person for whose use and benefit the name has been reserved. R.S.O. 1990, c. C.35, s. 12 (2). Section Amendments with date in force (d/m/y) 1997, c. 19, s. 3 (3) - 10/10/1997

Head Office

13 Repealed: 2001, c. 8, s. 8. Section Amendments with date in force (d/m/y) 2001, c. 8, s. 8 - 29/06/2001

14 (1) Subject to subsection (2), a co-operative shall at all times have its head office at the place in Ontario where the articles provide that the head office is to be located. R.S.O. 1990, c. C.35, s. 14 (1). Change of head office (2) A co-operative may by by-law change the municipality or geographic township in which its head office is located to another place in Ontario. R.S.O. 1990, c. C.35, s. 14 (2). Where municipality annexed or amalgamated (3) Where the location of the head office of a co-operative is changed by reason only of the annexation or amalgamation of the place in which the head office is located to or with another municipality, such change does not constitute and has never constituted a change within the meaning of subsection (2). R.S.O. 1990, c. C.35, s. 14 (3). Filing of by-law (4) The co-operative shall, within ten days after a by-law passed under subsection (2) ha…

Powers

15 (1) A co-operative has the capacity and the rights, powers and privileges of a natural person. Limitation in articles (2) The capacity or powers of a co-operative may be limited by the articles. 1992, c. 19, s. 3. (3) Repealed: 1992, c. 19, s. 3. Powers to act outside of Ontario (4) Every co-operative may exercise its powers beyond the boundaries of Ontario to the extent to which the laws in force where the powers are sought to be exercised permit, and may accept extra-provincial powers and rights. R.S.O. 1990, c. C.35, s. 15 (4). Section Amendments with date in force (d/m/y) 1992, c. 19, s. 3 - 24/08/1992

16 (1) No act of a co-operative and no transfer of real or personal property to or by a co-operative, otherwise lawful, that is heretofore or hereafter done or made, is invalid by reason of the fact that the co-operative was without capacity or power to do such act or make or receive such transfer, but such lack of capacity or power may be asserted, (a) in a proceeding against the co-operative by a member under subsection (2); (b) in a proceeding by the co-operative, whether acting directly or through a receiver, liquidator, trustee or other legal representative or through members in a representative capacity, against a director or officer or former director or officer of the co-operative; or (c) as cause for the cancellation of the certificate of incorporation of the co-operative under section 166. Restraining order (2) A member of a co-operative may apply to a court of competent jurisd…

17 (1) A co-operative shall not make loans to any of its members, directors or employees or give directly or indirectly, by means of a loan, guarantee, the provision of security or otherwise, any financial assistance to any member, director or employee, except in the course of transactions of a type available to all members of the co-operative. Liability of directors and officers (2) Those directors and officers of a co-operative who authorize or consent to making a loan or giving financial assistance in contravention of subsection (1) are jointly and severally liable to the co-operative and to its creditors for any actual loss to the co-operative together with interest at the rate of 6 per cent a year. R.S.O. 1990, c. C.35, s. 17.

18 (1) Repealed: 2001, c. 8, s. 9. Contracts (2) A contract that if entered into by an individual person would by law be required to be in writing signed by the parties to be charged therewith may be entered into on behalf of a co-operative in writing signed by any person acting under its authority, express or implied. R.S.O. 1990, c. C.35, s. 18 (2). Parol contracts (3) A contract that if entered into by an individual person would by law be valid although made by parol only and not reduced into writing may be entered into by parol on behalf of a co-operative by any person acting under its authority, express or implied. R.S.O. 1990, c. C.35, s. 18 (3). Section Amendments with date in force (d/m/y) 2001, c. 8, s. 9 - 29/06/2001

19 A co-operative may, by writing under seal, empower any person, either generally or in respect of any specified matters, to execute, as its attorney and on its behalf in any place within or outside Ontario, documents to which it is a party in any capacity and that are required by law to be under seal, and every document signed by such attorney on behalf of the co-operative acting within the scope of the attorney’s authority, express or implied, and under the seal of the attorney binds the co-operative and has the same effect as if it were under the seal of the co-operative. R.S.O. 1990, c. C.35, s. 19. Preincorporation contracts

