name: Canada Cooperatives Act
unofficial_text: # Canada Cooperatives Act
  
  SC 1998, c 1
  
  An Act respecting cooperatives
  
  Assented to 1998-3-31
  
  ### Preamble
   WHEREAS cooperatives in Canada carry on business in accordance with internationally recognized cooperative principles; WHEREAS cooperatives work for the social and economic development of their communities through policies approved by their members; WHEREAS the Government of Canada has determined that it is desirable to modernize the law governing those cooperatives; NOW, THEREFORE, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: 
  
  ## Short Title 
  
  ### Short title
  
  1 This Act may be cited as the Canada Cooperatives Act.  
  
  # PART 1 
  
  ## Interpretation and Application 
  
  ## Interpretation 
  
  ### Definitions
  
  2 (1) The definitions in this subsection apply in this Act.  
  *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)   
  *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 articles of correction, and includes any amendments to any of them. (statuts)   
  *associate*, in respect of a relationship with a person, means  
  (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; 
  (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; 
  (c) an unincorporated entity of which the person beneficially owns more than ten per cent of the ownership interests; 
  (d) a partner of the person acting on behalf of the partnership of which they are partners; 
  (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; 
  (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; 
  (g) a child of the person or of the spouse or individual referred to in paragraph (f); and 
  (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)   
  *auditor* includes a firm of accountants. (vérificateur)   
  *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)   
  *beneficial ownership* includes  
  (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 
  (b) in the rest of Canada, ownership of property through one or more trustees, legal representatives, agents or other intermediaries. ( véritable propriétaire)   
  *body corporate* includes a cooperative, a cooperative entity, a company or any 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 cooperative that granted the option or right to acquire. (option d’achat)   
  *cooperative* means a body corporate that is incorporated under this Act and not discontinued under this Act. (coopérative)   
  *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)   
  *court* means the court of first instance of superior jurisdiction of a province. (tribunal)   
  *debt obligation* means a bond, debenture, note or other evidence of indebtedness of an entity, whether secured or unsecured. (titre de créance)   
  *delegate* means an individual who is appointed or elected to represent a member at a meeting of members. (délégué)   
  *Director* means the Director appointed under section 371. (directeur)   
  *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)   
  *distributing cooperative* means, subject to subsections 4(4) and (5), a distributing cooperative as defined in the regulations. (coopérative ayant fait appel au public)   
  *entity* means a body corporate, a trust, a partnership, a fund or an unincorporated organization. (entité)   
  *federation* means a cooperative whose membership is composed substantially of other cooperative entities, federations or leagues of cooperative entities. (fédération)   
  *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)   
  *former Act cooperative* means a cooperative that was incorporated under the Canada Cooperative Associations Act. (coopérative sous le régime de l’ancienne loi)   
  *holder* means  
  (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; 
  (b) in respect of the ownership of a membership share, the person referred to in section 5; and 
  (c) in respect of the ownership of an investment share, the person referred to in section 6. ( détenteur)   
  *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)   
  *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)   
  *incorporator* means a person who signs articles of incorporation. (fondateur)   
  *individual* means a natural person. (particulier)   
  *issuer*, in respect of a security, means the entity that issues the security. (émetteur)   
  *investment share* means a share in the capital of a cooperative that is not a membership share. (part de placement)   
  *meeting of a cooperative* means  
  (a) a meeting of members of a cooperative, or of a class of members of a cooperative, or 
  (b) a meeting of the holders of investment shares of a cooperative, or a class or series of investment shares, as the context permits. ( assemblée d’une coopérative)   
  *member* means a member of a cooperative, but does not include an auxiliary member. (membre)   
  *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)   
  *membership share* means a share described in section 118. (part de membre)   
  *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)   
  *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)   
  *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)   
  *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)   
  *person* means an individual or an entity, and includes a 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 regulation. (Version anglaise seulement)   
  *prior legislation* means the Canada Cooperative Associations Act, chapter 6 of the Statutes of Canada, 1970-71-72. (législation antérieure)   
  *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)   
  *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*, with respect to an investment share issued by a cooperative, means that the share is one  
  (a) that the cooperative may acquire or redeem on the demand of the cooperative; or 
  (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)   
  *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)   
  *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)   
  *send* includes deliver. (envoyer)   
  *series*, in respect of investment shares, means a division of a class of those shares. (série)   
  *share* means a membership share or an investment share. (part)   
  *shareholder* means a person described in section 6. (détenteur de parts de placement)   
  *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)   
  *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)  
  
  ### Affiliates
  
  (2) For the purposes of this Act, 
  (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 
  (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. 
  
  ### Minors
  
  (3) 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.  
  
  ## Purpose and Application 
  
  ### Purposes of Act
  
  3 (1) The purposes of this Act are 
  (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 
  (b) to advance the cause of uniformity of cooperative business law in Canada. 
  
  ### Carrying on business in more than one place
  
  (2) No cooperative may be incorporated under this Act unless 
  (a) it will carry on its undertaking in two or more provinces; and 
  (b) it will have a fixed place of business in more than one province. 
  
  ### Application
  
  (3) This Act applies to cooperatives incorporated under this Act that have not been discontinued. 
  
  ### Non-application of certain Acts
  
  (4) 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.  
  
  ### Limitation on business that can be carried on
  
  (5) No cooperative may carry on the business of 
  (a) a bank; 
  (b) a company to which the Insurance Companies Act applies;  
  (c) a company to which the Trust and Loan Companies Act applies; or  
  (d) an association to which the Cooperative Credit Associations Act applies.  
  
  ### Prohibition on granting degrees
  
  (6) 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. 
  
  ### Control
  
  4 (1) For the purposes of this Act, 
  (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 
  (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. 
  
  ### Holding body corporate
  
  (2) A body corporate is the holding body corporate of another if that other body corporate is its subsidiary. 
  
  ### Subsidiary
  
  (3) A body corporate is a subsidiary of another body corporate if 
  (a) it is controlled by 
  (i) that other body corporate, 
  (ii) that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or 
  (iii) two or more bodies corporate each of which is controlled by that other body corporate; or 
  (b) it is a subsidiary of a body corporate that is a subsidiary of that other body corporate. 
  
  ### Exemptions — on application by cooperative
  
  (4) 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. 
  
  ### Exemptions — classes of cooperatives
  
  (5) 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. 
  (6)  [Repealed, 2001, c. 14, s. 138]  
  
  ## Share Ownership 
  
  ### Membership share ownership
  
  5 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. 
  
  ### Investment share ownership
  
  6 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. 
  
  ## Cooperative Basis 
  
  ### Cooperative basis
  
  7 (1) For the purposes of this Act, a cooperative is organized and operated, and carries on business, on a cooperative basis if 
  (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; 
  (b) each member or delegate has only one vote; 
  (c) no member or delegate may vote by proxy; 
  (d) interest on any member loan is limited to a maximum percentage fixed in the articles; 
  (e) dividends on any membership share are limited to the maximum percentage fixed in the articles; 
  (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; 
  (g) surplus funds arising from the cooperative’s operations are used 
  (i) to develop its business, 
  (ii) to provide or improve common services to members, 
  (iii) to provide for reserves or the payment of interest on member loans or dividends on membership shares and investment shares, 
  (iv) for community welfare or the propagation of cooperative enterprises, or 
  (v) as a distribution among its members as a patronage return; and 
  (h) it educates its members, officers, employees and the public on the principles and techniques of cooperative enterprise. 
  
  ### Restrictions
  
  (2) 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. 
  
  ### Exception
  
  (3) Despite paragraph (1)(b), 
  (a) the articles of a federation may provide that the members or delegates of the federation have more than one vote; 
  (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; 
  (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 
  (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. 
  
  # PART 2 
  
  ## Incorporation, Structure and Organization 
  
  ## Incorporators 
  
  ### Incorporators
  
  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. 
  
  ### Persons not to be incorporators
  
  (2) An application under subsection (1) is not to be made by 
  (a) an individual who is less than eighteen years of age; 
  (b) an individual who is incapable; or 
  (c) an individual or body corporate that has the status of bankrupt. 
  
  ## Capital Structure 
  
  ### Capital structure
  
  9 A cooperative may be incorporated with or without membership shares and with or without the power to issue investment shares. 
  
  ## Application for Incorporation 
  
  ### Application
  
  10 An application for incorporation is made by sending the following to the Director: 
  (a) articles of incorporation; 
  (b) a notice of registered office in accordance with section 30; 
  (c) a notice of directors in accordance with section 81; and 
  (d) and (e)  [Repealed, 2018, c. 8, s. 49]  
  (f) any other information that the Director may require to make a decision under section 12. 
  
  ## Articles of Incorporation 
  
  ### Articles
  
  11 (1) Articles of incorporation must be in the form fixed by the Director and contain the following particulars: 
  (a) the name of the cooperative; 
  (b) the place in Canada where its proposed registered office will be located; 
  (c)  [Repealed, 2018, c. 8, s. 50]  
  (d) the number of directors or the minimum and maximum number of directors; 
  (e) any restriction on the businesses that the cooperative may carry on; 
  (f) any restriction on the class of membership in the cooperative; 
  (g) a statement that the cooperative will be organized and operated and will carry on business on a cooperative basis; 
  (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; 
  (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; 
  (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; 
  (k) any provision for a maximum rate of return that may be paid on member loans or membership shares; 
  (l) whether there is to be investment share capital and, if so, the particulars of it; 
  (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 
  (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. 
  
  ### Additional provisions
  
  (2) 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. 
  
  ### Special majorities
  
  (3) 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. 
  
  ### Voting number
  
  (4) 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. 
  (5)  [Repealed, 2018, c. 8, s. 50]  
  
  ## Incorporation 
  
  ### Issuance of certificate of incorporation
  
  12 (1) The Director must issue a certificate of incorporation for a cooperative if the Director is satisfied that 
  (a) the articles are in accordance with section 11 and, if applicable, section 353 and subsection 359(2); 
  (b) the cooperative will be organized and operated and will carry on business on a cooperative basis; 
  (c) the cooperative will comply with Part 20 or 21, if applicable; and 
  (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. 
  
  ### Reliance on articles
  
  (2) For the purposes of paragraphs (1)(b) and (c), the Director may rely on the articles required by section 10. 
  
  ### Date of existence and effect
  
  13 On the day set out in its certificate of incorporation, a cooperative comes into existence and the incorporators become members of the cooperative. 
  
  ## By-laws 
  
  ### Adoption of by-laws
  
  14 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. 
  
  ### By-laws — mandatory provisions
  
  15 (1) The by-laws of a cooperative must provide for 
  (a) the qualifications of members and the procedures for acceptance of members; 
  (b) the rights of joint members, if any; 
  (c) the membership obligations of members, including any obligation to use the services of the cooperative and any fees to be paid by members; 
  (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 
  (i) the relationship an individual must have with the cooperative in order to be an auxiliary member, and 
  (ii) the services of the cooperative that may be available to auxiliary members; 
  (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; 
  (f) the selection, qualifications, term of office and removal of directors and members of committees of directors; 
  (g) the distribution of any surplus earnings arising from the operations of the cooperative; 
  (h) if the cooperative is to act as an agent or mandatary for its members, a definition of that relationship; 
  (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 
  (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. 
  
  ### By-laws — other provisions
  
  (2) The by-laws of a cooperative may provide for 
  (a) the representation of members by delegates and, if so, 
  (i) the designation of the classes or regional groups of members, if any, who may be represented by delegates, 
  (ii) the procedure for altering classes or regional groups of members, if applicable, and 
  (iii) the powers, duties, selection, voting rights and procedures for the removal of delegates; 
  (b) the division of members into classes or regional groups and, if so, 
  (i) the qualifications for membership in each class or regional group, 
  (ii) the conditions precedent to membership in each class or regional group, 
  (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 
  (iv) the conditions on which membership in a class or regional group ends; 
  (c) the referral of disputes between a member and the cooperative to a process of dispute resolution; and 
  (d) any other matter that the members consider necessary or desirable. 
  
  ### Binding effect of by-laws and articles
  
  16 The articles and by-laws of a cooperative bind it and its members to the same extent as if they 
  (a) had been signed by the cooperative and every member; and 
  (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. 
  
  ### Copies
  
  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. 
  
  ### Copies
  
  (2) The cooperative must provide each creditor, and, where the cooperative is a distributing cooperative, any other person, on payment of a reasonable fee, with a copy of the articles, the by-laws and any unanimous agreement of the cooperative. 
  
  ## Cooperative Basis 
  
  ### Cooperative basis
  
  18 (1) Every cooperative must be organized and operated and must carry on business on a cooperative basis. 
  
  ### Complaint
  
  (2) A person may make an application to the court in accordance with section 329 if the person has a complaint that 
  (a) a cooperative is not organized, operated or carrying on business on a cooperative basis; or 
  (b) in the case of a cooperative to which Part 20 or 21 applies, the cooperative is not complying with the applicable Part. 
  
  ## Pre-incorporation Contracts 
  
  ### Pre-incorporation contracts
  
  19 (1) 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 cooperative before it comes into existence is personally bound by the contract and is entitled to its benefits, unless the contract expressly provides otherwise. 
  
  ### Adoption by cooperative
  
  (2) A cooperative may, within a reasonable time after it comes into existence, adopt a contract that was made in its name or on its behalf before it came into existence by any act or conduct that signifies the cooperative’s intention to be bound by the contract. 
  
  ### Effect of adoption
  
  (3) If a cooperative adopts a contract under this section, 
  (a) the cooperative is bound by the contract and entitled to its benefits as of the date of the contract; and 
  (b) the person who originally entered into the contract ceases to be bound by the contract or to be entitled to its benefits, subject to an order made under subsection (4). 
  
  ### Court order
  
  (4) Whether or not a cooperative has adopted a contract, the court may, on application by a party to the contract, 
  (a) make an order respecting the nature and extent of the obligations and liability under the contract of the cooperative and the person who entered into or purported to enter into the contract by or on behalf of the cooperative; and 
  (b) make any other order that the court considers just in the circumstances. 
  
  ## Name 
  
  ### Required name
  
  20 (1) A cooperative must have the word “cooperative”, “co-operative”, “coop”, “co-op”, “coopérative”, “united” or “pool”, or another grammatical form of any of those words, as part of its name. 
  
  ### Use of abbreviation
  
  (2) A cooperative that has the word “cooperative”, “co-operative”, “coop”, “co-op” or “coopérative”, or another grammatical form of any of those words, as part of its name may use and be legally designated by any of those words or forms. 
  
  ### Business restriction
  
  (3) If the business of a cooperative is restricted by its articles or by a resolution of its members to a specific business purpose, the cooperative must have as part of its name one or more words that suggest the nature of the restriction. 
  
  ### Alternate form
  
  (4) The name of a cooperative 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 cooperative may use and be legally designated by any such form. 
  (5)  [Repealed, 2001, c. 14, s. 144]  
  
  ### Identification outside Canada
  
  (6) A cooperative may set out in its articles its name in any language form and, if it does, it may use and be legally designated outside Canada by its name in that form. 
  
  ### Publication of name
  
  (7) A cooperative must set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for things or services made by or on behalf of the cooperative and in all documents filed with the Director under this Act. 
  
  ### Other name
  
  21 Subject to subsection 20(3) and section 23, a cooperative may carry on business or identify itself by a name or style other than as set out in its articles. 
  
  ### Reservation of name
  
  22 The Director may, on request, reserve for a prescribed period a name for an intended cooperative or for a cooperative that intends to change its name. 
  
  ### Prohibited names
  
  23 A cooperative must not be incorporated or continued as a cooperative 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. 
  
  ### Direction to change name
  
  24 (1) The Director may direct a cooperative to change its name in accordance with section 289 if, through inadvertence or otherwise, the cooperative acquires a name that is prohibited by the regulations or that does not meet the prescribed requirements. 
  
  ### Revocation of name
  
  (2) If a cooperative has not followed a directive under subsection (1) or (3) within the prescribed period, the Director may revoke the name of the cooperative and assign a new name to it and, until changed in accordance with section 289, the name of the cooperative is the name assigned by the Director. 
  
  ### Undertaking to change name
  
  (3) If a cooperative 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 cooperative to change its name in accordance with section 289, unless the undertaking is honoured within the period specified in subsection (2). 
  (4)  [Repealed, 2018, c. 8, s. 53]  
  (5)  [Repealed, 2018, c. 8, s. 53]  
  
  ### Certificate of amendment
  
  24.1 (1) If the Director assigns a new name to a cooperative under subsection 24(2), the Director must issue a certificate of amendment showing the new name of the cooperative and must publish a notice of the change of name as soon as practicable in a publication generally available to the public. 
  
  ### Effect of certificate
  
  (2) The articles of the cooperative are amended accordingly on the date shown in the certificate of amendment. 
  
  ### Prohibition on use of name
  
  25 Every entity, other than a cooperative incorporated under this Act or a body corporate incorporated by or under the authority of another Act of Parliament or an Act of the legislature of a province, is guilty of an offence if the entity uses or authorizes the use of the word “cooperative”, “co-operative”, “co-op”, “coop”, “coopérative” or “pool”, or another grammatical form of any of those words, as part of its name or in any manner in connection with the conduct of its business so that the entity could reasonably be considered to be holding itself out as carrying on business as a cooperative entity. 
  
  # PART 3 
  
  ## Capacity and Powers 
  
  ### Legal capacity
  
  26 (1) Subject to this Act, a cooperative 
  (a) has the capacity and the rights, powers and privileges of a natural person; and 
  (b) may carry on business throughout Canada. 
  
  ### By-laws not required to confer powers
  
  (2) It is not necessary for a cooperative to pass a by-law in order to confer any particular power on a cooperative or its directors. 
  
  ### Powers outside the jurisdiction
  
  27 (1) Subject to this Act, a cooperative has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Canada to the extent and in the manner that the laws of that jurisdiction permit. 
  
  ### Business restriction
  
  (2) No cooperative and no subsidiary of a cooperative may carry on any business contrary to a restriction set out in the articles of the cooperative. 
  
  ### Validity of acts
  
  (3) No act of a cooperative, including a transfer of property, is invalid by reason only that the act is contrary to its articles or this Act. 
  
  ### Constructive notice
  
  (4) A member of a cooperative is deemed to have knowledge of the content of the articles and by-laws of the cooperative. 
  
  ### No constructive notice
  
  (5) Subject to subsection (4), no person is deemed to have knowledge of the content of a document by reason only that it is filed with the Director or is available for inspection at the cooperative. 
  
  ### Assertions
  
  28 (1) No cooperative and no guarantor of an obligation of a cooperative may assert against a person dealing with the cooperative or against a person who acquired rights from the cooperative that 
  (a) the cooperative’s articles, by-laws or any unanimous agreement have not been complied with; 
  (b) the persons named in the most recent notice of directors filed with the Director are not the directors; 
  (c) the place named in the most recent notice of registered office filed with the Director is not the registered office; 
  (d) a person held out as a director, an officer, an agent or a mandatary of the cooperative 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 cooperative or usual for a director, officer, agent or mandatary; 
  (e) a document issued by a director, officer, agent or mandatary of the cooperative with actual or usual authority to issue it is not valid or genuine; or 
  (f) a sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized. 
  (g)  [Repealed, 2001, c. 14, s. 145]  
  
  ### Exception
  
  (2) 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 cooperative. 
  
  ### No personal liability
  
  29 The members and shareholders of a cooperative, by reason only of being members or shareholders, are not liable for any liability, act or default of the cooperative, except as provided in this Act. 
  
  # PART 4 
  
  ## Registered Office and Records 
  
  ## Registered Office 
  
  ### Place of registered office
  
  30 (1) A cooperative must maintain a registered office in the place set out in its articles. 
  
  ### Notice of registered office
  
  (2) A notice of registered office in the form that the Director fixes must be sent to the Director together with any articles that designate or change the place of the registered office of the cooperative. 
  
  ### Change of address
  
  (3) The directors may change the address of the registered office within the place specified in the articles. 
  
  ### Notice of change of address
  
  (4) A cooperative must send to the Director, within fifteen days after any change of address of its registered office, a notice in the form that the Director fixes. 
  
  ## Records 
  
  ### Record keeping
  
  31 (1) A cooperative must prepare and maintain the following records at its registered office or at any other place in Canada designated by the directors: 
  (a) the cooperative’s articles and by-laws, including any amendments and a copy of any unanimous agreement; 
  (b) the minutes of meetings of the members and shareholders; 
  (c) copies of all notices of directors and notices of change of directors; 
  (d) a list of its members, setting out their names and addresses, the number of any membership shares owned and the amount of any member loans; 
  (e) a list of its shareholders, setting out their names and addresses and the number of investment shares owned; 
  (f) a register of its directors, setting out the names and addresses of the individuals who are or who have been directors and the dates on which they became or ceased to be directors; and 
  (g) if the cooperative issues securities in registered form, a securities register that complies with section 186. 
  
  ### Other records
  
  (2) In addition to the records specified in subsection (1), a cooperative must prepare and maintain adequate 
  (a) accounting records; 
  (b) records containing minutes of meetings and resolutions of directors and any committee of directors; and 
  (c) records sufficient for the purpose of calculating patronage returns, that show for each member particulars of the transactions between the cooperative and the member. 
  
  ### When records or registers kept outside Canada
  
  (3) Despite subsection (1), 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 cooperative may keep all or any of its records mentioned in paragraphs (1)(a), (b), (c), (f) and (g) and (2)(a) and (b) at a place outside Canada, if  
  (a) the records are available for inspection, by means of a computer terminal or other technology, during regular office hours at the registered office or another office in Canada designated by the directors; and 
  (b) the cooperative provides the technical assistance to facilitate an inspection referred to in paragraph (a). 
  
  ### Retention of accounting records
  
  (4) 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 cooperative must retain the accounting records referred to in paragraph (2)(a) for a period of six years after the end of the financial year to which they relate. 
  
  ### Records of continued cooperatives
  
  (5) For the purposes of paragraph (1)(b) and subsections (2) to (4), if 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. 
  
  ### Form of records
  
  32 (1) Any register or record required by this Act must be prepared and maintained in a form that is capable of reproducing any required information in intelligible written form within a reasonable time, including 
  (a) a bound or loose-leaf form; 
  (b) a photographic form; 
  (c) a system of mechanical or electronic data processing; or 
  (d) any other information storage device. 
  
  ### Precautions
  
  (2) A cooperative and its agents and mandataries must take reasonable precautions respecting the registers and records required by this Act to 
  (a) prevent their loss or destruction; 
  (b) prevent the falsification of entries in them; and 
  (c) facilitate the detection and correction of inaccuracies in them. 
  
  ### Records open to directors’ inspection
  
  (3) The records described in section 31, other than those described in paragraph 31(2)(c), must be open for inspection by the directors at any reasonable time. 
  
  ### Inspection and copying of records by members, creditors and shareholders
  
  (4) Members, creditors and shareholders of the cooperative, their personal representatives and the Director may examine the records referred to in paragraphs 31(1)(a), (b), (c) (f) and (g) during the usual business hours of the cooperative and may take extracts from the records, free of charge, or have copies of them made after payment of a reasonable fee. 
  
  ## Lists 
  
  ### Lists
  
  33 (1) Members, shareholders and creditors of a cooperative and their personal representatives and, where the cooperative is a distributing cooperative, any other person, may request that the cooperative provide them with a list of members or shareholders, no later than ten days after the cooperative receives the affidavit referred to in subsection (2) and after payment of a reasonable fee. 
  
  ### Affidavit
  
  (2) A request under subsection (1) must be accompanied by an affidavit containing 
  (a) the name and address of the applicant; and 
  (b) an undertaking that the list of members or shareholders will not be used except as permitted by subsection (5). 
  
  ### Request by Director
  
  (3) The Director may request that the cooperative provide him or her with a list of members or shareholders, no later than ten days after the cooperative receives the request and after payment of a reasonable fee. 
  
  ### Contents of list
  
  (4) The list of members or shareholders provided under subsection (1) or (3) must set out in alphabetical order the names and addresses of the members or shareholders of the cooperative as of a date not more than ten days before the receipt of the affidavit referred to in subsection (2) or the request referred to in subsection (3). 
  
  ### Permitted uses of list
  
  (5) A list obtained under subsection (1) must not be used by any person except in connection with 
  (a) an effort to influence voting at a meeting of the cooperative; and 
  (b) any other matter relating to the affairs of the cooperative. 
  
  ### Non-inclusion of name on request
  
  (6) A member or shareholder may advise the cooperative in writing that their name is not to be included in a list prepared by the cooperative further to a request under subsection (1), in which case the cooperative must not include that name in the list but must mention on the list that the list is incomplete. 
  
  ## Corporate Seal 
  
  ### Corporate seal
  
  34 (1) A cooperative may but need not adopt a corporate seal and may change a corporate seal that is adopted. 
  
  ### Validity of unsealed documents
  
  (2) A document executed or, in Quebec, signed on behalf of a cooperative is not invalid merely because a corporate seal is not affixed to it. 
  
  # PART 5 
  
  ## Membership 
  
  ## Conditions for Membership 
  
  ### By-laws govern
  
  35 Subject to this Act and any provision in the articles, membership in a cooperative is governed by its by-laws. 
  
  ### Application for membership
  
  36 (1) No person may be admitted to membership in a cooperative until 
  (a) the person has applied for membership in writing; 
  (b) the application has been approved by the directors; and 
  (c) the person has complied with the membership provisions required by the by-laws, including subscribing for any minimum number of membership shares, paying any minimum amount on account of the subscription price of the shares or paying any minimum amount on account of a member loan. 
  
  ### Effective date of membership
  
  (2) If all the conditions set out in subsection (1) have been met within six months after the date on which the cooperative receives the application for membership, the directors may make the admission of the member into membership effective as of the date of the application or as of any date after that date but before the end of the six months. 
  
  ### Right to vote
  
  37 (1) Subject to subsection (2) and subsection 7(3), a member has one vote on all matters to be decided by the members. 
  
  ### Delegates
  
  (2) If the by-laws provide that the voting rights of a member are vested in one or more delegates to be elected or appointed by the members, the delegates so elected or appointed may exercise all or any of those rights. 
  
  ### When delegation permitted by by-laws
  
  (3) When in this Act reference is made to a meeting of members and the cooperative has a by-law providing for the appointment of delegates, a reference in this Act to a meeting of members is to be construed as a reference to a meeting of delegates. 
  
  ### Members under eighteen years of age
  
  38 (1) Subject to the by-laws, a person less than eighteen years of age may be admitted to membership in a cooperative and may vote at meetings of the cooperative. 
  
  ### Minors
  
  (2) The articles and by-laws of a cooperative, and any unanimous agreement, are binding on a member who is less than eighteen years of age. 
  
  ## Withdrawal from Membership 
  
  ### Withdrawal of membership
  
  39 (1) Unless the by-laws provide otherwise, this section applies to the voluntary withdrawal of a member from membership in a cooperative. 
  
  ### Written notice
  
  (2) A member may withdraw from membership in a cooperative by written notice to the cooperative. Any such withdrawal is effective on the later of the date stated in the notice and the date on which the cooperative receives the notice. 
  
  ### Redemption of membership shares and repayment of amounts owing on withdrawal
  
  (3) Subject to section 149, the cooperative must, no later than one year after the effective date of a notice of withdrawal, redeem all membership shares held by the withdrawing member at the redemption price determined in accordance with section 146 and repay to the member all member loans, all other amounts held to the member’s credit and all amounts outstanding on loans made to the cooperative by the member, together with any interest accrued on those amounts up to the date of the payment. 
  
  ### Redemption and repayment more than one year after withdrawal
  
  (4) Despite subsection (3), if the directors determine that the redemption of membership shares, or the repayment of membership loans, of a withdrawing member would adversely affect the financial well-being of the cooperative, the directors may direct that the redemption and repayment referred to in subsection (3) take place after the end of the one year period. 
  
  ### Withdrawal not to have certain effects
  
  (5) Unless the directors determine otherwise, 
  (a) the withdrawal of a member from the cooperative does not release the member from any debt or obligation to the cooperative or contract with the cooperative; and 
  (b) the cooperative need not, despite subsection (3), repay to the member amounts outstanding on loans made to the cooperative that have a fixed maturity date until that date has arrived. 
  
  ## Termination of Membership 
  
  ### Termination of membership by directors
  
  40 (1) This section sets out the rights and procedures that apply to termination of membership. The by-laws of a cooperative may derogate from this section, but only in respect of the manner in which the membership of members may be terminated. 
  
  ### Special resolution of directors
  
  (2) The directors may by special resolution order the termination of the membership of a member but, if the cooperative is in breach of section 149 — or if making the payment referred to in subsection (7) would put the cooperative in breach of section 149 — the termination is not effective until the cooperative is no longer in breach. 
  
  ### Written notice
  
  (3) Not more than ten days after the date on which a special resolution is made, the secretary of the cooperative must give written notice to the member of the termination and the reasons for it. Subject to subsections (4) and (5), the effective date of the termination is the later of the date specified in the written notice and thirty days after the member receives the notice. 
  
  ### Appeal
  
  (4) A member whose membership has been terminated may appeal from the decision of the directors to the next meeting of members by giving written notice to the secretary of the member’s intention to appeal no later than thirty days after receiving notice of the special resolution. 
  
  ### Effect of notice of appeal
  
  (5) If a member gives a notice of appeal, the effect of the special resolution is suspended until the vote of the members under subsection (6). 
  
  ### Resolution of members
  
  (6) If a member appeals the termination of membership, a vote of members must be taken at the next meeting of members as to whether the member’s membership should be terminated as of the effective date referred to in subsection (3). The vote is by majority of the members present at the meeting, unless a greater proportion is specified in the articles, the by-laws or a unanimous agreement. 
  
  ### Effect of termination of membership
  
  (7) Subject to section 149, if a member’s membership is terminated, a cooperative must, no later than one year after the date of the special resolution, redeem all membership shares held by the member at the redemption price determined in accordance with section 146, and repay to the member all member loans and all other amounts held to the member’s credit and all amounts outstanding on loans made to the cooperative by the member, together with any interest accrued on those amounts up to the date of the payment. 
  
  ### Termination of membership not to have certain effects
  
  (8) Unless the directors determine otherwise, the termination of the membership of a member does not release the member from any debt or obligation to the cooperative or contract with the cooperative. 
  
  ### If address of member unknown
  
  (9) If the address of a member whose membership has been terminated by the directors is unknown to the cooperative after all reasonable efforts have been made to ascertain it and two years have elapsed since the effective date referred to in subsection (3), the cooperative must transfer all amounts owing under subsection (7) to a reserve fund, but those amounts do not, despite subsection (7), include any interest that would have accrued after the end of the two years. 
  
  ### Amounts paid to entitled persons
  
  (10) If any amounts are transferred to a reserve fund under subsection (9), the cooperative must pay those amounts to any person who, no later than ten years after the transfer, shows evidence of entitlement satisfactory to the cooperative. If no person appears to show that evidence within the ten years, the amounts become the property of the cooperative. 
  
  ## Limitation 
  
  ### Limitation on by-law
  
  41 No by-law governing the withdrawal of a member from membership or the termination of the membership of a member may authorize a redemption of membership shares or member loans in contravention of section 149. 
  
  ## Termination of Membership by Members 
  
  ### Termination by members
  
  42 Unless the by-laws provide otherwise, the membership of a member may be terminated by a special resolution of the members. Section 40 applies, with any modifications that the circumstances require, to a termination by the members. 
  
  ## Other Terminations 
  
  ### Termination of inactive membership
  
  43 (1) A cooperative may, by written notice to a member, terminate the membership if the member 
  (a) is a body corporate and winding-up proceedings have commenced with respect to it; or 
  (b) failed, during a period of two consecutive years, to transact any business with the cooperative. 
  
  ### Provisions not to apply
  
  (2) Section 40, other than subsections 40(7) to (10), does not apply to a termination under this section. 
  
  ### Non-profit housing cooperatives
  
  44 If the membership of a person in a non-profit housing cooperative is terminated, any right of the person to possession or occupancy of residential premises acquired by virtue of membership in the cooperative is subject to Part 20. 
  
  ### Re-admission
  
  45 A person whose membership has been terminated under section 40 or 42 may be re-admitted to membership only by special resolution of the members. 
  
  ### Transfer
  
  46 No transfer of a membership, a member loan or a membership share in a cooperative is valid for any purpose unless it is approved by the directors and the transferee has otherwise complied with the articles and by-laws of the cooperative and, if applicable, become a party to a unanimous agreement. 
  
  ### If membership too low
  
  47 If the membership of a cooperative is reduced to a number less than the number of members required for incorporation, and if after thirty days notice remains at less than that number, the Director may require the cooperative 
  (a) to apply for a certificate of continuance under the Canada Business Corporations Act, if it was incorporated with membership capital; or  
  (b) to be liquidated or dissolved under Part 17. 
  
  # PART 6 
  
  ## Corporate Governance 
  
  ## Meetings 
  
  ### Place of members’ meetings
  
  48 (1) Meetings of the members of a cooperative are to be held at the place in Canada provided for in the by-laws or, in the absence of such a provision, at any place in Canada that the directors may determine. 
  
  ### Place of shareholders’ meetings
  
  (2) Meetings of the shareholders must be held at the place set out in the articles. If the articles do not set out such a place, the meetings are to be held at the place in Canada that the directors determine, unless all the shareholders entitled to vote at the meeting agree that the meeting is to be held at another place that is not in Canada. 
  
  ### Participation in meeting by electronic means
  
  (3) Unless the by-laws provide otherwise, a member or shareholder may participate in a meeting of the cooperative, in accordance with the regulations, if any, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the cooperative makes available such a communication facility. 
  
  ### Meeting held by electronic means
  
  (3.1) If the directors of a cooperative, or any other person, call a meeting of the cooperative pursuant to this Act, those directors or that person, as the case may be, may determine that the meeting shall be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the by-laws so provide. 
  
  ### Presence
  
  (4) A person participating in a meeting referred to in subsection (3) is deemed to be present at the meeting. 
  
  ### Calling members’ meetings
  
  49 (1) After holding the organizational meeting referred to in section 82, the directors must call a meeting of the members without delay. 
  
  ### Business at first meeting
  
  (2) The members, at their first meeting, must 
  (a) adopt by-laws for the cooperative; 
  (b) elect directors in accordance with subsection 81(3); and 
  (c) subject to subsection 254(1), appoint an auditor to hold office until the close of the first annual meeting of members. 
  
  ### Calling meetings of the members
  
  50 (1) The directors must call the first annual meeting of members not later than eighteen months after the cooperative comes into existence and an annual meeting of members must be held not later than the earlier of 
  (a) fifteen months after holding the last annual meeting, and 
  (b) six months after the end of the preceding financial year. 
  
  ### Special meetings
  
  (2) The directors may at any time call a special meeting of the members or of the shareholders. 
  
  ### Order to delay calling of annual meeting
  
  (3) Despite subsection (1), the cooperative may apply to the court for an order extending the time for calling an annual meeting. 
  
  ### Record date
  
  51 (1) The directors may, within the prescribed period, fix in advance a date as the record date for the determination of the members or shareholders who are entitled to receive payment of a dividend or for any other purpose except the right to receive notice of, or to vote at, a meeting. 
  
  ### Record date — members’ meetings
  
  (2) For the purpose of determining the persons who are entitled to receive notice of, or to vote at, a meeting of members, the record date is 
  (a) the day before the day on which the notice is given; or 
  (b) if no notice is given, the day of the meeting. 
  
  ### Record date — notice of shareholders’ meetings
  
  (3) For the purpose of determining the shareholders who are entitled to receive notice of a meeting of the shareholders, the directors may, within the prescribed period, fix in advance a date as the record date for that determination. 
  
  ### Record date — voting at shareholders’ meetings
  
  (4) For the purposes of determining the shareholders who are entitled to vote at a meeting of shareholders, the directors may, within the prescribed period, fix in advance a date as the record date for that determination. 
  
  ### If no record date fixed
  
  (5) If no record date is fixed under subsection (1) or (3), the record date 
  (a) for the determination of members or shareholders for any purpose, other than to establish the right of a member or shareholder to receive notice of a meeting or to vote, is the day on which the directors pass the resolution relating to the particular purpose; and 
  (b) for the determination of shareholders who are entitled to receive notice of a meeting is 
  (i) the day before the day on which the notice is given, or 
  (ii) if no notice is given, the day of the meeting. 
  
  ### If record date fixed
  
  (6) If a record date with respect to shareholders is fixed under this section, unless notice of the date is waived by each shareholder whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given within the prescribed period 
  (a) by advertisement in a newspaper published or distributed in a place where the cooperative has its registered office and in each place in Canada where it has a transfer agent or where a transfer of its investment shares may be recorded; and 
  (b) by written notice to each stock exchange in Canada on which the investment shares of the cooperative are listed for trading. 
  
  ### Notice of meetings
  
  52 (1) Notice of the time and place of a meeting of a cooperative must be sent within the prescribed period 
  (a) to each person who is entitled to vote at the meeting; 
  (b) to each director; and 
  (c) to the auditor of the cooperative, if any. 
  
  ### Exception
  
  (1.1) In the case of a cooperative that is not a distributing cooperative, the notice may be sent within a shorter period if so specified in the articles or the by-laws. 
  
  ### Publication
  
  (2) Notice of the time and place of a meeting of the holders of investment shares of any class that is publicly traded on a recognized stock exchange in Canada may be published once a week for at least four consecutive weeks before the date of the meeting in a newspaper in general circulation in the place where the registered office of the cooperative is situated and in each place in Canada where the cooperative has a transfer agent or where a transfer of the investment shares may be recorded. 
  
  ### By-laws may specify manner of giving notice to members
  
  (3) The by-laws of a cooperative may derogate from this section, but only in respect of the manner in which notice of a meeting of members may be given to members. 
  
  ### Notice not required
  
  53 A notice of a meeting of a cooperative need not be sent to a shareholder who was not registered on the records of the cooperative or its transfer agent on the record date fixed or determined under section 51. 
  
  ### Failure to receive notice
  
  54 Failure to receive notice of a meeting does not deprive a person of a right to vote at the meeting to which the person is otherwise entitled. 
  
  ### Notice when adjournment
  
  55 (1) If a meeting of a cooperative is adjourned for less than thirty days, it is not necessary, unless the by-laws provide otherwise, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. 
  
  ### Notice of adjournment — meetings of members
  
  (2) If a meeting of members is adjourned by one or more adjournments for a total of thirty days or more, notice of the adjourned meeting must be given as for the original meeting. 
  
  ### Notice of adjournment — meetings of shareholders
  
  (3) If a meeting of shareholders is adjourned by one or more adjournments for a total of thirty days or more, notice of the adjourned meeting must be given as for the original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than ninety days, subsection 165(1) does not apply. 
  
  ### Special business
  
  56 (1) All matters dealt with at a special meeting of a cooperative and all matters dealt with at an annual meeting, except consideration of the financial statements, the auditor’s report, the business of the cooperative, the election of directors, the remuneration of directors and the re-appointment of the incumbent auditor, are special business. 
  
  ### Notice if special business is to be transacted
  
  (2) Notice of a meeting of a cooperative at which special business is to be transacted must 
  (a) state the nature of the special business in sufficient detail to permit the recipient to form a reasoned judgement with respect to the special business; and 
  (b) contain the text of any special resolution to be submitted to the meeting. 
  
  ### Waiver of notice
  
  57 (1) A person who is entitled to attend a meeting of a cooperative may waive notice of the meeting in any manner. 
  
  ### Attendance is waiver
  
  (2) Attendance at a meeting of a cooperative is a waiver of notice of the meeting, except when a person attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called. 
  
  ## Proposals 
  
  ### Proposals
  
  58 (1) A member may 
  (a) submit to the cooperative notice of any matter that the member proposes to raise at an annual meeting; and 
  (b) discuss at the meeting any matter in respect of which the member would have been entitled to submit a proposal. 
  
  ### Proposals by members or directors to amend articles
  
  (2) Any member or director may, in accordance with section 290, make a proposal to amend the articles. 
  
  ### Proposals by other persons to amend articles
  
  (2.1) Any other person may, in accordance with section 290, make a proposal to amend the articles if the person 
  (a) has been, for at least the prescribed period, the registered holder or the beneficial owner of at least the prescribed number of outstanding investment shares of the cooperative; or 
  (b) has the support of persons who, in the aggregate, and including or not including the person that submits the proposal, have been, for at least the prescribed period, the registered holders, or the beneficial owners of, at least the prescribed number of outstanding investment shares of the cooperative. 
  
  ### Information to be provided
  
  (2.2) A proposal submitted by a person described in paragraph (2.1)(a) must be accompanied by the following information: 
  (a) the name and address of the person and of the person’s supporters, if applicable; and 
  (b) the number of investment shares held or owned by the person and by the person’s supporters, if applicable, and the date the investment shares were acquired. 
  
  ### Information not part of proposal
  
  (2.3) The information provided under subsection (2.2) does not form part of the proposal or of the supporting statement referred to in subsection (3) and is not included for the purposes of the prescribed maximum word limit set out in subsection (3). 
  
  ### Proof may be required
  
  (2.4) If requested by the cooperative within the prescribed period, a person who submits a proposal must provide proof, within the prescribed period, that the person meets the requirements of subsection (2.1). 
  
  ### Proposal and statement to accompany notice of meeting
  
  (3) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the person making the proposal, a statement in support of the proposal and the name and address of person making the proposal. The statement and the proposal must together not exceed the prescribed maximum number of words. 
  
  ### Exceptions
  
  (4) A cooperative need not comply with subsection (3) if 
  (a) the proposal is not submitted to the cooperative within the prescribed period; 
  (b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the cooperative or its directors, officers, members or security holders; 
  (c) not more than the prescribed period before the receipt of a proposal, a person failed to present, at a meeting, a proposal that, at the person’s request, had been attached by the cooperative to the notice of the meeting; 
  (d) substantially the same proposal was attached to a notice of meeting relating to a meeting of the cooperative held not more than the prescribed period before the receipt of the proposal and the proposal did not receive the prescribed minimum amount of support at the meeting; or 
  (e) the rights conferred by subsections (1) and (2) are being abused to secure publicity. 
  
  ### Cooperative may refuse to include proposal
  
  (4.1) If 
  (a) a person described in subsection (2.1) makes a proposal and fails to continue to hold or own the number of investment shares referred to in that subsection up to and including the day of the meeting, or 
  (b) a member makes a proposal and, prior to the meeting, withdraws from membership in accordance with section 39, the cooperative is not required to include in the notice of a meeting, or attach to it, any proposal submitted by that person for any meeting held within the prescribed period following the date of the meeting. 
  
  ### Liability for circulation
  
  59 No cooperative or person acting on behalf of a cooperative incurs any liability by reason only of circulating a proposal or statement in accordance with section 58. 
  
  ### Refusal to include proposal
  
  60 (1) If a cooperative refuses to include a proposal in a notice of a meeting referred to in section 52, the cooperative must, within the prescribed period after the day on which it receives the proposal or the day on which it receives the proof of ownership under subsection 58(2.4), as the case may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the notice and of the reasons for the refusal. 
  
  ### Restraining order by court
  
  (2) On the application of a person submitting a proposal who claims to be aggrieved by a cooperative’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit. 
  
  ### Order to omit proposal from notice
  
  (3) A cooperative or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the cooperative to omit the proposal from a notice of meeting, and the court, if it is satisfied that subsection 58(4) applies, may make any order that it thinks fit. 
  
  ## Lists 
  
  ### List of persons entitled to receive notice
  
  61 (1) A cooperative must prepare an alphabetical list of its members as of the record date established under subsection 51(2) or, if the by-laws provide for delegates, of the delegates, who are entitled to receive notice of and vote at a meeting of members. 
  
  ### Entitlement to vote — members’ meetings
  
  (2) Subject to subsection 7(3), a member or delegate whose name appears on the list referred to in subsection (1) is entitled to one vote at a meeting of members. 
  
  ### List of shareholders entitled to vote
  
  (3) If a record date for voting is fixed under subsection 51(4), a cooperative must prepare, no later than ten days after the record date, an alphabetical list of shareholders who are entitled to vote as of the record date at a meeting of shareholders that shows the number of investment shares held by each shareholder. 
  
  ### Entitlement to vote
  
  (4) A shareholder named in the list referred to in subsection (3) is entitled to vote the investment shares opposite their name at the meeting to which the list relates. 
  
  ### List of shareholders entitled to receive notice
  
  (5) If a record date for voting is not fixed under subsection 51(4), a cooperative must prepare, not later than 10 days after the record date for notice of a meeting that is fixed under subsection 51(3) or not later than the record date that is referred to in subsection 51(5), as the case may be, an alphabetical list of shareholders who are entitled to receive notice of a meeting of shareholders as of the record date that shows the number of shares held by each shareholder. 
  
  ### Entitlement to vote
  
  (6) A shareholder whose name appears on the list referred to in subsection (5) is entitled to vote the investment shares shown opposite their name at the meeting to which the list relates, except to the extent that 
  (a) the shareholder has transferred the ownership of any of those investment shares after the record date, and 
  (b) the transferee of those investment shares demands, not later than ten days before the meeting, or any shorter period that the by-laws of the cooperative provide, that the transferee’s name be included in the list before the meeting and produces properly endorsed investment share certificates or otherwise establishes that the transferee owns the investment shares, in which case the transferee may vote the shares at the meeting. 
  
  ### Examination of list
  
  (7) A person who is entitled to vote at a meeting of a cooperative may examine a list that relates to the meeting 
  (a) during usual business hours at the registered office of the cooperative or at the place where its records of members and shareholders are maintained; and 
  (b) at the meeting for which the list was prepared. 
  
  ## Procedure 
  
  ### Quorum
  
  62 (1) Unless the by-laws provide otherwise, a quorum is present at a meeting of the cooperative if persons holding a majority of the voting rights that may be exercised at the meeting are present in person or represented in a manner provided for by this Act or permitted by the by-laws. 
  
  ### Opening quorum sufficient
  
  (2) If a quorum is present at the opening of a meeting, the persons who are present and entitled to vote may, unless the by-laws provide otherwise, proceed with the business of the meeting even though a quorum is not present throughout the meeting. 
  
  ### Adjournment
  
  (3) If a quorum is not present at the opening of a meeting, the persons who are present and entitled to vote may adjourn the meeting to a fixed time and place but may not transact any other business. 
  
  ### Representative
  
  63 (1) If an entity is entitled to vote at a meeting of a cooperative, the cooperative must recognize any individual authorized by a resolution of the directors or governing body or similar authority of the entity to represent it at meetings of the cooperative. 
  
  ### Powers of representative
  
  (2) An individual who is authorized under subsection (1) to represent an entity may exercise on behalf of the entity all the powers the entity could exercise if it were an individual. 
  
  ### Joint voting — members
  
  64 (1) Unless the by-laws provide otherwise, each joint member may vote at a meeting of members. 
  
  ### Joint voting — shareholders
  
  (2) Unless the articles provide otherwise, if two or more persons hold investment shares jointly, one of those holders present at a meeting of shareholders may, in the absence of the others, vote the investment shares, but if two or more of those persons who are present vote, in person or by proxy, they vote as one on the investment shares jointly held by them. 
  
  ### Voting by show of hands
  
  65 (1) Unless the by-laws provide otherwise, voting at a meeting of a cooperative takes place by a show of hands except when a ballot is demanded by a person who is entitled to vote at the meeting. 
  
  ### Ballot
  
  (2) A person who is entitled to vote at a meeting may demand a ballot either before or after a vote by show of hands. 
  
  ### Electronic voting
  
  (3) Despite subsection (1), unless the by-laws provide otherwise, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the cooperative makes available such a communication facility. 
  
  ### Voting while participating electronically
  
  (4) Unless the by-laws otherwise provide, a member or shareholder participating in a meeting of the cooperative under subsection 48(3) or (3.1) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the cooperative has made available for that purpose. 
  
  ### Resolution in lieu of meeting
  
  66 (1) Unless the by-laws provide otherwise, and except when a written statement is submitted under section 89 or subsection 260(4), a resolution in writing signed by all the persons who are entitled to vote on that resolution at a meeting of the cooperative is as valid as if it had been passed at such a meeting. 
  
  ### Resolution
  
  (2) Unless the by-laws provide otherwise, and except when a written statement is submitted under section 89 or subsection 260(4), a resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of a cooperative, and signed by all the persons who are entitled to vote at the meeting, satisfies all the requirements of this Act relating to meetings. 
  
  ### Copies of resolutions
  
  (3) A copy of every resolution referred to in subsection (1) must be kept with the minutes of the meeting. 
  
  ### Evidence
  
  67 Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. 
  
  ### One shareholder meeting
  
  68 If a cooperative has only one shareholder, or only one holder of any class or series of investment shares, the shareholder present in person or represented by proxy constitutes a meeting of the shareholders or a meeting of shareholders of that class or series. 
  
  ## Requisitions 
  
  ### Requisition of meeting
  
  69 (1) Two or more persons who together hold not less than five per cent of the voting rights that could be exercised at a meeting of a cooperative may requisition the directors to call such a meeting for the purposes stated in the requisition. 
  
  ### Form
  
  (2) The requisition 
  (a) must state the business to be transacted at the meeting and be sent to each director and to the registered office of the cooperative; and 
  (b) may consist of several documents of like form, each signed by one or more persons who are entitled to vote at the meeting. 
  
  ### Directors calling meeting
  
  (3) On receipt of the requisition, the directors must call a meeting to transact the business stated in the requisition unless 
  (a) the directors have called a meeting and given notice of it under section 52; 
  (b) the business of the meeting as stated in the requisition includes matters described in any of paragraphs 58(4)(b) to (e); or 
  (c) the business of the meeting as stated in the requisition includes a matter 
  (i) in the case of a requisition by a member, outside the powers of the members, and 
  (ii) in the case of a requisition by a shareholder, outside the powers of the shareholders. 
  
  ### Member or shareholder calling meeting
  
  (4) If the directors do not call a meeting within twenty-one days after receiving the requisition, any person who signed the requisition may call the meeting unless any of paragraphs (3)(a) to (c) applies. 
  
  ### Procedure
  
  (5) A meeting called under this section must be called as nearly as possible in the manner in which meetings are to be called pursuant to the by-laws, a unanimous agreement and this Act. 
  
  ### Reimbursement
  
  (6) Unless the persons who are present and entitled to vote at a meeting called under subsection (4) resolve otherwise, the cooperative must reimburse the persons who signed the requisition for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting. 
  
  ## Other Methods of Calling Meetings 
  70  [Repealed, 2001, c. 14, s. 157]  
  
  ### Meeting called by court
  
  71 (1) A court, on the application of a director or a person who is entitled to vote at a meeting, may order a meeting of a cooperative to be called, held and conducted within the time and in the manner that the court directs, if 
  (a) it is not feasible to call the meeting within the time or in the manner in which those meetings are to be called; 
  (b) it is not feasible to conduct the meeting in the manner required by this Act or the by-laws; or 
  (c) the court thinks the meeting should be called, held and conducted in the manner it directs for any other reason. 
  
  ### Varying quorum
  
  (2) Without restricting the generality of subsection (1), a court may order that the quorum required by the by-laws or this Act be varied or dispensed with at a meeting called, held and conducted under this section. 
  
  ### Valid meeting
  
  (3) A meeting called, held and conducted under this section is for all purposes a meeting duly called, held and conducted. 
  
  ### Court review of election
  
  72 (1) A cooperative, a director or any person who is entitled to vote in the election or appointment of a director or an auditor may apply to a court to resolve any dispute in respect of the election or appointment of a director or an auditor of the cooperative. 
  
  ### Powers of court
  
  (2) On an application under subsection (1), a court may make any order it thinks fit, including an order 
  (a) restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute; 
  (b) declaring the result of a disputed election or appointment; 
  (c) requiring a new election or appointment, and including in the order directions for the management of the business and affairs of the cooperative until a new election is held or a new appointment is made; or 
  (d) determining the voting rights of persons claiming to be entitled to vote. 
  
  ## By-laws 
  
  ### Making or amendment of by-law by members
  
  73 (1) The members may, by special resolution, make, amend or repeal any by-law that regulates the business and affairs of the cooperative. 
  
  ### Making or amendment of by-law by directors
  
  (2) Unless the by-laws of a cooperative provide otherwise, the directors may, by special resolution, make a by-law or amend a by-law of the cooperative, but only if the by-law or amendment is not contrary to a by-law made by the members. 
  
  ### Approval
  
  (3) The directors must present a by-law or an amendment to a by-law that is made under subsection (2) to the members at the next meeting of members and the members may, by special resolution, confirm or amend it. 
  
  ### By-law not confirmed
  
  (4) If a by-law or an amendment to a by-law made by the directors is not confirmed, with or without amendments, under subsection (3), the by-law or amendment is repealed as of the date of the meeting of members at which it was not confirmed. 
  
  ### Proposal of by-law
  
  74 A member may, in accordance with section 58, make a proposal to make, amend or repeal a by-law. 
  
  ### Effective date of by-law
  
  75 (1) A by-law or an amendment to or repeal of a by-law made by the members is effective from the later of the date of the resolution made under subsection 73(1) and the date specified in the by-law, amendment or repeal. 
  
  ### Effective date of by-law
  
  (2) A by-law or an amendment to a by-law made by the directors is effective from the later of the date the by-law is made or amended by the directors and the date specified in the by-law, until it is confirmed, with or without amendment, under subsection 73(3) or repealed under subsection 73(4) and, if the by-law is confirmed, or confirmed as amended, it is in effect in the form in which it was so confirmed. 
  
  ### If by-law not approved
  
  (3) If a by-law or an amendment to a by-law made by the directors under subsection 73(2) is not submitted by the directors to the next meeting of the members as required under subsection 73(3), the by-law or amendment ceases to be effective from the date of that meeting. 
  
  ### New resolution of directors
  
  (4) If a by-law or an amendment to a by-law made by the directors under subsection 73(2) is repealed under subsection 73(4) or ceases to be effective under subsection (3), no subsequent resolution of the directors to make or amend a by-law that has substantially the same purpose or effect is effective until it is confirmed, or confirmed as amended, by the members. 
  
  # PART 7 
  
  ## Directors and Officers 
  
  ## General Provisions 
  
  ### Number of directors
  
  76 (1) A cooperative must have at least three directors or any greater minimum number that is set out in the articles. 
  
  ### Effect of decrease
  
  (2) If the articles are amended to decrease the number of directors, the term of any incumbent director is not affected. 
  
  ### Effect of increase
  
  (3) At a meeting to amend the articles to increase the number of directors, the persons who are entitled to do so may elect or appoint the additional number of directors. 
  
  ### Directors as members
  
  77 Not less than two thirds of the directors, or any greater proportion that is provided for by the articles, must be members of the cooperative, or representatives of members that are entities or members of members that are cooperative entities. 
  
  ### Qualifications
  
  78 (1) A person is not qualified to be a director if the person 
  (a) is not an individual; 
  (b) is less than eighteen years of age; 
  (c) is incapable; or 
  (d) has the status of bankrupt. 
  
  ### Additional qualifications
  
  (2) A cooperative may provide in its by-laws for qualifications or disqualifications of directors in addition to those in subsection (1). 
  
  ### Status of directors
  
  (3) Unless Part 21 applies to a cooperative, a majority of the directors must be individuals who are not full-time officers or employees of the cooperative. 
  
  ### Resident in Canada
  
  (4) At least twenty-five per cent of the directors must be resident in Canada. However, if the cooperative has only three directors, at least one director must be resident in Canada. 
  
  ### Member election
  
  (5) Subject to subsections 124(3) and (4), all directors are to be elected by the members. 
  
  ### Functions of directors
  
  79 Subject to this Act and to the articles and any unanimous agreement, the directors manage or supervise the management of the business and affairs of the cooperative. 
  
  ### Duties
  
  80 (1) Every director and officer must, in exercising the powers and performing the duties of office, 
  (a) act honestly and in good faith with a view to the best interests of the cooperative; and 
  (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 
  
  ### Duty of compliance
  
  (2) Every director and officer must comply with this Act, the articles, the by-laws and any unanimous agreement. 
  
  ### No exculpation
  
  (3) Subject to subsection 115(5), no provision in a contract, the articles, the by-laws, a unanimous agreement or a resolution relieves a director or officer from complying with this Act and the regulations or from liability for non-compliance. 
  
  ### Notice of directors
  
  81 (1) At the time of sending articles of incorporation, the incorporators must send the Director a notice of directors, in the form that the Director fixes. 
  
  ### First directors
  
  (2) When a cooperative comes into existence, the individuals identified in the notice have all the powers and duties of directors until the first meeting of members. 
  
  ### First meeting
  
  (3) At the first meeting of members after a cooperative comes into existence, the directors are to be elected or appointed in accordance with this Act, the articles, the by-laws and any unanimous agreement. 
  
  ### Organizational meeting
  
  82 (1) After a cooperative comes into existence, a meeting of directors must be held at which the directors may 
  (a) adopt forms of security certificates and of cooperative records; 
  (b) admit persons to membership in the cooperative and issue or authorize the issuance of membership shares and member loan certificates; 
  (c) appoint officers; 
  (d) appoint an auditor to hold office until the first meeting of members; 
  (e) make arrangements with an appropriate financial institution; and 
  (f) transact any other business necessary to organize the cooperative. 
  
  ### Notice
  
  (2) An incorporator or a director may call a meeting of directors referred to in subsection (1) by giving not less than five days notice of the meeting to each director, stating the time and place of the meeting. 
  
  ### Rules for election of directors
  
  83 (1) Unless the articles, the by-laws or a unanimous agreement provides otherwise, the election of the directors must be in accordance with this section, subsection 78(5) and sections 84 to 87 and 124. 
  
  ### Annual election
  
  (2) Elections of directors are to be held annually at a meeting of the persons who are entitled to elect or appoint them. 
  
  ### Term of office
  
  (3) Directors hold office until the close of the meeting at which their successors are elected. 
  
  ### Staggered terms
  
  (4) It is not necessary that all directors elected at a meeting of the cooperative hold office for the same term. 
  
  ### Re-election
  
  (5) Directors may be re-elected. 
  
  ### Election or appointment as director
  
  (6) An individual who is elected or appointed to hold office as a director is not a director and is deemed not to have been elected or appointed to hold office as a director unless 
  (a) he or she was present at the meeting when the election or appointment took place and he or she did not refuse to hold office as a director; or 
  (b) he or she was not present at the meeting when the election or appointment took place and 
  (i) he or she consented to hold office as a director in writing before the election or appointment or within ten days after it, or 
  (ii) he or she has acted as a director pursuant to the election or appointment. 
  (7)  [Repealed, 2001, c. 14, s. 160]  
  
  ### Secret ballot
  
  (8) Directors are to be elected by secret ballot if the number of nominees exceeds the number of directors to be elected. 
  
  ### Casting ballot
  
  (9) A ballot that is cast for the election of more than the number of directors to be elected is null or void. 
  
  ### Determining election of directors
  
  (10) The individual who receives the greatest number of votes at an election of directors is elected a director and the other individuals who receive, in descending order, the next greatest numbers of votes are also elected directors, until the number of directors to be elected has been elected. If two individuals receive an equal number of votes for the last vacancy on the board, the directors already elected to the board must determine which of the two individuals is to be elected. 
  
  ### Majority voting
  
  (10.1) If, at a meeting of persons who are entitled to elect or appoint directors of a distributing cooperative — other than in the case of a prescribed class of distributing cooperatives — at which an election of directors is required, there is only one candidate nominated for each position available on the board, each candidate is elected only if the number of votes cast in their favour represents a majority of the votes cast for and against them by those persons who are present in person or represented by proxy, unless the articles require a greater number of votes. 
  
  ### Incumbent director not elected
  
  (10.2) Despite subsection (3) and paragraph 84(1)(b), if an incumbent director who was a candidate in an election held in accordance with subsection (10.1) was not elected during the election, the director may continue in office until the earlier of 
  (a) the 90th day after the day of the election; and 
  (b) the day on which their successor is appointed or elected. 
  
  ### Separate election
  
  (11) If shareholders have a right to elect one or more directors, they vote separately from the members. 
  
  ### Separate vote for each candidate
  
  (12) If the election of directors is for a prescribed cooperative, a separate vote by persons who are entitled to elect or appoint directors must be taken with respect to each candidate nominated for director. 
  
  ### Exception
  
  (13) If an individual who was a candidate in an election held in accordance with subsection (10.1) was not elected during that election, the individual is not to be appointed, except in prescribed circumstances, as a director under subsection 85(1) before the next meeting at which an election of directors is required by persons who are entitled to elect or appoint directors. 
  
  ### Maximum term
  
  84 (1) Subject to section 86, a director is entitled to hold office for a term expiring not later than 
  (a) in the case of a cooperative that is not a distributing cooperative, the close of the third annual meeting of members following the director’s election; and 
  (b) in the case of a distributing cooperative, the close of the next annual meeting of members following the director’s election. 
  
  ### Exceptions — certain distributing cooperatives
  
  (2) Despite paragraph (1)(b), in the case of any prescribed class of distributing cooperatives or in any prescribed circumstances respecting distributing cooperatives or classes of distributing cooperatives, the directors are not entitled to hold office for a term that is longer than three years. 
  
  ### Vacancy on board
  
  85 (1) Subject to subsection (3), if there is a vacancy on the board of directors, except a vacancy because of an increase in the number or the minimum or maximum number of directors provided for in the articles or because of a failure to elect or appoint the number or minimum number of directors provided for in the articles, and there is still a quorum on the board, the remaining directors may 
  (a) continue to fulfil their functions without filling the vacancy; or 
  (b) subject to subsection (8), appoint a director to fill the vacancy. 
  
  ### Failure to appoint or elect minimum
  
  (2) If, at the close of a meeting of a cooperative, the persons at the meeting have failed to appoint or elect the number or minimum number of directors required by this Act or the articles, the purported appointment or election of directors at the meeting 
  (a) is valid if the directors purported to be appointed or elected and the incumbent directors, if any, whose terms did not expire at the close of the meeting, together constitute a quorum; or 
  (b) is null or void if the directors purported to be appointed or elected and the incumbent directors, if any, whose terms did not expire at the close of the meeting, together do not constitute a quorum. 
  
  ### Special meeting
  
  (3) The articles may provide that if there is a vacancy on the board of directors, the remaining directors must call a special meeting of the persons who are entitled to vote for the purpose of electing or appointing directors to fill the vacancy. 
  
  ### Absence of quorum
  
  (4) If there is not a quorum of directors, the directors must, without delay, call a special meeting of the persons who are entitled to vote to fill the vacancy, and if they fail to do so, any person who is entitled to vote at a meeting of the cooperative may call the meeting. 
  
  ### Vacant board
  
  (5) If the board of directors is vacant, any person who is entitled to vote at a meeting of the cooperative may call a special meeting to elect directors to fill the vacancies. 
  
  ### Deemed directors
  
  (6) If all of the directors have resigned or been removed without replacement, a person who manages or supervises the management of the business and affairs of the cooperative is deemed to be a director for the purposes of this Act. 
  
  ### Exceptions
  
  (7) Subsection (6) does not apply to 
  (a) an officer who manages the business or affairs of the cooperative under the direction or control of a member, shareholder or other person; 
  (b) a lawyer, notary, accountant or other professional who participates in the management of the cooperative solely for the purpose of providing professional services; or 
  (c) a trustee in bankruptcy, receiver, receiver-manager, sequestrator or secured creditor who participates in the management of the cooperative or exercises control over its property solely for the purpose of the realization of security or the administration of a bankrupt’s estate, in the case of a trustee in bankruptcy. 
  
  ### Class director
  
  (8) Subject to subsection (3), if there is a vacancy in the position of a director who is to be elected by a class vote of either the members or the shareholders, 
  (a) any remaining directors elected or appointed by that class may act under subsection (1); or 
  (b) if there are no such remaining directors, any member of the class may act under subsection (5). 
  
  ### Unexpired term
  
  (9) Unless the by-laws provide otherwise, a director who is elected or appointed to fill a vacancy holds office for the unexpired term of their predecessor in office. 
  
  ### Continuation in office
  
  86 If the election of directors does not occur at the time fixed by this Act, the by-laws or a unanimous agreement, the directors then in office continue in office until their successors are elected. 
  
  ### Ceasing to hold office
  
  87 (1) A director ceases to hold office when he or she dies, resigns, is removed from office or is no longer qualified to be a director. 
  
  ### Resignation date
  
  (2) A resignation of a director becomes effective on the later of 
  (a) the day a written letter of resignation is sent to the cooperative, and 
  (b) the day specified in the letter of resignation. 
  
  ### Removal of directors
  
  88 (1) A director may be removed from office by ordinary resolution at a special meeting of the persons who are entitled to vote in the election or appointment of that director. 
  
  ### Vacancy
  
  (2) The vacancy created by the removal of a director may be filled at the meeting at which the director was removed. 
  
  ### Resignation statement
  
  89 (1) A director who resigns is entitled to submit to the cooperative a written statement giving the reasons for the resignation. 
  
  ### Opposition statement
  
  (2) A director who learns of 
  (a) a meeting of the cooperative called for the purpose of removing the director, or 
  (b) a meeting of the cooperative, or of the directors, at which another person is to be appointed or elected to succeed or replace the director, is entitled to attend and address the meeting, or to submit a written statement to the cooperative, giving the reasons why the director opposes any proposed action or resolution at the meeting. 
  
  ### Circulation of statement
  
  (3) When the cooperative receives a statement under subsection (1) or (2), it must ensure that a copy of it is sent without delay to the Director and to every person who is entitled to receive notice of the meeting. 
  
  ### Immunity for statement
  
  (4) No cooperative or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (3). 
  
  ### Right to attend meetings
  
  90 A director is entitled to receive notice of, to attend and to be heard at every meeting of the cooperative. 
  
  ### Notice of change of director or director’s address
  
  91 (1) A cooperative must, within fifteen days after 
  (a) a change is made among its directors, or 
  (b) it receives a notice of change of address of a director referred to in subsection (2), send to the Director a notice, in the form that the Director fixes, setting out the change. 
  
  ### Director’s change of address
  
  (2) A director must, within fifteen days after changing his or her address, send the cooperative a notice of that change. 
  
  ### Application to court
  
  (3) Any interested person, or the Director, may apply to a court for an order to require a cooperative to comply with subsection (1), and the court may so order and make any further order it thinks fit. 
  
  ### Place of meetings
  
  92 (1) The directors may meet at any place unless the articles or by-laws provide otherwise. 
  
  ### Notice of meeting
  
  (2) Unless the by-laws provide otherwise, notice of the time and place of a meeting of directors must be given to every director by sending the notice not less than ten days before the date of the meeting to the latest address of the director as shown on the records of the cooperative. 
  
  ### Content of notice
  
  93 Notice of a meeting of directors must specify the time and place of the meeting but need not specify the matter to be dealt with at the meeting, unless the matter is one listed in subsection 109(3). 
  
  ### Waiver of notice
  
  94 A director may, in any manner, waive notice of a meeting of directors and attendance at a meeting constitutes waiver of notice unless the director is attending for the purpose of objecting to the meeting on the ground that it was not lawfully called. 
  
  ### Adjourned meeting
  
  95 There is no need to give notice for the continuation of a meeting of directors that is adjourned or for a meeting of directors that immediately follows an annual meeting. 
  
  ### Quorum
  
  96 Unless the articles, the by-laws or a unanimous agreement provides for a greater proportion, a majority of the number or minimum number of directors, subject to section 97, constitutes a quorum at any meeting of directors or of a committee of directors, and, despite any vacancy among the directors, a quorum of directors may exercise all the powers of the directors. 
  
  ### Quorum
  
  97 (1) To constitute a quorum, 
  (a) at least twenty-five per cent of the directors at the meeting must be resident in Canada or, if the cooperative has only three directors, at least one of the directors at the meeting must be resident in Canada; and 
  (b) a majority of the directors at the meeting must be members of the cooperative, or representatives of members that are entities or members of members that are cooperative entities. 
  
  ### Exception
  
  (2) Despite subsection (1), a meeting of directors may be held without the number of directors resident in Canada required under that subsection if 
  (a) a director who is resident in Canada and who is not present approves, in writing or by telephonic, electronic or other communication facilities, the business transacted at the meeting; and 
  (b) the required number would have been present had that director been present at the meeting. 
  
  ### Participation
  
  98 (1) Subject to the by-laws, a director may, in accordance with the regulations, if any, participate in a meeting of directors or of a committee of directors by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. 
  
  ### Presence
  
  (2) A director participating in a meeting by a means referred to in subsection (1) is deemed to be present at the meeting. 
  
  ### Validity of acts
  
  99 No act of a director or officer is invalid by reason only of an irregularity in the person’s election or appointment or because the director or officer is not qualified to be one. 
  
  ### Resolution in lieu of meeting
  
  100 (1) A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or of a committee of directors, is as valid as if it had been passed at a meeting of directors or of a committee of directors. 
  
  ### Copy of resolutions
  
  (2) A copy of every resolution referred to in subsection (1) must be kept with the minutes of the meetings of the directors or committee of directors. 
  
  ### Evidence
  
  (3) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. 
  
  ## Liability 
  
  ### Directors’ liability
  
  101 (1) Directors who vote for or consent to a resolution authorizing the issue of a membership share or an investment share in exchange for a thing or service other than money are jointly and severally, or solidarily, liable to the cooperative to make good any amount by which the thing or service received is less than the fair equivalent of the money that the cooperative would have received if the membership share or investment share had been issued for money on the date of the resolution. 
  
  ### Exemption
  
  (2) A director is not liable under subsection (1) if the director proves that he or she did not know and could not reasonably have known that the membership share or investment share was issued for a thing or service less than the fair equivalent of the money that the cooperative would have received if the membership share or investment share had been issued for money on the date of the resolution. 
  
  ### Further liability
  
  (3) Directors who vote for or consent to resolutions authorizing any of the following matters are jointly and severally, or solidarily, liable to restore to the cooperative any amounts so distributed or paid and not otherwise recovered by the cooperative: 
  (a) a redemption or other acquisition of shares or the repayment of member loans contrary to this Act; 
  (b) a commission contrary to this Act; 
  (c) a payment of a dividend, a patronage return or interest contrary to this Act; 
  (d)  [Repealed, 2001, c. 14, s. 166]  
  (e) a payment of an indemnity contrary to this Act; or 
  (f) any other payment contrary to this Act. 
  
  ### Contribution
  
  (4) A director who satisfies a judgment for a debt owed under this section is entitled to contribution from the other directors who were liable for the debt. 
  
  ### Recovery
  
  (5) A director who is liable under subsection (3) may apply to a court for an order to recover any money or property referred to in paragraphs (3)(a) to (f). 
  
  ### Order of court
  
  (6) A court may, on application under subsection (5), if it is satisfied that it is equitable to do so, 
  (a) order any person to pay or deliver to the director any money or property referred to in paragraphs (3)(a) to (f) that was paid or distributed to that person; 
  (b) order a cooperative to return or issue membership shares or investment shares to a person from whom the cooperative redeemed or otherwise acquired membership shares or investment shares; 
  (c) order any person to repay to the cooperative the amount of a member loan that was repaid; or 
  (d) make any further order that it sees fit. 
  
  ### Limitation period
  
  (7) An action to enforce a liability imposed by this section may not be commenced more than two years after the date of the resolution authorizing the action complained of. 
  
  ### Liability for wages
  
  102 (1) Subject to this section and any other applicable law, each director is jointly and severally, or solidarily, liable to the employees of the cooperative for all debts payable to them for services performed while the director held office. 
  (2)  [Repealed, 2001, c. 14, s. 167]  
  
  ### Amount of liability
  
  (3) The amount of the liability under this section may not exceed six months wages in the case of each employee. 
  
  ### Conditions precedent
  
  (4) A director is not liable under this section unless 
  (a) the cooperative was sued for the debt within six months after it became due and execution was returned unsatisfied in whole or in part; 
  (b) the cooperative has commenced liquidation or dissolution proceedings or was dissolved and a claim for the debt was proved no later than six months after the earlier of the date of commencement of the proceedings and the date of the dissolution; or 
  (c) the cooperative made an assignment or was made subject to a bankruptcy order under the Bankruptcy and Insolvency Act and a claim for the debt was proved no later than six months after the date of the assignment or bankruptcy order.  
  
  ### Limitation period
  
  (5) A director is not liable under this section unless he or she is sued while holding office or no later than two years after ceasing to be a director. 
  
  ### Amount due after execution
  
  (6) If execution referred to in paragraph (4)(a) has issued, the amount recoverable from the director is the amount remaining unsatisfied after execution. 
  
  ### Subrogation of director
  
  (7) A director who pays a debt owed under this section that is proven in liquidation and dissolution or bankruptcy proceedings is subrogated to any priority that the employee would have been entitled to and, if a judgment has been obtained, the director is 
  (a) in Quebec, subrogated to the employee’s rights as declared in the judgment; and 
  (b) elsewhere in Canada, entitled to an assignment of the judgment. 
  
  ### Contribution
  
  (8) A director who pays a debt owed under this section is entitled to contribution from the other directors who were liable for the debt. 
  
  ## Conflict of Interests 
  
  ### Disclosure of interest
  
  103 (1) A director or officer must, in accordance with this section, disclose to the cooperative the nature and extent of any interest that the director or officer has in a material contract or transaction, or a proposed material contract or transaction, with the cooperative, and any material change to any such interest, if the director or officer 
  (a) is a party to the contract or transaction; 
  (b) is a director or officer — or an individual acting in a similar capacity — of a party to the contract or transaction; or 
  (c) has a material interest in a party to the contract or transaction. 
  
  ### Exemption
  
  (2) This section does not require the disclosure of an interest in a contract or transaction that is available to and customarily entered into between the cooperative and its members, if the contract or transaction is on the same terms as are generally available to members. 
  
  ### Manner of disclosure
  
  (3) The director or officer must make the disclosure in writing to the cooperative or request to have it entered in the minutes of the meetings of directors. 
  
  ### Time of disclosure for a director
  
  (4) A director must make the disclosure 
  (a) at the meeting of directors at which the proposed contract or transaction is first considered; 
  (b) if the director was not interested in the proposed contract or transaction at the time of the meeting referred to in paragraph (a), at the first meeting after the director acquires an interest in it; 
  (c) if there is a material change in the director’s interest in the contract, transaction, proposed contract or proposed transaction, at the first meeting after the change; 
  (d) if the director becomes interested in a contract or transaction after it is made, at the first meeting after the director acquires an interest in it; 
  (e) if the director had an interest in the contract or transaction before becoming a director, at the first meeting after becoming a director; or 
  (f) if the contract or transaction is one that would, in the ordinary course of business, not require the approval of the directors, as soon as the director becomes aware of the contract or transaction. 
  
  ### Time of disclosure for an officer
  
  (5) An officer who is not a director must make the disclosure 
  (a) immediately after becoming aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors; 
  (b) if the officer acquires an interest in a contract or transaction after it is made, immediately after the officer acquires an interest in it; 
  (c) if there is a material change in the officer’s interest in the contract, transaction, proposed contract or proposed transaction, immediately after the change; 
  (d) if the officer had an interest in the contract or transaction before becoming an officer, immediately after becoming an officer; or 
  (e) if the contract or transaction is one that would, in the ordinary course of business, not require the approval of the directors, as soon as the officer becomes aware of the contract or transaction. 
  
  ### Access
  
  (6) The members and shareholders may examine the portions of minutes of meetings of directors, of other documents that contain disclosures under this section and of the general notice referred to in section 105 during the usual business hours of the cooperative. 
  (7)  [Repealed, 2001, c. 14, s. 168]  
  
  ### Voting
  
  104 (1) A director who is interested in a contract or transaction referred to in subsection 103(1) may not vote on any resolution to approve the contract or transaction. 
  
  ### Exception
  
  (2) Subsection (1) does not apply to 
  (a) a contract or transaction that relates primarily to the director’s remuneration as a director, officer, employee or agent or mandatary of the cooperative or of one of its subsidiaries; or 
  (b) a contract for indemnity or insurance under section 113. 
  
  ### Continuing disclosure
  
  105 For the purposes of section 103, a general notice to the directors declaring that the director or officer is a director or officer of an entity or acting in a similar capacity, or has a material interest in an entity, or that there has been a change in the nature of their interest in the entity, and that the director or officer is therefore to be regarded as interested in a contract or transaction made with that entity, as declared in the notice, is a sufficient declaration of interest in a contract or transaction so made. 
  
  ### Effect of disclosure
  
  106 A contract or transaction for which disclosure is required under section 103 is not invalid, and the director or officer is not accountable to the cooperative, its members or its shareholders for any profit realized from the contract or transaction, because of the director’s or officer’s interest in the contract or transaction or because the director was present or was counted to determine whether a quorum existed at the meeting of directors or committee of directors that considered the contract or transaction, if 
  (a) disclosure of the interest was made in accordance with sections 103 to 105; 
  (b) the directors approved the contract or transaction; and 
  (c) the contract or transaction was reasonable and fair to the cooperative when it was approved. 
  
  ### Confirmation
  
  106.1 Even if the conditions of section 106 are not met, a director or officer, acting honestly and in good faith, is not accountable to the cooperative, its members or its shareholders for any profit realized from a contract or transaction for which disclosure is required under section 103 and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction if 
  (a) the contract or transaction is approved or confirmed by special resolution at a meeting of the members; 
  (b) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and 
  (c) the contract or transaction was reasonable and fair to the cooperative when it was approved or confirmed. 
  
  ### Court order
  
  107 If a director or officer of a cooperative fails to disclose an interest in a material contract or transaction in accordance with section 103, or otherwise fails to comply with sections 103 to 106.1, a court may, on the application of the cooperative or a member or shareholder, set aside the contract or transaction on any terms that it thinks fit or order that the director or officer account to the cooperative, its members or its shareholders for any profit realized from the contract or transaction. 
  
  ## Officers 
  
  ### Officers
  
  108 Subject to the articles, the by-laws and any unanimous agreement, the directors may 
  (a) designate the offices of the cooperative; 
  (b) specify the powers and duties of each office; 
  (c) appoint any individual of full capacity, including a director, to be an officer; 
  (d) appoint one individual to hold more than one office; and 
  (e) delegate to the officers the power to manage the business and affairs of the cooperative, except a power referred to in subsection 109(3). 
  
  ### Appointment of managing director or committee
  
  109 (1) The directors may appoint from among themselves a managing director or any committee they consider necessary. 
  
  ### Residency
  
  (2) The managing director must be resident in Canada. 
  
  ### Delegation
  
  (3) The directors may delegate to a managing director or a committee composed of at least three directors any powers of the directors, except the power to 
  (a) fill a vacancy among the directors or in the office of the auditor, or appoint additional directors; 
  (b) declare dividends on shares, interest on member loans or patronage returns; 
  (c) approve a financial statement of the cooperative; 
  (d) submit to the persons who are entitled to vote on them questions or matters required to be approved at a meeting of the cooperative; 
  (e) make decisions that by this Act, the articles or a unanimous agreement are required to be made by a vote of greater than a majority of the directors; 
  (f) redeem or otherwise acquire shares issued by the cooperative; 
  (g) pay a commission referred to in section 128, except as authorized by the directors; 
  (h) approve a management proxy circular referred to in Part 9; 
  (i) issue securities, except in the manner and on the terms authorized by the directors; or 
  (j) issue investment shares of a series under section 126 except as authorized by the directors. 
  