20 (1) In this section, “contractor” means a person who enters into a preincorporation contract in the name of or on behalf of a co-operative before its incorporation; (“contractant”) “other party” means a person with whom a contractor enters into a preincorporation contract; (“autre partie”) “preincorporation contract” means a contract entered into by a contractor in the name of or on behalf of a co-operative before its incorporation. (“contrat préconstitutif”) Adoption of preincorporation contracts (2) A co-operative may adopt a preincorporation contract entered into in its name or on its behalf, and thereupon the co-operative is entitled to the benefits and is subject to the liabilities that were contracted in its name or on its behalf and the contractor ceases to be entitled to such benefits or to be subject to such liabilities. Non-adoption of preincorporation contracts (3) Where a …

21 Subject to this Act and the articles, the directors may pass by-laws that regulate the business and affairs of the co-operative. 1992, c. 19, s. 4. Section Amendments with date in force (d/m/y) 1992, c. 19, s. 4 - 24/08/1992

21.1 The directors of a renewable energy co-operative shall pass one or more by-laws governing how the surplus arising from the business of the co-operative is to be allocated, credited or paid to the members of the co-operative. 2009, c. 12, Sched. I, s. 3. Section Amendments with date in force (d/m/y) 2009, c. 12, Sched. I, s. 3 - 9/09/2009

22 A by-law relating to the remuneration of a director as director shall fix the remuneration and the period for which it is to be paid. R.S.O. 1990, c. C.35, s. 22.

23 No by-law is effective until it is, (a) passed by the directors of a co-operative; and (b) confirmed, with or without variation, by at least two-thirds of the votes cast at a general meeting of the members of the co-operative duly called for that purpose, or such greater proportion of the votes cast as the articles provide. R.S.O. 1990, c. C.35, s. 23.

24 (1) The directors may pass by-laws providing for, (a) the division of its members into groups, either territorially or on the basis of common interest; (b) the election of some or all of its directors, (i) by such groups on the basis of the number of members in each group or the volume of business done by each group with the co-operative, or both, or (ii) for the groups in a defined geographical area, by the delegates of such groups meeting together; (c) the election of delegates and alternate delegates to represent each group on the basis of the number of members in each group or the volume of business done by each group with the co-operative, or both; (d) where a member is a co-operative, the election or appointment of delegates and alternate delegates to represent the member co-operative on the basis of the number of members in the member co-operative or the volume of business done…

Capital

25 (1) The authorized capital of a co-operative shall be divided into shares with par value and may consist of shares of more than one class or series. R.S.O. 1990, c. C.35, s. 25 (1); 2004, c. 31, Sched. 8, s. 3 (1). Par value (2) Each class or series of shares shall have a minimum par value of $1 or any multiple of $1 that results in a par value expressed in dollars without cents. 2001, c. 8, s. 10; 2004, c. 31, Sched. 8, s. 3 (2). Authorized capital (3) The authorized capital of the co-operative shall be expressed in Canadian currency in its articles and is an amount equal to the total of the products of the number of shares of each class or series multiplied by the par value thereof. R.S.O. 1990, c. C.35, s. 25 (3); 2004, c. 31, Sched. 8, s. 3 (3). Section Amendments with date in force (d/m/y) 2001, c. 8, s. 10 - 29/06/2001 2004, c. 31, Sched. 8, s. 3 (1-3) - 31/08/2007

26 (1) The membership shares of a co-operative shall be shares to which there is attached no preference, right, condition, restriction, limitation or prohibition set out in the articles of the co-operative other than the restriction on the allotment, issue or transfer. R.S.O. 1990, c. C.35, s. 26 (1); 1994, c. 17, s. 2. Classes of shares (2) Where a co-operative has only one class of shares, that class shall be membership shares and designated as co-operative or co-op membership shares. R.S.O. 1990, c. C.35, s. 26 (2); 1994, c. 17, s. 2. Idem (3) Where a co-operative has more than one class of shares, one class shall be membership shares, designated as provided in subsection (2), and the other shares shall consist of one or more classes of preference shares and shall have attached thereto the designation co-operative or co-op preference shares and such other designation as set out in the…