  ### Powers
  
  (4) A committee referred to in subsection (1) may exercise the powers that have been delegated to it subject to any restrictions imposed by the directors. 
  
  ### Membership on committee
  
  (5) A director who is appointed to a committee may remain on the committee until the appointment is revoked or the person ceases to be a director. 
  
  ### Duties
  
  (6) A committee appointed under this section must 
  (a) fix its quorum at not less than a majority of its members; 
  (b) keep minutes of its proceedings; and 
  (c) report, at each meeting of the directors, on the proceedings of the committee since the last meeting of the directors. 
  
  ### Deemed assent
  
  110 (1) A director who is present at a meeting of directors is deemed to have consented to any resolution made or action taken at the meeting unless 
  (a) the director requests that a dissent be entered in the minutes of the meeting or the dissent is so entered; 
  (b) the director sends a written dissent to the secretary of the meeting before it is adjourned; or 
  (c) the director sends a written dissent by confirmed delivery service or delivers it personally, to the registered office of the cooperative immediately after the meeting is adjourned. 
  
  ### Loss of right to dissent
  
  (2) A director who votes for or expressly consents to a resolution or action taken at a meeting is not entitled to later dissent. 
  
  ### Deemed assent of absent director
  
  (3) A director who is not present at a meeting of directors is deemed to have consented to any resolution made or action taken at the meeting unless the director, within seven days after becoming aware of the resolution or action, 
  (a) causes a dissent to be entered in the minutes of the meeting; or 
  (b) sends a written dissent by confirmed delivery service or delivers it personally, to the registered office of the cooperative. 
  
  ### Due diligence
  
  111 A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on 
  (a) financial statements of the cooperative represented to the director by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or 
  (b) a report of a person whose profession lends credibility to a statement made by the professional person. 
  
  ### Remuneration
  
  112 Unless the articles, the by-laws or a unanimous agreement provides otherwise, the directors may fix the remuneration of the directors, officers and employees of the cooperative. 
  
  ### Indemnification
  
  113 (1) A cooperative may indemnify an individual who is or was a director or officer of the cooperative, or who acts or acted at the cooperative’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a claim, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved by reason of their association with the cooperative or entity. 
  
  ### Advance of costs
  
  (2) A cooperative may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual must repay the moneys if the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys. 
  
  ### Limitation
  
  (3) A cooperative may not indemnify an individual under subsection (1) unless the individual 
  (a) acted honestly and in good faith with a view to the best interests of the cooperative, or, as the case may be, to the best interests of the entity for which the individual acted as director or officer or in a similar capacity at the cooperative’s request; and 
  (b) in the case of a criminal or administrative proceeding, had reasonable grounds for believing that the individual’s conduct was lawful. 
  
  ### Derivative action
  
  (4) A cooperative may not indemnify an individual under subsection (1) or advance costs under subsection (2) in respect of an action by or on behalf of the cooperative or entity unless a court so orders. 
  
  ### Right to indemnity
  
  (5) An individual referred to in subsection (1) is entitled to indemnity from the cooperative for the costs, charges and expenses referred to in that subsection if the individual 
  (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and 
  (b) fulfils the conditions in subsection (3). 
  
  ### Insurance
  
  (6) A cooperative may purchase and maintain insurance for the benefit of an individual referred to in subsection (1) against any liability incurred by the individual by reason of being or having been a director or officer of the cooperative, having been a director or officer of another entity or having acted in a similar capacity, if the individual acts or acted in that capacity at the cooperative’s request. 
  
  ### Application to court
  
  114 (1) A court may, on application of a cooperative or an individual referred to in subsection 113(3), approve an indemnity under section 113 and make any further order that it sees fit. 
  
  ### Notice
  
  (2) On an application under subsection (1), the court may order notice to be given to any interested person and the person is entitled to appear and be heard in person or by counsel. 
  
  ### Restricting powers of directors
  
  115 (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), those powers, is valid. 
  
  ### Deemed unanimous agreement
  
  (2) For the purpose of subsection (1), a unanimous agreement to which another person is also a party is deemed to be a unanimous agreement. 
  
  ### Investment shareholders
  
  (3) A purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement. 
  
  ### When no notice given
  
  (4) If notice is not given to the purchaser or transferee of the existence of a unanimous agreement, in the manner referred to in subsection 183(2) or otherwise, the purchaser or transferee may, no later than thirty days after they become aware of its existence, rescind the transaction by which they acquired the investment shares. 
  
  ### Rights of members
  
  (5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent. 
  
  ### Discretion of shareholders
  
  (6) Nothing in this section prevents members from fettering their discretion when exercising the powers of directors under a unanimous agreement. 
  (7) and (8)  [Repealed, 2001, c. 14, s. 174]  
  
  # PART 8 
  
  ## Capital Structure 
  
  ## Membership Capital 
  
  ### Loan capital
  
  116 The capital of a cooperative without membership shares may be in the form of member loans and those loans may be in the amounts, payable at the times, and with or without interest, that the articles of the cooperative provide. 
  
  ### Membership shares
  
  117 A cooperative with membership shares must have one class of membership shares, designated as such in the articles. 
  
  ### Issuance to members
  
  118 (1) Membership shares may be issued only to members, each of whom must hold the minimum number of membership shares prescribed by the by-laws. 
  
  ### Equal rights
  
  (2) Subject to Parts 20 and 21, the membership shares of a cooperative confer on their holders equal rights, including equal rights to 
  (a) receive dividends declared on membership shares; and 
  (b) subject to the articles, receive the remaining property of the cooperative on dissolution. 
  
  ### Membership shares
  
  (3) The articles may not include any preference, right, condition, restriction, limitation or prohibition on membership shares, except as provided for by this Act. 
  
  ### Transfer requires approval
  
  (4) A transfer of membership shares is valid only if it complies with section 46 and any restrictions set out in the by-laws. 
  
  ### No right to vote
  
  (5) The right to vote attaches to membership in accordance with section 37 and not to a membership share. 
  
  ### Redeemable
  
  (6) Subject to sections 146 and 149, membership shares may be redeemed by the cooperative. 
  
  ## Certificates 
  
  ### Issue of certificates
  
  119 (1) The by-laws of a cooperative may provide that no membership share certificates or certificates in respect of member loans need be issued. If the by-laws provide that no such certificates need be issued, the cooperative must, on the request of a member, issue a statement of the number of membership shares held by, or the amount of any member loan of, the member. 
  
  ### Certificates
  
  (2) The face of each certificate that the cooperative issues in respect of membership shares or member loans after the coming into force of this section must contain 
  (a) the name of the cooperative; 
  (b) a statement that the cooperative is subject to this Act; 
  (c) the name of the person to whom it is issued; 
  (d) a statement that the certificate represents membership shares in, or member loans to, the cooperative, and the number of the membership shares or the amount of the member loan; 
  (e) a statement that the certificate is not transferable without the approval of the directors; and 
  (f) a statement that there is a charge, lien or hypothec on the membership shares or member loans represented by the certificate in favour of the cooperative for any indebtedness of the member to the cooperative. 
  
  ### Certificate of membership
  
  (3) Each member is entitled to a certificate of membership. 
  
  ### Authorized capital
  
  120 (1) The membership shares of a cooperative may be issued with or without a par value. 
  
  ### Par-value membership shares
  
  (2) If the membership shares of a cooperative are with a par value, the articles must specify that fact and specify their par value and any limit on their number. 
  
  ### No-par-value membership shares
  
  (3) If the membership shares of a cooperative are without a par value, the articles must specify that fact and specify any limit on their number. 
  
  ### Fixed or determined value
  
  121 If any no-par-value membership shares of a cooperative are to be issued and are to be redeemed at a fixed or determined value, the articles must set out those facts and state the fixed price or formula to be used to determine the value. 
  
  ### Distribution on dissolution
  
  122 Subject to Parts 20 and 21, the articles of a cooperative may provide that, on dissolution of the cooperative and after the payment of all debts and liabilities — including any declared and unpaid dividends, the amount to be paid to the holders of any investment shares and the amount to be paid on the redemption of membership shares — the value of the remaining property of the cooperative is to be distributed or disposed of to any person, including distribution 
  (a) among the members at the time of dissolution, in any manner, including equally among the members irrespective of the number of membership shares or amount of member loans, if any, held or made by a member; 
  (b) among the members at the time of dissolution on the basis of patronage returns accrued to those members during a stated period before the dissolution; or 
  (c) to charitable organizations or cooperative entities. 
  
  ### Charge, lien or hypothec on membership shares for amounts
  
  123 (1) A cooperative has a charge, lien or hypothec on a membership share or any amount standing to the credit of a member or the personal representative of a member for a debt of that member to the cooperative. 
  
  ### Enforcement of charge
  
  (2) A cooperative may 
  (a) enforce a charge, lien or hypothec referred to in subsection (1) in the manner set out in its by-laws; or 
  (b) apply any moneys standing to the credit of a member toward payment of a debt due by the member to the cooperative. 
  
  ## Investment Shares 
  
  ### Investment shares
  
  124 (1) The articles of a cooperative may provide that the cooperative may issue investment shares, and if they do, the articles must set out the following: 
  (a) whether the investment shares may be issued to non-members; 
  (b) whether the number of investment shares is to be unlimited and, if not, the maximum number of investment shares that may be issued; 
  (c) the number of classes of investment shares; and 
  (d) the preferences, rights, conditions, restrictions, limitations and prohibitions attaching to the investment shares and, if there is to be more than one class, the designation of each class and the special preferences, rights, conditions, restrictions, limitations and prohibitions attaching to each class. 
  
  ### No voting rights
  
  (2) Subject to the articles and to this Act, no right to vote at a meeting of the cooperative attaches to an investment share. 
  
  ### Exception
  
  (3) The articles may provide that 
  (a) an investment share confers on its holder the right to vote at an election of directors by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled; or 
  (b) the shareholders, any class of shareholders or the holders of a series of investment shares, may elect a fixed number or a percentage of the directors. 
  
  ### Limit on shareholders’ directors
  
  (4) Despite subsections (2) and (3), neither the articles nor a unanimous agreement may provide that the shareholders have the right to elect more than twenty per cent of the directors. 
  
  ### One share, one vote
  
  (5) If shareholders are entitled to vote in accordance with subsection (3) or otherwise in accordance with this Act, each investment share entitles the holder to one vote. 
  
  ### Members may exercise shareholder rights if shareholders
  
  (6) Despite section 37, a member who holds an investment share may exercise any voting right that holders of investment shares have. 
  
  ### No-par-value shares
  
  125 (1) Investment shares of a cooperative must be in registered form and without a par value. 
  
  ### When cooperative continued
  
  (2) Investment shares of a cooperative that is continued under this Act are deemed to be investment shares without a par value. 
  
  ### Shares in series
  
  126 (1) The articles may authorize, subject to any limitations set out in them and subject to subsection (2), the issue of any class of investment shares in one or more series and may do either or both of the following: 
  (a) fix the number of investment shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the investment shares of, each series; or 
  (b) authorize the directors to fix the number of investment shares in, and to determine the designation, rights, privileges, restrictions and conditions attaching to the investment shares of, each series. 
  
  ### Member authorization
  
  (2) No investment share may be issued until the members have authorized the principle of the issuance of investment shares. 
  
  ### Series participation
  
  (3) If any cumulative dividends or amounts payable on return of capital in respect of a series of investment shares are not paid in full, the investment shares of all series of the same class must participate rateably in respect of accumulated dividends and return of capital. 
  
  ### Restrictions on series
  
  (4) No rights, privileges, restrictions or conditions attached to a series of investment shares authorized under this section confer a priority in respect of dividends or return of capital on a series over any other series of investment shares of the same class that are then outstanding. 
  
  ### Amendment of articles
  
  (5) If the directors exercise their authority under paragraph (1)(b), they must, before the issue of shares of the series, send to the Director articles of amendment in the form that the Director fixes to designate a series of investment shares. 
  
  ### Certificate of amendment
  
  (6) On receipt of articles of amendment designating a series of shares under subsection (5), the Director must issue a certificate of amendment. 
  
  ### Effect of certificate
  
  (7) The articles of the cooperative are amended accordingly on the date shown in the certificate of amendment. 
  
  ### Pre-emptive right
  
  127 (1) If the articles so provide, no investment shares of any class may be issued unless the investment shares are first offered to the shareholders of that class. The shareholders of that class have a pre-emptive right to acquire the offered investment shares in proportion to their holdings of the investment shares of that class, at the price at which and on the terms on which those investment shares are to be offered to others. 
  
  ### Limitation
  
  (2) Even if the articles provide the pre-emptive right referred to in subsection (1), shareholders have no pre-emptive right to acquire investment shares that are to be issued 
  (a) in exchange for a thing or service other than money; 
  (b) as an investment share dividend or in payment of a patronage return; or 
  (c) pursuant to the exercise of conversion privileges, options or rights previously granted by the cooperative. 
  
  ### Commissions
  
  128 The directors may authorize the cooperative to pay a reasonable commission to any person in consideration of the person 
  (a) purchasing or agreeing to purchase investment shares from the cooperative or from some other person; or 
  (b) procuring or agreeing to procure purchasers for any such investment shares. 
  
  ### Charge, lien or hypothec on investment shares
  
  129 (1) Subject to subsection 183(2), the articles may provide that the cooperative has a charge, lien or hypothec on an investment share registered in the name of a shareholder or the personal representative of a shareholder for a debt of the shareholder to the cooperative, including an amount unpaid as of the date a body corporate was continued under this Act, in respect of an investment share issued by it. 
  
  ### Enforcement
  
  (2) A cooperative may enforce a charge, lien or hypothec referred to in subsection (1) in accordance with its by-laws. 
  
  ## Constraints 
  
  ### Constraints on shares
  
  130 (1) Subject to subsection 290(3), a distributing cooperative that has issued investment shares that remain outstanding and are held by more than one person may, by special resolution of the members and by a separate special resolution of the shareholders of each class, amend its articles to constrain 
  (a) the issue or transfer of investment shares of any class or series to persons who are not resident in Canada; 
  (b) the issue or transfer of investment shares of any class or series to enable the cooperative or any of its affiliates or associates to qualify under any prescribed law of Canada or a province 
  (i) to obtain a licence to carry on a business, 
  (ii) to become a publisher of a Canadian newspaper or periodical, or 
  (iii) to acquire investment shares of a financial intermediary as defined in the regulations; 
  (c) the issue, transfer or ownership of investment shares of any class or series to assist the cooperative or any of its affiliates or associates to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control; 
  (d) the issue, transfer or ownership of any investment share to assist the cooperative to comply with any prescribed law; or 
  (e) the issue, transfer or ownership of any investment share to enable the cooperative to be a registered labour sponsored venture capital corporation under Part X.3 of the Income Tax Act.  
  
  ### Exception in respect of paragraph (1)(c)
  
  (2) Paragraph (1)(c) does not permit a constraint on the issue, transfer or ownership of investment shares of any class or series of which any investment shares are outstanding unless the investment shares of that class or series are already subject to a constraint permitted under that paragraph. 
  
  ### Limitation of prohibition of investment shares
  
  (3) If the ownership by a person of investment shares would adversely affect the ability of a cooperative or any of its affiliates or associates to attain or maintain a level of Canadian ownership or control specified in its articles that equals or exceeds a specified level referred to in paragraph (1)(c), the cooperative may, under that paragraph, limit the number of investment shares of the cooperative that may be owned, or prohibit the ownership of investment shares, by that person. 
  
  ### Change or removal of constraint
  
  (4) A cooperative referred to in subsection (1) may, by a special resolution of the members and by a separate special resolution of the shareholders of each class, amend its articles to change or remove any constraint on the issue, transfer or ownership of its investment shares. 
  
  ### Termination
  
  (5) The directors may, if authorized by a special resolution effecting an amendment under subsection (1) or (4), revoke the resolution before it is acted on without further approval. 
  
  ### Regulations
  
  (6) The Governor in Council may make regulations with respect to a cooperative that constrains the issue, transfer or ownership of its investment shares, prescribing 
  (a) the disclosure required of the constraints in documents issued or published by the cooperative; 
  (b) the duties and powers of the directors to refuse to issue or register transfers of investment shares in accordance with the articles; 
  (c) the limitations on voting rights of any investment shares held contrary to the articles; 
  (d) the powers of the directors to require disclosure of beneficial ownership of investment shares of the cooperative and the right of the cooperative and its directors, employees and agents or mandataries to rely on that disclosure and the effects of that reliance; and 
  (e) the rights of any person owning investment shares of the cooperative at the time of an amendment to its articles constraining investment share issues or transfers. 
  
  ### Validity of acts
  
  (7) An issue or a transfer of an investment share or an act of a cooperative is valid despite any failure to comply with this section or the regulations. 
  
  ### Sale of constrained shares
  
  131 (1) A cooperative that has constraints on the issue, transfer or ownership of any class of investment shares may, in accordance with any regulations, sell any of the investment shares that are owned, or that the directors determine may be owned, contrary to those constraints, as if it owned the investment shares, for the purposes of 
  (a) attaining or maintaining the level of Canadian ownership or control specified in its articles or required by law to carry on a business or qualify for a benefit; or 
  (b) complying with any prescribed law. 
  
  ### Selection of shares
  
  (2) The directors must select the investment shares to be sold under subsection (1) in good faith and in a manner that does not unfairly prejudice or disregard the interests of the holders of the investment shares in the constrained class as a whole. 
  
  ### Right to proceeds
  
  (3) A person who owned an investment share that was sold under this section is divested of all interests or rights in the investment share and is entitled to receive only the net proceeds of the sale and any net income on the proceeds. 
  
  ### Immunity
  
  (4) Sections 192, 193 and 194 apply to the person referred to in subsection (3) as if the proceeds were a security and the person were a registered owner of the security. 
  
  ### Trust moneys
  
  132 (1) The proceeds of a sale under section 131 are trust moneys in the hands of the cooperative for the benefit of the person who is entitled to receive them. 
  
  ### Handling of trust moneys
  
  (2) Trust moneys under this section 
  (a) may be commingled with other such trust moneys; and 
  (b) must be invested as may be prescribed. 
  
  ### Costs of administration
  
  (3) Reasonable costs of administration of trust moneys referred to in subsection (1) may be deducted from the trust moneys and any income earned on them. 
  
  ### Appointment of trust company
  
  (4) Subject to this section, a cooperative may transfer any trust moneys referred to in subsection (1), and the administration of them, to a trust company in Canada registered as one under the laws of Canada or a province, and the cooperative is discharged of all further liability in respect of the trust moneys. 
  
  ### Discharge of cooperative and trust company
  
  (5) A receipt signed by a person entitled under subsection 131(3) to receive the proceeds of a sale that constitute trust moneys under subsection (1) constitutes a complete discharge of the cooperative and of any trust company to which trust moneys are transferred under subsection (4), in respect of the trust moneys and income earned on them paid to the person. 
  
  ### Vesting in Crown
  
  (6) Trust moneys described in subsection (1), together with any income earned on them, less any taxes and costs of administration, that has not been claimed by a person entitled under subsection 131(3) to receive the proceeds of a sale that constitute the trust moneys for a period of ten years after the date of the sale vests in Her Majesty in right of Canada. 
  
  ###  Escheats Act applies 
  
  (7) Sections 3 to 5 of the Escheats Act apply in respect of a trust fund that vests in Her Majesty in right of Canada under subsection (6).  
  
  ### Election of directors
  
  133 (1) If the holders of a class or series of investment shares of a cooperative have, under section 124, a right to elect or appoint one or more directors, or have a right to elect or appoint one or more directors by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled, the directors must call the following meetings for the purpose of electing or appointing the director or directors: 
  (a) a special meeting of the holders of the class or series of investment shares, to be called within six months or at any earlier date that may be specified in the articles, after the date on which investment shares of the class or series are first issued or after the event has occurred or the condition has been fulfilled; and 
  (b) an annual meeting of those holders for every subsequent year. 
  
  ### Cumulative voting
  
  (2) If the articles so provide, directors who are to be elected by holders of investment shares may be elected by cumulative voting. 
  
  ### When cumulative voting
  
  (3) If the articles provide for cumulative voting, 
  (a) the articles must require a fixed number of directors to be elected by the holders of investment shares, and not a minimum and maximum number of directors; 
  (b) each shareholder who is entitled to vote at an election of directors by holders of investment shares has the right to cast a number of votes equal to the number of votes attached to the investment shares held by that shareholder multiplied by the number of directors to be elected, and the shareholder may cast all the votes in favour of one candidate or distribute them among the candidates in any manner; 
  (c) a separate vote of shareholders must be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting two or more persons to be elected by a single resolution; 
  (d) if a shareholder has voted for more than one candidate without specifying the distribution of votes among the candidates, the shareholder is deemed to have distributed their votes equally among the candidates for whom the shareholder voted; 
  (e) if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes are eliminated until the number of candidates remaining equals the number of positions to be filled; 
  (f) each director ceases to hold office at the close of the first annual meeting after their election of the holders of investment shares entitled to elect that director; 
  (g) a director may only be removed from office if the number of votes cast in favour of the director’s removal is greater than the product of the number of directors and the number of votes cast against the motion; and 
  (h) the number of directors required by the articles may only be decreased if the votes cast in favour of the motion to decrease the number of directors is greater than the product of the number of directors and the number of votes cast against the motion. 
  
  ### Amendment of articles
  
  134 (1) The holders of investment shares of a class or, subject to subsection (4), of a series are, unless the articles provide otherwise in the case of an amendment referred to in paragraphs (a), (b) and (e), entitled to vote separately as a class or series on a proposal to amend the articles to 
  (a) increase or decrease any maximum number of authorized investment shares of the class, or increase any maximum number of authorized investment shares of a class having rights or privileges equal or superior to the investment shares of the class; 
  (b) effect an exchange, reclassification or cancellation of all or part of the investment shares of the class; 
  (c) add, change or remove the rights, privileges, restrictions or conditions attached to the investment shares of the class, including 
  (i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends, 
  (ii) add, remove or change prejudicially redemption rights, 
  (iii) reduce or remove a dividend preference or a liquidation preference, or 
  (iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of a cooperative, or sinking fund provisions; 
  (d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the investment shares of the class; 
  (e) create a new class of investment shares equal or superior to the investment shares of the class; 
  (f) make any class of investment shares having rights or privileges inferior to the investment shares of the class equal or superior to the investment shares of the class; 
  (g) effect an exchange or create a right of exchange of all or part of the investment shares of another class into the investment shares of the class; or 
  (h) constrain the issue, transfer or ownership of the investment shares of the class or change or remove a constraint. 
  
  ### Exception
  
  (2) Subsection (1) does not apply in respect of a proposal to amend the articles to add a right or privilege for a holder to convert investment shares of a class or series into investment shares of another class or series that is subject to a constraint permitted under paragraph 130(1)(c) but otherwise equal to the class or series first mentioned. 
  
  ### Deeming provision
  
  (3) For the purpose of paragraph (1)(e), a new class of investment shares, the issue, transfer or ownership of which is to be constrained by an amendment to the articles under paragraph 130(1)(c), that is otherwise equal to an existing class of shares is deemed not to be equal or superior to the existing class of shares. 
  
  ### Limitation
  
  (4) The holders of a series of investment shares of a class are entitled to vote separately as a series under subsection (1) only if the series is affected by an amendment in a manner different from other investment shares of the same class. 
  
  ### Right to vote
  
  (5) Subsection (1) applies whether or not investment shares of a class or series otherwise carry the right to vote. 
  
  ### Separate resolutions
  
  (6) A proposed amendment to the articles referred to in subsection (1) is adopted when it is approved by a special resolution of the members and by a separate special resolution of the shareholders of each class. 
  
  ## Corporate Finance 
  
  ### Power to issue investment shares
  
  135 Subject to this Act, the articles, the by-laws and any unanimous agreement, membership shares may only be issued to members, and investment shares may be issued to any person, at any time and for money or in exchange for any thing or service that the directors may determine. 
  
  ### Payment for investment shares
  
  136 (1) A cooperative may not issue an investment share until it is fully paid in money, or past service or any other thing that is not less in value than the fair equivalent of the money that the cooperative would have received if the investment share had been issued for money, but neither a promissory note nor a promise to pay made by a person to whom the investment shares are issued or a person not dealing at arm’s length with that person is acceptable in payment of an investment share. 
  
  ### Payment for membership shares
  
  (2) Membership shares may be paid for in money, or past service or any other thing that is not less in value than the fair equivalent of the money that the cooperative would have received if the membership share had been issued for money. 
  
  ### Borrowing
  
  137 Unless the articles, the by-laws or a unanimous agreement provide otherwise, the directors may, subject to subsection 126(2), without the authorization of the members or shareholders, 
  (a) borrow money; 
  (b) give debt obligations; 
  (c) give guarantees; 
  (d) create security interests in its property; and 
  (e) despite paragraph 108(e) and subsection 109(3), delegate any power referred to in any of paragraphs (a) to (d). 
  
  ### Stated capital account
  
  138 (1) A cooperative that is authorized to issue shares must maintain a stated capital account for each class and series of shares that it issues. 
  
  ### Amounts
  
  (2) A cooperative must add to the appropriate stated capital account the full amount of any money, or the value or any thing or service, that it receives for shares it issues. 
  
  ### Exception for non-arm’s length transactions
  
  (3) Despite subsection (2), a cooperative may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the money, or the value of the things and services, it receives in an exchange if the cooperative issues shares 
  (a) in exchange for 
  (i) property of a person who immediately before the exchange did not deal with the cooperative at arm’s length within the meaning of that expression in the Income Tax Act,  
  (ii) shares of, or another interest or right in, an entity that immediately before the exchange, or that because of the exchange, did not deal with the cooperative at arm’s length within the meaning of that expression in the Income Tax Act, or  
  (iii) property of a person who, immediately before the exchange, dealt with the cooperative at arm’s length within the meaning of that expression in the Income Tax Act, if the person, the cooperative and all the holders of shares in the class or series of shares so issued consent to the exchange; or  
  (b) under an amalgamation or arrangement, or to members or shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated cooperative. 
  
  ### Limit on addition to a stated capital account
  
  (4) On the issue of a share, a cooperative may not add to a stated capital account in respect of the share it issues an amount greater than the amount of the money, or the value of the thing or service, it received for the share. 
  
  ### Constraint on addition to a stated capital account
  
  (5) The proposed addition of an amount to a stated capital account maintained by a cooperative in respect of a class or series of shares must be approved in advance by a special resolution of the members and, if the cooperative has issued investment shares, by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of investment shares that is affected by the special resolution, if 
  (a) the amount to be added was not received by the cooperative as consideration for the issue of the shares; and 
  (b) the cooperative has issued shares of more than one class or series that are outstanding. 
  
  ### Membership share inclusion
  
  (6) For greater certainty, if a cooperative issues membership shares with a par value, the cooperative is deemed, for the purposes of subsection 147(2), sections 151 and 154 and paragraph 299(2)(d), to have a stated capital account for its membership shares that includes each amount that has been received by the cooperative for the membership shares. 
  
  ### Other additions to stated capital account
  
  139 (1) When a body corporate is continued under this Act, it may add to a stated capital account any money, or the value of any thing or service, received by it for a share it issued. 
  
  ### Transitional
  
  (2) When a body corporate is continued under this Act, subsection 138(2) does not apply to the money, or the value of things or services, received by it before it was so continued unless the share in respect of which the money, thing or service received is issued after the body corporate is continued. 
  
  ### Transitional
  
  (3) When a body corporate is continued under this Act, any amount unpaid in respect of a share issued by the body corporate before it was so continued and paid after it was so continued is added to the stated capital account maintained for the shares of that class or series. 
  
  ### Continued cooperative
  
  (4) For the purposes of subsection 147(2), sections 151 and 154 and paragraph 299(2)(d), when a cooperative is continued under this Act, its stated capital account is deemed to include the amount that would have been included if the cooperative had been incorporated under this Act. 
  
  ### Membership shares with a par value
  
  (5) When a cooperative is continued under this Act, subsection 138(6) applies if the cooperative has membership shares with a par value. 
  
  ### Restriction
  
  (6) A cooperative must not reduce its stated capital or any stated capital account except in the manner provided in this Act. 
  
  ### Surplus accounts
  
  140 Subject to subsection 138(5), a cooperative continued under this Act may at any time add to a stated capital account any amount it has credited to a retained earnings or other surplus account. 
  
  ### Shares not assessable
  
  141 The shares of a cooperative are non-assessable and the members and shareholders are not liable to the cooperative or to its creditors in respect of them. 
  
  ### Options and rights
  
  142 (1) A cooperative may issue certificates, warrants or other evidence of conversion privileges, options or rights to acquire shares or securities of the cooperative. 
  
  ### Conversion for members only
  
  (2) A conversion privilege, option or right to acquire membership shares may be granted only to members, and is non-transferable. 
  
  ### Conditions
  
  (3) The conditions of the conversion privileges, options or rights must be set out in 
  (a) the certificate, warrant or other evidence; or 
  (b) the certificates evidencing the securities to which the conversion privileges, options or rights are attached. 
  
  ### Transferability
  
  (4) Subject to subsection (2), conversion privileges, options or rights to acquire securities of a cooperative may be made transferable or non-transferable, and options and rights to acquire securities of a cooperative may be made separable or inseparable from any securities to which they are attached. 
  
  ### Restriction regarding bearer investment shares
  
  142.1 (1) Despite section 142, a cooperative must not issue, in bearer form, a certificate, warrant or other evidence of a conversion privilege, option or right to acquire an investment share of the cooperative. 
  
  ### Replacement
  
  (2) A cooperative must, on the request of a holder of a certificate, warrant or other evidence of a conversion privilege, option or right to acquire an investment share of the cooperative that is in bearer form and that was issued before the coming into force of this section, issue in exchange to that holder, in registered form, a certificate, warrant or other evidence, as the case may be. 
  
  ### Reserves
  
  143 If the articles limit the number of authorized shares, the cooperative must reserve sufficient authorized shares to meet the exercise of any conversion privileges, or any options or rights issued or granted by the cooperative to acquire shares. 
  
  ### Holding own shares
  
  144 (1) Subject to sections 145 to 149, a cooperative may not 
  (a) hold any shares in itself or in its holding body corporate; or 
  (b) permit any of its subsidiaries to hold shares in the cooperative, other than the minimum number of membership shares required by the by-laws of the cooperative to qualify for membership in it. 
  
  ### Disposal of shares
  
  (2) A cooperative must cause any subsidiary that holds shares in the cooperative contrary to subsection (1) to dispose of those shares no later than five years after the date on which 
  (a) it became a subsidiary; or 
  (b) the cooperative was continued under this Act. 
  
  ### Exception for holding own shares
  
  145 (1) A cooperative may, and may permit its subsidiaries to, hold, in the capacity of a personal representative, shares in itself or in its holding body corporate only if the cooperative, holding body corporate or subsidiary does not have a beneficial interest in the shares. 
  
  ### Holding shares by way of security
  
  (2) A cooperative may hold shares in itself or its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money. 
  
  ### Redemption of membership shares
  
  146 Subject to section 149, a cooperative may at any time redeem any of its membership shares, if issued on a par-value basis at par value and if issued on a no-par-value basis in accordance with the price or formula that is set out in its articles, or, if no such price or formula is set out in the articles, at a fair value. 
  
  ### Acquisition of investment shares
  
  147 (1) Subject to its articles and to subsection (2), a cooperative may at any time acquire any investment share issued by it. 
  
  ### Limitation
  
  (2) A cooperative may not make a payment to acquire investment shares if there are reasonable grounds to believe that 
  (a) the cooperative is, or would after the payment be, unable to pay its liabilities as they become due; or 
  (b) the realizable value of the cooperative’s assets after the payment would be less than the total of the stated capital of all its issued shares and its liabilities. 
  
  ### Redemption of investment shares
  
  (3) Subject to section 149, a cooperative may at any time redeem any of its investment shares that are redeemable, in accordance with any price or formula that may be set out in its articles or, if the articles do not so provide, at fair market value. 
  
  ### Alternative share acquisition
  
  148 Despite section 146 and subsection 147(2), but subject to section 149 and to its articles, a cooperative may acquire shares issued by it 
  (a) to satisfy the claim of members or shareholders who dissent under section 302; 
  (b) to comply with an order under section 340; 
  (c) to settle or compromise a debt or claim asserted by the cooperative; 
  (d) to eliminate fractional shares; or 
  (e) to fulfil the terms of a non-assignable option or obligation to purchase shares owned by a director, officer or employee. 
  
  ### Limitation on acquisition or redemption
  
  149 A cooperative may not make a payment to acquire or redeem a share under section 146 or 148 if there are reasonable grounds to believe that 
  (a) the cooperative is, or would after the payment be, unable to pay its liabilities as they become due; or 
  (b) the realizable value of the cooperative’s assets after the payment would be less than the total of 
  (i) its liabilities, and 
  (ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a redemption or liquidation, rateably with or in priority to the holders of the shares to be purchased or redeemed. 
  
  ### Cancellation or resurrection of shares
  
  150 Shares of a cooperative that are redeemed or otherwise acquired by it are cancelled or, if the articles limit the number of authorized shares, restored to the status of unissued shares. 
  
  ### Reduction of capital
  
  151 (1) Subject to subsection (2), a cooperative may reduce its stated capital for any purpose, by special resolution of its members and, if an investment share is proposed to be affected by the reduction, by the holders of the investment shares. 
  
  ### Limitation on reductions
  
  (2) A cooperative may not reduce its stated capital if there are reasonable grounds to believe that 
  (a) the cooperative is, or would after the payment be, unable to pay its liabilities as they become due; or 
  (b) the realizable value of the cooperative’s assets after the reduction would be less than the total of its liabilities. 
  
  ### Exception
  
  (3) Subsection (2) does not apply to a reduction of stated capital that is not represented by realizable assets. 
  
  ### If several stated capital accounts
  
  (4) If a cooperative maintains more than one stated capital account, the special resolution to reduce stated capital required by subsection (1) must specify the stated capital account or accounts from which the reduction will be deducted. 
  
  ### Court order
  
  (5) A creditor of a cooperative may apply to a court for an order compelling a person 
  (a) to pay to the cooperative an amount equal to any liability of the person that was extinguished or reduced contrary to this section; or 
  (b) to pay or deliver to the cooperative any money or property that was paid or distributed to the person as a consequence of a reduction of stated capital made contrary to this section. 
  
  ### Limitation period
  
  (6) No action may be commenced to enforce a liability imposed by this section more than two years after the date of the act complained of. 
  
  ### Adjustment of stated capital account
  
  152 (1) On a redemption or acquisition of any of its shares, a cooperative must adjust the stated capital account in relation to that share by the ratio of the stated capital for that class to that share. 
  
  ### If special resolution
  
  (2) A cooperative must adjust its stated capital account in accordance with any special resolution made under subsection 151(1). 
  
  ### Class or series
  
  (3) On a conversion of investment shares of a cooperative into investment shares of another class or series or a change under section 289, a reorganization under section 303 or the redemption or exchange of investment shares under an order made under section 340, the cooperative must 
  (a) deduct from the stated capital account maintained for the class or series of shares converted or changed, or subject to the reorganization, redemption or exchange, an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, or subject to the reorganization, redemption or exchange, divided by the number of issued shares of that class or series immediately before the conversion, change, reorganization, redemption or exchange; and 
  (b) add the result obtained under paragraph (a) and any additional amount received pursuant to the conversion, change, reorganization, redemption or exchange to the stated capital account maintained or to be maintained for the class or series of shares. 
  
  ### Stated capital of interconvertible shares
  
  (4) For the purposes of subsection (3) and subject to its articles, if a cooperative issues two classes of investment shares and there is attached to each such class a right to convert an investment share of the one class into an investment share of the other class, if an investment share of one class is converted into a share of the other class, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of issued investment shares of both classes immediately before the conversion. 
  
  ### Exception
  
  (5) For the purposes of this section, a cooperative holding shares in itself as permitted by section 145 is deemed not to have redeemed or acquired them. 
  
  ### Conversion or change of investment shares
  
  (6) Investment shares issued by a cooperative and converted into shares of another class or series or changed under section 289, or subject to a reorganization under section 303 or the redemption or exchange of investment shares under an order made under section 340, become shares of the other class or series of shares. 
  
  ### Effect of change of investment shares on number of unissued shares
  
  (7) If the articles limit the number of authorized shares of a class of investment shares of a cooperative and issued shares of that class or of a series of shares of that class have become, under subsection (6), issued investment shares of another class or series, the number of unissued shares of the first-mentioned class is, unless the articles provide otherwise, increased by the number of investment shares that, under subsection (6), became investment shares of another class or series. 
  
  ### Form of dividend
  
  153 (1) A cooperative may pay a dividend by issuing fully paid shares of the cooperative and, subject to section 154, a cooperative may pay a dividend in money or property, except that membership shares may only be issued to members. 
  
  ### Stated capital account
  
  (2) If shares of a cooperative are issued in payment of a dividend, the declared amount of the dividend stated as an amount of money must be added to the stated capital account. 
  
  ### Limitation on paying dividends
  
  154 A cooperative may not declare or pay a dividend if there are reasonable grounds to believe that 
  (a) the cooperative is, or would after the payment be, unable to pay its liabilities as they become due; or 
  (b) the realizable value of the cooperative’s assets after payment of the dividend would be less than the total of its liabilities and the stated capital of all its issued shares. 
  
  ### Patronage returns
  
  155 (1) A cooperative may allocate among and credit or pay to the members, as a patronage return, all or a part of the surplus arising from the operations of the cooperative in a financial year in proportion to the business done by the members with or through the cooperative in that financial year, calculated in the manner described in subsection (2) at a rate set by the directors. 
  
  ### Calculation of patronage
  
  (2) For the purpose of subsection (1), the directors may calculate the amount of the business done by each member with or through a cooperative in a financial year by taking into account 
  (a) the quantity, quality, kind and value of things bought, sold, handled, marketed or dealt in by the cooperative; 
  (b) the services rendered 
  (i) by the cooperative on behalf of or to the member, and 
  (ii) by the member on behalf of or to the cooperative; and 
  (c) differences that are, in the opinion of the directors, appropriate for different classes, grades or qualities of things and services. 
  
  ### Non-member patronage allocation
  
  (3) The by-laws may provide that a cooperative may allocate among and credit or pay to persons who use the services of the cooperative but who are not members a share of any surplus at a rate that is equal to or less than the rate at which the surplus is distributed to members. 
  
  ### Calculation of non-member patronage
  
  (4) If a cooperative allocates among and credits or pays to persons referred to in subsection (3) a share of any surplus, the directors must calculate the business done by the non-member patrons in the manner described in subsection (2). 
  
  ### Investment of patronage return
  
  156 (1) A cooperative may, by by-law, provide that the whole, or any part that the directors may determine, of the patronage return of each member in respect of each financial year be applied to the purchase for the member of membership or investment shares in the cooperative. 
  
  ### Contents of by-law
  
  (2) The by-law must provide for the giving of notice to each member of the number of shares purchased or to be purchased for the member, the manner of issuance or transfer of shares, the payment for the shares out of the patronage returns of members and, if applicable, the issuance and forwarding of certificates to members representing shares so issued or transferred. 
  
  ### Price of shares
  
  (3) No member is required under this section to purchase membership shares, in the case of membership shares with a par value, at a price in excess of their par value, and in the case of membership shares with no par value or investment shares, 
  (a) if the articles provide for a fixed price or a price determined in accordance with a formula, in excess of that price; and 
  (b) in any other case, in excess of the fair value of the membership shares or the fair market value of the investment shares. 
  
  ### Stated capital account
  
  (4) If shares of a cooperative are issued in payment of a patronage return, the amount of the patronage return, stated as an amount of money, must be added to the stated capital account. 
  
  ### Loans from patronage returns
  
  157 A cooperative may, by by-law, require its members to lend to it the whole, or any part that the directors may determine, of the patronage returns to which they may become entitled in each financial year, on the terms and at the rate of interest that the directors determine, so long as the rate of interest does not exceed the rate that is provided in the by-laws. 
  
  ### Insolvent cooperative
  
  158 If a cooperative is unable to pay its liabilities as they become due, no member need, under section 157, lend a patronage return to the cooperative, and no member need purchase shares under section 156. 
  
  ## Marketing 
  
  ### Marketing plans
  
  159 (1) Subject to subsection (3), this section applies to a cooperative and its members if the members are required by a marketing plan established under an Act of Parliament or of the legislature of a province to sell or deliver things or render services to or through a producer board or a marketing commission or agency. 
  
  ### Patronage returns
  
  (2) For the purposes of allocating, crediting and paying patronage returns among or to members and of making payments to members as part of the price or proceeds of their things or services, the members referred to in subsection (1) are deemed to have sold and delivered the things or to have rendered the services, or, if the by-laws so specify, any portion or category of the things or services, to the cooperative. 
  
  ### Conditions
  
  (3) The by-laws of a cooperative may provide that this section does not apply to a member until any conditions with respect to the delivery of things or rendering of services set out in the by-laws are fulfilled. 
  160  [Repealed, 2001, c. 14, s. 184]  
  
  ### Enforcement of contract to buy shares
  
  161 (1) A cooperative must fulfil its obligations under a contract to buy shares of the cooperative, except if the cooperative can prove that enforcement of the contract would put it in breach of subsection 147(2) or section 149. 
  
  ### Right of claimant
  
  (2) Until the cooperative has fulfilled all its obligations under a contract referred to in subsection (1), the other party retains the status of claimant entitled to be paid as soon as the cooperative is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors and to the rights of any class of shareholders whose rights were in priority to the rights given to the class of investment shares being purchased, but in priority to the rights of members and other shareholders. 
  
  ### Debt obligations
  
  162 (1) Debt obligations issued by a cooperative are not redeemed by reason only that the indebtedness evidenced by the debt obligation is repaid. 
  
  ### Cancellation, etc.
  
  (2) Debt obligations issued by a cooperative and purchased, redeemed or otherwise acquired may be cancelled or may secure any obligation of the cooperative then existing or later incurred. 
  
  # PART 9 
  
  ## Proxies 
  
  ### Interpretation
  
  163 (1) The definitions in this subsection apply in this Part.  
  *form of proxy* means a written or printed form that, on completion and execution or, in Quebec, on signing by or on behalf of a shareholder, becomes a proxy. (formulaire de procuration)   
  *intermediary* means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes  
  (a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction; 
  (b) a securities depositary; 
  (c) a financial institution; 
  (d) in respect of a clearing agency, a securities dealer, trust company, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominees hold securities of an issuer; 
  (e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act ;  
  (f) a nominee of a person referred to in any of paragraphs (a) to (e); and 
  (g) a person who carries out functions similar to those carried out by individuals or entities referred to in any of paragraphs (a) to (e) and that holds a security registered in its name, or in the name of its nominee, on behalf of another person who is not the registered holder of the security. ( intermédiaire)   
  *solicit* or 
  *solicitation*  
  (a) includes 
  (i) a request for a proxy whether or not accompanied by or included in a form of proxy, 
  (ii) a request to execute or not to execute or, in Quebec, to sign or not to sign a form of proxy or to revoke a proxy, 
  (iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and 
  (iv) the sending of a form of proxy to a shareholder under section 165; but 
  (b) does not include 
  (i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder, 
  (ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy, 
  (iii) the sending by an intermediary of the documents referred to in section 169, 
  (iv) a solicitation by a person in respect of investment shares of which they are the beneficial owner, 
  (v) a public announcement, as prescribed, by a shareholder of how the shareholder intends to vote and the reasons for that decision, 
  (vi) a communication for the purposes of obtaining the number of investment shares required for a proposal under subsection 58(2.1), or 
  (vii) a communication, other than a solicitation by or on behalf of the management of the cooperative, that is made to shareholders, in any circumstances that may be prescribed. ( sollicitation)   
  *solicitation by or on behalf of the management of a cooperative* means a solicitation by a person pursuant to a resolution or instructions of, or with the acquiescence of, the directors or a committee of directors. (sollicitation effectuée par la direction ou pour son compte)  
  
  ### Membership and membership shares excluded
  
  (2) This Part does not apply to a member or membership shares, but a member who is a shareholder may exercise the rights given to a shareholder by this Part for all investment shares held. 
  
  ### Appointing proxyholder
  
  164 (1) A shareholder who is entitled to vote at a meeting of shareholders may appoint a proxyholder or one or more alternate proxyholders, who are not required to be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy. 
  
  ### Execution or signature of proxy
  
  (2) For a proxy to be valid, it must be executed or, in Quebec, signed by the shareholder or by their personal representative authorized in writing. 
  
  ### Validity of proxy
  
  (3) A proxy is valid only at the meeting in respect of which it is given or at any adjournment of that meeting. 
  
  ### Revocation of proxy
  
  (4) A shareholder may revoke a proxy 
  (a) by depositing a document in writing executed or, in Quebec, signed by the shareholder or by their personal representative authorized in writing 
  (i) at the registered office of the cooperative at any time up to and including the last business day before the day of the meeting or adjournment at which the proxy is to be used, or 
  (ii) with the chairperson of the meeting on the day of the meeting or adjournment; or 
  (b) in any other manner permitted by law. 
  
  ### Deposit of proxies
  
  (5) The directors may specify in a notice calling a meeting of shareholders a time not more than 48 hours, excluding Saturdays and holidays, before the meeting or adjournment before which time proxies to be used at the meeting must be deposited with the cooperative or its agent or mandatary. 
  
  ### Mandatory solicitation
  
  165 (1) Subject to subsection (2), the management of a cooperative shall, concurrently with giving notice of a meeting of shareholders, send a form of proxy in prescribed form to each shareholder who is entitled to receive notice of the meeting. 
  
  ### Exception
  
  (2) The management of a cooperative is not required to send a form of proxy under subsection (1) if 
  (a) it is not a distributing cooperative; and 
  (b) it has fifty or fewer shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder. 
  
  ### Soliciting proxies
  
  166 (1) No person may solicit a proxy unless the applicable circular described in subsection (2) is sent to the auditor of the cooperative, to each shareholder whose proxy is solicited, to each director and, if paragraph (2)(b) applies, to the cooperative. 
  
  ### Circulars
  
  (2) The circular that is to be sent under subsection (1) is 
  (a) in the case of solicitation by or on behalf of the management of a cooperative, a management proxy circular in the prescribed form, either as an appendix to or as a separate document accompanying the notice of the meeting; and 
  (b) in the case of any other solicitation, a dissident’s proxy circular in the prescribed form stating the purposes of the solicitation. 
  
  ### Copy to Director
  
  (3) When a management proxy circular or dissident’s proxy circular is sent, a copy of it must be sent to the Director together with a statement in the prescribed form and a copy of any notice of meeting, form of proxy and any other documents for use in connection with the meeting. 
  
  ### Solicitation to fifteen or fewer shareholders
  
  (4) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the cooperative, without sending a dissident’s proxy circular, if the total number of shareholders whose proxies are solicited is fifteen or fewer, two or more joint holders being counted as one shareholder. 
  
  ### Solicitation by public broadcast
  
  (4.1) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the cooperative, without sending a dissident’s proxy circular, if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication. 
  
  ### When all shareholders are members
  
  (5) A management proxy circular need not be sent 
  (a) if all the shareholders of a cooperative are members; and 
  (b) if management has sent to the shareholders substantially the same information as that required to be sent in the circular, not less than twenty-one days or more than sixty days before the meeting at which the vote to which the circular relates is to be held. 
  
  ### Exemption
  
  167 (1) On the application of any interested person, the Director may exempt, on any terms that the Director thinks fit, the person from any of the requirements of section 165 or subsection 166(1) or 169(1). The exemption may have retroactive effect. 
  (2)  [Repealed, 2018, c. 8, s. 62]  
  
  ### Attendance at meeting
  
  168 (1) An individual who solicits a proxy and is appointed proxyholder shall attend the meeting in respect of which the proxy is given in person, or cause an alternate proxyholder to attend it, and shall comply with the directions of the shareholder who appointed the proxyholder. 
  
  ### Rights of a proxyholder
  
  (2) A proxyholder or an alternate proxyholder has the same rights as the shareholder who appointed the proxyholder to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except if the proxyholder or alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by a show of hands. 
  
  ### Show of hands
  
  (3) Despite subsections (1) and (2), if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what to the knowledge of the chairperson will be the decision of the meeting in relation to any matter or group of matters is less than five per cent of all the votes that might be cast by shareholders present in person or represented by proxy at the meeting on the ballot, unless a shareholder or proxyholder demands a ballot, 
  (a) the chairperson may conduct the vote in respect of that matter or group of matters by a show of hands; and 
  (b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by a show of hands. 
  
  ### Duty of intermediary
  
  169 (1) Shares of a cooperative that are registered in the name of an intermediary or a nominee of an intermediary and not beneficially owned by the intermediary must not be voted unless the intermediary, without delay after receipt of the notice of the meeting, management proxy circular, dissident’s proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy of the document to the beneficial owner and, except when the intermediary has received written voting instructions from the beneficial owner, a written request for those instructions. 
  
  ### Restriction on voting
  
  (2) An intermediary, or a proxyholder appointed by an intermediary, may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or in the name of a nominee of the intermediary unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner. 
  
  ### Copies
  
  (3) A person by or on behalf of whom a solicitation is made must provide, at the request of an intermediary, without delay, to the intermediary at the person’s expense the necessary number of copies of the documents referred to in subsection (1), other than copies of the document requesting voting instructions. 
  
  ### Instructions to intermediary
  
  (4) An intermediary shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner. 
  
  ### Beneficial owner as proxyholder
  
  (5) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder. 
  
  ### Validity
  
  (6) The failure of an intermediary to comply with this section does not render null or void any meeting of shareholders or any action taken at the meeting. 
  
  ### Limitation
  
  (7) Nothing in this section gives an intermediary the right to vote shares that the intermediary is otherwise prohibited from voting. 
  
  ### Restraining order
  
  170 (1) If a form of proxy, management proxy circular or dissident’s proxy circular contains an untrue statement of a material fact or omits to state a material fact required in it or necessary to make a statement contained in it not misleading in the light of the circumstances in which it was made, the Director or any other interested person may apply to a court and the court may make any order it thinks fit, including 
  (a) an order restraining the solicitation or the holding of the meeting, or restraining any person from implementing or acting on a resolution passed at the meeting to which the form of proxy, management proxy circular or dissident’s proxy circular relates; 
  (b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; and 
  (c) an order adjourning the meeting. 
  
  ### Notice to Director
  
  (2) An applicant under this section must give the Director notice of the application and the Director is entitled to appear and to be heard in person or by counsel. 
  
  # PART 10 
  
  ## Insider Trading 
  
  ### Interpretation
  
  171 (1) The definitions in this subsection apply in this Part.  
  *business combination* means an acquisition of all or substantially all the property of one entity by another, or an amalgamation of two or more entities, or any similar reorganization between or among two or more entities. (regroupement d’entreprises)   
  *insider* means, except in section 173,  
  (a) a director or officer of a distributing cooperative; 
  (b) a director or officer of a subsidiary of a distributing cooperative; 
  (c) a director or officer of an entity that enters into a business combination with a distributing cooperative; and 
  (d) a person employed or retained by a distributing cooperative. ( initié)   
  *officer* means the chairperson of the board of directors, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director, or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices. (dirigeant)   
  *share* means an investment share that carries voting rights under the articles or in the circumstances in which voting rights are exercisable with respect to it under this Act, and includes  
  (a) a security currently convertible into such an investment share; and 
  (b) currently exercisable options and rights to acquire such an investment share or such a convertible security. ( part)  
  
  ### Further interpretation
  
  (2) For the purposes of this Part, 
  (a) a director or an officer of an entity that beneficially owns, directly or indirectly, shares of a distributing cooperative, or that exercises control or direction over shares of the distributing cooperative, or that has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the distributing cooperative not including shares held by the entity as underwriter while those shares are in the course of a distribution to the public is deemed to be an insider of the distributing cooperative; 
  (b) a director or an officer of an entity, or an individual acting in a similar capacity, that is a subsidiary is deemed to be an insider of its holding distributing cooperative; 
  (c) a person is deemed to beneficially own shares beneficially owned by an entity controlled by them directly or indirectly; 
  (d) an entity is deemed to beneficially own shares beneficially owned by its affiliates; and 
  (e) the acquisition or disposition by an insider of an option or right to acquire a share is deemed to be a change in the beneficial ownership of the share to which the option or right to acquire relates. 
  
  ### Membership shares
  
  (3) For the purposes of this Part, the sale of membership shares to members or the making of a member loan to a cooperative is not a distribution to the public. 
  (4)  [Repealed, 2001, c. 14, s. 191]  
  
  ### Prohibition of short sale
  
  172 (1) No insider shall knowingly sell, directly or indirectly, a security of a distributing cooperative or any of its affiliates if the insider selling the security does not own or has not fully paid for the security to be sold. 
  
  ### Calls and puts
  
  (2) No insider shall knowingly, directly or indirectly, buy a put or sell a call in respect of a security of the cooperative or any of its affiliates. 
  
  ### Exception
  
  (3) Despite subsection (1), an insider may sell a security that the insider does not own if the insider owns another security convertible into the security sold or an option or right to acquire the security sold and, no later than ten days after the sale, the insider 
  (a) exercises the conversion privilege, option or right and delivers the security so acquired to the purchaser; or 
  (b) transfers the convertible security, option or right to the purchaser. 
  
  ### Definition of insider 
  
  173 (1) In this section, 
  *insider*, with respect to a cooperative, means  
  (a) the cooperative; 
  (b) an affiliate of the cooperative; 
  (c) a director or an officer of the cooperative or of any persons described in paragraphs (b), (e) or (g); 
  (d) a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of the cooperative; 
  (e) a person who beneficially owns, directly or indirectly, shares of the cooperative or who exercises control or direction over shares of the cooperative, or a combination of any such ownership, control and direction, carrying more than the prescribed percentage of the voting rights attached to all of the outstanding shares of the cooperative other than shares held by the person as underwriter while those shares are in the course of a distribution to the public; 
  (f) a person, other than a person described in paragraph (g), employed or retained by the cooperative or by a person described in paragraph (g); 
  (g) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the cooperative; 
  (h) a person who received, while they were a person described in any of paragraphs (a) to (g) material confidential information concerning the cooperative; 
  (i) a person who receives material confidential information from a person described in this subsection or in subsection (2) or (2.1), including from a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (2) or (2.1), including a person described in this paragraph; and 
  (j) a prescribed person. 
  
  ### Deemed insiders
  
  (2) For the purposes of this section, a person who proposes to make a take-over bid (as defined in the regulations) for securities of a cooperative, or to enter into a business combination with a cooperative, is an insider of the cooperative with respect to material confidential information obtained from the cooperative and is an insider of the cooperative for the purposes of subsection (6). 
  
  ### Deemed insiders
  
  (2.1) An insider of a person referred to in subsection (2), and an affiliate or associate of such a person, is an insider of the cooperative referred to in that subsection. Paragraphs (1)(b) to (j) apply in determining whether a person is such an insider except that references to “cooperative” in those paragraphs are to be read as references to “person described in subsection (2)”. 
  
  ### Expanded definition of “security”
  
  (3) For the purposes of this section, the following are deemed to be a security of the cooperative: 
  (a) a put, call or option or other right or obligation to purchase or sell a security of the cooperative; and 
  (b) a security of another entity whose market price varies materially with the market price of the securities of the cooperative. 
  
  ### Insider trading — compensation to persons
  
  (4) An insider who purchases or sells a security of the cooperative with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate the seller of the security or the purchaser of the security, as the case may be, for any damages suffered by the seller or purchaser as a result of the purchase or sale, unless the insider establishes that 
  (a) the insider reasonably believed that the information had been generally disclosed; 
  (b) the information was known, or ought reasonably to have been known, by the seller or purchaser; or 
  (c) the purchase or sale of the security took place in the prescribed circumstances. 
  
  ### Insider trading — compensation to cooperative
  
  (5) The insider is accountable to the cooperative for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances in paragraph 4(a). 
  
  ### Tipping — compensation to persons
  
  (6) An insider who discloses to another person confidential information with respect to the cooperative that has not been generally disclosed and that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate for damages any person who subsequently sells securities of the cooperative to, or purchases securities of the cooperative from, any person that received the information, unless the insider establishes 
  (a) that the insider reasonably believed that the information had been generally disclosed; 
  (b) that the information was known, or ought reasonably to have been known, to the person who alleges to have suffered the damages; 
  (c) that the disclosure of the information was necessary in the course of the business of the insider, except if the insider is a person described in subsection (2) or (2.1); or 
  (d) if the insider is a person described in subsection (2) or (2.1), that the disclosure of the information was necessary to effect the take-over bid or the business combination, as the case may be. 
  
  ### Tipping — compensation to cooperative
  
  (7) The insider is accountable to the cooperative for any benefit or advantage received or receivable by the insider as a result of a disclosure of the information as described in subsection (6) unless the insider establishes the circumstances in paragraph (6)(a), (c) or (d). 
  
  ### Measure of damages
  
  (8) The court may assess damages under subsection (4) or (6) in accordance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in a situation involving a security of a distributing cooperative, the court must consider the following: 
  (a) if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security over the twenty trading days immediately following general disclosure of the information; and 
  (b) if the plaintiff is a seller, the average market price of the security over the twenty trading days immediately following general disclosure of the information, less the price that the plaintiff received for the security. 
  
  ### Liability
  
  (9) If more than one insider is liable under subsection (4) or (6) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary. 
  
  ### Limitation
  
  (10) An action to enforce a right created by subsections (4) to (7) may be commenced only within two years after discovery of the facts that gave rise to the cause of action. 
  
  # PART 11 
  
  ## Compulsory Acquisition 
  
  ### Definitions
  
  174 The definitions in this section apply in this Part.  
  *dissenting offeree* means a holder of a share of a class for which a take-over bid is made who does not accept the take-over bid, and includes a subsequent holder of that share who acquires it from the first-mentioned holder. (pollicité dissident)   
  *offer* includes an invitation to make an offer. (pollicitation)   
  *offeree* means a person to whom a take-over bid is made. (pollicité)   
  *offeree cooperative* means a distributing cooperative whose shares are the object of a take-over bid. (coopérative pollicitée)   
  *offeror* means a person, other than an agent or mandatary, who makes a take-over bid, and includes two or more persons who, directly or indirectly,  
  (a) make take-over bids jointly or in concert; or 
  (b) intend to exercise jointly or in concert voting rights attached to shares for which a take-over bid is made. ( pollicitant)   
  *share* means an investment share, with or without voting rights, and includes  
  (a) a security currently convertible into such a share; and 
  (b) currently exercisable options and rights to acquire such a share or such a convertible security. ( part)   
  *take-over bid* means an offer made by an offeror to shareholders of a distributing cooperative at approximately the same time to acquire all of the shares of a class of issued shares and includes an offer made by a distributing cooperative to repurchase all of the shares of a class of its shares. (offre d’achat)  
  
  ### Right to acquire
  
  175 (1) If within one hundred and twenty days after the date of a take-over bid the bid is accepted by the holders of not less than ninety per cent of the shares of any class of shares to which the take-over bid relates, other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror is entitled, on complying with this section, to acquire the shares held by the dissenting offerees. 
  
  ### Notice
  
  (2) An offeror may acquire shares held by a dissenting offeree by sending, by confirmed delivery service within sixty days after the date of termination of the take-over bid and in any event within one hundred and eighty days after the date of the take-over bid, a notice to each dissenting offeree stating that 
  (a) the offerees holding not less than ninety per cent of the shares to which the bid relates accepted the take-over bid; 
  (b) the offeror is bound to take up and pay for or has taken up and paid for the shares of the offerees who accepted the take-over bid; 
  (c) a dissenting offeree is required to elect 
  (i) to transfer their shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the take-over bid, or 
  (ii) to demand payment of the fair value of their shares in accordance with subsections (10) to (19) by notifying the offeror within twenty days after the offeree receives the notice; 
  (d) a dissenting offeree who does not notify the offeror in accordance with subparagraph (c)(ii) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and 
  (e) a dissenting offeree must send the shares to which the take-over bid relates to the offeree cooperative within twenty days after the offeree receives the offeror’s notice. 
  
  ### Notice of adverse claim
  
  (3) Concurrently with sending the notice under subsection (2), the offeror must send to the offeree cooperative a notice of adverse claim in accordance with section 240 with respect to each share held by a dissenting offeree. 
  
  ### Share certificate
  
  (4) A dissenting offeree to whom a notice is sent under subsection (2) must, within twenty days after receiving the notice, 
  (a) send the share certificates of the class of shares to which the take-over bid relates to the offeree cooperative; and 
  (b) elect 
  (i) to transfer the shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the take-over bid, or 
  (ii) to demand payment of the fair value of the shares in accordance with subsections (10) to (19) by notifying the offeror. 
  
  ### Deemed election
  
  (5) A dissenting offeree who does not notify the offeror in accordance with subparagraph (4)(b)(ii) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid. 
  
  ### Payment
  
  (6) Within twenty days after the offeror sends a notice under subsection (2), the offeror must pay or transfer to the offeree cooperative the amount that the offeror would have had to pay to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i). 
  
  ### Amounts
  
  (7) The offeree cooperative is deemed to hold in trust for the dissenting shareholders the amounts it receives under subsection (6), and the offeree cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate. 
  
  ### When cooperative is offeror
  
  (8) A cooperative that is an offeror making a take-over bid to repurchase all of the shares of a class of its shares is deemed to hold in trust for the dissenting shareholders the amounts that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i), and the cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate. 
  
  ### Duty of offeree cooperative
  
  (9) Within thirty days after the offeror sends a notice under subsection (2), the offeree cooperative must 
  (a) if the payments required by subsection (6) are made and the money or things are deposited as required by subsection (7), issue to the offeror a share certificate in respect of the shares that were held by dissenting offerees; 
  (b) give to each dissenting offeree who elects to accept the take-over bid terms under subparagraph (4)(b)(i) and who sends share certificates as required by paragraph (4)(a) the money or thing to which the offeree is entitled, disregarding fractional shares, which may be paid for in money; and 
  (c) if the payments required by subsection (6) are made and the money or things are deposited as required by subsection (7) or (8), send to each dissenting shareholder who has not sent share certificates as required by paragraph (4)(a) a notice stating that 
  (i) the dissenting shareholder’s shares have been cancelled, 
  (ii) the offeree cooperative or some designated person holds in trust for the dissenting shareholder the money or other things to which that shareholder is entitled as payment for or in exchange for the shares, and 
  (iii) the offeree cooperative will, subject to subsections (10) to (19), send that money or thing to that shareholder without delay after receiving the shares. 
  
  ### Application to court
  
  (10) If a dissenting offeree has elected to demand payment of the fair value of the shares under subparagraph (4)(b)(ii), the offeror may, within twenty days after it has paid the money or transferred the things under subsection (6), apply to a court to fix the fair value of the shares of that dissenting offeree. 
  
  ### Application to court
  
  (11) If an offeror fails to apply to a court under subsection (10), a dissenting offeree may apply to a court for the same purpose within a further period of twenty days. 
  
  ### Status of dissenter if no court application
  
  (12) If no application is made to a court under subsection (11) within the period set out in that subsection, a dissenting offeree is deemed to have elected to transfer shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid. 
  
  ### Venue
  
  (13) An application under subsection (10) or (11) must be made to a court having jurisdiction in the place where the cooperative has its registered office or in the province where the dissenting offeree resides if the cooperative carries on business in that province. 
  
  ### No security for costs
  
  (14) A dissenting offeree is not required to give security for costs in an application made under subsection (10) or (11). 
  
  ### Parties
  
  (15) On an application under subsection (10) or (11), 
  (a) all dissenting offerees referred to in paragraph (4)(b) whose shares have not been acquired by the offeror must be joined as parties and are bound by the decision of the court; and 
  (b) the offeror must notify each affected dissenting offeree of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel. 
  
  ### Powers of court
  
  (16) On an application to a court under subsection (10) or (11), the court may determine whether any other person is a dissenting offeree who should be joined as a party, and the court must then fix a fair value for the shares of all dissenting offerees. 
  
  ### Appraisers
  
  (17) A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of a dissenting offeree. 
  
  ### Final order
  
  (18) The final order of the court must be made against the offeror in favour of each dissenting offeree and for the amount for shares as fixed by the court. 
  
  ### Additional powers
  
  (19) In connection with proceedings under this section, a court may make any order it thinks fit, including an order to 
  (a) fix the amount of money or things that are required to be held in trust under subsections (7) and (8); 
  (b) order that the money or thing be held in trust by a person other than the offeree cooperative; 
  (c) allow a reasonable rate of interest on the amount payable to each dissenting offeree from the date the offeree sends or delivers the share certificates under subsection (4) until the date of payment; and 
  (d) order that any money payable to a shareholder who cannot be found be paid to the Receiver General, in which case subsection 327(3) applies. 
  
  ### Distributing cooperative
  
  176 (1) If a shareholder holding shares of a distributing cooperative does not receive a notice under this Part, the shareholder may 
  (a) within ninety days after the date of the end of the take-over bid, or 
  (b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of 
  (i) the date of the end of the take-over bid, and 
  (ii) the date on which the shareholder learned of the take-over bid, require the offeror to acquire those shares. 
  
  ### Obligation to acquire
  
  (2) If a shareholder requires the offeror to acquire shares under subsection (1), the offeror must acquire the shares on the same terms under which the offeror acquired or will acquire the shares of the offerees who accepted the take-over bid. 
  
  # PART 12 
  
  ## Security Certificates, Registers and Transfers 
  
  ## Interpretation 
  
  ### Definitions
  
  177 (1) The definitions in this subsection apply in this Part.  
  *adverse claim*, in respect of a security, includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest or right in the security. (opposition)   
  *bearer* means the person who is in possession of a security that is payable to bearer or endorsed in blank. (porteur)   
  *broker* means a person who is engaged in whole or in part in the business of buying and selling securities and who, in the transaction concerned, acts for, or buys a security from, or sells a security to a customer. (courtier)   
  *delivery* means voluntary transfer of possession. (livraison ou remise)   
  *fiduciary* means any person who acts in a fiduciary capacity or as the administrator of the property of others and includes a personal representative of a deceased person. (représentant)   
  *fungible*, in relation to securities, means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit. (fongibles)   
  *genuine* means free of forgery or counterfeiting. (authentique)   
  *good faith*, with respect to a transaction, means honesty in fact in the conduct of the transaction. (bonne foi)   
  *good faith purchaser*, with respect to a security in bearer form or order form or a security in registered form issued to the purchaser or endorsed to the purchaser or endorsed in blank, means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of the security. (acquéreur de bonne foi)   
  *holder* means a person who is in possession of a security that is issued or endorsed to the person or to bearer or in blank. (détenteur)   
  *issuer* includes a cooperative that  
  (a) is required by this Act to maintain a securities register; 
  (b) in Quebec, issues securities that confer directly or indirectly rights in its property; or 
  (c) elsewhere in Canada, directly or indirectly creates fractional interests in its rights or property and issues securities as evidence of the fractional interests. ( émetteur)   
  *overissue* means the issue of securities in excess of any maximum number of securities that the issuer is authorized by its articles or a trust indenture to issue. (émission excédentaire)   
  *purchaser* means a person who takes an interest or right in a security by sale, mortgage, hypothec, pledge, issue, reissue, gift or any other voluntary transaction. (acquéreur)   
  *security* or 
  *security certificate* means a document issued by a cooperative that is  
  (a) in bearer, order or registered form, 
  (b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment, 
  (c) one of a class or series or by its terms divisible into a class or series of documents, and 
  (d) evidence of an investment share, participation or other interest or right in or obligation of a cooperative, but does not include 
  (e) a membership share or a document evidencing a membership share, or 
  (f) a member loan or a document evidencing a member loan. ( valeur mobilière ou certificat de valeurs mobilières)   
  *transfer* includes transmission by operation of law. (transfert)   
  *trust indenture* means a trust indenture as defined in section 266. (acte de fiducie)   
  *valid* means issued in accordance with the applicable law and the articles of the issuer, or validated under section 196. (valide)  
  
  ### Negotiable instruments
  
  (2) Except when a transfer is restricted and noted on a security in accordance with subsection 183(2), a security is a negotiable instrument. 
  
  ### Registerable form
  
  (3) A security is in registered form if it 
  (a) specifies a person who is entitled to the security or to the rights it evidences, and its transfer is capable of being recorded in a securities register; or 
  (b) bears a statement that it is in registered form. 
  
  ### Order form
  
  (4) A debt obligation is in order form if, by its terms, it is payable to the order of a person specified with reasonable certainty in it or to a person to whom it is assigned. 
  
  ### Bearer form
  
  (5) A security is in bearer form if it is payable to bearer according to its terms and not by reason of an endorsement. 
  
  ### Guarantor for issuer
  
  (6) A guarantor for an issuer is deemed to be an issuer to the extent of the guarantee, whether or not the obligation is noted on the security. 
  
  ## Application 
  
  ### Application
  
  178 This Part governs the transfer or transmission of a security. 
  
  ## Security Certificates 
  
  ### Security certificate
  
  179 Every security holder is entitled, at their option, to obtain from the cooperative 
  (a) a security certificate that complies with this Act; or 
  (b) a non-transferable written acknowledgement of their right to obtain a security certificate. 
  
  ### Fee
  
  180 A cooperative may charge a reasonable fee for a security certificate issued in respect of a transfer. 
  
  ### Joint owners
  
  181 If securities are held jointly by more than one person, 
  (a) a cooperative is not required to issue more than one security certificate in respect of those securities; and 
  (b) delivery of a security certificate to one of the joint owners is sufficient delivery to them all. 
  
  ### Signatures
  
  182 (1) A security certificate must be signed by at least one of the following persons, or a facsimile of the signature must be reproduced on the certificate: 
  (a) a director, or an individual on their behalf, or an officer; 
  (b) a transfer agent or branch transfer agent of the cooperative, or an individual on their behalf; or 
  (c) a trustee who certifies it in accordance with a trust indenture. 
  
  ### Former director
  
  (2) A cooperative may issue security certificates that contain the signature of a person who is no longer a director or officer and the validity of the certificate is not adversely affected. 
  
  ### Contents of certificate
  
  183 (1) The following information must be stated on the face of each security certificate issued by a cooperative: 
  (a) the name of the cooperative; 
  (b) the words “Incorporated under the Canada Cooperatives Act ”, “constituée sous l’autorité de la Loi canadienne sur les coopératives ”, “Subject to the Canada Cooperatives Act ” or “assujetti à la Loi canadienne sur les coopératives ”;  
  (c) the name of the person to whom it was issued; and 
  (d) the number and class of shares and the designation of any series that the certificate represents. 
  
  ### Notation of restrictions
  
  (2) No restriction, charge, lien, hypothec, agreement or endorsement described in subsection (3) is effective against a transferee of a security, issued by a cooperative or by a body corporate before it is continued under this Act, who has no actual knowledge of the restriction, charge, lien, hypothec, agreement or endorsement unless it or a reference to it is noted conspicuously on the security certificate. 
  
  ### Restrictions, etc.
  
  (3) The restrictions, charges, liens, hypothecs, agreements and endorsements referred to in subsection (2) are 
  (a) a restriction on transfer other than a constraint under section 130; 
  (b) a charge, lien or hypothec in favour of the cooperative; 
  (c) a unanimous agreement; and 
  (d) an endorsement under subsection 302(10). 
  
  ### Restrictions
  
  (4) If the issued investment shares of a distributing cooperative remain outstanding and are held by more than one person, the cooperative must not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 130. 
  
  ### Conspicuous notation
  
  (5) A reference to a constraint on the issue, transfer or ownership of any class or series of investment shares must be noted conspicuously on every security certificate evidencing such a share that is issued after the share becomes subject to the constraint under this Act, if the constraint is one 
  (a) for the purpose of attaining or maintaining a level of Canadian ownership or control specified in its articles or required by law to carry on business or qualify for benefit; or 
  (b) to comply with any prescribed law. 
  
  ### Effect of failure to note constraint
  
  (6) A failure to note a constraint under subsection (5) does not invalidate the investment share or the security certificate and does not render the constraint ineffective. 
  
  ### Contents of certificate
  
  184 (1) Every share certificate for an investment share of a cooperative that is authorized to issue shares of more than one class or series must clearly state 
  (a) the rights, privileges, restrictions and conditions attached to the shares of each class and series that exist when the share certificate is issued; or 
  (b) that the class or series of shares that it represents has rights, privileges, restrictions or conditions attached to it and that the cooperative will provide a shareholder, on demand and without charge, with a full copy of the text of 
  (i) any rights, privileges, restrictions and conditions attached to each class authorized to be issued, and to each series, that have been fixed by the directors, and 
  (ii) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series. 
  
  ### Copy of information
  
  (2) If a share certificate for an investment share contains the statement referred to in paragraph (1)(b), the cooperative must provide the shareholder, on demand and without charge, with a copy of 
  (a) the rights, privileges, restrictions and conditions attached to each class or series of investment shares authorized to be issued; and 
  (b) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series of investment shares in the same class. 
  
  ### Fractional shares
  
  185 (1) A cooperative may issue for each fractional investment share, a certificate in registered form or scrip certificates in registered form that entitle the holder to receive a certificate for a full investment share in exchange for scrip certificates equalling a full investment share. 
  
  ### Replacement
  
  (1.1) A cooperative must, on the request of a holder of a certificate for a fractional investment share or scrip certificate that is in bearer form and that was issued before the coming into force of this subsection, issue in exchange to that holder, in registered form, a certificate for a fractional investment share or a scrip certificate, as the case may be. 
  
  ### Conditions
  
  (2) The directors may attach conditions to scrip certificates issued by the cooperative, including conditions that 
  (a) the scrip certificates become void or, in Quebec, null if not exchanged for an investment share representing a full investment share before a specified date; and 
  (b) any investment shares for which the scrip certificates are exchangeable may, despite any pre-emptive right, be issued by the cooperative to any person and the proceeds distributed rateably to the holders of the scrip certificates. 
  
  ### Voting rights
  
  (3) A holder of a fractional investment share is not entitled to exercise voting rights or to receive a dividend in respect of the investment share unless 
  (a) the fractional share results from a consolidation of investment shares; or 
  (b) the articles of the cooperative provide otherwise. 
  
  ### Exercise of voting rights
  
  (4) A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate. 
  
  ## Registers 
  
  ### Securities register
  
  186 (1) A cooperative that issues securities must maintain a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series 
  (a) the names, in alphabetical order, and the latest known address of each person who holds or previously held the security; 
  (b) the number of securities held by each security holder; and 
  (c) the date and particulars of the issue and transfer of each security. 
  
  ### Location of register
  
  (2) The securities register must be maintained at the cooperative’s registered office or at any other place in Canada designated by the directors. 
  
  ### Branch registers
  
  (3) A cooperative may maintain additional branch securities registers in other places designated by the directors. 
  
  ### Contents of branch register
  
  (4) A branch securities register only contains particulars of securities issued or transferred at the branch. The same information is also recorded in the central registry. 
  
  ### Destruction of certificates
  
  (5) A cooperative, its agent or mandatary or a trustee as defined in section 266 is not required to produce 
  (a) a cancelled security certificate in registered form, an instrument referred to in any of subsections 142(1) to (3) that is cancelled or a like cancelled instrument in registered form six years after the date of its cancellation; 
  (b) a cancelled security certificate in bearer form or an instrument referred to in any of subsections 142(1) to (3) that is cancelled or a like cancelled instrument in bearer form after the date of its cancellation; or 
  (c) an instrument referred to in any of subsections 142(1) to (3) or a like instrument, irrespective of its form, after the date of its expiration. 
  
  ### Agent or mandatary
  
  187 A cooperative may appoint an agent or mandatary to maintain securities registers on its behalf. 
  
  ### Registration
  
  188 The registration of the issue or transfer of an investment share in a securities register maintained by the cooperative is complete and valid registration for all purposes. 
  
  ### Trustee
  
  189 Subject to sections 51, 53 and 61, a cooperative or a trustee as defined in section 266 may treat the person whose name appears on the securities register as the owner of a security as its owner for all purposes. 
  
  ### Proof of ownership
  
  190 If a cooperative restricts the right to transfer its investment shares, the cooperative may, despite section 189, treat a person as the registered holder of a security if the person provides the cooperative with evidence that reasonably meets the requirements of the cooperative that the person is 
  (a) the heir of a deceased security holder, or the fiduciary of the estate or succession of a deceased security holder, or of a registered security holder who is a minor, an incapable person or a missing person; or 
  (b) a liquidator of, or a trustee in bankruptcy for, a registered security holder. 
  
  ### Proof of ownership
  
  191 A cooperative must treat a person, other than one described in section 190, as being entitled to exercise the rights and privileges attached to a security if the person provides proof that the person has acquired ownership of the security by operation of law or has legal authority to exercise the rights and privileges. 
  
  ### Joint owners
  
  192 If satisfactory proof of the death of a joint holder of a security is provided to a cooperative, it may treat any surviving joint holders as the owner of the security. 
  
  ### Duties of cooperative
  
  193 A cooperative is not required to inquire into the existence of, or see to the performance of, any duty owed to a third person by a registered holder or a person who may be treated as a registered holder of a security. 
  
  ### Minors
  
  194 If an individual who is less than 18 years of age exercises a right of ownership in a security of a cooperative, no subsequent repudiation or avoidance or, in Quebec, annulment or reduction of obligations is effective against the cooperative. 
  
  ### Deceased owner
  
  195 (1) Subject to any applicable law relating to the collection of taxes, a person who is an heir or a fiduciary of an estate or succession of a deceased security holder is entitled to become the registered holder or to designate a registered holder if the person deposits the following information with the cooperative or its transfer agent, together with any reasonable assurances that the cooperative may require: 
  (a) the security certificate or, in default of one, a document proving that the deceased was the security holder; 
  (b) a document proving the death of the security holder; and 
  (c) a document proving that the heir or fiduciary has the right under the law of the place in which the deceased was domiciled immediately before their death to deal with the security. 
  
  ### Endorsement
  
  (2) A security certificate referred to in paragraph (1)(a) must be endorsed 
  (a) in the case of a transfer to an heir or fiduciary, by that person; and 
  (b) in any other case, in a manner acceptable to the cooperative. 
  
  ### Right of cooperative
  
  (3) Deposit of the documents required by subsection (1) empowers a cooperative or its transfer agent to record in a securities register the transmission of a security from the deceased holder to the heir or fiduciary or to any person that the heir or fiduciary may designate and to treat the person who becomes a registered holder as the owner of the securities. 
  