27 (1) Articles that provide for preference shares must set out, (a) the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to any class of preference shares; and (b) the maximum number of shares of any class of preference shares that the co-operative is authorized to issue. Same (2) Preference shares do not confer on their holder the right to vote except as permitted under this Act or the right to receive any of the remaining property of the co-operative on dissolution. 1994, c. 17, s. 6. Section Amendments with date in force (d/m/y) 1994, c. 17, s. 6 - 23/06/1994

27.1 (1) The articles, subject to such conditions and restrictions as may be prescribed and subject to the limitations set out in the articles, (a) may authorize the issue of any class of preference shares in one or more series and may fix the number of shares in, and determine the designations, preferences, rights, conditions, restrictions, limitations and prohibitions attaching to the shares of, each series; and (b) may, where the articles authorize the issue of any class of preference shares in one or more series, authorize the directors to fix the number of shares in, and to determine the designations, preferences, rights, conditions, restrictions, limitations and prohibitions attaching to the shares of each series. 2004, c. 31, Sched. 8, s. 4. Proportionate abatement (2) If any amount, (a) of cumulative dividends, whether or not declared, or declared non-cumulative dividends; or (b)…

28 Each share of a class shall be the same in all respects as every other share of that class, except as otherwise permitted by section 27.1. 2004, c. 31, Sched. 8, s. 5. Section Amendments with date in force (d/m/y) 2004, c. 31, Sched. 8, s. 5 - 31/08/2007

Issued Capital

29 The issued capital of a co-operative shall be expressed in Canadian currency and is an amount equal to the total of the products of the number of issued shares of each class or series multiplied by the par value thereof less such decreases in the issued capital as from time to time have been effected by the co-operative in accordance with this Act. R.S.O. 1990, c. C.35, s. 29; 2004, c. 31, Sched. 8, s. 6. Section Amendments with date in force (d/m/y) 2004, c. 31, Sched. 8, s. 6 - 31/08/2007

30 (1) If an issued share of a class or series is cancelled, the issued capital is decreased by an amount equal to the par value of the shares of that class or series. 2004, c. 31, Sched. 8, s. 7. Cancellation of fractions of shares (2) If a fraction of an issued share of a class or series is cancelled, the issued capital is decreased by an amount that bears the same proportion to the amount determined under subsection (1) that the fraction bears to a whole share of that class or series. 2004, c. 31, Sched. 8, s. 7. Section Amendments with date in force (d/m/y) 2004, c. 31, Sched. 8, s. 7 - 31/08/2007

Redemption, Purchase and Surrender

30.1 (1) A co-operative may purchase or redeem its shares only in accordance with this Act and the regulations and in accordance with its articles. 2004, c. 31, Sched. 8, s. 8 (1). Price for purchase and redemption (2) A co-operative may purchase, for cancellation, any of its shares or redeem any of its redeemable shares at a price not exceeding the par value of the shares and any premium and unpaid dividends. 1994, c. 17, s. 7. Interpretation (3) For the purposes of this Act, (a) “premium”, when used with respect to shares, means an amount payable on the purchase for cancellation or redemption of shares of a class or series of preference shares of a co-operative in addition to the par value of the shares, which amount is calculated according to a formula stated in the articles and does not exceed a prescribed amount; and (b) “unpaid dividends” includes cumulative dividends that are due …

31 (1) If the articles provide that the shares of a class of preference shares are redeemable without the consent of the holders of the shares and if only part of the preference shares are to be redeemed, the shares to be redeemed shall be selected, (a) by lot in the manner determined by the board of directors; (b) as nearly as may be in proportion to the number of preference shares of the class that are registered in the name of each holder of shares of that class; (c) in such other manner as the board of directors determines with the consent of the holders of preference shares of the class, obtained in the manner set out in subsection (3); or (d) in such manner as may be authorized by regulation,

but the articles may confine the manner of selection to one or more of the methods referred to in clause (a), (b), (c) or (d). 2004, c. 31, Sched. 8, s. 9. Redemption of shares of a series of preference shares (1.1) If the articles provide that the shares of a series of preference shares are redeemable without the consent of the holders of the shares and if only part of the series of preference shares are to be redeemed, the shares to be redeemed shall be selected in such manner as may be prescribed by regulation. 2004, c. 31, Sched. 8, s. 9. Insolvency (2) A co-operative shall not redeem shares under subsection (1) if the co-operative is insolvent or if the redemption would render the co-operative insolvent. R.S.O. 1990, c. C.35, s. 31 (2). Method of redemption (3) Where shares of a class of preference shares are selected in the manner referred to in clause (1) (c), the selection shall …