  ### Overissue
  
  196 (1) Subject to this section, the provisions of this Part that validate a security or compel its issue or reissue do not apply if the validation, issue or reissue of a security would result in overissue. 
  
  ### Identical security
  
  (2) The person who is entitled to a validation or issue may, if there has been an overissue and if a valid security that is similar in all respects to the security involved in the overissue is reasonably available for purchase, compel the issuer to purchase and deliver that security against the surrender of the security that the person holds. 
  
  ### If identical security not available
  
  (3) If a valid security that is similar in all respects to the security involved in the overissue is not reasonably available for purchase, the person who is entitled to the validation or issue may recover from the issuer an amount equal to the price the last purchaser for value paid for the invalid security. 
  
  ### Increase in capital
  
  (4) The overissued securities are valid from the date they were issued only if the issuer increases the number of its authorized securities to a number equal to or greater than the number of securities previously authorized plus the number of the securities overissued. 
  
  ### Exemptions
  
  197 Sections 147 to 149 and 152 do not apply to a payment or purchase by an issuer under section 196. 
  
  ## Proceedings 
  
  ### Rules of action
  
  198 The following rules apply in an action on a security: 
  (a) each signature on the security certificate or in a necessary endorsement is admitted unless specifically denied in the pleadings; 
  (b) a signature on the security is presumed to be genuine and authorized but, if the effectiveness of the signature is in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature; 
  (c) if a signature is admitted or established, production of a certificate entitles the holder to recover on it unless the other party establishes a defence or defect going to the validity of the security; and 
  (d) if the other party establishes the defence or defect, the plaintiff has the burden of establishing that the defect is ineffective against the plaintiff or some other person under whom the claim is made. 
  
  ## Delivery 
  
  ### Delivery of securities
  
  199 (1) A person who is required to deliver securities may deliver any security of the specified issue 
  (a) in bearer form; 
  (b) in registered form in the name of the transferee; or 
  (c) endorsed to the person or in blank. 
  
  ### Limitation
  
  (2) Subsection (1) is subject to any agreement to the contrary, to the provisions of this Act, of any other applicable Act of Parliament, of any applicable Act of the legislature of a province or of any applicable regulation made under any such Act or to any applicable stock exchange rule. 
  
  ## General 
  
  ### Incorporation by reference
  
  200 (1) The terms of a security include those stated on the security and those incorporated by reference to another instrument or act, Act of Parliament or the legislature of a province, regulation, rule or order to the extent that the incorporated terms do not conflict with those stated on the security. 
  
  ### Purchaser without notice
  
  (2) Subsection (1) applies to a good faith purchaser but the incorporation by reference is itself not notice of a defect to the purchaser even if the security expressly states that a person accepting it admits that notice. 
  
  ### Validity of security
  
  201 A security is valid in the hands of a good faith purchaser. 
  
  ### Defence
  
  202 Subject to section 205, the fact that a security is not genuine is a complete defence even against a good faith purchaser. 
  
  ### Defences
  
  203 All other defences of an issuer, including non-delivery and conditional delivery of a security, are ineffective against a good faith purchaser. 
  
  ### Deemed notice
  
  204 (1) A purchaser is deemed to have notice of any defect in the issue of a security or any defence of the issuer if the security becomes stale within the meaning of subsection (2). 
  
  ### Stale security
  
  (2) A security becomes stale if 
  (a) the purchaser takes the security more than two years after 
  (i) the date on which performance of the principal obligation evidenced by the security was due, or 
  (ii) the set date on or after which the security is to be presented or surrendered for redemption or exchange; or 
  (b) the payment of money or the delivery of securities is required in order to present or surrender the security, the money or securities are available on the day for the payment or delivery and the purchaser takes the security more than one year after that day. 
  
  ### Unauthorized signature
  
  205 (1) Subject to subsection (2), an unauthorized signature on a security is ineffective. 
  
  ### Limited effectiveness
  
  (2) An unauthorized signature on a security is effective in favour of a good faith purchaser if the signature was made by 
  (a) an authenticating trustee, transfer agent or other person entrusted by the issuer with the duty to sign the security, or similar securities, or to prepare them for signing; or 
  (b) an employee of the issuer or a person referred to in paragraph (a) who handles the security in the ordinary course of their duties. 
  
  ### Completion of form
  
  206 If a security contains the signatures necessary for its issue or transfer but is incomplete in another respect, any person may complete it in accordance with their authority. 
  
  ### Enforceability
  
  207 A security that was completed incorrectly is enforceable by a good faith purchaser. 
  
  ### Fraud
  
  208 A completed security that was improperly altered, even if fraudulently altered, remains enforceable but only according to its original terms. 
  
  ### Guarantees
  
  209 (1) A person signing a security as an authenticating trustee, transfer agent or other person entrusted by the issuer with the duty to sign the security guarantees to a good faith purchaser that 
  (a) the security is genuine; 
  (b) the person’s acts in connection with the security are within the person’s authority; and 
  (c) the person has reasonable grounds for believing that the security is in the form and within the amount the issuer is authorized to issue. 
  
  ### Liability
  
  (2) Unless agreed otherwise, a person referred to in subsection (1) does not assume any further liability for the validity of the security. 
  
  ### Acquisition of rights
  
  210 (1) On delivery of a security, the purchaser of the security acquires the rights in it that the transferor had or had authority to convey. 
  
  ### Claim free
  
  (2) A good faith purchaser of a security acquires it free from any adverse claim. 
  
  ### No better position
  
  (3) A purchaser who was a party to a fraud or illegality affecting a security or who, as a prior holder, had notice of an adverse claim does not have a better position by taking from a later good faith purchaser. 
  
  ### Limitation of the purchase
  
  211 A purchaser acquires rights only to the extent of the interest or right purchased. 
  
  ### Deemed notice
  
  212 (1) A purchaser of a security, or a broker for a seller or purchaser, is deemed to have notice of an adverse claim if 
  (a) the security has been endorsed “for collection” or “for surrender” or for some other purpose other than transfer; or 
  (b) the security is in bearer form and has a statement on it that it belongs to a person other than the transferor. 
  
  ### Name
  
  (2) The mere writing of a name on a security is not a statement for the purposes of paragraph (1)(b). 
  
  ### No duty to inquire
  
  213 (1) A purchaser of a security, or a broker for a seller or purchaser, has no duty to inquire into the rightfulness of the transfer and, subject to section 214, has no notice of an adverse claim. 
  
  ### Third party holding
  
  (2) Subsection (1) applies even if the purchaser or broker has notice that the security is held by a third person or is registered in the name of or endorsed by a fiduciary. 
  
  ### Deemed notice
  
  214 A purchaser or broker who knows that the transaction is for the personal benefit of the fiduciary or is otherwise in breach of the fiduciary’s duty is deemed to have notice of an adverse claim. 
  
  ### Staleness
  
  215 (1) The following events do not constitute notice of an adverse claim except if the security becomes stale within the meaning of subsection (2): 
  (a) an event that creates a right to performance of the principal obligation evidenced by the security; or 
  (b) an event that sets the date on or after which the security is to be presented or surrendered for redemption or exchange. 
  
  ### Staleness of security
  
  (2) A security becomes stale if 
  (a) the purchaser takes the security more than one year after 
  (i) the date on which performance of the principal obligation evidenced by the security was due, or 
  (ii) the date on or after which the security was to be presented or surrendered for redemption or exchange; or 
  (b) the payment of money or the delivery of securities is required in order to present or surrender the security, the money or securities are available on the day for the payment or delivery and the purchaser takes the security more than six months after that day. 
  
  ### Guarantee
  
  216 (1) A person who presents a security for registration of transfer or for payment or exchange guarantees to the issuer that the person is entitled to do so. 
  
  ### Limitation on guarantee
  
  (2) A good faith purchaser who receives a new, re-issued or re-registered security and who registers a transfer guarantees only that the purchaser has no knowledge of any unauthorized signature in a necessary endorsement. 
  
  ### Content of guarantee
  
  217 A person who transfers a security to a purchaser for value guarantees by the transfer only that 
  (a) the transfer is effective and rightful; 
  (b) the security is genuine and has not been materially altered; and 
  (c) the person knows of nothing that might impair the validity of the security. 
  
  ### Guarantee of intermediary
  
  218 An intermediary delivering a security to a purchaser who knows that the intermediary is an intermediary guarantees only good faith. 
  
  ### Guarantee of broker
  
  219 A broker gives to a customer, to the issuer and to a purchaser the guarantees provided in sections 216 to 218 and has the rights and privileges of a purchaser under those sections, and those guarantees of and in favour of the broker acting as an agent or mandatary are in addition to guarantees given by the customer and guarantees given in favour of the customer. 
  
  ### Right to compel endorsement
  
  220 If a registered security is delivered to a purchaser without a necessary endorsement, the purchaser has the right to demand the endorsement. The purchaser becomes a good faith purchaser after the endorsement. 
  
  ### Definition of appropriate 
  
  221 (1) In this section, section 222, subsections 229(1) and 237(1) and section 241, 
  *appropriate*, with respect to a person, means that the person is  
  (a) the person who is specified by the security or by a special endorsement to be entitled to the security; 
  (b) if a person described in paragraph (a) is described as a fiduciary but is no longer serving as one, either that person or their successor; 
  (c) if the security or endorsement mentioned in paragraph (a) specifies more than one person as fiduciaries and one or more of those persons is no longer a fiduciary, the remaining fiduciary or fiduciaries, whether or not a successor has been appointed or qualified; 
  (d) if a person described in paragraph (a) is an individual and is without capacity to act by reason of death, minority or incapability, the person’s fiduciary; 
  (e) if the security or endorsement mentioned in paragraph (a) specifies more than one person with right of survivorship and by reason of death not all of the persons can sign, the survivor or survivors; 
  (f) a person who has the legal power to sign; or 
  (g) to the extent that a person described in any of paragraphs (a) to (f) may act through an agent or mandatary, the person’s authorized agent or mandatary. 
  
  ### Time for determination
  
  (2) The authority of a person signing is determined as of the time of signing. 
  
  ### Endorsement
  
  222 (1) An endorsement of a security in registered form for the purposes of assignment or transfer is made when an appropriate person signs either the security or a separate document, or when the signature of an appropriate person is written without more on the back of the security. 
  
  ### Blank or special
  
  (2) An endorsement may be 
  (a) in blank; or 
  (b) special. 
  
  ### Blank endorsement
  
  (3) An endorsement in blank includes an endorsement to bearer. 
  
  ### Special endorsement
  
  (4) A special endorsement specifies the person to whom the security is to be transferred, or who has power to transfer it. 
  
  ### Right of holder
  
  (5) A holder may convert an endorsement in blank into a special endorsement. 
  
  ### Immunity of endorser
  
  223 Unless agreed otherwise, the endorser does not, by the endorsement, assume any obligation that the security will be honoured by the issuer. 
  
  ### Partial endorsement
  
  224 An endorsement purporting to be an endorsement of only part of a security representing units intended by the issuer to be separately transferable is effective to the extent of the endorsement. 
  
  ### Effect of failure by fiduciary to comply
  
  225 Failure of a fiduciary to comply with the instrument or act that is the source of the fiduciary’s power or with the law of the jurisdiction governing the fiduciary relationship does not render the fiduciary’s endorsement unauthorized for the purposes of this Part. 
  
  ### Effect of endorsement without delivery
  
  226 An endorsement of a security does not constitute a transfer until delivery of the security on which it appears or, if the endorsement is on a separate document, until delivery of both the security and the document. 
  
  ### Endorsement in bearer form
  
  227 An endorsement of a security in bearer form may give notice of an adverse claim under section 212 but does not otherwise affect any of the holder’s rights. 
  
  ### Effect of unauthorized endorsement
  
  228 (1) The owner of a security may assert the ineffectiveness of an endorsement against the issuer or a purchaser, other than a good faith purchaser who has in good faith received a new, re-issued or re-registered security on registration of transfer, unless the owner 
  (a) has ratified an unauthorized endorsement of the security; or 
  (b) is otherwise precluded from impugning the effectiveness of an unauthorized endorsement. 
  
  ### Liability of issuer
  
  (2) An issuer who registers the transfer of a security on an unauthorized endorsement is liable for improper registration. 
  
  ### Warranties of guarantor of signature
  
  229 (1) A person who guarantees the signature of an endorser of a security warrants that, at the time of signing, the signer was an appropriate person to endorse and the signature was genuine. 
  
  ### Limitation of liability
  
  (2) A person who guarantees the signature of an endorser does not otherwise warrant the rightfulness of the transfer to which the signature relates. 
  
  ### Warranties of guarantor of endorsement
  
  (3) A person who guarantees the endorsement of a security warrants both the signature and the rightfulness, in all respects, of the transfer to which the signature relates, but an issuer may not require a guarantee of endorsement as a condition to registration of transfer. 
  
  ### Extent of liability
  
  (4) The guarantees referred to in subsections (1) to (3) are made to any person who, relying on the guarantee, takes or deals with the security, and the guarantor is liable to the person for any loss resulting from breach of warranty. 
  
  ### Presumption of delivery
  
  230 Delivery of a security to a purchaser occurs when 
  (a) the purchaser or a person designated by the purchaser acquires possession of it; 
  (b) the purchaser’s securities broker acquires possession of a security specially endorsed to or issued in the name of the purchaser; 
  (c) the purchaser’s securities broker sends the purchaser confirmation of the purchase and the broker in the broker’s records identifies a specific security as belonging to the purchaser; or 
  (d) in respect of an identified security to be delivered while still in the possession of a third person, that person acknowledges that it is held for the purchaser. 
  
  ### Presumption of ownership
  
  231 (1) A purchaser is the owner of a security held for the purchaser by a securities broker, but a purchaser is not a holder except in the cases described in paragraphs 230(b) and (c). 
  
  ### Ownership of part of fungible bulk
  
  (2) If a security is part of a fungible bulk, a purchaser of the security is the owner of the proportionate interest or right in the fungible bulk. 
  
  ### Notice to securities broker of adverse claim
  
  (3) Notice of an adverse claim received by a securities broker or by a purchaser after the broker takes delivery as a holder for value is not effective against the broker or the purchaser, except that, as between the broker and the purchaser, the purchaser may demand delivery of an equivalent security in respect of which no notice of an adverse claim has been received. 
  
  ### Delivery of security
  
  232 (1) Unless agreed otherwise, if a sale of a security is made on a stock exchange or otherwise through securities brokers, 
  (a) the selling customer fulfils their duty to deliver when the customer delivers the security to the selling securities broker or to a person designated by the selling securities broker or when they cause an acknowledgement to be made to the selling securities broker; and 
  (b) the selling securities broker, including a correspondence broker, acting for a selling customer fulfils their duty to deliver by delivering the security or a like security to the buying securities broker or to a person designated by the buying securities broker or by affecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place. 
  
  ### Duty to deliver
  
  (2) Except as provided otherwise in this section and unless agreed otherwise, a transferor’s duty to deliver a security under a contract of purchase is not fulfilled until the transferor delivers the security in negotiable form to the purchaser or to a person designated by the purchaser, or causes an acknowledgement to be made to the purchaser that the security is held for the purchaser. 
  
  ### Delivery to securities broker
  
  (3) A sale to a securities broker purchasing for the securities broker’s own account is subject to subsection (2) and not subsection (1), unless the sale is made on a stock exchange. 
  
  ### Right to reclaim possession
  
  233 (1) A person against whom the transfer of a security is wrongful may, against anyone except a good faith purchaser, 
  (a) reclaim possession of the security or obtain possession of a new security evidencing all or part of the same rights; or 
  (b) claim damages. 
  
  ### Recovery when unauthorized endorsement
  
  (2) If the transfer of a security is wrongful by reason of an unauthorized endorsement, the owner may reclaim possession of the security or a new security even from a good faith purchaser if the ineffectiveness of the purported endorsement is asserted against the purchaser under section 228. 
  
  ### Right to requisites for registration
  
  234 (1) Unless agreed otherwise, a transferor must, on demand, supply a purchaser with proof of the transferor’s authority to transfer a security or with any other requisite that is necessary to obtain registration of the transfer of a security, but if the transfer is not for value, it is not necessary for the transferor to provide authority to transfer unless the purchaser pays the reasonable and necessary costs of the proof and transfer. 
  
  ### Rescission of transfer
  
  (2) If a transferor fails to comply with a demand under subsection (1) within a reasonable time, the purchaser may reject or rescind the transfer. 
  
  ### Seizure of security
  
  235 No seizure of a security or other interest or right evidenced by the security is effective until the person making the seizure obtains possession of the security. 
  
  ### No liability for acts in good faith
  
  236 An agent or mandatary, or a bailee or depositary, who in good faith has received securities and sold, pledged or delivered them according to the instructions of the principal or mandator is not in breach of a fiduciary duty or otherwise liable even though they have no right to dispose of the securities. 
  
  ### Duty to register transfer
  
  237 (1) If a security in registered form is presented for transfer, the issuer must register the transfer if 
  (a) the security is endorsed by an appropriate person; 
  (b) reasonable assurance is given that the endorsement is genuine and effective; 
  (c) the issuer has no duty to inquire into adverse claims or has discharged that duty; 
  (d) all applicable laws relating to the collection of taxes have been complied with; 
  (e) the transfer is rightful or is to a good faith purchaser; and 
  (f) any transfer fee referred to in section 180 has been paid. 
  
  ### Liability for delay
  
  (2) An issuer who has a duty to register a transfer of a security is liable to the person presenting it for registration for any loss resulting from an unreasonable delay in registration or from the failure or refusal to register the transfer. 
  
  ### Assurance of endorsement
  
  238 (1) An issuer may require an assurance that each necessary endorsement on a security is genuine and effective by requiring a guarantee of the signature of the person endorsing the security and by requiring 
  (a) if the endorsement is by an agent or mandatary, reasonable assurance of authority to sign; 
  (b) if the endorsement is by a fiduciary, evidence of appointment or incumbency; 
  (c) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and 
  (d) in any other case, assurance that corresponds as closely as is feasible to the cases set out in paragraphs (a) to (c). 
  
  ### Sufficiency of guarantee
  
  (2) For the purpose of subsection (1), a guarantee of the signature of a person is sufficient if it is signed by or on behalf of a person whom the issuer believes, on reasonable grounds, to be a responsible person. 
  
  ### Standards
  
  (3) An issuer may adopt reasonable standards to determine responsible persons for the purpose of subsection (2). 
  
  ### Sufficiency of evidence of appointment or incumbency
  
  (4) For the purpose of paragraph (1)(b), the following constitute sufficient evidence of appointment or incumbency of a fiduciary: 
  (a) in the case of a fiduciary of a deceased security holder’s estate or succession, a certified copy of the document referred to in paragraph 195(1)(c) and dated not earlier than sixty days before the day a security is presented for transfer; or 
  (b) in the case of any other fiduciary, a copy of a document showing the appointment or other evidence believed by the issuer to be appropriate. 
  
  ### Standards
  
  (5) An issuer may adopt reasonable standards with respect to evidence referred to in paragraph (4)(b). 
  
  ### No notice to issuer
  
  (6) An issuer is deemed not to have notice of the content of a document referred to in subsection (4) that is obtained by the issuer except to the extent that the contents relate directly to appointment or incumbency. 
  
  ### Notice from additional documentation
  
  239 If an issuer, in relation to a transfer, demands assurance other than an assurance specified in subsection 238(1) and obtains a copy of a will, trust or partnership agreement or a by-law or similar document, the issuer is deemed to have notice of all matters contained in the document that affect the transfer. 
  
  ### Limited duty of inquiry
  
  240 (1) An issuer to whom a security is presented for registration has a duty to inquire into adverse claims if the issuer 
  (a) receives written notice of an adverse claim at a time and in a manner that provide the issuer with a reasonable opportunity to act on it before the issue of a new, re-issued or re-registered security and the notice discloses the name and address of the claimant, the registered owner and the issue of which the security is a part; or 
  (b) is deemed to have notice of an adverse claim from a document that it obtained under section 239. 
  
  ### Discharge of duty
  
  (2) An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address provided by the adverse claimant or, if no such address has been provided, to the adverse claimant’s residence or regular place of business, that a security has been presented for registration of transfer by a named person and that the transfer will be registered unless, no later than thirty days after the date of sending the notice, the issuer 
  (a) is served with a restraining order or other order of a court; or 
  (b) is provided with an indemnity bond sufficient in the issuer’s judgement to protect the issuer and any transfer agent or other agent or mandatary of the issuer from any loss that may be incurred by any of them as a result of complying with the adverse claim. 
  
  ### Inquiry into adverse claim
  
  241 (1) Unless an issuer is deemed to have notice of an adverse claim from a document that is obtained under section 239 or has received notice of an adverse claim under subsection 240(1), if a security presented for registration is endorsed by the appropriate person, the issuer has no duty to inquire into adverse claims and, in particular, 
  (a) an issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and the issuer may then assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security; 
  (b) an issuer registering a transfer on an endorsement by a fiduciary has no duty to inquire into whether the transfer is made in compliance with the document or with the law of the jurisdiction governing the fiduciary relationship; and 
  (c) an issuer is deemed not to have notice of the contents of a court record or a registered document even if the record or document is in the issuer’s possession and the transfer is made on the endorsement of a fiduciary to the fiduciary specifically or to the fiduciary’s nominee. 
  
  ### Duration of notice of adverse claim
  
  242 A written notice of adverse claim received by an issuer is effective for twelve months after the day it was received unless the notice is renewed in writing. 
  
  ### Limitation on issuer’s liability
  
  243 (1) Except as provided otherwise in any applicable law relating to the collection of taxes, an issuer is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a security if 
  (a) the necessary endorsements were on or with the security; and 
  (b) the issuer had no duty to inquire into adverse claims or had discharged that duty. 
  
  ### Duty of issuer on default
  
  (2) If an issuer has registered a transfer of a security to a person not entitled to it, the issuer must on demand deliver a like security to the owner unless 
  (a) the issuer is not liable by virtue of subsection (1); 
  (b) the owner is precluded by subsection 244(1) from asserting a claim; or 
  (c) the delivery would result in an overissue to which section 196 applies. 
  
  ### Lost or stolen security
  
  244 (1) The owner of a security who fails to notify the issuer of an adverse claim, in writing, within a reasonable time after the owner knows of a loss, apparent destruction or wrongful taking of the security is precluded from asserting against the issuer a claim to a new security if the issuer has registered a transfer of the security. 
  
  ### Duty to issue new security
  
  (2) If the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer shall issue a new security in place of the original security if the owner 
  (a) so requests before the issuer has notice that the security has been acquired by a good faith purchaser; 
  (b) provides the issuer with a sufficient indemnity bond; and 
  (c) satisfies any other reasonable requirements imposed by the issuer. 
  
  ### Duty to register transfer
  
  (3) If, after the issue of a new security under subsection (2), a good faith purchaser of the original security presents the original security for registration of transfer, the issuer shall register the transfer unless registration would result in an overissue to which section 196 applies. 
  
  ### Right of issuer to recover
  
  (4) In addition to the rights that an issuer has by reason of an indemnity bond, the issuer may recover the new security issued under subsection (2) from the person to whom it was issued or any person taking under that person other than a good faith purchaser. 
  
  ### Duty
  
  245 An authenticating trustee, transfer agent or other agent or mandatary of an issuer has, in respect of the issue, registration of transfer and cancellation of a security of the issuer, 
  (a) a duty to the issuer to exercise good faith and reasonable diligence; and 
  (b) the same obligations to the holder or owner of a security and the same rights, privileges and immunities as the issuer. 
  
  ### Notice to agent or mandatary
  
  246 Notice to an authenticating trustee, transfer agent or other agent or mandatary of an issuer is notice to the issuer in respect of the functions performed by the agent or mandatary. 
  
  # PART 13 
  
  ## Financial Disclosure 
  
  ### Annual financial statements to members
  
  247 (1) The directors must place before the members at every annual meeting of members 
  (a) prescribed comparative financial statements that conform to any prescribed requirements and relate separately to 
  (i) the period that began on the date the cooperative came into existence and ended not more than six months before the annual meeting or, if the cooperative has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and 
  (ii) the immediately preceding financial year; 
  (b) the report of the auditor, if any; and 
  (c) any further information respecting the financial position of the cooperative and the results of its operations required by the articles, the by-laws or a unanimous agreement. 
  
  ### Annual financial statements to shareholders
  
  (2) If shareholders have a right to have an annual meeting under subsection 133(1), the directors must place the documents described in subsection (1) before the shareholders at every annual meeting of shareholders. 
  
  ### Exception
  
  (3) Despite paragraph (1)(a) and subsection (2), the financial statements referred to in subparagraph (1)(a)(ii) may be omitted if the reason for the omission is set out in the financial statements, or in a note to those statements, to be placed before the members at an annual meeting of members and, in a case to which subsection (2) applies, the shareholders at an annual meeting of shareholders. 
  
  ### Application for exemption
  
  248 On the application of a cooperative, the Director may exempt the cooperative, on any terms that the Director thinks fit, from any requirement set out in section 247 or any of sections 249 to 252, if the Director reasonably believes that the detriment that may be caused to the cooperative by the requirement outweighs its benefit to the members and shareholders or, in the case of a distributing cooperative, to the public. 
  
  ### Consolidated statements
  
  249 (1) A cooperative must keep at its registered office a copy of the financial statements of each of its subsidiaries and of each entity the accounts of which are consolidated in its financial statements. 
  
  ### Examination
  
  (2) The members and shareholders of a cooperative and their personal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the cooperative and may take extracts from them free of charge. 
  
  ### Barring examination
  
  (3) A cooperative may, not later than fifteen days after a request to examine under subsection (2), apply to a court for an order barring the right of any person to so examine, and the court may, if it is satisfied that the examination would be detrimental to the cooperative or a subsidiary, bar the right and make any further order it thinks fit. 
  
  ### Notice
  
  (4) A cooperative must give the person requesting to examine under subsection (2) notice of an application under subsection (3), and the person may appear and be heard in person or by counsel. 
  
  ### Approval of financial statements
  
  250 (1) The directors must approve the financial statements referred to in section 247 and the approval is evidenced by the manual signature of one or more directors, or a facsimile of the signatures reproduced on the statements. 
  
  ### Condition precedent
  
  (2) A cooperative may not issue, publish or circulate copies of the financial statements referred to in section 247 unless they are 
  (a) approved and signed in accordance with subsection (1); and 
  (b) accompanied by the report of the auditor of the cooperative, if any. 
  
  ### Copies to shareholders
  
  251 A cooperative shall send a copy of the documents referred to in section 247 to each member and shareholder, except to a member or shareholder who has informed the cooperative in writing that they do not want a copy of the documents, 
  (a) not less than twenty-one days before each annual meeting of members; 
  (b) not less than twenty-one days before each annual meeting of shareholders, if subsection 247(2) applies; or 
  (c) not later than a resolution in lieu of an annual meeting is signed under section 66. 
  
  ### Copies to Director
  
  252 (1) A distributing cooperative, any of the issued securities of which remain outstanding and are held by more than one person, must send a copy of the documents referred to in section 247 to the Director 
  (a) not less than twenty-one days before each annual meeting of members or, without delay after a resolution referred to in paragraph 251(c) is signed; and 
  (b) in any event within fifteen months after the last preceding annual meeting of shareholders was held or the resolution referred to in paragraph 251(c) was signed, but no later than six months after the end of the cooperative’s preceding financial year. 
  
  ### Subsidiary cooperative
  
  (2) A subsidiary cooperative is not required to comply with this section if its financial statements are consolidated or combined with those of its holding cooperative entity and the statements of its holding cooperative entity are sent to the Director in compliance with this section. 
  
  ### Qualifications of auditor
  
  253 (1) Subject to subsection (5), a person is disqualified from being an auditor of a cooperative if the person is not independent of the cooperative, of any of its affiliates or of the directors or officers of the cooperative or its affiliates. 
  
  ### Independence
  
  (2) For the purposes of this section, 
  (a) independence is a question of fact; and 
  (b) a person is deemed not to be independent if the person, or another person with whom the person is in business, 
  (i) is a director, officer or employee of the cooperative or any of its affiliates, is in business with the cooperative or any of its affiliates, or is in business with a director, officer or employee of the cooperative or any of its affiliates, 
  (ii) beneficially owns or controls, directly or indirectly, a material interest in the securities of the cooperative or any of its affiliates, or 
  (iii) has been a receiver, receiver-manager, sequestrator, liquidator or trustee in bankruptcy of the cooperative or any of its affiliates within two years of the proposed appointment of the person as auditor of the cooperative. 
  
  ### Duty to resign
  
  (3) An auditor who becomes disqualified under this section must, subject to subsection (5), resign without delay after becoming aware of the disqualification. 
  
  ### Disqualification order
  
  (4) Any interested person may apply to a court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant. 
  
  ### Exemption order
  
  (5) Any interested person may apply to a court for an order exempting an auditor from disqualification under this section and the court may, if it is satisfied that an exemption would not unfairly prejudice the members or shareholders, make an exemption order on any terms that it thinks fit. The order may have retrospective effect. 
  
  ### Appointment of auditor
  
  254 (1) Subject to section 255, the members must, by ordinary resolution, at the first annual meeting of members and at each subsequent annual meeting, appoint an auditor to hold office until the close of the next annual meeting. 
  
  ### Eligibility
  
  (2) An auditor appointed under section 82 is eligible for appointment under subsection (1). 
  
  ### Incumbent auditor
  
  (3) Despite subsection (1), if an auditor is not appointed at a meeting of members, the incumbent auditor continues in office until a successor is appointed. 
  
  ### Remuneration
  
  (4) The remuneration of an auditor may be fixed by ordinary resolution of the members or, if not so fixed, may be fixed by the directors. 
  
  ### Dispensing with auditor
  
  255 (1) A cooperative that is not a distributing cooperative may resolve not to appoint an auditor by 
  (a) special resolution of the members; and 
  (b) special resolution of all shareholders, including those who do not otherwise have the right to vote. 
  
  ### Limitation
  
  (2) A resolution under subsection (1) is valid only until the next annual meeting of members. 
  
  ### Ceasing to hold office
  
  256 (1) An auditor of a cooperative ceases to hold office when the auditor dies, resigns or is removed under section 257. 
  
  ### Effective date of resignation
  
  (2) A resignation of an auditor becomes effective on the date on which a written resignation is sent to the cooperative, or on the date specified in the resignation, whichever is later. 
  
  ### Removal of auditor
  
  257 (1) The members may by ordinary resolution at a special meeting remove the auditor from office, unless the auditor was appointed by a court under section 259. 
  
  ### Vacancy
  
  (2) A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 258. 
  
  ### Filling vacancy
  
  258 (1) Subject to subsection (3), the directors must fill a vacancy in the office of auditor without delay after it occurs. 
  
  ### Calling meeting
  
  (2) If there is not a quorum of directors, the directors then in office must, not later than twenty-one days after a vacancy in the office of auditor occurs, call a special meeting of members to fill the vacancy and, if they fail to call a meeting or if there are no directors, the meeting may be called by any member. 
  
  ### Members filling vacancy
  
  (3) The by-laws of a cooperative may provide that a vacancy in the office of auditor may only be filled by vote of the members. 
  
  ### Unexpired term
  
  (4) An auditor appointed to fill a vacancy holds office for the unexpired term of their predecessor. 
  
  ### Court appointed auditor
  
  259 (1) If a cooperative does not have an auditor, the court may, on the application of a member or shareholder, appoint and fix the remuneration of an auditor who holds office until an auditor is appointed by the members. 
  
  ### Exception
  
  (2) Subsection (1) does not apply if a resolution made under section 255 not to appoint an auditor is in effect. 
  
  ### Right to attend meeting
  
  260 (1) The auditor of a cooperative is entitled to receive notice of every meeting of the cooperative and, at the expense of the cooperative, to attend and be heard at the meetings on matters relating to the auditor’s duties. 
  
  ### Duty to attend
  
  (2) If a director or member of a cooperative, whether or not the member is entitled to vote at the meeting, or a shareholder that is entitled to vote at that meeting of shareholders, gives written notice not less than ten days before a meeting of the cooperative to the auditor or a former auditor of the cooperative, the auditor or former auditor shall attend the meeting at the expense of the cooperative and answer questions relating to the auditor’s duties. 
  
  ### Notice to cooperative
  
  (3) A director, member or shareholder who sends a notice referred to in subsection (2) must send a copy of the notice to the cooperative at the same time. 
  
  ### Statement of auditor
  
  (4) An auditor is entitled to submit to the cooperative a written statement giving the reasons for the auditor’s resignation or the reasons why the auditor opposes a proposed action or resolution set out in any of paragraphs (a) to (d), in any of the following situations: 
  (a) the auditor resigns; 
  (b) the auditor receives a notice or otherwise learns of a meeting of members called for the purpose of removing the auditor from office; 
  (c) the auditor receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because the term of office of the incumbent auditor has expired or is about to expire; or 
  (d) the auditor receives a notice or otherwise learns of a meeting at which a resolution referred to in section 255 is to be proposed. 
  
  ### Other statements
  
  (5) In the case of a proposed replacement of an auditor, whether through removal or at the end of the auditor’s term, the following rules apply with respect to other statements: 
  (a) the cooperative must make a statement on the reasons for the proposed replacement; and 
  (b) the proposed replacement auditor may make a statement in which he or she comments on the reasons referred to in paragraph (a). 
  
  ### Circulating statement
  
  (6) The cooperative must send a copy of the statements referred to in subsections (4) and (5) without delay to every person who is entitled to receive notice of a meeting referred to subsection (1) and to the Director. 
  
  ### Replacing auditor
  
  (7) No person may accept appointment or consent to be appointed as auditor of a cooperative if the person is replacing an auditor who has resigned or been removed or whose term of office has expired or is about to expire until the person has requested and received from that auditor a written statement of the circumstances and the reasons why, in that auditor’s opinion, the auditor is to be replaced. 
  
  ### Exception
  
  (8) Despite subsection (7), a person otherwise qualified may accept appointment or consent to be appointed as auditor of a cooperative if, no later than fifteen days after making the request referred to in that subsection, the person does not receive a reply. 
  
  ### Effect of non-compliance
  
  (9) Unless subsection (8) applies, an appointment as auditor of a cooperative of a person who has not complied with subsection (7) is null or void. 
  
  ### Examination
  
  261 (1) An auditor of a cooperative must make any examination that is in the auditor’s opinion necessary to enable the auditor to report in the manner that may be prescribed on the financial statements required by this Act to be placed before the members or shareholders, except any financial statements or parts of statements that relate to the period referred to in subparagraph 247(1)(a)(ii). 
  
  ### Reliance on other auditor
  
  (2) Despite section 262, an auditor of a cooperative may reasonably rely on the report of an auditor of an entity the accounts of which are included in whole or in part in the financial statements of the cooperative. 
  
  ### Application
  
  (3) Subsection (2) applies whether or not the financial statements of the cooperative reported on by the auditor are in consolidated form. 
  
  ### Right to information
  
  262 (1) On the demand of an auditor of a cooperative, the present or former directors, officers, employees or agents or mandataries of the cooperative must provide any information and explanations, and access to any documents of the cooperative or any of its subsidiaries that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 261 and that they are reasonably able to provide. 
  
  ### Other information
  
  (2) On the demand of the auditor of a cooperative, the directors must obtain from the present or former directors, officers, employees and agents or mandataries of any subsidiary of the cooperative the information and explanations that the present or former directors, officers, employees and agents or mandataries are reasonably able to provide and that are, in the auditor’s opinion, necessary to enable the auditor to make the examination and report required under section 261 and provide them to the auditor. 
  
  ### No civil liability
  
  (3) A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil action arising from having made the communication. 
  
  ### Audit committee
  
  263 (1) Subject to subsection (2), a distributing cooperative must, and any other cooperative may, have an audit committee composed of not fewer than three directors, a majority of whom are not full-time officers or employees of the cooperative or any of its affiliates. 
  
  ### Exemption
  
  (2) The Director may, on application of a cooperative, authorize the cooperative to dispense with an audit committee and the Director may, if satisfied that the members and shareholders will not be prejudiced, permit the cooperative to dispense with an audit committee on any reasonable conditions that the Director thinks fit. 
  
  ### Duty of committee
  
  (3) An audit committee must review the financial statements of the cooperative before they are approved under section 250. 
  
  ### Auditor’s attendance
  
  (4) The auditor of a cooperative is entitled to receive notice of every meeting of the audit committee and, at the expense of the cooperative, to attend and be heard at the meeting. If requested to do so by a member of the audit committee, the auditor must attend every meeting of the committee held during the auditor’s term of office. 
  
  ### Calling meeting
  
  (5) The auditor of a cooperative or a member of the audit committee may call a meeting of the committee. 
  
  ### Notice of error
  
  264 (1) A director or officer of a cooperative shall, without delay, notify the auditor and the audit committee, if any, of any error or misstatement of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on. 
  
  ### Errors in financial statements
  
  (2) If the auditor or former auditor of a cooperative is notified or becomes aware of an error or misstatement in a financial statement on which the auditor or former auditor has reported, and if in their opinion the error or misstatement is material, the auditor or former auditor must inform each director accordingly. 
  
  ### Duty of directors
  
  (3) When under subsection (2) the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall 
  (a) prepare and issue revised financial statements; or 
  (b) otherwise inform the members and shareholders and, if the cooperative is one that is required to comply with section 252, inform the Director of the error or misstatement in the same manner as it informs the members. 
  
  ### Qualified privilege
  
  265 Any oral or written statement or report made under this Act by the auditor or former auditor of a cooperative has qualified privilege. 
  
  # PART 14 
  
  ## Trust Indentures 
  
  ## Interpretation 
  
  ### Definitions
  
  266 The definitions in this section apply in this Part.  
  *event of default* means, in relation to a trust indenture, an event specified in the trust indenture on the occurrence of which the principal, interest and other money payable under the trust indenture become or may be declared to be payable before maturity, but the event is not an event of default until all the conditions set out in the trust indenture in connection with the giving of notice of the event have been satisfied or the period for giving the notice has elapsed. (cas de défaut)   
  *guarantor* means a person that has guaranteed an obligation of an issuer under a trust indenture. (caution)   
  *issuer* means a cooperative that has issued, is about to issue or is in the process of issuing debt obligations. (émetteur)   
  *trustee* means a person appointed as trustee, including the administrator of the property of others, under the terms of a trust indenture to which a cooperative is a party, and includes a successor trustee. (fiduciaire)   
  *trust indenture* means a deed, indenture or other instrument or act, including a supplement or amendment, made by a cooperative under which the cooperative issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations issued under it. (acte de fiducie)  
  
  ## Application 
  
  ### Application
  
  267 (1) This Part applies to a trust indenture if the debt obligations issued or to be issued under it are part of a distribution to the public. 
  
  ### Exemptions
  
  (2) The Director may, in writing, exempt a trust indenture from the application of this Part if, in the Director’s opinion, the trust indenture and the debt obligations under it are subject to a law of another jurisdiction that is substantially equivalent to the provisions of this Act relating to trust indentures. 
  
  ## General 
  
  ### Conflict of interests
  
  268 (1) No person may be appointed as trustee if there is a material conflict of interests between the person’s role as trustee and any other role of the person. 
  
  ### Eliminating conflict of interests
  
  (2) A trustee must, no later than ninety days after the trustee becomes aware that a material conflict of interests exists, 
  (a) eliminate the conflict of interests; or 
  (b) resign from office. 
  
  ### Validity despite conflict
  
  269 A trust indenture, any debt obligations issued under it and the security interest effected by them are valid even if there is a material conflict of interests of the trustee. 
  
  ### Removal of trustee
  
  270 If a trustee is appointed in contravention of subsection 268(1) or if a trustee contravenes subsection 268(2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on any terms that it thinks fit. 
  
  ### Trustee application
  
  271 A trustee, or at least one of the trustees if more than one is appointed, must be a trust company incorporated under the laws of Canada or a province and authorized to carry on business as a trustee. 
  
  ### List of security holders
  
  272 (1) A holder of debt obligations issued under a trust indenture may, on payment to the trustee of a reasonable fee and on delivery of a statutory declaration to the trustee, require the trustee to provide, no later than fifteen days after the delivery to the trustee of the statutory declaration, a list setting out the following information, as shown on the records maintained by the trustee on the day the statutory declaration is delivered to the trustee: 
  (a) the names and addresses of the registered holders of the outstanding debt obligations; 
  (b) the principal amount of outstanding debt obligations of each such holder; and 
  (c) the total principal amount of debt obligations outstanding. 
  
  ### Duty of issuer
  
  (2) On the demand of a trustee, the issuer must provide the trustee with the information required to enable the trustee to comply with subsection (1). 
  
  ### When applicant is entity
  
  (3) If the person requiring the trustee to provide a list under subsection (1) is an entity, the statutory declaration required under that subsection may be made by a director or an officer of the entity or a person acting in a similar capacity. 
  
  ### Contents of statutory declaration
  
  (4) The statutory declaration must state 
  (a) the name and address of the person requiring the trustee to provide the list and, if the person is an entity, its address for service; and 
  (b) that the list will not be used except as permitted by subsection (5). 
  
  ### Use of list
  
  (5) No person shall use a list obtained under this section except in connection with 
  (a) an effort to influence the voting of the holders of debt obligations; 
  (b) an offer to acquire debt obligations; or 
  (c) any other matter relating to the debt obligations or the affairs of the issuer or guarantor of them. 
  
  ### Compliance with trust indentures
  
  273 (1) An issuer or a guarantor of a debt obligation issued or to be issued under a trust indenture must provide the trustee with evidence of compliance with the conditions in the trust indenture before undertaking 
  (a) the issue, certification and delivery of debt obligations under the trust indenture; 
  (b) the release, or release and substitution, of property subject to a security interest constituted by the trust indenture; or 
  (c) the satisfaction and discharge of the trust indenture. 
  
  ### Compliance by issuer or guarantor
  
  (2) On the demand of a trustee, the issuer or guarantor must provide the trustee with evidence of compliance with the conditions in the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor. 
  
  ### Evidence of compliance
  
  (3) The following documents constitute evidence of compliance for the purposes of subsections (1) and (2): 
  (a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in subsections (1) and (2) have been complied with; 
  (b) an opinion of legal counsel that the conditions of the trust indenture requiring review by legal counsel have been complied with, if the trust indenture requires compliance with conditions that are subject to review by legal counsel; and 
  (c) an opinion or report of the auditors of the issuer or guarantor, or any other accountant that the trustee selects, that the conditions of the trust indenture have been complied with, if the trust indenture requires compliance with conditions that are subject to review by auditors or accountants. 
  
  ### Further evidence of compliance
  
  (4) The evidence of compliance described in subsection (3) must include a statement by the person giving the evidence 
  (a) declaring that the person has read and understands the conditions of the trust indenture referred to in subsections (1) and (2); 
  (b) describing the nature and scope of the examination or investigation on which the person based the certificate, statement or opinion; and 
  (c) declaring that the person has made any examination or investigation that the person believes necessary to enable the statements to be made or the opinions contained or expressed in the statement to be given. 
  
  ### Trustee may require evidence
  
  274 (1) On request of a trustee, the issuer or guarantor must provide the trustee with evidence in any form that the trustee requires of compliance with any condition relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture. 
  
  ### Certificate of compliance
  
  (2) At least once in each twelve month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer or guarantor must provide the trustee with a certificate stating that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars of the failure. 
  
  ### Notice of default
  
  275 A trustee must, no later than thirty days after the trustee becomes aware of the occurrence of an event of default, give to the holders of debt obligations issued under a trust indenture notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee believes on reasonable grounds that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs the issuer and guarantor in writing. 
  
  ### Duty
  
  276 (1) In exercising powers and discharging duties, the trustee must 
  (a) act honestly and in good faith with a view to the best interests of the holders of the debt obligations issued under the trust indenture; and 
  (b) exercise the care, diligence and skill of a reasonably prudent trustee. 
  
  ### Reliance on statements
  
  (2) Despite subsection (1), a trustee is not liable if the trustee relies in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture. 
  
  ### No exculpation
  
  277 No term of a trust indenture or of an agreement between a trustee and the holders of debt obligations issued under the indenture or agreement or between the trustee and the issuer or guarantor operates to relieve a trustee from the duties imposed on the trustee by this Part. 
  
  # PART 15 
  
  ## Receivers, Receiver-managers and Sequestrators 
  
  ### Functions of receiver or sequestrator
  
  278 A receiver or sequestrator of any property of a cooperative may, subject to the rights of secured creditors, receive the income from the property and pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver or sequestrator is appointed, but, except to the extent permitted by a court, the receiver or sequestrator may not carry on the business of the cooperative. 
  
  ### Functions of receiver-manager
  
  279 A receiver-manager of a cooperative may carry on any business of the cooperative to protect the security interest of those on behalf of whom the receiver-manager is appointed. 
  
  ### Directors’ powers cease
  
  280 If a receiver, receiver-manager or sequestrator is appointed by a court or under an instrument or act, no director shall exercise the directors’ powers that the receiver, receiver-manager or sequestrator is authorized to exercise until the receiver, receiver-manager or sequestrator is discharged. 
  
  ### Appointment by court
  
  281 (1) A receiver, receiver-manager or sequestrator appointed by a court must act in accordance with any directions of the court. 
  
  ### Appointment under instrument or act
  
  (2) A receiver, receiver-manager or sequestrator appointed under an instrument or act must act in accordance with the instrument or act and any direction that the court may make under section 282. 
  
  ### Duty
  
  (3) A receiver, receiver-manager or sequestrator must 
  (a) act honestly and in good faith; and 
  (b) deal with any property of the cooperative in their possession or control in a commercially reasonable manner. 
  
  ### Directions given by court
  
  282 A court may, on the application of a receiver, receiver-manager or sequestrator appointed by a court or under an instrument or act, or any other interested person, make any order giving directions on any matter relating to the duties of the receiver, receiver-manager or sequestrator that it considers appropriate, including an order 
  (a) appointing, replacing or discharging a receiver, receiver-manager or sequestrator and approving their accounts; 
  (b) determining the notice to be given to any person or dispensing with notice to any person; 
  (c) fixing the remuneration of the receiver, receiver-manager or sequestrator; 
  (d) requiring the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom they were appointed, to make good any default in connection with their custody or management of the property and business of the cooperative, or relieving them, or a person by or on behalf of whom they were appointed, from any default on any terms that the court considers appropriate; 
  (e) confirming any act of the receiver, receiver-manager or sequestrator; and 
  (f) giving directions on any other matter relating to the duties of the receiver, receiver-manager or sequestrator. 
  
  ### Required action
  
  283 A receiver, receiver-manager or sequestrator must 
  (a) take the property of the cooperative into custody and control in accordance with the court order, instrument or act under which the receiver, receiver-manager or sequestrator is appointed; 
  (b) open and maintain a bank account as receiver, receiver-manager or sequestrator of the cooperative for the money of the cooperative coming under their control; 
  (c) keep detailed accounts of all transactions carried out as receiver, receiver-manager or sequestrator; 
  (d) keep accounts of the administration as receiver, receiver-manager or sequestrator and cause them to be made available during usual business hours for inspection by the directors; 
  (e) prepare, at least once in every six month period after the day of appointment, financial statements of the administration, as far as is feasible, in the form required by section 247; 
  (f) on completion of their duties, render a final account of the administration in the form that the receiver, receiver-manager or sequestrator has adopted for preparation of interim accounts under paragraph (e); and 
  (g) if section 252 would otherwise apply, file with the Director a copy of any financial statement mentioned in paragraph (e) and any final account mentioned in paragraph (f) not later than fifteen days after it is prepared or rendered. 
  
  # PART 16 
  
  ## Fundamental Changes 
  
  ### Definition of common share 
  
  284 For the purposes of this Part, 
  *common share* means a share in a body corporate, the rights of the holders of which are equal in all respects, including equal rights to  
  (a) receive dividends declared by the body corporate on the shares; and 
  (b) receive the remaining property of the body corporate on dissolution. 
  
  ### Continuance
  
  285 (1) A body corporate incorporated or continued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Director for a certificate of continuance under this Act if the body corporate 
  (a) satisfies, or by its articles of continuance would satisfy, the requirements for incorporation as a cooperative under this Act; 
  (b) is organized and operated and carries on its business on a cooperative basis or, by its articles of continuance, causes the body corporate to be organized and operated and to carry on its business on a cooperative basis; and 
  (c) has a capital and corporate structure that, if set out in its articles and by-laws, would meet the requirements of this Act. 
  
  ### Continuance for the purpose of amalgamation
  
  (2) A body corporate incorporated or continued otherwise than under this Act may, if so authorized by its governing legislation, apply to the Director for a certificate of continuance and a certificate of amalgamation under this Act if the body corporate 
  (a) proposes to be continued under this section for the purpose of amalgamating with another body corporate in compliance with this Act and does, or will after the amalgamation, satisfy the requirements for incorporation as a cooperative under this Act; 
  (b) is organized and operated and carries on its business on a cooperative basis or, after the amalgamation, will be organized and operated and will carry on its business on a cooperative basis; and 
  (c) has a capital and corporate structure — or after the amalgamation will have a capital and corporate structure — that, if set out in its articles and by-laws, would meet the requirements of this Act. 
  
  ### Amendments in articles of continuance
  
  (3) A body corporate that applies for continuance under subsection (1) or (2) may, without so stating in its articles of continuance, effect by those articles any amendment to its constating documents if the amendment is one that a cooperative incorporated under this Act may make to its articles. 
  
  ### Articles of continuance
  
  (4) If a body corporate wishes to apply for continuance under subsection (1), articles of continuance in the form that the Director fixes must be sent to the Director, together with any information that the Director may require. 
  
  ### Articles of continuance and of amalgamation
  
  (5) If a body corporate wishes to apply for continuance under subsection (2), articles of continuance and articles of amalgamation in the form that the Director fixes must be sent to the Director, together with any information that the Director may require. 
  
  ### Certificate of continuance
  
  (6) The Director must issue 
  (a) a certificate of continuance, on receipt of the articles of continuance, if the Director is satisfied that the requirements for incorporation have been met; or 
  (b) a certificate of continuance and a certificate of amalgamation, on receipt of the articles of continuance and the articles of amalgamation, if the Director is satisfied that the requirements for incorporation and the requirements for amalgamation have been met. 
  
  ### Reliance on articles
  
  (7) For the purpose of subsection (6), the Director may rely on the articles. 
  
  ### Effect of certificate
  
  (8) On the date shown in the certificate of continuance, 
  (a) the body corporate becomes a cooperative to which this Act applies as if it had been incorporated under this Act; 
  (b) the articles of continuance are deemed to be the articles of incorporation of the continued cooperative; and 
  (c) the certificate of continuance is deemed to be the certificate of incorporation of the continued cooperative. 
  
  ### Copy of certificate
  
  (9) The Director must send, without delay after the certificate of continuance is issued, a copy of that certificate to the appropriate official or public body charged with the administration of the legislation under which continuance under this Act was authorized. 
  
  ### Rights preserved
  
  (10) When a body corporate is continued as a cooperative under this Act, 
  (a) the property of the body corporate continues to be the property of the cooperative; 
  (b) the cooperative continues to be liable for the obligations of the body corporate; 
  (c) an existing cause of action, claim or liability to prosecution is unaffected; 
  (d) a civil, criminal, administrative, investigative or other action or proceeding pending by or against the body corporate may be continued to be prosecuted by or against the cooperative; and 
  (e) a conviction against, or ruling, order or judgment in favour of or against, the body corporate may be enforced by or against the cooperative. 
  
  ### Membership shares
  
  (11) When a body corporate is continued as a cooperative under this Act, 
  (a) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act and the articles; 
  (b) the holders of the common shares of the body corporate are deemed to be the members of the cooperative; and 
  (c) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect. 
  
  ### Federal credit union
  
  (11.1) If a federal credit union, within the meaning of section 2 of the Bank Act, is continued as a cooperative under this Act,  
  (a) its membership shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act and the articles; 
  (b) the members of the federal credit union are deemed to be the members of the cooperative; and 
  (c) any agreement made before continuance under which the members of the federal credit union have agreed to vote in a manner provided in the agreement is of no effect. 
  
  ### Issued shares
  
  (12) Subject to section 182 and subsection (13), 
  (a) a share of a body corporate issued before it was continued under this Act is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance, irrespective of whether the share is fully paid and of any designation, right, privilege, restriction or condition set out on or referred to in the certificate representing the share; 
  (b) continuance under this Act does not deprive a holder of any right or privilege that the holder claims under, or relieve the holder of any liability in respect of, an issued share; and 
  (c) shares carry voting rights only to the extent permitted by this Act. 
  
  ### Conversion privilege
  
  (13) If a cooperative continued under this Act had, before it was so continued, issued a share certificate in registered form that is convertible to bearer form, the cooperative must not, if a holder of such a share certificate exercises the conversion privilege attached to the certificate, issue a share certificate in bearer form. 
  
  ### Definition of share 
  
  (14) For the purposes of subsections (12) and (13), 
  *share* includes a document referred to in any of subsections 142(1) to (3), a share warrant within the meaning of the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, or a like instrument.  
  
  ### Continuance — other federal acts
  
  286 (1) A cooperative, other than one to which Part 20 or 21 applies, with membership share capital may, on special resolution of the members and, if the cooperative has issued investment shares, on a separate special resolution of the shareholders of each class, apply for continuance under the Canada Business Corporations Act, the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act. On the date specified in the document evidencing the continuance, that Act applies and this Act ceases to apply to the body corporate continued under that Act.  
  
  ### Result of continuance
  
  (2) On a continuance under subsection (1), the membership shares of a cooperative are deemed to be common shares without a par value. 
  
  ### Withdrawal of application
  
  (3) If a special resolution authorizing the application for continuance referred to in subsection (1) so states, the directors may, without further approval of the members or shareholders, withdraw the application before it is acted on. 
  
  ### Certificate of discontinuance
  
  (4) On receipt of a notice satisfactory to the Director that the cooperative has been continued under this section, the Director must file the notice and issue a certificate of discontinuance in the form that the Director fixes. 
  
  ### Date of discontinuance
  
  (5) This Act ceases to apply to the cooperative on the date shown in the certificate of discontinuance. 
  
  ### Export
  
  287 (1) Subject to subsection (6) and Parts 20 and 21, a cooperative, on a special resolution of the members and, if the cooperative has issued investment shares, on a separate special resolution of the shareholders of each class, may, if it establishes to the satisfaction of the Director that its proposed continuance in another jurisdiction would not have an effect set out in any of paragraphs (a) to (d), apply to the appropriate official or public body of another jurisdiction requesting that the cooperative be continued as if it had been incorporated under the laws of that other jurisdiction, namely, that the continuance would not 
  (a) adversely affect the members, creditors or shareholders; 
  (b) result in the cooperative carrying on its business and affairs in a manner not consistent with carrying on business on a cooperative basis; 
  (c) result in a cooperative to which Part 20 applies carrying on its business or affairs in a manner not consistent with Part 20; or 
  (d) result in a cooperative to which Part 21 applies carrying on its business or affairs in a manner not consistent with Part 21. 
  
  ### Notice of meeting
  
  (2) A notice of a meeting of the cooperative to authorize a continuance under this section must be sent to each member and shareholder and state that a dissenting member or shareholder is entitled to the benefit of section 302, but failure to make that statement does not invalidate a discontinuance under this Act. 
  
  ### Abandonment of application
  
  (3) The directors may, if authorized by the special resolution at the time of approving an application for continuance under this section, abandon the application without further approval of the members or shareholders. 
  
  ### Certificate of discontinuance
  
  (4) On receipt of a notice satisfactory to the Director that the cooperative has been continued under the laws of another jurisdiction, the Director must file the notice and issue a certificate of discontinuance in the form that the Director fixes. 
  
  ### Date of discontinuance
  
  (5) This Act ceases to apply to the cooperative on the date shown in the certificate of discontinuance. 
  
  ### Requirements for continuance
  
  (6) A cooperative may not be continued as a body corporate under the laws of another jurisdiction unless those laws provide that 
  (a) its property continues to be the property of the body corporate; 
  (b) the body corporate continues to be liable for the obligations of the cooperative; 
  (c) an existing cause of action, claim or liability to prosecution is unaffected; 
  (d) a civil, criminal, administrative, investigative or other action or proceeding pending by or against the cooperative may be continued to be prosecuted by or against the body corporate; and 
  (e) a conviction against, or ruling, order or judgment in favour of or against, the cooperative may be enforced by or against the body corporate. 
  
  ### Shareholders right to vote
  
  288 Each investment share carries the right to vote on a continuance under section 286 or 287, whether or not it otherwise carries the right to vote. 
  
  ### Amendment of articles
  
  289 (1) Subject to subsections (3) and 130(2) and sections 134, 290 and 291, the articles of a cooperative may be amended by a special resolution to 
  (a) change its name; 
  (b) change the place in which its registered office is situated; 
  (c) add, change or remove a restriction on the business or businesses that the cooperative may carry on; 
  (d) convert par-value membership shares into no-par-value membership shares and provide for a maximum number of membership shares that may be issued; 
  (e) change a price or formula at which membership shares may be issued or redeemed or otherwise acquired by the cooperative; 
  (f) add, change or remove restrictions on membership; 
  (g) convert a cooperative that is incorporated without membership shares to a cooperative with membership shares and provide for membership shares with a par value and their par value or membership shares without a par value and the maximum number of membership shares that may be issued; 
  (h) convert a cooperative with membership shares into a cooperative without membership shares and provide for the conversion of membership shares into member loans; 
  (i) change any maximum number of shares that the cooperative is authorized to issue; 
  (j) reduce or increase its stated capital, if its stated capital is set out in the articles; 
  (k) create investment shares or new classes of investment shares; 
  (l) change the designation of all or any of its investment shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its investment shares, whether issued or unissued; 
  (m) change the investment shares of any class or series, whether issued or unissued, into a different number of investment shares of the same class or series or into the same or a different number of investment shares of other classes or series; 
  (n) divide a class of investment shares, whether issued or unissued, into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of them; 
  (o) authorize the directors to divide any class of unissued investment shares into series and fix the number of investment shares in each series and the rights, privileges, restrictions and conditions of them; 
  (p) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued investment shares of any series; 
  (q) revoke, diminish or enlarge any authority conferred under paragraphs (o) and (p); 
  (r) increase or decrease the number of directors or the minimum or maximum number of directors, subject to section 76 and subsection 124(4); 
  (s) add, change or remove restrictions on the issue, transfer or ownership of investment shares; or 
  (t) add, change or remove any other provision that is permitted by this Act to be set out in the articles. 
  
  ### Termination
  
  (2) The directors may, if authorized by the special resolution effecting an amendment under this section, revoke the resolution before it is acted on without further approval of the members or shareholders. 
  
  ### Restriction on amendment
  
  (3) If the name of a cooperative is indicative of a restriction on the business that may be carried on by it, the articles of the cooperative may not be amended to remove that restriction unless its name is also amended. 
  
  ### Cooperative basis
  
  (4) An amendment to the articles of a cooperative may not be made if it would result in the cooperative not being organized or operated or not carrying on business on a cooperative basis or, if applicable, result in the cooperative not being in compliance with Part 20 or 21. 
  
  ### Proposal to amend
  
  290 (1) Subject to subsection (2), a person referred to in subsection 58(2) or (2.1) may make a proposal to amend the articles and section 58 applies, with any modifications that the circumstances require, to any meeting of the cooperative at which the proposal is to be considered. 
  
  ### Notice of amendment
  
  (2) Notice of the meeting of a cooperative at which a proposal to amend the articles is to be considered must set out the proposed amendment and, if applicable, state that a dissenting member or a dissenting shareholder is entitled to the benefit of section 302, but failure to make that statement does not invalidate an amendment. 
  
  ### Separate resolutions
  
  (3) A proposed amendment to the articles referred to in subsection (1) is adopted when approved by a special resolution of the members and, subject to section 134, if the cooperative has issued investment shares, by a separate special resolution of the shareholders or the class or series thereof. 
  
  ### Right to vote
  
  (4) Each investment share that is affected by a proposed amendment to the articles carries the right to vote in accordance with section 134. 
  
  ### Delivery of articles
  
  291 (1) Subject to any revocation under subsection 130(5) or 289(2), after an amendment has been adopted, articles of amendment in the form that the Director fixes must be sent to the Director, together with any information that the Director may require. 
  
  ### Reduction of stated capital
  
  (2) If an amendment effects or requires a reduction of stated capital, subsections 151(2) and (5) apply. 
  
  ### Certificate of amendment
  
  292 On receipt of articles of amendment, the Director must issue a certificate of amendment. 
  
  ### Effect of certificate
  
  293 (1) An amendment becomes effective on the date shown in the certificate of amendment and the articles are amended accordingly. 
  
  ### Existing claims not affected
  
  (2) No amendment to the articles affects an existing cause of action or claim or liability to prosecution in favour of or against the cooperative or its directors or officers, or any civil, criminal, administrative, investigative or other action or proceeding to which a cooperative or its directors or officers are a party. 
  
  ### Restated articles
  
  294 (1) The directors may at any time, and must when reasonably so directed by the Director, restate the articles of incorporation. 
  
  ### Sent to Director
  
  (2) Restated articles of incorporation in the form that the Director fixes must be sent to the Director. 
  
  ### Restated certificate
  
  (3) On receipt of restated articles of incorporation, the Director must issue a restated certificate of incorporation. 
  
  ### Effective date
  
  (4) Restated articles of incorporation are effective on the date shown in the restated certificate of incorporation. 
  
  ### Amalgamation
  
  295 Two or more cooperatives, including holding and subsidiary cooperatives, may amalgamate and continue as one cooperative, provided that the amalgamation agreement sets out a capital and corporate structure for the amalgamated cooperative that is one that would meet the requirements for a cooperative to be incorporated under this Act. 
  
  ### Amalgamation agreement
  
  296 (1) Each cooperative proposing to amalgamate must enter into an agreement setting out the terms and means of effecting the amalgamation and, in particular, setting out 
  (a) the provisions that are required to be included in articles of incorporation under section 11; 
  (b) the name and address of each proposed director of the amalgamated cooperative; 
  (c) the manner in which the shares of each amalgamating cooperative are to be converted into membership shares of the amalgamated cooperative and, if applicable, investment shares or other securities of the amalgamated cooperative; 
  (d) if any share of an amalgamating cooperative is not to be converted into shares or securities of the amalgamated cooperative, the amount of money or securities of a cooperative that the holders of those shares are to receive in addition to or instead of shares or securities of the amalgamated cooperative; 
  (e) the manner of payment of money instead of the issue of fractional shares of the amalgamated cooperative or of any other body corporate the securities of which are to be received in the amalgamation; 
  (f) whether the by-laws of the amalgamated cooperative are to be those of one of the amalgamating cooperatives, and if not, a copy of the proposed by-laws; and 
  (g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated cooperative. 
  
  ### Cancellation
  
  (2) If shares of one of the amalgamating cooperatives are held by or on behalf of another of the amalgamating cooperatives, the amalgamation agreement must provide for the cancellation of the shares when the amalgamation becomes effective without any repayment of capital in respect of them, and no provision may be made in the agreement for the conversion of those shares into shares of the amalgamated cooperative. 
  
  ### Approval
  
  297 (1) The directors of each amalgamating cooperative must submit the amalgamation agreement for approval to a meeting of the members of each amalgamating cooperative and to a meeting of the shareholders of each amalgamating cooperative and, subject to subsection (5), to the holders of each class or series of those investment shares. 
  
  ### Notice of meeting
  
  (2) A notice of a meeting of members or shareholders complying with section 52 must be sent in accordance with that section to each member and shareholder of each amalgamating cooperative and must 
  (a) include or be accompanied by a copy or summary of the amalgamation agreement; and 
  (b) state that a dissenting member or shareholder is entitled to the benefit of section 302. 
  
  ### Failure to make statement
  
  (3) Failure to make the statement referred to in paragraph (2)(b) does not invalidate an amalgamation. 
  
  ### Right to vote
  
  (4) Each investment share carries the right to vote with respect to an amalgamation agreement, whether or not it otherwise carries the right to vote. 
  
  ### Class vote
  
  (5) The holders of investment shares of a class or series are entitled to vote separately as a class or series in respect of the amalgamation agreement if it contains a provision that, if contained in a proposed amendment to the articles, would entitle them to vote as a class or series under subsection 290(4). 
  
  ### Approval
  
  (6) Subject to subsection (5), an amalgamation agreement is adopted when the members of each amalgamating cooperative and, if any of the amalgamating cooperatives has issued investment shares, their shareholders, have approved the amalgamation agreement by separate special resolutions. 
  
  ### Termination
  
  (7) An amalgamation agreement may provide that at any time before the issue of a certificate of amalgamation the agreement may be terminated by the directors of an amalgamating cooperative, even if the agreement has been approved by the members and shareholders of all or any of the amalgamating cooperatives. 
  
  ### Vertical short-form amalgamation
  
  298 (1) A cooperative that is a holding cooperative may amalgamate with one or more of its wholly owned subsidiary cooperatives. The cooperative and subsidiaries continue as one cooperative without complying with sections 295 to 297 if 
  (a) the amalgamation is approved by a resolution of the directors of each amalgamating cooperative; and 
  (b) the resolutions provide that 
  (i) the shares of each subsidiary be cancelled without any repayment of capital in respect of them, 
  (ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating holding cooperative, and 
  (iii) no shares or securities may be issued by the amalgamated cooperative in connection with the amalgamation. 
  
  ### Horizontal short-form amalgamation
  
  (2) Two or more wholly owned subsidiary cooperatives of a holding entity may amalgamate and continue as one cooperative without complying with sections 295 to 297 if 
  (a) the amalgamation is approved by a resolution of the directors of each amalgamating cooperative; and 
  (b) the resolutions provide that 
  (i) the shares of all but one of the amalgamating subsidiaries be cancelled without any repayment of capital in respect of them, 
  (ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating subsidiary cooperative whose shares are not cancelled, and 
  (iii) the stated capital of the amalgamating subsidiaries whose shares are cancelled are added to the stated capital of the amalgamating subsidiary whose shares are not cancelled. 
  
  ### Change of name
  
  (3) Despite subparagraph (2)(b)(ii) and section 289, the directors of the holding entity of the subsidiaries referred to in subsection (2) may, by resolution, approve a new name for the amalgamated cooperative, so long as, in a case to which Part 20 or 21 applies, the name would comply with the provisions of the applicable Part. 
  
  ### Sending of articles
  
  299 (1) After an amalgamation has been approved under section 297 or 298, articles of amalgamation in the form that the Director fixes must be sent to the Director, together with a notice of registered office and a notice of the directors of the amalgamated cooperative. 
  
  ### Attached statutory declarations
  
  (2) A statutory declaration of a director or officer of each amalgamating cooperative must be attached to the articles of amalgamation and must establish to the satisfaction of the Director 
  (a) to (c)  [Repealed, 2018, c. 8, s. 76]  
  (d) that there are reasonable grounds to believe that 
  (i) each amalgamating cooperative is, and the amalgamated cooperative will be, able to pay its liabilities as they become due, and 
  (ii) the realizable value of the amalgamated cooperative’s assets will not be less than the total of its liabilities and stated capital of all classes; and 
  (e) that there are reasonable grounds to believe that 
  (i) no creditor will be prejudiced by the amalgamation, or 
  (ii) adequate notice has been given to all known creditors of the amalgamating cooperatives and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious. 
  
  ### Adequate notice
  
  (3) For the purpose of subparagraph (2)(e)(ii), adequate notice is given if 
  (a) a notice in writing is sent to each known creditor who has a claim against any of the amalgamating cooperatives that exceeds one thousand dollars; 
  (b) a notice in writing is published once in a newspaper published or distributed in the place where each amalgamating cooperative has its registered office and reasonable notice is given in each province where the cooperative carries on business; and 
  (c) each notice states that the cooperative intends to amalgamate with one or more specified cooperatives in accordance with this Act and that a creditor of the cooperative may object to the amalgamation not later than thirty days after the date of the notice. 
  
  ### Certificate of amalgamation
  
  (4) On receipt of articles of amalgamation and the declarations required by subsection (2), the Director must issue a certificate of amalgamation if the Director is satisfied that 
  (a) the articles are in accordance with section 11 and, if applicable, section 353 and subsection 359(2); 
  (b) the cooperative will be organized and operated and will carry on business on a cooperative basis; 
  (c) the things described in paragraphs (2)(d) and (e) are true; and 
  (d) if applicable, Part 20 or 21 has been complied with. 
  
  ### Reliance on certificate
  
  (5) For the purposes of paragraphs (4)(b) to (d), the Director may rely on the articles and the declarations required by subsection (2). 
  
  ### Effect of certificate
  
  300 On the date shown in a certificate of amalgamation, 
  (a) the amalgamation of the amalgamating cooperatives and their continuance as one cooperative becomes effective; 
  (b) the property of each amalgamating cooperative continues to be the property of the amalgamated cooperative; 
  (c) the amalgamated cooperative continues to be liable for the obligations of each amalgamating cooperative; 
  (d) an existing cause of action, claim or liability to prosecute is unaffected; 
  (e) a civil, criminal, administrative, investigative or other action or proceeding pending by or against an amalgamating cooperative may be continued to be prosecuted by or against the amalgamated cooperative; 
  (f) a conviction against, or ruling, order or judgment in favour of or against, an amalgamating cooperative may be enforced by or against the amalgamated cooperative; and 
  (g) the articles of amalgamation are deemed to be the articles of incorporation of the amalgamated cooperative and the certificate of amalgamation is deemed to be the certificate of incorporation of the amalgamated cooperative. 
  
  ### Extraordinary disposition
  
  301 (1) A sale, lease or exchange of all or substantially all of the property of a cooperative, other than in the ordinary course of business, requires the approval of the members and shareholders in accordance with subsections (2) to (7). 
  
  ### Notice
  
  (2) A notice of meeting complying with section 52 must be sent to all members and shareholders and must 
  (a) include a copy or summary of the proposed agreement of sale, lease or exchange; and 
  (b) state that a dissenting member or shareholder is entitled to bring section 302 into effect. 
  
  ### Failure to make statement
  
  (3) Failure to make the statement referred to in paragraph (2)(b) does not invalidate the disposition. 
  
  ### Right to vote
  
  (4) Each investment share carries the right to vote with respect to an extraordinary disposition, whether or not it otherwise carries the right to vote. 
  
  ### Class vote
  
  (5) The holders of investment shares of a class or series are entitled to vote separately as a class or series if the class or series is affected differently from another class or series by the proposed disposition. 
  
  ### Approval
  
  (6) Subject to subsection (5), a disposition is authorized when approved by a special resolution of the members and, if the cooperative has issued investment shares, by a separate special resolution of the shareholders of each class or series. The special resolution may authorize the directors to fix any terms or conditions of a sale, lease or exchange. 
  
  ### Termination
  
  (7) The directors, if authorized by the members and shareholders approving a proposed disposition, and subject to the rights of third parties, may abandon the disposition without further approval. 
  
  ### Right to dissent
  
  302 (1) Unless section 303 or 340 applies, a member or shareholder may dissent if a cooperative resolves to 
  (a) amend its articles in a manner that adversely affects a member’s membership rights or that affects the rights of a shareholder in respect of an investment share; 
  (b) amend its articles to add, change or remove a restriction on the business the cooperative may carry on; 
  (c) amalgamate other than under section 298; 
  (d) apply for continuance under section 286 or 287; or 
  (e) sell, lease or exchange all or substantially all of its property under section 301. 
  
  ### Further right
  
  (2) A holder of investment shares of any class or series of shares entitled to vote under section 134 may dissent if the cooperative resolves to amend its articles in a manner described in that section. 
  
  ### Dissent
  
  (3) A dissenting member or shareholder must send to the cooperative, at or before any meeting of members or meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the cooperative did not give notice to the member or shareholder of the purpose of the meeting and of the right to dissent. 
  
  ### Effect of dissent
  
  (4) A dissenting member is deemed to have given notice of intent to withdraw from the cooperative under this section if the resolution is passed. A dissenting shareholder is deemed to have claimed under this section on behalf of all investment shares in a class held by the shareholder if the resolution is passed. 
  
  ### Notice of resolution
  
  (5) The cooperative must, not later than ten days after the members and shareholders have adopted the resolution, send to each dissenting member and shareholder notice that the resolution has been adopted. 
  
  ### Notice
  
  (6) A dissenting member or shareholder may, no later than twenty-one days after receiving the notice under subsection (5), or if no notice is received, no later than twenty-one days after learning that the resolution was adopted, send to the cooperative a written notice that contains 
  (a) the person’s name and address; 
  (b) if the person is a shareholder, the number of investment shares and the class or classes of the shares held; and 
  (c) a demand 
  (i) in the case of a dissenting member, for withdrawal from the cooperative, for payment of all membership shares at their fair value and for repayment of any other interest or right held by the member in the cooperative, fair value being determined on the day before the resolution was adopted, and 
  (ii) in the case of a dissenting shareholder, for payment of the fair market value of all investment shares of each class held by the shareholder, fair market value being determined on the day before the resolution was adopted. 
  
  ### Rights of members
  
  (7) Despite the articles, the by-laws or section 39, a dissenting member who has sent a demand under subsection (6) does not have the right to vote at a meeting of the cooperative after having sent the notice. Despite the articles, the by-laws or section 146, the member is entitled to be paid the value of their membership shares in the cooperative in accordance with this section or a court order under subsection 304(4). 
  
  ### Share certificates
  
  (8) A dissenting shareholder must, not later than thirty days after sending the notice under subsection (6), send the certificates representing the investment shares held in the cooperative to the cooperative or to its transfer agent. 
  
  ### Forfeiture
  
  (9) A dissenting shareholder who fails to comply with subsection (8) has no right to claim under this section. 
  
  ### Endorsing certificate
  
  (10) Each certificate sent under subsection (8) must be endorsed by the cooperative or its transfer agent with a notice that the holder is a dissenting shareholder and must be returned to the shareholder. 
  
  ### Suspension of rights
  
  (11) On sending a notice under subsection (6), a member’s rights as a member, and a shareholder’s rights as a shareholder, other than the right to be paid in accordance with subsection (6), are suspended. 
  
  ### Reinstatement
  
  (12) The rights of the member or shareholder are reinstated as of the date of the notice referred to in subsection (6) if 
  (a) the dissenting member or shareholder withdraws the demand made under paragraph (6)(c) before the cooperative makes an offer under subsection (13); 
  (b) the cooperative fails to make an offer in accordance with subsection (13) and the dissenting member or shareholder withdraws their notice; or 
  (c) the directors revoke a resolution to amend the articles under subsection 289(2), terminate an amalgamation agreement under subsection 297(7) or an application for continuance under subsection 286(3) or 287(3), or abandon a sale, lease or exchange under subsection 301(7). 
  
  ### Offer to pay
  
  (13) A cooperative must, not later than seven days after the later of the day on which the resolution under subsection (1) or (2) is effective or the day the cooperative receives the notice under subsection (6), send to each dissenting member or shareholder 
  (a) a written offer to pay the amount determined in accordance with subsection (6) and a statement showing how the amount was calculated; or 
  (b) a statement that subsection (23) or (24) applies. 
  
  ### Same terms
  
  (14) Every offer for membership shares must be on the same terms and every offer for the same class or series of investment shares must be on the same terms. 
  
  ### Payment
  
  (15) Subject to subsection (23) or (24), a cooperative must pay to the dissenting member or shareholder the amount offered under subsection (13) no later than ten days after acceptance, but the offer lapses if it is not accepted within thirty days after being made. 
  
  ### Application to court
  
  (16) If the dissenting member or shareholder fails to accept the offer, the cooperative may, not later than fifty days after the resolution is approved or any later time that the court may allow, apply to the court to fix the amount to be paid under subsection (6). 
  
  ### If no application
  
  (17) If the cooperative fails to make an application under subsection (16) — or fails to make an offer under subsection (13) within the time set out in subsection (16) — a dissenting member or shareholder may, no later than twenty days after the end of that period, make an application for the same purpose. 
  
  ### Venue
  
  (18) An application under subsection (16) or (17) may be made to the court having jurisdiction where the registered office of the cooperative is located or to a court having jurisdiction where the dissenting member or shareholder resides if the cooperative carries on business in that jurisdiction. 
  
  ### Parties
  
  (19) On an application under subsection (16) or (17), all dissenting members and shareholders whose shares or other interests or rights have not been purchased are joined as parties and the cooperative must notify them, advising each of them of the right to participate in, and the consequences of, the application. No dissenting member or shareholder is required to give security for costs in the application. 
  
  ### Powers of court
  
  (20) On an application under subsection (16) or (17), the court must determine who is a dissenting member or shareholder and fix the amount to be paid under subsection (6) and may make any further order that the court thinks fit. 
  
  ### Notice if subsection (23) or (24) applies
  
  (21) If subsection (23) or (24) applies, the cooperative must, no later than ten days after the determination under subsection (20), advise each dissenting member and shareholder that subsection (23) or (24) applies. 
  
  ### Effect if subsection (23) or (24) applies
  
  (22) If subsection (23) or (24) applies, 
  (a) a dissenting member or shareholder, not later than thirty days after the notice under subsection (21), may by notice to the cooperative withdraw the notice of demand, in which case the member is reinstated as a member or the shareholder is reinstated as a shareholder; or 
  (b) if no notice is given to the cooperative under paragraph (a), the dissenting member or shareholder retains the status of a claimant to be paid as soon as the cooperative may lawfully do so or, in liquidation, to be paid in priority to the remaining members and shareholders. 
  
  ### Limitation
  
  (23) The cooperative may not make a payment to a dissenting member or shareholder under this section if there are reasonable grounds to believe that after that payment the cooperative would be in breach of section 149. 
  
  ### Installments
  
  (24) If the directors determine that the payment to a dissenting member as member would adversely affect the financial well-being of the cooperative, payment may be made at the times that the directors determine, over a period that begins on the day on which the resolution was adopted and ends not later than 
  (a) five years after that day; or 
  (b) any other day that is not more than ten years after the day on which the resolution was adopted and that is specified in the articles of the cooperative. 
  
  ### Interest
  
  (25) Payments under subsection (24) shall bear interest at the rates prescribed by or calculated in accordance with the regulations. 
  
  ### Reorganization
  
  303 (1) This section applies to a reorganization made pursuant to a court order under section 340, a court order approving a proposal under the Bankruptcy and Insolvency Act or a court order that affects the rights among the cooperative, its members, shareholders and creditors made under any other Act of Parliament.  
  
  ### Limitation
  
  (2) No court order for reorganization may result in a cooperative 
  (a) no longer being organized or operating or carrying on business on a cooperative basis; 
  (b) if the cooperative is one to which Part 20 applies, not complying with Part 20; or 
  (c) if the cooperative is one to which Part 21 applies, not complying with Part 21. 
  
  ### Powers of court
  
  (3) If a cooperative is subject to an order referred to in subsection (1), its articles may be amended by the order to effect any changes that might lawfully be made by an amendment under this Act. 
  