32 (1) Subject to subsection (2), (a) a co-operative may, with a person’s consent, purchase all or a part of the shares in the co-operative held by the person on payment to the person of such amount as they have agreed that does not exceed the sum of the par value of the shares and any premium and unpaid dividends; and (b) a co-operative may redeem a member’s shares, without the consent of the member, on payment to the member of an amount equal to the lesser of the book value of the shares and the sum of the par value of the shares and any premium and unpaid dividends if, (i) the member has not transacted any business with the co-operative for two years and the co-operative is not a renewable energy co-operative, or (ii) the member, if it is a corporation, is about to be dissolved. 2009, c. 12, Sched. I, s. 4. Insolvency (2) A co-operative shall not purchase or redeem shares under subsec…

32.1 (1) The articles of a co-operative may provide for any class of shares that the co-operative may purchase for cancellation or may redeem shares of the class at a price determined in accordance with a formula set out in the articles that is less than the price for purchase for cancellation or redemption price otherwise determined if, (a) the co-operative is otherwise required to purchase for cancellation or to redeem the shares; and (b) the board of directors determines, by resolution, that it is necessary for the long-term financial well-being of the co-operative. Notice of reduced redemption price (2) A co-operative that resolves to purchase for cancellation or redeem shares under subsection (1) shall deliver written notice to the holder of the shares within seven days following the date of the resolution. Right to dissent or retain shares (3) A holder of shares who receives notice…

33 (1) A co-operative may accept from any member a donation of any of its shares without any repayment of capital in respect thereof. R.S.O. 1990, c. C.35, s. 33 (1). Sale of donated shares (2) Shares accepted under subsection (1) are not thereby cancelled and the co-operative may sell the shares at such price and on such terms as the directors determine. 1994, c. 17, s. 10. Section Amendments with date in force (d/m/y) 1994, c. 17, s. 10 - 23/06/1994

Offering Statement

34 (1) No co-operative or person shall sell, dispose of or accept directly or indirectly any consideration for securities of the co-operative where the co-operative has more than the prescribed number of security holders, or where the sale or disposition of or acceptance of consideration for the securities would have the effect of increasing the number of security holders in the co-operative to more than the prescribed number, unless the co-operative has filed with the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario an offering statement and has obtained a receipt for it. 2004, c. 31, Sched. 8, s. 10; 2018, c. 17, Sched. 9, s. 13; 2019, c. 15, Sched. 8, s. 3. Exception (2) Subsection (1) does not apply to, (a) the issue of shares under subsection 56 (1) or of debt obligations under subsection 56 (4); (b) a co-operative that has filed with the Ontario Sec…

35 (1) An offering statement shall provide full, true and plain disclosure of all material facts relating to the securities proposed to be issued. Form and content (2) An offering statement shall comply as to form and content with the requirements of this Act and the regulations. Supporting material (3) There shall be filed with an offering statement such documents, reports and other material as are required by this Act and the regulations. R.S.O. 1990, c. C.35, s. 35 (1-3). Material changes (4) Where there is a material change in the facts set forth in an offering statement, whether before or after the issuance of a receipt therefor, the co-operative shall, within thirty days of that change, file with the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario a statement of such change. R.S.O. 1990, c. C.35, s. 35 (4); 1997, c. 28, s. 35; 2018, c. 17, Sched. 9…

36 (1) The Chief Executive Officer of the Financial Services Regulatory Authority of Ontario may in his or her discretion issue a receipt for any statement filed under section 34 or subsection 35 (4) or (5) unless it appears to the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario that, (a) the statement or any document required to be filed therewith, (i) fails to comply in any substantial respect with any of the requirements of this Act or the regulations, (ii) contains any statement, promise, estimate or forecast that is misleading, false or deceptive, or (iii) conceals or omits to state any material facts necessary in order to make any statement contained therein not misleading in the light of the circumstances in which it was made; or (b) the proceeds from the sale of the securities to which the statement relates that are to be paid into the treasury o…

37 (1) A copy of a statement for which a receipt has been issued under section 36 shall be open to inspection, (a) at the offices of the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario; and (b) during normal business hours, at the head office of the co-operative. R.S.O. 1990, c. C.35, s. 37 (1); 1997, c. 28, s. 36; 2018, c. 17, Sched. 9, s. 2, 13; 2019, c. 15, Sched. 8, s. 3. Same (2) No person shall refuse to permit a person to inspect a statement in accordance with subsection (1) or to make extracts from them. 2023, c. 9, Sched. 8, s. 2. Inspection by remote means (3) The co-operative may, but is not required to, permit a person to inspect a copy of a statement mentioned in subsection (1) remotely at any time by means of any technology and may permit the person to make extracts by such means. 2023, c. 9, Sched. 8, s. 2. Section Amendments with date in …

Allotment, Issue and Transfer

38 Shares shall not be allotted or issued except for a consideration at least equal to the product of the number of shares allotted or issued multiplied by the par value thereof. R.S.O. 1990, c. C.35, s. 38; 1994, c. 17, s. 12. Section Amendments with date in force (d/m/y) 1994, c. 17, s. 12 - 23/06/1994

39 (1) No share shall be issued until it is fully paid and a share is not fully paid until all the consideration therefor in cash, property or services, as determined under this section, has been received by the co-operative. Idem (2) For the purposes of subsection (1) and paragraph 21 of subsection 15 (2), a document evidencing indebtedness of the allottee does not constitute property, and services shall be past services actually performed for the co-operative, and the value of property or services shall be the value the directors determine by express resolution to be in all the circumstances of the transaction the fair equivalent of the cash value. R.S.O. 1990, c. C.35, s. 39.

40 No transfer of membership shares in a co-operative with share capital, unless made by sale under execution or under the decree, order or judgment of a court of competent jurisdiction or by transmission to the personal representative of a member, is valid for any purpose unless, (a) the transfer has been authorized by resolution of the directors of the co-operative or by a person authorized by such a resolution to approve such transfers; (b) the transferee is admitted to membership in the co-operative as required by its articles and by-laws; and (c) the entry thereof has been duly made in the register of transfers of the co-operative or in a branch register of transfers,

except only as evidence of the rights of the parties thereto towards each other. R.S.O. 1990, c. C.35, s. 40; 1994, c. 17, s. 2. Section Amendments with date in force (d/m/y) 1994, c. 17, s. 2 - 23/06/1994

41 (1) A co-operative may provide by by-law for the payment of commissions to persons in consideration of their procuring subscriptions for shares in the co-operative, but no such commission shall exceed 10 per cent of the par value of the shares. No unauthorized commission (2) Except as provided in subsection (1), no co-operative shall apply any of its shares or capital, either directly or indirectly, in payment of any commission to any person in consideration of the person’s procuring subscriptions for shares of the co-operative, whether the shares or capital is so applied by being added to the purchase money of any property acquired by the co-operative or to the contract price of any work to be executed for the co-operative, or is paid out of the nominal purchase money or contract price or otherwise. R.S.O. 1990, c. C.35, s. 41.

42 The shares of a co-operative are personal property and are transferable in such manner and subject to such conditions and restrictions as are prescribed by this Act and the articles of the co-operative. R.S.O. 1990, c. C.35, s. 42.

43 Where a member is indebted to the co-operative for goods or services, and where the articles or by-laws so provide, the co-operative has a lien to the extent of the debt on the shares registered in the name of the member. R.S.O. 1990, c. C.35, s. 43.

44 (1) Every member is entitled to a share or loan certificate in respect of the shares held or loans made by the member, signed by the proper officers in such form as the by-laws of the co-operative provide, but in no case is the co-operative bound to issue more than one share or loan certificate in respect of a share or shares held or a loan made jointly by several persons, and delivery of a share or loan certificate to one of several joint holders or lenders is sufficient delivery to all. Fee (2) A co-operative may charge a fee of not more than $1 for every share certificate issued, except that in the case of the allotment and issue of shares, no fee shall be charged. R.S.O. 1990, c. C.35, s. 44.