  ### Further powers
  
  (4) If a court makes an order referred to in subsection (1), the court may also 
  (a) authorize the issue of debt obligations that if held by members may be converted to membership shares or investment shares and otherwise may be converted to investment shares and fix the terms of them; and 
  (b) appoint directors in place of or in addition to all or any of the directors then in office. 
  
  ### Articles of reorganization
  
  (5) After an order referred to in subsection (1) has been made, articles of reorganization in the form that the Director fixes, together with, if applicable, notice of registered office and notice of change of directors, must be sent to the Director. 
  
  ### Certificate of amendment
  
  (6) On receipt of articles of reorganization, the Director must issue a certificate of amendment. 
  
  ### Effect of certificate
  
  (7) A reorganization becomes effective on the date shown on the certificate of amendment and the articles of incorporation are amended accordingly. 
  
  ### No dissent
  
  (8) No member or shareholder is entitled to dissent under section 302 if an amendment to the articles of incorporation is effected under this section. 
  
  ### Definition of arrangement 
  
  304 (1) In this section, 
  *arrangement* includes  
  (a) a continuance for the purpose of amalgamation; 
  (b) an amendment to the articles of a cooperative; 
  (c) an amalgamation of two or more cooperatives; 
  (d) an amalgamation of a body corporate with a cooperative that results in an amalgamated cooperative; 
  (e) an amalgamation of two bodies corporate to become a cooperative; 
  (f) a division of the business carried on by a cooperative; 
  (g) a transfer of all or substantially all of the property of a cooperative to another body corporate in exchange for property, money or securities of the body corporate; 
  (h) an exchange of securities of a cooperative for property, money or other securities of the cooperative or property, money or securities of another body corporate, subject to the issue or transfer of membership shares to members; 
  (i) a liquidation and dissolution of a cooperative; and 
  (j) any combination of the events set out in paragraphs (a) to (i). 
  
  ### When cooperative insolvent
  
  (2) For the purposes of this section, a cooperative is insolvent 
  (a) when it is unable to pay its liabilities as they become due; or 
  (b) if the realizable value of its assets is less than the total of its liabilities and the stated capital of all membership shares and investment shares. 
  
  ### Application to court for approval of arrangement
  
  (3) If it is not feasible for a cooperative that is not insolvent to effect a fundamental change in the nature of an arrangement under any other provision of this Act, the cooperative may apply to a court for an order approving an arrangement proposed by the cooperative. 
  
  ### Powers of court
  
  (4) In connection with an application under this section, the court may make any order it thinks fit, including an order 
  (a) respecting the giving of notice of the application, subject to subsection (6); 
  (b) respecting the representation of the interests of members or shareholders; 
  (c) requiring meetings of the cooperative to be held; 
  (d) permitting a member or shareholder to dissent under section 302; and 
  (e) approving an arrangement in any manner the court may direct. 
  
  ### Limitation
  
  (5) The court may not make an order that would result in the cooperative 
  (a) no longer being organized or operating or carrying on business on a cooperative basis; 
  (b) if the cooperative is one to which Part 20 applies, not complying with Part 20; and 
  (c) if the cooperative is one to which Part 21 applies, not complying with Part 21. 
  
  ### Notice to Director
  
  (6) Notice of an application under subsection (4) must be given to the Director and the Director is entitled to appear and be heard in person or by counsel. 
  
  ### Articles of arrangement
  
  (7) If an order is made under paragraph (4)(e), articles of arrangement in the form that the Director fixes, together with, if applicable, notice of registered office and notice of change of directors, must be sent to the Director. 
  
  ### Certificate of arrangement
  
  305 (1) On receipt of articles of arrangement, the Director must issue a certificate of arrangement. 
  
  ### Effect of certificate
  
  (2) An arrangement becomes effective on the date shown in the certificate of arrangement. 
  
  # PART 17 
  
  ## Liquidation and Dissolution 
  
  ### Definition of court 
  
  306 In this Part, 
  *court* means a court having jurisdiction in the place where the cooperative has its registered office.  
  
  ### Application of Part
  
  307 (1) This Part, other than sections 308 and 311, does not apply to a cooperative that is an insolvent person or a bankrupt as those terms are defined in section 2 of the Bankruptcy and Insolvency Act.  
  
  ### Staying of proceedings
  
  (2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a cooperative are stayed if the cooperative is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be an insolvent person as defined in section 2 of that Act.  
  
  ### Revival
  
  308 (1) When a cooperative is dissolved under this Part, any interested person, or any person who would be an interested person if a certificate of revival were issued under this section, may apply to the Director to have the dissolved cooperative revived as a cooperative under this Act. 
  
  ### Articles of revival
  
  (2) Articles of revival in the form that the Director fixes must be sent to the Director. 
  
  ### Certificate of revival
  
  (3) On receipt of articles of revival, the Director must issue a certificate of revival, unless the Director is of the opinion that issuing the certificate 
  (a) would result in the dissolved cooperative 
  (i) no longer being organized or operating or carrying on business on a cooperative basis, 
  (ii) if the cooperative is one to which Part 20 applies, not complying with Part 20, and 
  (iii) if the cooperative is one to which Part 21 applies, not complying with Part 21; or 
  (b) would not be advisable for any other valid reason. 
  
  ### Reliance on articles
  
  (4) For the purpose of subsection (3), the Director may rely on the articles of revival. 
  
  ### Date of revival
  
  (5) A dissolved cooperative is revived as a cooperative under this Act on the date shown on the certificate of revival. 
  
  ### Rights preserved
  
  (6) In the same manner and to the same extent as if it had not been dissolved, but subject to any reasonable terms that may be imposed by the Director, to the rights acquired by any person after its dissolution and to any changes to the internal affairs of the cooperative after its dissolution, the revived cooperative is 
  (a) restored to its previous position in law, including the restoration of any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and 
  (b) liable for the obligations that it would have had if it had not been dissolved whether they arise before its dissolution or after its dissolution and before its revival. 
  
  ### Legal actions
  
  (7) Any legal action respecting the affairs of a revived cooperative taken between the time of its dissolution and its revival is valid and effective. 
  
  ### Definition of interested person 
  
  (8) In this section, 
  *interested person* includes  
  (a) a member, a shareholder, a director, an officer, an employee and a creditor of the dissolved cooperative; 
  (b) a person who has a contract — other than, in Quebec, a contract by gratuitous title — with the dissolved cooperative; and 
  (c) a trustee in bankruptcy or liquidator for the dissolved cooperative. 
  
  ### Dissolution if no property and no liability
  
  309 (1) A cooperative that has no property and no liabilities may be dissolved by a special resolution of the members and, if the cooperative has issued investment shares, by a separate special resolution of the shareholders of each class, whether or not they are otherwise entitled to vote. 
  
  ### Dissolution if property disposed of
  
  (2) A cooperative that has property or liabilities, or both, may be dissolved by a special resolution of the members and, if the cooperative has issued investment shares, by a separate special resolution of the shareholders of each class, whether or not they are otherwise entitled to vote, if 
  (a) by the special resolution or resolutions they authorize the directors to cause the cooperative to distribute property and discharge liabilities; and 
  (b) the cooperative has distributed property and discharged liabilities before it sends articles of dissolution to the Director under subsection (3). 
  
  ### Articles of dissolution
  
  (3) Articles of dissolution in the form that the Director fixes must be sent to the Director. 
  
  ### Certificate of dissolution
  
  (4) On receipt of articles of dissolution, the Director must issue a certificate of dissolution. 
  
  ### Effect of certificate
  
  (5) The cooperative ceases to exist on the date shown in the certificate of dissolution. 
  
  ### Proposing liquidation and dissolution
  
  310 (1) The directors may propose, or a member may, in accordance with section 58, make a proposal for, the voluntary liquidation and dissolution of a cooperative. 
  
  ### Notice of meeting
  
  (2) Notice of any meeting of the cooperative at which voluntary liquidation and dissolution is to be proposed must set out the terms of the proposal. 
  
  ### Approval
  
  (3) A cooperative may liquidate and dissolve by a special resolution of the members and, if the cooperative has issued investment shares, by a separate special resolution of the shareholders of each class, whether or not they are otherwise entitled to vote. 
  
  ### Statement of intent to dissolve
  
  (4) A statement of intent to dissolve in the form that the Director fixes must be sent to the Director. 
  
  ### Certificate of intent to dissolve
  
  (5) On receipt of a statement of intent to dissolve, the Director must issue a certificate of intent to dissolve. 
  
  ### Effect of certificate
  
  (6) On the issue of a certificate of intent to dissolve, the cooperative must cease to carry on business except to the extent necessary for the liquidation, but its corporate existence continues until the Director issues a certificate of dissolution. 
  
  ### Liquidation
  
  (7) After the issue of a certificate of intent to dissolve, the cooperative must, without delay, 
  (a) cause a notice to be sent to each known creditor of the cooperative; 
  (b) proceed to collect its property, dispose of properties that are not to be distributed in kind to its members or shareholders, discharge all its obligations and do all other acts required to liquidate its business; and 
  (c) after giving the notice required under paragraph (a) and adequately providing for the payment or discharge of all its obligations, but subject to the articles and Parts 20 and 21, distribute its remaining property among its members and shareholders, if any, according to their respective rights. 
  
  ### Supervision by court
  
  (8) Any interested person may, at any time during the liquidation of a cooperative, apply to a court for an order that the liquidation be continued under the supervision of the court as provided in this Part, and on the application the court may so order and make any further order it thinks fit. 
  
  ### Notice to Director
  
  (9) An applicant under this section must give the Director notice of the application. 
  
  ### Revocation
  
  (10) At any time after issue of a certificate of intent to dissolve and before issue of a certificate of dissolution, a certificate of intent to dissolve may be revoked by sending the Director a statement of revocation of intent to dissolve in the form that the Director fixes, if the revocation is approved in the same manner as the resolution under subsection (3). 
  
  ### Certificate of revocation of intent to dissolve
  
  (11) On receipt of a statement of revocation of intent to dissolve, the Director must issue a certificate of revocation of intent to dissolve. 
  
  ### Effect of certificate
  
  (12) On the date shown in the certificate of revocation of intent to dissolve, the revocation is effective and the cooperative may continue to carry on its business or businesses. 
  
  ### Articles of dissolution
  
  (13) If a certificate of intent to dissolve has not been revoked and the cooperative has complied with subsection (7), articles of dissolution in the form that the Director fixes must be sent to the Director. 
  
  ### Certificate of dissolution
  
  (14) On receipt of articles of dissolution, the Director must issue a certificate of dissolution. 
  
  ### Effect of certificate
  
  (15) The cooperative ceases to exist on the date shown in the certificate of dissolution. 
  
  ### Dissolution by Director
  
  311 (1) Subject to subsections (2) and (3), the Director may dissolve a cooperative by issuing a certificate of dissolution under this section if the cooperative 
  (a) has not commenced business within three years after the date shown in its certificate of incorporation; 
  (b) has not carried on its business for three consecutive years; 
  (c) is in default for a period of one year in sending the Director any fee, notice or document required by this Act; or 
  (d) does not have any directors or is in the situation described in subsection 85(6). 
  
  ### Publication
  
  (2) The Director may not dissolve a cooperative under this section until 
  (a) one hundred and twenty days have elapsed since notice of intent to dissolve has been given to the cooperative and to each of its directors; and 
  (b) notice of intent to dissolve the cooperative has been published in a publication generally available to the public. 
  
  ### Certificate of dissolution
  
  (3) Unless cause to the contrary has been shown or an order has been made by a court under section 315, the Director may, after the end of the one hundred and twenty days referred to in subsection (2), issue a certificate of dissolution. 
  
  ### Exception — non-payment of incorporation fee
  
  (3.1) Despite anything in this section, the Director may dissolve a cooperative by issuing a certificate of dissolution if the fee for the issuance of a certificate of incorporation is not paid. 
  
  ### Effect of certificate
  
  (4) The cooperative ceases to exist on the date shown in the certificate of dissolution. 
  
  ### Grounds for dissolution
  
  312 (1) Any interested person may apply to a court for an order dissolving a cooperative if the cooperative has 
  (a) failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings; 
  (b) contravened section 18, subsection 27(2) or section 31, 247 or 249; or 
  (c) procured any certificate under this Act by misrepresentation. 
  
  ### Notice to director
  
  (2) An applicant under this section must give the Director notice of the application. 
  
  ### Dissolution order
  
  (3) On an application under this section, the court may order that the cooperative be dissolved or that it be liquidated and dissolved under the supervision of the court, and the court may make any other order it thinks fit. 
  
  ### Certificate
  
  (4) On receipt of an order under this section or section 313, the Director must 
  (a) if the order is to dissolve the cooperative, issue a certificate of dissolution in the form that the Director fixes; or 
  (b) if the order is to liquidate and dissolve the cooperative under the supervision of the court, issue a certificate of intent to dissolve in the form that the Director fixes and publish notice of the order in a publication generally available to the public. 
  
  ### Effect of certificate
  
  (5) The cooperative ceases to exist on the date shown in the certificate of dissolution. 
  
  ### Further grounds
  
  313 (1) A court may order the liquidation and dissolution of a cooperative or any of its affiliates on the application of a member or a shareholder if the court is satisfied 
  (a) that the cooperative no longer carries on business or is no longer organized or operating on a cooperative basis; 
  (b) that an act or omission of the cooperative or any of its affiliates effects a result, that the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted in a manner, or that the powers of the directors of the cooperative or any of its affiliates are or have been exercised in a manner, that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member, shareholder, security holder, creditor, director or officer; or 
  (c) that events have occurred that entitle a member or shareholder, in accordance with a unanimous agreement, to demand that the cooperative be dissolved or that it is just and equitable that the cooperative be liquidated and dissolved. 
  
  ### Alternate order
  
  (2) On an application under this section, a court may make any order under this section or section 340 that it thinks fit. 
  
  ### Application of section 341
  
  (3) Section 341 applies to an application under this section. 
  
  ### Application for supervision
  
  314 (1) An application to a court to supervise a voluntary liquidation and dissolution under subsection 310(8) must state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation and dissolution. 
  
  ### Court supervision
  
  (2) If a court makes an order applied for under subsection 310(8), the liquidation and dissolution of the cooperative continues under the supervision of the court in accordance with this Act. 
  
  ### Application to court
  
  315 (1) An application to a court under subsection 313(1) must state the reasons, verified by an affidavit of the applicant, why the cooperative should be liquidated and dissolved. 
  
  ### Show cause order
  
  (2) On an application under subsection 313(1), the court may make an order requiring the cooperative and any person who has an interest in it or claim against it to show cause, at a specified time and place, not less than four weeks after the date of the order, why the cooperative should not be liquidated and dissolved. 
  
  ### Powers of court
  
  (3) On an application under subsection 313(1), the court may order the directors and officers of the cooperative to provide the court with all material information known to or reasonably ascertainable by them, including 
  (a) financial statements of the cooperative; 
  (b) the name and address of each member and shareholder; and 
  (c) the name and address of each known creditor or claimant, including any creditor or claimant with unliquidated, future or contingent claims, and any person with whom the cooperative has a contract. 
  
  ### Publication
  
  (4) A copy of an order made under subsection (2) must be 
  (a) published as directed in the order, at least once in each week before the time appointed for the hearing, in a publication generally available to the public; and 
  (b) served on the Director and each person named in the order. 
  
  ### Person responsible
  
  (5) Publication and service of an order under this section must be effected by the cooperative or by any other person and in any manner that the court may order. 
  
  ### Powers of court
  
  316 In connection with the liquidation and dissolution of a cooperative, the court may, if it is satisfied that the cooperative is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit, including an order 
  (a) to liquidate; 
  (b) appointing a liquidator, with or without security, and fixing their remuneration, or replacing a liquidator; 
  (c) appointing inspectors or referees, specifying their powers and fixing their remuneration, or replacing inspectors or referees; 
  (d) determining the notice to be given to any interested person, or dispensing with notice to any person; 
  (e) determining the validity of any claim made against the cooperative; 
  (f) at any stage of the proceedings, restraining the directors and officers from 
  (i) exercising any of their powers, or 
  (ii) collecting or receiving any debt or other property of the cooperative, and from paying out or transferring any property of the cooperative, except as permitted by the court; 
  (g) determining and enforcing the duty or liability of any present or former director, officer, member or shareholder 
  (i) to the cooperative, or 
  (ii) for an obligation of the cooperative; 
  (h) approving the payment, satisfaction or compromise of claims against the cooperative and the retention of assets for those purposes, and determining the adequacy of provisions for the payment or discharge of obligations of the cooperative, whether liquidated, unliquidated, future or contingent; 
  (i) disposing of or destroying documents and records of the cooperative; 
  (j) on the application of a creditor, the inspectors or the liquidator, giving directions on any matter arising on the liquidation; 
  (k) after notice has been given to all interested parties, relieving a liquidator from an omission or default on any terms that the court thinks fit and confirming any act of the liquidator; 
  (l) subject to section 322, approving any proposed interim or final distribution to members or shareholders in money or in property in accordance with their respective rights; 
  (m) disposing of any property that belongs to creditors, members or shareholders who cannot be found; 
  (n) on the application of a director, officer, member, shareholder or creditor or the liquidator, 
  (i) staying the liquidation on any terms and conditions that the court thinks fit, 
  (ii) continuing or discontinuing the liquidation proceedings, or 
  (iii) to the liquidator, to restore to the cooperative all its remaining property; and 
  (o) after the liquidator has rendered a final account to the court, dissolving the cooperative. 
  
  ### Effect of order
  
  317 The liquidation of a cooperative commences when a court makes an order for liquidation. 
  
  ### Cessation of business and powers
  
  318 (1) If a court makes an order for liquidation of a cooperative, 
  (a) the cooperative continues in existence but must cease to carry on business, except the business that is in the liquidator’s opinion required for an orderly liquidation; and 
  (b) the powers of the directors, members and shareholders cease and vest in the liquidator, except as specifically authorized by the court. 
  
  ### Delegation by liquidator
  
  (2) The liquidator may delegate any of the powers vested in him or her by paragraph (1)(b) to the directors or members. 
  
  ### Appointment of liquidator
  
  319 (1) When making an order for the liquidation of a cooperative or at any time after making one, the court may appoint any person, including a director, officer, member or shareholder, or any other body corporate, as liquidator of the cooperative. 
  
  ### Vacancy
  
  (2) If an order for the liquidation of a cooperative has been made and the office of liquidator is or becomes vacant, the property of the cooperative is under the control of the court until the office of liquidator is filled. 
  
  ### Duties of liquidator
  
  320 A liquidator must, without delay after being appointed, 
  (a) give notice of appointment to each claimant and creditor known to the liquidator; 
  (b) publish notice in a publication generally available to the public and take reasonable steps to give notice of the appointment in each province or other jurisdiction where the cooperative carries on business, requiring 
  (i) any person who is indebted to the cooperative to render an account and pay any amount owing to the liquidator at the time and place specified, 
  (ii) any person who possesses property of the cooperative to deliver it to the liquidator at the time and place specified, and 
  (iii) any person who has a claim against the cooperative, whether liquidated, unliquidated, future or contingent, to present particulars of it in writing to the liquidator not later than two months after the first publication of the notice; 
  (c) take the property of the cooperative into custody and control; 
  (d) open and maintain a trust account for money received by the liquidator in the course of the liquidation; 
  (e) keep accounts of the moneys of the cooperative received and paid out in the course of the liquidation; 
  (f) maintain separate lists of the members, shareholders and creditors and other persons who have claims against the cooperative; 
  (g) if at any time the liquidator determines that the cooperative is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions; 
  (h) deliver to the court and to the Director, at least once in every twelve month period after appointment or more often as the court may require, financial statements of the cooperative in the form required by section 247, or in any other form that the liquidator may think proper or that the court may require; and 
  (i) after the final accounts are approved by the court, distribute any remaining property of the cooperative among the members and shareholders according to their respective rights. 
  
  ### Powers of liquidator
  
  321 (1) A liquidator may 
  (a) retain lawyers, notaries, accountants, engineers, appraisers and other professionals; 
  (b) bring, defend or take part in any civil, criminal, administrative, investigative or other action or proceeding in the name and on behalf of the cooperative; 
  (c) carry on the business of the cooperative as required for an orderly liquidation; 
  (d) sell any property of the cooperative by public auction or private sale; 
  (e) do all acts and execute or, in Quebec, sign any documents in the name and on behalf of the cooperative; 
  (f) borrow money on the security of the property of the cooperative; 
  (g) settle or compromise any claims by or against the cooperative; and 
  (h) do all other things necessary for the liquidation of the cooperative and the distribution of its property. 
  
  ### Due diligence
  
  (2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on 
  (a) financial statements of the cooperative represented to the liquidator by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or 
  (b) a report of a person whose profession lends credibility to a statement made by the professional person. 
  
  ### Application to court
  
  (3) If a liquidator has reason to believe that any property of the cooperative is in the possession or control of a person or that anyone has concealed, withheld or misappropriated any property of the cooperative, the liquidator may apply to the court for an order requiring the person to appear before the court at the time and place designated in the order and to be examined. 
  
  ### Power of court
  
  (4) If the examination discloses that the person has concealed, withheld or misappropriated property of the cooperative, the court may order the person to restore it or pay compensation to the liquidator. 
  
  ### Costs of liquidation
  
  322 (1) A liquidator must pay the costs of liquidation out of the property of the cooperative and must pay or make adequate provision for all claims against it. 
  
  ### Final accounts
  
  (2) No later than one year after appointment, and after paying or making adequate provision for all claims against the cooperative, the liquidator must apply to the court for 
  (a) approval of the final accounts of the liquidator and, subject to the articles and Parts 20 and 21, an order permitting a distribution in money or in kind of the remaining property of the cooperative to the members and shareholders, if any, according to their respective rights; or 
  (b) an extension of time, setting out the reasons for the extension. 
  
  ### Application
  
  (3) If a liquidator fails to make the application required by subsection (2), a member or shareholder may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made. 
  
  ### Publication
  
  (4) A liquidator must give notice of their intention to make an application under subsection (2) to the Director, to each inspector appointed under section 316, to each member or shareholder and to any person who provided a security, a fidelity bond or fidelity insurance for the liquidation, and must publish the notice in a newspaper published or distributed in the place where the cooperative has its registered office, in any manner set out in the by-laws or as otherwise directed by the court. 
  
  ### Final order
  
  (5) If the court approves the final accounts rendered by a liquidator, the court must make an order 
  (a) directing the Director to issue a certificate of dissolution; 
  (b) directing the custody or disposal of the documents of the cooperative; and 
  (c) discharging the liquidator, subject to the remaining duty required by subsection (6). 
  
  ### Delivery of order
  
  (6) The liquidator must send a certified copy of the order described in subsection (5) to the Director without delay. 
  
  ### Certificate of dissolution
  
  (7) On receipt of the order described in subsection (5), the Director must issue a certificate of dissolution. 
  
  ### Effect of certificate
  
  (8) The cooperative ceases to exist on the date shown in the certificate of dissolution. 
  
  ### Right to distribution in money
  
  323 A member or shareholder may apply to the court for an order requiring the distribution of the property of the cooperative to be in money if, in the course of the liquidation of the cooperative, the members and shareholders resolve or the liquidator proposes to 
  (a) exchange all or substantially all the property of the cooperative for securities of another body corporate that are to be distributed to the members and shareholders, if any; or 
  (b) distribute all or part of the property of the cooperative to the members and shareholders, if any, in kind. 
  
  ### Powers of court
  
  324 On an application under section 323, the court, subject to the articles and Parts 20 and 21, may order 
  (a) that all the property of the cooperative be converted into and distributed in money; or 
  (b) that the claims of a member or shareholder applying under this section be satisfied by a distribution in money, in which case subsections 302(19) and (20) apply. 
  
  ### Custody of documents
  
  325 A person who has been granted custody of the documents of a dissolved cooperative remains liable to produce those documents until the end of the prescribed period or of any other shorter period fixed by an order made under subsection 322(5). 
  
  ### Heirs and representatives
  
  326 (1) In this section, “member” and “shareholder” include their heirs and personal representatives. 
  
  ### Continuation of actions
  
  (2) Despite the dissolution of a cooperative under this Act, 
  (a) a civil, criminal, administrative, investigative or other action or proceeding commenced by or against the cooperative before its dissolution may be continued as if it had not been dissolved; 
  (b) a civil, criminal, administrative, investigative or other action or proceeding may be brought against the cooperative within two years after its dissolution as if it had not been dissolved; and 
  (c) any property that would have been available to satisfy a judgment or order if the cooperative had not been dissolved remains available for those purposes. 
  
  ### Service
  
  (3) Service of a document on a cooperative after its dissolution may be effected by serving the document on a person named in the last notice sent under section 81 or 91. 
  
  ### Reimbursement
  
  (4) Despite the dissolution of a cooperative under this Act, a member or shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount distributed to that member or shareholder. An action to enforce the liability may be brought no later than two years after the date of the dissolution of the cooperative. 
  
  ### Representative action
  
  (5) A court may order an action referred to in subsection (4) to be brought against the persons who were members or shareholders as a class, subject to any conditions that the court thinks fit, and, if the plaintiff establishes a claim, the court may refer the proceedings to a referee or other officer of the court who may 
  (a) add as a party to the proceedings each member or shareholder who was found by the plaintiff; 
  (b) determine, subject to subsection (4), the amount that each of those members and shareholders must contribute towards satisfaction of the plaintiff’s claim; and 
  (c) direct payment of the amounts so determined. 
  
  ### Unknown claimants
  
  327 (1) On the dissolution of a cooperative under this Act, the portion of the property to be distributed to a creditor, member or shareholder who cannot be found must be converted into money and paid to the Receiver General. 
  
  ### Deemed satisfaction
  
  (2) A payment under subsection (1) is deemed to be in satisfaction of a debt or claim of the creditor, member or shareholder. 
  
  ### Recovery
  
  (3) If at any time a person establishes their entitlement to any money paid to the Receiver General under this Act, the Receiver General must pay the person an equivalent amount out of the Consolidated Revenue Fund. 
  
  ### Vesting in Crown
  
  328 (1) Subject to subsection 326(2) and section 327, property of a cooperative that has not been disposed of at the date of its dissolution under this Act vests in Her Majesty in right of Canada. 
  
  ### Return of property on revival
  
  (2) If a cooperative is revived as a cooperative under section 308, any property, other than money, that vested in Her Majesty under subsection (1) and that has not been disposed of must be returned to the cooperative, and there must be paid to the cooperative out of the Consolidated Revenue Fund 
  (a) an amount equal to any money received by Her Majesty under subsection (1); and 
  (b) if property other than money vested in Her Majesty under subsection (1) and the property has been disposed of, an amount equal to the lesser of 
  (i) the value of the property at the date it vested in Her Majesty, and 
  (ii) the amount realized by Her Majesty from the disposition of the property. 
  (3)  [Repealed, 2001, c. 14, s. 216]  
  
  # PART 18 
  
  ## Investigations 
  
  ### Investigation
  
  329 (1) Any interested person may apply, without notice or on any notice that the court may require, to a court having jurisdiction in the place where the cooperative has its registered office for an order directing an investigation to be made of the cooperative and any of its affiliates. 
  
  ### Grounds
  
  (2) The court may order an investigation to be made of the cooperative and any of its affiliates if, on an application under subsection (1), it appears to the court that the application is neither frivolous nor vexatious and that 
  (a) the cooperative is not organized, operated or carrying on business on a cooperative basis; 
  (b) the business or the affairs of the cooperative are not being carried out or conducted in accordance with 
  (i) the restrictions contained in its articles, 
  (ii) its by-laws, 
  (iii) a unanimous agreement, or 
  (iv) this Act; 
  (c) the business of the cooperative or any of its affiliates is or has been carried on with intent to defraud a person; 
  (d) the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised, in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member or a security holder; 
  (e) the cooperative or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose; or 
  (f) persons concerned with the formation, business or affairs of the cooperative or any of its affiliates have, in connection with the formation, business or affairs of the cooperative, acted fraudulently or dishonestly. 
  
  ### No security for costs
  
  (3) An applicant under this section is not required to give security for costs. 
  
  ### Powers of court
  
  330 (1) In connection with an investigation under this Part, the court may make any order it thinks fit, including an order 
  (a) to investigate; 
  (b) appointing an inspector, who may be the Director, and fixing their remuneration, or replacing an inspector; 
  (c) determining the notice to be given to any interested person, or dispensing with notice to any person; 
  (d) authorizing an inspector to enter any premises in which the court is satisfied there might be relevant information and to examine any thing and make copies of any document found on the premises; 
  (e) requiring any person to produce documents to an inspector; 
  (f) authorizing an inspector to conduct a hearing, administer oaths and examine any person on oath, and setting out rules for the conduct of hearings; 
  (g) requiring any person to attend a hearing conducted by an inspector and to give evidence on oath; 
  (h) giving directions to an inspector or any other interested person on any matter arising in the investigation; 
  (i) requiring an inspector to make an interim or final report to the court; 
  (j) determining whether a report of an inspector should be published and, if so, ordering its publication in whole or in part or that copies of it be sent to any person the court designates; 
  (k) requiring an inspector to discontinue the investigation; 
  (l) if the cooperative is incorporated with membership capital, requiring the cooperative to be continued under the Canada Business Corporations Act, or if it is incorporated without membership capital, requiring it to be dissolved;  
  (m) determining any matter that relates to the relationship between a member and the cooperative; and 
  (n) requiring the cooperative to pay the costs of the investigation. 
  
  ### Copy of report
  
  (2) An inspector must send the Director a copy of every report made by the inspector under this Part. 
  
  ### Powers of inspector
  
  331 (1) An inspector appointed under this Part has the powers set out in the order appointing the inspector. 
  
  ### Exchange of information
  
  (2) In addition to the powers set out in the order appointing an inspector, the inspector may provide information to, or exchange information and otherwise cooperate with, any public official in Canada or elsewhere who 
  (a) is authorized to exercise investigatory powers; and 
  (b) is investigating, in respect of the cooperative, any allegation of improper conduct that is the same as or similar to the conduct described in subsection 329(2). 
  
  ### Court order
  
  (3) An inspector must, on the request of an interested person, produce a copy of any order made under subsection 330(1). 
  
  ### Hearing in private
  
  332 (1) Any interested person may apply to the court for an order that a hearing under this Part be heard in private and for directions on any matter arising in the investigation. 
  
  ### Right to counsel
  
  (2) A person whose conduct is being investigated or who is being examined at a hearing conducted under this Part has the right to be represented by counsel. 
  
  ### Incriminating statements
  
  333 No person is excused from attending and giving evidence and producing documents to an inspector under this Part by reason only that the evidence tends to incriminate the person or subject the person to a proceeding or penalty, but no such evidence may be used or is receivable against the person in any later proceeding instituted under an Act of Parliament, other than a prosecution for perjury in giving the evidence or a prosecution under section 132 or 136 of the Criminal Code in respect of the evidence.  
  
  ### Absolute privilege — defamation
  
  334 Any oral or written statement or report made by an inspector or other person in an investigation under this Part has absolute privilege. 
  
  ### Membership shares included
  
  335 (1) For the purposes of this section, a security includes a membership share or an interest or right in one. 
  
  ### Information respecting ownership and control
  
  (2) If the Director is satisfied that, for the purposes of Part 9 or 10 or for the purposes of enforcing any regulation made under section 130, there is reason to inquire into the ownership or control of a security of a cooperative or any of its affiliates, the Director may require any person that the Director reasonably believes has or has had an interest or right in the security or acts or has acted on behalf of a person with such an interest or right to report to the Director or to any designated person, 
  (a) information that the person has or can reasonably be expected to obtain as to present and past interests or rights in the security; and 
  (b) the names and addresses of the persons who have or have had such an interest or right and of any person who acts or has acted in relation to the security on behalf of such persons. 
  
  ### Deemed interest or right in securities
  
  (3) For the purposes of subsection (2), a person is deemed to hold an interest or right in a security if 
  (a) in the case of a membership share, the person is or is entitled to be entered in the records of the cooperative as the owner of the membership share; and 
  (b) in the case of an investment share, 
  (i) the person has a right to vote or to acquire or dispose of the investment share or an interest or right in it, 
  (ii) the person’s consent is necessary for the exercise of the rights or privileges of any other person with an interest or right in the investment share, or 
  (iii) any other person with an interest or right in the investment share can be required or is accustomed to exercise rights or privileges attached to it in accordance with that person’s instructions. 
  
  ### Publication
  
  (4) The Director must publish, in a publication generally available to the public, the particulars of information obtained under this section if the particulars 
  (a) are required by this Act or the regulations to be disclosed; and 
  (b) have not previously been so disclosed. 
  
  ### Solicitor-client privilege or professional secrecy
  
  336 Nothing in this Part may be construed as affecting solicitor-client privilege or, in Quebec, the professional secrecy of advocates and notaries. 
  
  ### Inquiries
  
  337 The Director may make inquiries of any person relating to compliance with this Act. 
  
  # PART 18.1 
  
  ## Apportioning Award of Damages 
  
  ## Interpretation and Application 
  
  ### Definitions
  
  337.1 The definitions in this section apply in this Part.  
  *financial interest*, with respect to a cooperative, includes  
  (a) a security; 
  (b) a title to or an interest in capital, assets, property, profits, earnings or royalties; 
  (c) an option or other interest in, or a subscription to, a security; 
  (d) an agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets; 
  (e) an agreement providing that money received will be repaid or treated as a subscription for shares, units or interests at the option of any person or the cooperative; 
  (f) a profit-sharing agreement or certificate; 
  (g) a lease, claim or royalty in oil, natural gas or mining, or an interest in the lease, claim or royalty; 
  (h) an income or annuity contract that is not issued by an insurance company governed by an Act of Parliament or a law of a province; 
  (i) an investment contract; and 
  (j) anything that is prescribed to be a financial interest. ( intérêt financier)   
  *financial loss* means a financial loss arising out of an error, omission or misstatement in financial information concerning a cooperative that is required under this Act or the regulations. (perte financière)   
  *third party* includes any subsequent party that is joined in proceedings before a court. (Version anglaise seulement)  
  
  ### Application of Part
  
  337.2 (1) This Part applies to the apportionment of damages awarded to a plaintiff for financial loss after a court has found more than one defendant or third party responsible for the financial loss. 
  
  ### Non-application of Part
  
  (2) This Part does not apply to an award of damages to any of the following plaintiffs: 
  (a) Her Majesty in right of Canada or of a province; 
  (b) an agent of Her Majesty in right of Canada or of a province or a federal or provincial Crown corporation or government agency, unless a substantial part of its activities involves trading, including making investments in, securities or other financial instruments; 
  (c) a charitable organization, private foundation or public foundation within the meaning of subsection 149.1(1) of the Income Tax Act ; or  
  (d) an unsecured creditor in respect of goods or services that the creditor provided to a cooperative. 
  
  ## Apportionment of Damages 
  
  ### Degree of responsibility
  
  337.3 (1) Subject to this section and sections 337.4 to 337.6, every defendant or third party who has been found responsible for a financial loss is liable to the plaintiff only for the portion of the damages that corresponds to their degree of responsibility for the loss. 
  
  ### Uncollectable amounts
  
  (2) If any part of the damages awarded against a responsible defendant or third party is uncollectable, the court may, on the application of the plaintiff, reallocate that amount to the other responsible defendants or third parties, if the application is made within one year after the date that the judgment was made enforceable. 
  
  ### Reallocation
  
  (3) The amount that may be reallocated to each of the other responsible defendants or third parties under subsection (2) is calculated by multiplying the uncollectable amount by the percentage that corresponds to the degree of responsibility of that defendant or third party for the total financial loss. 
  
  ### Maximum amount
  
  (4) The maximum amount determined under subsection (3), in respect of any responsible defendant or third party, may not be more than fifty per cent of the amount originally awarded against that responsible defendant or third party. 
  
  ### Exception — fraud
  
  337.4 (1) The plaintiff may recover the whole amount of the damages awarded by the court from any defendant or third party who has been held responsible for a financial loss if it was established that the defendant or third party acted fraudulently or dishonestly. 
  
  ### Contribution
  
  (2) The defendant or third party referred to in subsection (1) is entitled to claim contribution from any other defendant or third party who is held responsible for the loss. 
  
  ## Joint and Several, or Solidary, Liability 
  
  ### Individual or personal body corporate
  
  337.5 (1) Defendants and third parties referred to in subsection 337.2(1) are jointly and severally, or solidarily, liable for the damages awarded to a plaintiff who is an individual or a personal body corporate and who 
  (a) had a financial interest in a cooperative on the day that an error, omission or misstatement in financial information concerning the cooperative occurred, or acquired a financial interest in the period between the day that the error, omission or misstatement occurred and the day, as determined by the court, that it was generally disclosed; and 
  (b) has established that the value of the plaintiff’s total financial interest in the cooperative was not more than the prescribed amount at the close of business on the day that the error, omission or misstatement occurred or at the close of business on any day that the plaintiff acquired a financial interest in the period referred to in paragraph (a). 
  
  ### Exception
  
  (1.1) Subsection (1) does not apply when the plaintiff brings the action as a member of a partnership or other association or as a trustee in bankruptcy, liquidator, receiver or sequestrator of a body corporate. 
  
  ### Interpretation
  
  (2) For the purposes of this section, 
  (a) a personal body corporate is a body corporate that is not actively engaged in any financial, commercial or industrial business and that is controlled by an individual, or by a group of individuals who are connected by marriage, common-law partnership or any legal parent-child relationship or are connected indirectly by a combination of those relationships, whether or not the individuals through whom they are connected are members of the group; and 
  (b) a common-law partnership is a relationship between two persons who are cohabiting with each other in a conjugal relationship and have done so for a period of at least one year. 
  
  ### Equitable grounds
  
  337.6 (1) If the value of the plaintiff’s total financial interest referred to in subsection 337.5(1) is greater than the prescribed amount, a court may nevertheless determine that the defendants and third parties are jointly and severally, or solidarily, liable if the court considers that it is just and reasonable to do so. 
  
  ### Factors
  
  (2) The Governor in Council may establish factors that the court shall take into account in deciding whether to hold the defendants and third parties jointly and severally, or solidarily, liable. 
  
  ###  Statutory Instruments Act 
  
  (3) The Statutory Instruments Act does not apply to the factors referred to in subsection (2), but the factors shall be published in Part I of the Canada Gazette.  
  
  ### Value of security
  
  337.7 (1) When, in order to establish the value of the total financial interest referred to in subsection 337.5(1), it is necessary to determine the value of a security that is traded on an organized market, the value of the security is, on the day specified in subsection (3), 
  (a) the closing price of that class of security; 
  (b) if no closing price is given, the average of the highest and lowest prices of that class of security; or 
  (c) if the security was not traded, the average of the bid and ask prices of that class of security. 
  
  ### Court may adjust value
  
  (2) The court may adjust the value of a security that has been determined under subsection (1) when the court considers it reasonable to do so. 
  
  ### Valuation day
  
  (3) The value of the security is to be determined as of the day that the error, omission or misstatement occurred. If the security was acquired in the period between that day and the day, as determined by the court, that the error, omission or misstatement was generally disclosed, the value is to be determined as of the day that it was acquired. 
  
  ### Definition of organized market 
  
  (4) In this section, 
  *organized market* means a recognized exchange for a class of securities or a market that regularly publishes the price of that class of securities in a publication that is generally available to the public.  
  
  ### Court determines value
  
  337.8 (1) The court shall determine the value of all or any part of a financial interest that is subject to resale restrictions or for which there is no organized market. 
  