45 Unless the by-laws provide otherwise, a share or loan certificate must be signed by an officer of the co-operative or by or on behalf of a transfer agent of the co-operative. 1992, c. 19, s. 6; 2023, c. 9, Sched. 8, s. 3. Section Amendments with date in force (d/m/y) 1992, c. 19, s. 6 - 24/08/1992 2023, c. 9, Sched. 8, s. 3 - 01/10/2023

46 (1) Every share or loan certificate shall state upon its face, (a) the name of the co-operative and a statement in English or in French that it is a co-operative incorporated under the law of the Province of Ontario; (b) the name of the person to whom the share or loan certificate is issued as holder; (c) the amount, maturity date and annual rate of interest where the certificate represents a loan; (d) if the certificate represents shares, the number and the class of shares, and the designation of any series, represented by the certificate and the par value of the shares; (e) a statement of the dividend rate, where applicable. R.S.O. 1990, c. C.35, s. 46 (1); 2004, c. 31, Sched. 8, s. 11. Restrictions to be noted (2) Every share certificate shall have noted conspicuously thereon a statement in English or in French that the transfer of shares is restricted. R.S.O. 1990, c. C.35, s. 46 …

47 (1) A share certificate issued for a share of a class or series of preference shares shall, (a) legibly state on the certificate or have attached to it a legible statement setting out, (i) the preferences, rights, conditions, restrictions, limitations and prohibitions attaching to that class or to that series, and (ii) the authority of the directors to fix the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to subsequent series, if applicable; or (b) legibly state on the certificate that there are preferences, rights, conditions, restrictions, limitations or prohibitions attaching to that class or series and that the co-operative will furnish to a shareholder, on demand and without charge, a full copy of the text of, (i) the preferences, rights, conditions, restrictions, limitations and prohibitions attached to that share and to each class authoriz…

48 Where, as a result of a change in authorized capital of a co-operative, a person becomes entitled to a fraction of a share, the person is not entitled to be registered on the records of the co-operative in respect thereof or to receive a share certificate therefor, but the person is entitled to receive a bearer fractional certificate in respect of such fraction, and on presentation at the head office of the co-operative or at a place designated by the co-operative of bearer fractional certificates for fractions that together represent a whole share, a share certificate for a whole share shall be issued in exchange therefor. R.S.O. 1990, c. C.35, s. 48.

Loan Capital

49 (1) The capital of co-operatives without share capital may be in the form of loans from members, called member loans, and such loans may be in such amounts, payable on demand or at such times and without interest or at interest not exceeding the prescribed maximum annual percentage or, if authorized by by-law of the co-operative, at such a lesser rate as the board of directors may by resolution determine. R.S.O. 1990, c. C.35, s. 49 (1); 1992, c. 19, s. 7. Borrowing from members (2) A co-operative may borrow money from its members not being loans made as a condition of membership or as compulsory loans of patronage returns, in such amounts payable on demand or at such times and either without interest or with interest at such rate as the by-laws provide or, if authorized by by-law, at such rate as the directors may by resolution determine. R.S.O. 1990, c. C.35, s. 49 (2). Termination …

Borrowing Powers

50 (1) Where authorized by by-law, the directors may, (a) borrow money on the credit of the co-operative; (b) issue, sell or pledge debt obligations of the co-operative; or (c) charge, mortgage, hypothecate or pledge all or any currently owned or subsequently acquired real or personal movable or immovable property of the co-operative, including book debts, rights, powers, franchises and undertakings, to secure any debt obligations or any money borrowed or other debt or liability of the co-operative. R.S.O. 1990, c. C.35, s. 50 (1); 2013, c. 3, s. 1. Contents of by-law (2) Any by-law referred to in subsection (1) may, (a) limit the amount to be borrowed as determined by the by-law; and (b) provide for the delegation by the directors of the powers conferred on them under the by-law to such directors or officers of the co-operative and to such extent and manner as is set out in the by-law. …

51 Nothing in this Act prohibits the issue of debt obligations in bearer form. R.S.O. 1990, c. C.35, s. 51.

52 A condition contained in a debt obligation or in an instrument for securing a debt obligation is not invalid by reason only that the debt obligation is thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long. R.S.O. 1990, c. C.35, s. 52.

53 Repealed: 2019, c. 15, Sched. 8, s. 4. Section Amendments with date in force (d/m/y) 1997, c. 19, s. 3 (4) - 10/10/1997; 1997, c. 28, s. 37 - 1/07/1998 2018, c. 17, Sched. 9, s. 13 - 08/06/2019 2019, c. 15, Sched. 8, s. 4 - 10/12/2019

Dividends and Surplus

54 A co-operative may by by-law provide that, before any distribution of surplus arising from the business of the co-operative in each fiscal year is made, the co-operative may, (a) set aside reserve funds; (b) provide for the payment of dividends on the share capital. R.S.O. 1990, c. C.35, s. 54; 1994, c. 17, s. 14. Section Amendments with date in force (d/m/y) 1994, c. 17, s. 14 - 23/06/1994

55 (1) Subject to subsections (4) and (6), the surplus arising from the business of a co-operative, other than a direct charge co-operative, in each fiscal year shall be allocated, credited or paid to the members in proportion to the business done by each member with or through the co-operative, computed at a rate in relation to the quantity, quality or value of the goods or products acquired, marketed, handled, dealt in or sold or services rendered by the member or by the co-operative from or on behalf of or to the member, or the co-operative whether as principal or as agent of the member or otherwise, with appropriate differences in the rate for different classes, grades or qualities thereof. R.S.O. 1990, c. C.35, s. 55 (1); 2009, c. 12, Sched. I, s. 6 (1). Worker co-operatives (1.1) Subject to subsection (4), the surplus arising from the business of a worker co-operative in each fisca…

56 (1) A co-operative may by by-law provide that in each fiscal year the whole, or such part as the directors may by resolution determine, of the patronage return of each member shall be applied to the purchase for the member of a stated number of unissued shares of the co-operative or a stated number of issued shares of the co-operative, if obtainable. R.S.O. 1990, c. C.35, s. 56 (1). Notice (2) Where a co-operative has enacted a by-law under subsection (1) and the whole or part of the patronage return of a member is required to be invested in issued shares, the co-operative shall send a written notice to each member stating the number of shares to be purchased by the member. R.S.O. 1990, c. C.35, s. 56 (2); 2004, c. 31, Sched. 8, s. 13 (1). Purchase of shares on behalf of member (3) Unless within 30 days after the date on which the notice is sent, the member required to purchase issued…

57 (1) A co-operative may, when authorized by by-law, deduct a percentage amount from the money received by the co-operative on the goods, products or services marketed, handled or dealt in by the co-operative for or on behalf of any member. R.S.O. 1990, c. C.35, s. 57 (1). Idem (2) An amount retained by a co-operative under subsection (1) shall be applied by the co-operative, (a) as a loan on the terms provided in the by-law and at the rate of interest provided in the by-law not exceeding the prescribed maximum annual percentage; or (b) as an investment by the member in shares of the co-operative, but no member shall be required to purchase membership shares for more than the par value of the shares or purchase preference shares for more than the par value plus any premium. R.S.O. 1990, c. C.35, s. 57 (2); 1992, c. 19, s. 11; 1994, c. 17, s. 2; 2001, c. 8, s. 12. Section Amendments with…

58 (1) Subject to subsection (2) and the articles of the co-operative, the directors may declare and the co-operative may pay dividends on its issued shares. R.S.O. 1990, c. C.35, s. 58 (1). Maximum dividends (2) Dividends on a membership share shall not exceed the prescribed rate. 1994, c. 17, s. 16. Manner of payment (3) A dividend may be paid in cash or in property not exceeding in value the amount of the dividend. When dividend not to be declared (4) The directors shall not declare and the co-operative shall not pay any dividend when the co-operative is insolvent, or any dividend the payment of which renders the co-operative insolvent or that diminishes its capital. R.S.O. 1990, c. C.35, s. 58 (3, 4). Section Amendments with date in force (d/m/y) 1994, c. 17, s. 16 - 23/06/1994

59 For the amount of any dividend that the directors may declare payable in cash, they may declare a stock dividend and issue therefor shares of the co-operative as fully paid. R.S.O. 1990, c. C.35, s. 59.

Members

60 (1) Subject to the provisions of this Act and the articles of the co-operative, membership therein is governed by the by-laws of the co-operative. Classes of membership (2) The articles of a co-operative may provide for more than one class of membership and in that case shall set forth the designation of and the terms and conditions attaching to each class. R.S.O. 1990, c. C.35, s. 60.