  ### Factors
  
  (2) The Governor in Council may establish factors that the court may take into account in determining value under subsection (1). 
  
  ###  Statutory Instruments Act 
  
  (3) The Statutory Instruments Act does not apply to the factors referred to in subsection (2), but the factors shall be published in Part I of the Canada Gazette.  
  
  ### Application to determine value
  
  337.9 The plaintiff may, by application made at any time before or during the course of the proceedings, request the court to determine the value of the plaintiff’s financial interest for the purpose of subsection 337.5(1). 
  
  # PART 19 
  
  ## Remedies, Offences and Punishment 
  
  ### Definitions
  
  338 The definitions in this section apply in this Part.  
  *action* means an action taken under this Act. (action)   
  *complainant* means  
  (a) a member or former member; 
  (b) a registered holder or beneficial owner, or a former registered holder or beneficial owner, of a security of a cooperative or any of its affiliates; 
  (c) a director or an officer, or a former director or officer, of a cooperative or any of its affiliates; or 
  (d)  [Repealed, 2001, c. 14, s. 219]  
  (e) any other person who, in the opinion of the court, is a proper person to make an application under this Part. ( plaignant)  
  
  ### Commencement of derivative action
  
  339 (1) Subject to subsection (2), a complainant may apply to the court for leave to bring an action in the name and on behalf of a cooperative or any of its subsidiaries, or to intervene in an action to which the cooperative or any of its subsidiaries is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the cooperative or subsidiary. 
  
  ### Condition precedent
  
  (2) No person may bring an action and no person may intervene in an action brought under subsection (1) unless the court is satisfied that 
  (a) if the directors of the cooperative or its subsidiary do not bring, diligently prosecute, defend or discontinue the action, the complainant has given notice to the directors of the cooperative or its subsidiary of the complainant’s intention to apply to the court under subsection (1) not less than fourteen days before bringing the application, or as otherwise ordered by the court; 
  (b) the complainant is acting in good faith; and 
  (c) it appears to be in the interests of the cooperative or its subsidiary to bring, prosecute, defend or discontinue the action. 
  
  ### Powers of court
  
  (3) In an action brought or intervened in under this section, the court may make any order it considers appropriate, including an order 
  (a) authorizing the complainant or any other person to control the conduct of the action; 
  (b) giving directions for the conduct of the action; 
  (c) directing that an amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to a former or present member or to a former or present security holder of the cooperative or its subsidiary instead of to the cooperative or its subsidiary; or 
  (d) requiring the cooperative or its subsidiary to pay reasonable costs incurred by the complainant in connection with the action. 
  
  ### Application to court re oppression
  
  340 (1) A complainant may apply to the court for an order, including an alternate order, under this section. 
  
  ### Grounds
  
  (2) If the court receives an application under subsection (1) and is satisfied that an act or omission of a cooperative effects a result, that the business or affairs of the cooperative are or have been carried on or conducted in a manner, or that the powers of the director are or have been exercised in a manner, that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of a member or other security holder, creditor, director or officer of the cooperative, the court may order the rectification of the matters complained of. 
  
  ### Types of order
  
  (3) For the purpose of subsection (2), the court may make any order that it considers appropriate, including an order 
  (a) restraining the conduct complained of; 
  (b) appointing a receiver or receiver-manager; 
  (c) requiring the cooperative to amend an agreement with members generally or with a member; 
  (d) regulating the affairs of the cooperative by amending its articles or by-laws or creating or amending a unanimous agreement; 
  (e) directing an issue or exchange of securities; 
  (f) directing changes in the directors; 
  (g) determining whether a person is or is qualified to be a member; 
  (h) determining any matter in regard to the relations between the cooperative and a member; 
  (i) subject to subsection (6), directing the cooperative or any other person to purchase securities of a security holder; 
  (j) subject to subsection (6), directing the cooperative or any other person to pay to a security holder any part of the money paid by the security holder for securities; 
  (k) subject to subsection (6), directing the cooperative to redeem membership shares, repay member loans or to pay to a member any other amount standing to the member’s credit in the records of the cooperative; 
  (l) varying or setting aside a transaction or contract to which the cooperative is a party and compensating the cooperative or any other party to the transaction or contract; 
  (m) directing the production and delivery within a specified time of financial statements of the cooperative; 
  (n) directing an accounting; 
  (o) compensating an aggrieved person; 
  (p) directing rectification of the registers or other records of the cooperative under section 342; 
  (q) liquidating and dissolving the cooperative; 
  (r) directing a special audit or an investigation under section 329; or 
  (s) requiring the trial of an issue. 
  
  ### Duty of directors and members
  
  (4) If an order made under this section directs an amendment of the articles or by-laws of a cooperative, 
  (a) the directors, members and shareholders must comply with subsection 303(5); and 
  (b) no other amendment to the articles or by-laws may be made without the consent of the court, until the court orders otherwise. 
  
  ### Exclusion
  
  (5) A member or shareholder is not entitled to dissent under section 302 if an amendment to the articles is effected under this section. 
  
  ### Limitation
  
  (6) No cooperative may make a payment to a member or shareholder under an order of the court if there are reasonable grounds to believe that 
  (a) the cooperative is, or would after that payment be, unable to pay its liabilities as they become due; or 
  (b) the realizable value of the cooperative’s assets after the payment would be less than the total of 
  (i) its liabilities, and 
  (ii) the amount that would be required to pay the holders of securities who have a right to be paid, on a redemption or liquidation, rateably with or in priority to the holders of the securities to be purchased or redeemed. 
  
  ### Alternate order
  
  (7) An applicant under this section may apply for an order under section 313 instead of the order under this section. 
  
  ### Evidence of member or shareholder approval not decisive
  
  341 (1) No application made and no action brought or intervened in under this Part is to be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the cooperative or any of its subsidiaries has been or may be approved by the members or shareholders, but evidence of approval by the members or shareholders must be taken into account by the court in making an order under section 313 or this Part. 
  
  ### Court approval to discontinue
  
  (2) No application made and no action brought or intervened in under this Part is to be stayed, discontinued, settled or dismissed for want of prosecution or, in Quebec, failure to respect the agreement between the parties as to the conduct of the proceeding without the approval of the court given on any terms that the court considers appropriate. 
  
  ### Notice
  
  (3) If the court determines that the interests of a complainant may be substantially affected by a stay, discontinuance, settlement or dismissal mentioned in subsection (2), the court may order any party to the application or action to give notice of the application or action to the complainant. 
  
  ### No security for costs
  
  (4) A complainant is not required to give security for costs in an application made or action brought or intervened in under this Part. 
  
  ### Interim costs
  
  (5) In an application made or an action brought or intervened in under this Part, the court may at any time order the cooperative or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable for any interim costs so paid on the final disposition of the application or action. 
  
  ### Application to court to rectify records
  
  342 (1) If the name of a person is alleged to be or to have been wrongly entered or retained in or wrongly deleted or omitted from the registers or other records of a cooperative, the cooperative, a security holder of the cooperative or any aggrieved person may apply to the court for an order that the registers or records be rectified. 
  
  ### Power of court
  
  (2) On an application made under this section, the court may make any order it considers appropriate, including an order 
  (a) requiring the registers or records of the cooperative to be rectified; 
  (b) restraining the cooperative from calling or holding a meeting or allocating or paying a dividend or interest on shares or a patronage refund before rectification of the registers or records; 
  (c) determining the right of a party to the proceedings to have the party’s name entered or retained in or deleted or omitted from the registers or records of the cooperative, whether the issue arises between two or more members or security holders, or alleged members or security holders, or between the cooperative and a member or security holder or alleged member or security holder; or 
  (d) compensating a party who has incurred a loss by reason of the wrongful entry, retention, deletion or omission. 
  
  ### Application for directions
  
  343 The Director may apply to a court for directions in respect of any matter concerning the Director’s duties under this Act and, on the application, the court may give any directions that it thinks fit. 
  
  ### Notice of refusal by Director
  
  344 (1) The Director must file all documents that are required to be sent to him or her under this Act. If the Director refuses to file any of those documents, the Director must, no later than twenty days after the later of the receipt of the document and the receipt of any approval that may be required under any other law, give written notice of the refusal to the person who sent the document, giving reasons for the refusal. 
  
  ### Deemed refusal
  
  (2) If the Director does not file or give written reasons of refusal to file the documents within the twenty days provided for in subsection (1), the Director is deemed to have refused to file the document. 
  
  ### Appeal from Director’s decision
  
  345 A person who feels aggrieved by a decision of the Director referred to in any of paragraphs (a) to (f) may apply to a court for an order, including an order requiring the Director to change the decision: 
  (a) to refuse to file in the form submitted any articles or other documents required by this Act to be sent; 
  (b) to give a name, change or revoke a name or refuse to reserve, accept, change or revoke a name under this Act; 
  (c) to grant, or to refuse to grant, an exemption that may be granted under this Act and the regulations; 
  (d) to refuse to issue a certificate of discontinuance or a certificate attesting that as of a certain date the cooperative exists under section 375; 
  (d.1) to correct, or to refuse to correct, articles, a notice, a certificate or other document under section 376.1; 
  (d.2) to cancel, or to refuse to cancel, the articles and related certificate under section 376.2; 
  (e) to issue, or refuse to issue, a certificate of revival or the decision with respect to the terms for revival imposed by the Director; or 
  (f) to dissolve a cooperative under section 311. 
  
  ### Restraining or compliance order
  
  346 If a cooperative or any director, officer, employee, agent or mandatary, auditor, trustee, receiver, receiver-manager, sequestrator or liquidator of a cooperative does not comply with this Act, the regulations, the articles, the by-laws or a unanimous agreement, a complainant or the Director may, in addition to any other right, apply to a court for an order directing any such person to comply with or restraining them from acting in breach of it. On the application, the court may order compliance and make any further order it thinks fit. 
  
  ### Summary application to court
  
  347 When this Act states that a person may apply to a court, the application may be made in any summary manner by petition, originating notice of motion or otherwise as the rules of court provide and subject to any order respecting notice to interested parties or costs or any other order the court thinks fit. 
  
  ### Appeal of final order
  
  348 (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act. 
  
  ### Appeal on leave
  
  (2) An appeal lies to the court of appeal of a province from any other order made by a court of that province, only with leave of the court of appeal in accordance with the rules of that court. 
  
  ### Offences with respect to this Act
  
  349 (1) Every person who knowingly contravenes section 31, 32 or 33, subsection 165(1), section 166, 168, 169, 172, 251 or 252, subsection 260(2), 264(1) or (3) or 272(5), section 325 or 335 or any other provision of this Act or who does not fulfil a duty imposed under this Act is guilty of an offence punishable on summary conviction. 
  
  ### Offences with respect to the regulations
  
  (2) Every person who, without reasonable cause, contravenes a provision of the regulations or does not fulfil a duty imposed by the regulations is guilty of an offence punishable on summary conviction. 
  
  ### Offences with respect to reports
  
  (3) A person is guilty of an offence punishable on summary conviction if the person knowingly makes or assists in making a report, return, notice or other document required by this Act or the regulations to be sent to the Director or to any other person that 
  (a) contains an untrue statement of a material fact; or 
  (b) omits to state a material fact required in it or necessary to make a statement contained in it not misleading in the light of the circumstances in which it was made. 
  
  ### Order to comply
  
  350 (1) If a person is guilty of an offence under this Act or the regulations, the court in which proceedings in respect of the offence are taken may, in addition to any punishment it may impose, order the person to comply with the provisions of this Act or the regulations for the contravention of which the person has been convicted. 
  
  ### Limitation period
  
  (2) A prosecution of an offence under this Act may be instituted at any time within but not later than two years after the time when the subject-matter of the complaint arose. 
  
  ### Civil remedy not affected
  
  (3) No civil remedy for an act or omission is suspended or affected by reason that the act or omission is an offence under this Act. 
  
  ### Alternative resolution
  
  351 The Minister of Agriculture and Agri-Food may, in accordance with any regulations, provide assistance with respect to the alternative resolution of any dispute relating to the affairs of a cooperative. 
  
  # PART 20 
  
  ## Additional Provisions Respecting Non-profit Housing Cooperatives 
  
  ### Application
  
  352 This Part applies to cooperatives for which articles are issued to carry on business as non-profit housing cooperatives. 
  
  ### Requirement of articles
  
  353 The articles of a non-profit housing cooperative must provide that 
  (a) the name of the non-profit housing cooperative include the words “non-profit”, “not-for-profit”, “not for profit”, “sans but lucratif” or “à but non lucratif” and “housing cooperative”, “housing co-operative”, “housing co-op”, “coopérative d’habitation”, “coop d’habitation”, “co-op d’habitation”, “coopérative de logement”, “coop de logement” or “co-op de logement”; and 
  (b) the business of the cooperative is restricted to that of primarily providing housing to its members. 
  
  ### Special limitations
  
  354 The following restrictions apply to a non-profit housing cooperative: 
  (a) it may not issue investment shares; 
  (b) it may only issue membership shares on a par-value basis; 
  (c) it must in each year conduct at least fifty per cent of its business with its members; 
  (d) subject to subsection 357(2), its business must be carried on without the purpose of gain for its members; and 
  (e) on its dissolution, and after the payment of its liabilities, its remaining property is to be transferred to or distributed among one or more non-profit housing cooperatives, cooperatives incorporated in a province that have similar objectives and limitations, or charitable organizations. 
  
  ### By-laws
  
  355 (1) The by-laws of a non-profit housing cooperative must include 
  (a) any obligation of a member to provide capital to the cooperative and the manner in which the capital is to be contributed; 
  (b) any obligation of a member to contribute to charges of the cooperative and the manner in which the charges are to be determined and paid; 
  (c) the procedure for determining disputes between members and between members and the cooperative; 
  (d) subject to subsection (2), the manner in which the membership of a member may be terminated; 
  (e) the manner in which a member’s equity is to be determined on the member’s withdrawal from the cooperative, or on the termination of their membership and on a dissolution of the cooperative and the manner in which that equity is to be repaid; 
  (f) a provision for the establishment of adequate reserves and the maintenance of adequate insurance to protect the cooperative from loss; and 
  (g) a provision for the establishment of the rules governing charges by the cooperative for the occupation, leasing, subletting and subleasing of housing units of the cooperative. 
  
  ### Termination of membership
  
  (2) If the by-laws provide that membership is to be terminated by the directors, the by-laws must include a right of appeal to the members. Despite section 40, the by-laws may require that an appeal from the decision of the directors may only be launched within seven days after the member receives notice of the termination of membership. 
  
  ### Other provisions in by-laws
  
  (3) The by-laws of a non-profit housing cooperative may provide 
  (a) the rules by which the directors may establish a system of providing subsidies to members for housing charges, provided that the administration of the rules by the directors is fair as among the members; and 
  (b) any rules in addition to those specified in paragraph (1)(g) relating to the occupancy of a housing unit of the cooperative. 
  
  ### Member occupancy rights
  
  356 (1) A person who is a member is entitled to occupy the housing unit allocated to them by the non-profit housing cooperative while they are a member, although the directors may, subject to the by-laws, by notice, require the member to occupy an alternate housing unit. 
  
  ### Appeal
  
  (2) A member to whom a notice has been given by the cooperative to occupy an alternate housing unit may appeal that decision in the same manner as that provided for appeals of decisions by the directors to terminate the membership of a member. 
  
  ### Unsuccessful appeal
  
  (3) If an appeal by the member is not successful and the member does not relocate to the alternate housing unit within the time provided by the directors, their membership is deemed to have been terminated and despite section 40 and subsection 356(4), the member has no further appeal. 
  
  ### Occupancy during appeal
  
  (4) Despite section 40, if, in accordance with the by-laws, the directors terminate a member’s membership and the member appeals the termination, the member has the right to occupy the housing unit allocated to them until the termination has been confirmed by the members. 
  
  ### Confirmation on appeal
  
  (5) A decision of the directors to terminate the membership of a member is confirmed if the members, at a duly called meeting of the members, do not reverse the directors’ decision. 
  
  ### Deemed confirmation
  
  (6) If a meeting of the members is duly called to consider the appeal of a terminated member and a quorum of members is not available for the meeting, the decision of the directors is deemed to be confirmed. 
  
  ### Regaining possession of unit
  
  (7) If a member’s membership has been terminated and the member no longer has the right to occupy a housing unit of the cooperative, the cooperative regains possession of the housing unit by consent or by appropriate legal proceedings. 
  
  ### Compensation for occupation past termination date
  
  (8) The cooperative is entitled to compensation for a housing unit that is occupied by a terminated member until it is vacated. 
  
  ### Cooperative not to take other property
  
  (9) The cooperative may not take the property of a member to satisfy amounts due to the cooperative except by consent or by legal proceedings. 
  
  ### Inclusion in by-laws
  
  (10) For the purpose of section 16, the provisions of this section must be included in the by-laws of a non-profit housing cooperative. 
  
  ### Non-profit requirements
  
  357 (1) Subject to subsection (2), but despite any other provision of this Act, a non-profit housing cooperative may not distribute or pay any of its assets to a member. 
  
  ### Permitted payments
  
  (2) The cooperative may pay a member 
  (a) dividends on membership shares paid at a rate that is not more than eight per cent per year and interest on member loans at a rate that is not more than ten per cent per year; 
  (b) if the member withdraws from the cooperative or their membership in the cooperative is terminated, or on the dissolution of the cooperative, a sum equal to the member’s investment in membership shares or member loans; and 
  (c) a reasonable amount for property or services provided by the member to the cooperative. 
  
  ### No other payments permitted
  
  (3) No person may pay or accept compensation for the withdrawal from membership of a member of a non-profit housing cooperative or for any person giving up possession of a housing unit of the cooperative, except as is provided in subsection (2). 
  
  ### Limit on compensation
  
  (4) No person may give or accept, in connection with the allocation or use of a housing unit of the cooperative, compensation that exceeds the housing charges for the housing unit determined in accordance with the by-laws. 
  
  ### Limit on compensation
  
  (5) No person may give or accept, in connection with the allocation or use of a part of a housing unit of the cooperative, compensation that exceeds the amount that, having regard to the portion of the housing unit, would be a reasonable share of the housing charges for the housing unit determined in accordance with the by-laws. 
  
  ### If contravention of subsection (3), (4) or (5)
  
  (6) A person who accepts compensation in contravention of subsection (3), (4) or (5) must pay the amount of the compensation to the cooperative. 
  
  ### Resolution if proposed fundamental change
  
  358 A non-profit housing cooperative may not be a party to a fundamental change to which Part 16 applies unless the change is authorized by a vote of not less than ninety per cent of the members. 
  
  # PART 21 
  
  ## Additional Provisions Respecting Worker Cooperatives 
  
  ### Definition of worker cooperative 
  
  359 (1) For the purposes of this Part, 
  *worker cooperative* means a cooperative whose prime objectives are to provide employment to its members and to operate an enterprise in which control rests with the members.  
  
  ### Requirements of articles
  
  (2) The articles of a worker cooperative must provide that 
  (a) no person may be admitted to membership unless the person is an individual and an employee of the cooperative; and 
  (b) the maximum membership investment payable by a person to be a member may not be more than fifty per cent of their expected annual salary during the first year of their membership, unless any amount in excess of that amount is also paid equally by all persons who are members. 
  
  ### Non-member employees
  
  (3) Despite subsection (2), a worker cooperative may provide employment to non-members if, not later than five years after the incorporation of the cooperative or the acquisition of a business by the cooperative, not less than seventy-five per cent of its permanent employees or those of any entity controlled by it are members. 
  
  ### Permanent employees
  
  (4) For the purpose of subsection (3), the following persons are not permanent employees: 
  (a) a person who is employed on a probationary period of less than three years; or 
  (b) a person who is under contract for a period of less than two years. 
  
  ### By-laws
  
  360 (1) The by-laws of a worker cooperative must include 
  (a) any obligation of a member to provide capital to the cooperative, which capital, if required, must be applied fairly to all members; 
  (b) subject to subsections (2) and (3), the manner in which the membership of a member may be terminated; 
  (c) the procedure for allocating, crediting or distributing any surplus earnings of the cooperative, including that not less than fifty per cent of those earnings must be paid on the basis of the remuneration earned by the members from the cooperative or the labour contributed by the members to the cooperative; 
  (d) the period of probation of an applicant for membership, which may not be longer than three years; 
  (e) how work is to be allocated; 
  (f) a provision for the laying off or suspending of members when there is a lack of work; and 
  (g) a provision for the recall of members to work. 
  
  ### Termination of membership
  
  (2) If the by-laws provide that membership is to be terminated by the directors, the by-laws must include a right of appeal to the members. Despite section 40, the by-laws may require that an appeal from the decision of the directors may only be launched within seven days after the member receives notice of the termination of membership. 
  
  ### Laid-off member
  
  (3) A temporary lay-off of a member does not result in termination of their membership. After a member has been laid off and two years have elapsed after the date of the lay-off without the member having resumed employment with the cooperative, the directors or the members may, in accordance with the by-laws, terminate the membership of the member. 
  
  ### Confirmation on appeal
  
  (4) A decision of the directors to terminate the membership of a member is confirmed if the members, at a duly called meeting of the members, do not reverse the directors’ decision. 
  
  ### Deemed confirmation
  
  (5) If a meeting of the members is duly called to consider the appeal of a terminated member and a quorum of members is not available for the meeting, the directors must call a second meeting to be held, despite section 52, not later than seven days after the first meeting. If, at the second meeting, there is no quorum of members, the decision of the directors is deemed to be confirmed. 
  
  ### Name
  
  361 (1) The articles of a worker cooperative must provide that the name of the worker cooperative include the words “worker cooperative”, “worker co-operative”, “worker co-op”, “coopérative de travailleurs”, “coop de travailleurs”, “co-op de travailleurs”, “coopérative de travail”, “coop de travail” or “co-op de travail”. 
  
  ### Directors
  
  (2) Despite anything in this Act, 
  (a) not less than eighty per cent of the directors of a worker cooperative must be members that are employees of the cooperative; and 
  (b) the general manager of a worker cooperative may be a director. 
  
  ### Reorganization
  
  (3) A worker cooperative may not be a party to a fundamental change to which Part 16 applies unless the change is authorized by a vote of not less than ninety per cent of the members. 
  
  ### Dissolution
  
  (4) Unless otherwise provided in the articles, on dissolution of a worker cooperative, not less than twenty per cent of the surplus of the cooperative, after the payment of its liabilities, must be distributed to another cooperative, a non-profit entity or a charitable entity before any distribution is made to a member or shareholder. 
  
  # PART 21.1 
  
  ## Documents in Electronic or Other Form 
  
  ### Definitions
  
  361.1 The definitions in this section apply in this Part.  
  *electronic document* means, except in section 361.6, any form of representation of information or of concepts fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means. (document électronique)   
  *information system* means a system used to generate, send, receive, store or otherwise process an electronic document. (système d’information)  
  
  ### Application
  
  361.2 This Part does not apply to a notice, document or other information sent to or issued by the Director pursuant to this Act or to any prescribed notice, document or other information. 
  
  ### Use not mandatory
  
  361.3 (1) Nothing in this Act or the regulations requires a person to create or provide an electronic document. 
  
  ### Consent and other requirements
  
  (2) Despite anything in this Part, a requirement under this Act or the regulations to provide a person with a notice, document or other information is not satisfied by the provision of an electronic document unless 
  (a) the addressee has consented, in the manner prescribed, and has designated an information system for the receipt of the electronic document; and 
  (b) the electronic document is provided to the designated information system, unless otherwise prescribed. 
  
  ### Revocation of consent
  
  (3) An addressee may revoke the consent referred to in paragraph (2)(a) in the manner prescribed. 
  
  ### Creation and provision of information
  
  361.4 A requirement under this Act or the regulations that a notice, document or other information be created or provided is satisfied by the creation or provision of an electronic document if 
  (a) the by-laws or the articles of the cooperative do not provide otherwise; and 
  (b) the regulations, if any, have been complied with. 
  
  ### Creation of information in writing
  
  361.5 (1) A requirement under this Act or the regulations that a notice, document or other information be created in writing is satisfied by the creation of an electronic document if, in addition to the conditions in section 361.4, 
  (a) the information in the electronic document is accessible so as to be usable for subsequent reference; and 
  (b) the regulations pertaining to this subsection, if any, have been complied with. 
  
  ### Provision of information in writing
  
  (2) A requirement under this Act or the regulations that a notice, document or other information be provided in writing is satisfied by the provision of an electronic document if, in addition to the conditions set out in section 361.4, 
  (a) the information in the electronic document is accessible by the addressee and capable of being retained by the addressee, so as to be usable for subsequent reference; and 
  (b) the regulations pertaining to this subsection, if any, have been complied with. 
  
  ### Copies
  
  (3) A requirement under this Act or the regulations for one or more copies of a document to be provided to a single addressee at the same time is satisfied by the provision of a single version of the electronic document. 
  
  ### Registered mail
  
  (4) A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by the sending of an electronic document unless prescribed. 
  
  ### Statutory declarations and affidavits
  
  361.6 (1) A statutory declaration or an affidavit required under this Act or the regulations may be created or provided in an electronic document if 
  (a) the person who makes the statutory declaration or affidavit signs it with his or her secure electronic signature; 
  (b) the authorized person before whom the statutory declaration or affidavit is made signs it with his or her secure electronic signature; and 
  (c) the requirements of sections 361.3 to 361.5 are complied with. 
  
  ### Definitions
  
  (2) For the purposes of this section, “electronic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.  
  
  ### Clarification
  
  (3) For the purpose of complying with paragraph (1)(c), the references to an “electronic document” in sections 361.3 to 361.5 are to be read as references to an “electronic document” as defined in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.  
  
  ### Signatures
  
  361.7 A requirement under this Act or the regulations for a signature or for a document to be executed, except with respect to a statutory declaration or an affidavit, is satisfied if, in relation to an electronic document, the prescribed requirements pertaining to this section, if any, are met and if the signature results from the application by a person of a technology or a process that permits the following to be proven: 
  (a) the signature resulting from the use by a person of the technology or process is unique to the person; 
  (b) the technology or process is used by a person to incorporate, attach or associate the person’s signature to the electronic document; and 
  (c) the technology or process can be used to identify the person using the technology or process. 
  
  # PART 22 
  
  ## General 
  
  ## Notices 
  
  ### Notice to members, shareholders and directors
  
  362 (1) A notice or document required by this Act, the regulations, the articles, the by-laws or a unanimous agreement to be sent to a member, shareholder or director may be sent to 
  (a) the member at the member’s latest address as shown in the records of the cooperative; 
  (b) the shareholder at the shareholder’s latest address as shown in the records of the cooperative or its transfer agent; and 
  (c) the director at the director’s latest address as shown in the records of the cooperative or in the last notice sent under section 81 or 91. 
  
  ### Effect of notice
  
  (2) A director named in a notice sent by a cooperative to the Director under section 81 or 91 is presumed for the purposes of this Act to be a director of the cooperative referred to in the notice. 
  
  ### Deemed receipt
  
  (3) A notice or document sent in accordance with subsection (1) to a member, shareholder or director is deemed to have been received seven days after it was sent unless there are reasonable grounds to believe that the member, shareholder or director did not receive the notice or document at that time or at all. 
  
  ### Undelivered notice
  
  (4) If a cooperative sends a notice or document to a member or shareholder in accordance with subsection (1) and the notice or document is returned on two consecutive occasions because the member or shareholder cannot be found, the cooperative is not required to send any further notices or documents to the member or shareholder until the cooperative is informed in writing of their new address. 
  
  ### Notice to a cooperative
  
  363 (1) A notice or document that is required to be sent to a cooperative may be sent to the cooperative’s registered office shown in the last notice of registered office filed with the Director and, if so sent, is deemed to have been received seven days after it was sent unless there are reasonable grounds to believe that the cooperative did not receive the notice or document at that time or at all. 
  
  ### Service on a cooperative
  
  (2) A notice or document that is required to be served on a cooperative may be served on it at the cooperative’s registered office shown in the last notice of registered office filed with the Director. 
  
  ### Waiver of notice
  
  364 When a notice or document is required by this Act or the regulations to be sent, the sending of the notice or document may be waived or the time for the notice or document may be waived or abridged at any time with the consent in writing of the person who is entitled to it. 
  
  ## Certificates 
  
  ### Certificate of Director
  
  365 (1) When this Act requires or authorizes the Director to issue a certificate or to certify a fact, the certificate must be signed by the Director or by a Deputy Director authorized under section 371. 
  
  ### Evidence
  
  (2) Except in a proceeding under section 312 to dissolve a cooperative, a certificate referred to in subsection (1) or a certified copy of one, when introduced as evidence in a civil, criminal, administrative, investigative or other action or proceeding, is conclusive proof of the facts so certified without proof of the signature or official character of the person appearing to have signed it. 
  
  ### Certificate of cooperative
  
  366 (1) A certificate that is issued on behalf of a cooperative stating a fact that is set out in the articles, the by-laws, a unanimous agreement or the minutes of the meetings of the directors, a committee of directors, the members or the shareholders, or in a trust indenture or other contract to which the cooperative is a party, may be signed by a director, officer or transfer agent of the cooperative. 
  
  ### Proof
  
  (2) When introduced as evidence in a civil, criminal, administrative, investigative or other action or proceeding, the following things are, in the absence of evidence to the contrary, proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate: 
  (a) a fact stated in a certificate referred to in subsection (1); 
  (b) a certified extract from a securities register or a members’ register of a cooperative; and 
  (c) a certified copy of minutes or certified extract from minutes of a meeting of members, shareholders, directors or a committee of directors. 
  
  ### Security certificate
  
  (3) An entry in a securities register of, or a security certificate issued by, a cooperative is, in the absence of evidence to the contrary, proof that the person in whose name the security is registered is the owner of the securities described in the register or certificate. 
  
  ### Membership certificate
  
  (4) An entry in a members’ register of, or a certificate of membership or a membership share certificate issued by, a cooperative is, in the absence of evidence to the contrary, proof that the person whose name appears in it or on it is a member or owns the membership shares as set out in the membership share certificate or the register. 
  
  ## Notices and Documents 
  367 (1) to (3)  [Repealed, 2018, c. 8, s. 86]  
  
  ### Execution or signature of documents
  
  (4) Any articles, notice, resolution, requisition, statement or other document required or permitted to be executed or, in Quebec, signed by more than one individual for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the individuals. The documents, when duly executed or signed by all individuals required or permitted, as the case may be, to do so, are deemed to constitute one document for the purposes of this Act. 
  
  ### Copies
  
  368 (1) When a notice or document is required to be sent to the Director under this Act, the Director may accept a photostatic or photographic copy of it. 
  
  ### Content and form of documents
  
  (2) The Director may establish the requirements for the content and fix the form, including electronic or other forms, of notices and other documents sent to or issued by the Director under this Act and, in so doing, the Director may specify, among other things, 
  (a) the notices and documents that may be transmitted in electronic or other form; 
  (b) the persons or classes of persons who may sign or transmit the notices and other documents; 
  (c) their signature in electronic or other form, or the actions that are to have the same effect for the purposes of this Act as their signature; and 
  (d) the time and circumstances when electronic notices and documents are to be considered to be sent or received, and the place where they are considered to have been sent or received. 
  (3)  [Repealed, 2018, c. 8, s. 87]  
  
  ### Storage of documents or information in electronic or other form
  
  (4) Subject to the regulations, a document or information that is received by the Director under this Act in electronic or other form may be entered or recorded by an information storage device, including a system of mechanical or electronic data processing, that is capable of reproducing stored documents or information in intelligible form within a reasonable time. 
  
  ### When notices or documents need not be sent
  
  369 The Director may, on any conditions that the Director considers appropriate, determine that notices or documents or classes of notices or documents need not be sent to the Director under this Act if they are notices or documents that contain information similar to information contained in notices or documents required to be made public under any other Act of Parliament or under an Act of the legislature of a province. 
  
  ### Proof required by Director
  
  370 (1) The Director may require that a document or a fact stated in a document required by this Act or the regulations to be sent to the Director be verified in accordance with subsection (2). 
  
  ### Form of proof
  
  (2) A document or fact that the Director requires to be verified may be verified by affidavit or by statutory declaration under the Canada Evidence Act before any commissioner for oaths or for taking affidavits.  
  
  ## Appointment of Director 
  
  ### Appointment
  
  371 The Minister may appoint a Director and one or more Deputy Directors to perform the duties and exercise the powers of the Director under this Act. 
  
  ## Regulations 
  
  ### Regulations
  
  372 (1) The Governor in Council may make regulations 
  (a) providing for anything that by this Act is to be prescribed or provided for by the regulations; 
  (b) defining, enlarging or restricting the meaning of any word or expression used but not defined in this Act; 
  (c) requiring the payment of a fee in respect of the receipt, examination, filing, issuance or copying of any document, or in respect of any action that the Director is required or authorized to take under this Act, and prescribing the amount of the fee or the manner of determining the fee; 
  (d) respecting the payment of any fees, including the time when and the manner in which the fees are to be paid, the additional fees that may be charged for the late payment of fees and the circumstances in which any fees previously paid may be refunded in whole or in part; 
  (d.1) prescribing, for the purposes of subsection 58(2.1), a manner of determining the number of investment shares required for a person to be eligible to make a proposal, including the time and manner of determining a value or percentage of the outstanding investment shares; 
  (d.2) prescribing, for the purposes of paragraph 58(4)(d), the minimum amount of support required in relation to the number of times the person has submitted substantially the same proposal within the prescribed period; 
  (e) prescribing rules with respect to exemptions permitted by this Act; 
  (f) respecting the powers that may be granted by a shareholder in a form of proxy; 
  (g) prescribing any matter necessary for the purposes of the application of Part 21.1, including the time and circumstances when an electronic document is to be considered to have been provided or received and the place where it is considered to have been provided or received; 
  (h) prescribing the manner of, and conditions for, participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting; and 
  (i) prescribing, for the purposes of subsection 65(3), the manner of, and conditions for, voting at a meeting of a cooperative by means of a telephonic, electronic or other communication facility. 
  
  ### Incorporation by reference
  
  (2) The regulations may incorporate any material by reference, regardless of its source and either as it exists on a particular date or as amended from time to time. 
  
  ### Incorporated material is not a regulation
  
  (3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.  
  
  ### Payment of fees
  
  372.1 A fee in respect of the receipt or copying of any document must be paid to the Director when it is received or copied, and a fee in respect of the examination, filing or issuance of any document or in respect of any action that the Director is required or authorized to take must be paid to the Director before the document is examined, filed or issued or the action is taken. 
  
  ## Statements 
  
  ### Definition of statement 
  
  373 (1) In this section, 
  *statement* means a statement of intent to dissolve and a statement of revocation of intent to dissolve referred to in section 310.  
  
  ### Sending of articles and statements
  
  (2) If this Act requires that articles or a statement relating to a cooperative be sent to the Director, on receiving the articles or statement in the form that the Director fixes, any other required documents and the required fees, the Director shall 
  (a) record the date of receipt; 
  (b) issue the appropriate certificate; 
  (c) send the certificate, or a copy, image or photographic, electronic or other reproduction of the certificate, to the cooperative or its agent or mandatary; and 
  (d) publish a notice of the issuance of the certificate in a publication generally available to the public. 
  
  ### Date of certificate
  
  (3) A certificate referred to in subsection (2) that is issued by the Director may be dated as of the date of the receipt of the articles, statement or court order pursuant to which the certificate was issued or as of any later date specified by the court or person who signed the articles or statement. 
  
  ### Signature
  
  (4) A signature required on a certificate issued by the Director under this Act may be printed or otherwise reproduced on the certificate or may be made in accordance with the regulations. 
  
  ### Date of certificate
  
  (5) Despite subsection (3), a certificate of discontinuance may be dated as of the day a cooperative amalgamates under another Act or is continued. 
  
  ### Publication
  
  373.1 The Director must publish, in a publication generally available to the public, a notice of any decision made by the Director granting an application made under subsection 4(4) or 167(1), section 248 or subsection 263(2) or 267(2). 
  
  ### Annual return
  
  374 Every cooperative must send the Director an annual return in the form and within the period that the Director fixes. 
  
  ### Certificate
  
  375 (1) The Director may provide any person with a certificate that a cooperative 
  (a) has sent to the Director a document required to be sent; 
  (b) has paid all required fees; or 
  (c) exists as of a certain date. 
  
  ### Director may refuse to issue certificate of existence
  
  (2) For greater certainty, the Director may refuse to issue a certificate under paragraph (1)(c) if the Director has knowledge that the cooperative is in default of sending a document required to be sent or is in default of paying a required fee. 
  
  ### Alteration
  
  376 The Director may alter a notice or document, other than an affidavit or statutory declaration, if authorized to do so by the person who sent the document or by their representative. 
  
  ### Corrections at request of Director
  
  376.1 (1) If there is an error in articles, a notice, a certificate or other document, the directors, members or shareholders must, on the request of the Director, pass the resolutions and send to the Director the documents required to comply with this Act, and take any other steps that the Director may reasonably require so that the Director may correct the document. 
  
  ### No prejudice
  
  (2) Before proceeding under subsection (1), the Director must be satisfied that the correction would not prejudice any of the members, shareholders or creditors of the cooperative. 
  
  ### Corrections at the request of the cooperative
  
  (3) The Director may, at the request of the cooperative or of any other interested person, accept a correction to any of the documents referred to in subsection (1) if 
  (a) the correction is approved by the directors of the cooperative, unless the error is obvious or was made by the Director; and 
  (b) the Director is satisfied that the correction would not prejudice any of the members, shareholders or creditors of the cooperative and that the correction reflects the original intention of the cooperative or the incorporators, as the case may be. 
  
  ### Application to court
  
  (4) If, in the view of the Director, of the cooperative or of any interested person who wishes a correction, a correction to any of the documents referred to in subsection (1) would prejudice any of the members, shareholders or creditors of a cooperative, the Director, the cooperative or the person, as the case may be, may apply to the court for an order that the document be corrected and for an order determining the rights of the members, shareholders or creditors. 
  
  ### Notice to Director
  
  (5) An applicant under subsection (4) must give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel. 
  
  ### Director may require surrender of document
  
  (6) The Director may demand the surrender of the original document, and may issue a corrected certificate or file the corrected articles, notice or other document. 
  
  ### Date of corrected document
  
  (7) A corrected document must bear the date of the document it replaces unless 
  (a) the correction is made with respect to the date of the document, in which case the document must bear the corrected date; or 
  (b) the court decides otherwise. 
  
  ### Notice
  
  (8) If a corrected certificate materially amends the terms of the original certificate, the Director must without delay give notice of the correction in a publication generally available to the public. 
  
  ### Cancellation of articles by Director
  
  376.2 (1) In the prescribed circumstances, the Director may cancel the articles and related certificate of a cooperative. 
  
  ### No prejudice
  
  (2) Before proceeding under subsection (1), the Director must be satisfied that the cancellation would not prejudice any of the members, shareholders or creditors of the cooperative. 
  
  ### Request to Director to cancel articles
  
  (3) In the prescribed circumstances, the Director may, at the request of a cooperative or of any other interested person, cancel the articles and related certificate of the cooperative if 
  (a) the cancellation is approved by the directors of the cooperative; and 
  (b) the Director is satisfied that the cancellation would not prejudice any of the members, shareholders or creditors of the cooperative and that the cancellation reflects the original intention of the cooperative or the incorporators, as the case may be. 
  
  ### Application to court
  
  (4) If, in the view of the Director, of the cooperative or of any interested person who wishes a cancellation, a cancellation of articles and a related certificate would prejudice any of the members, shareholders or creditors of a cooperative, the Director, the cooperative or the person, as the case may be, may apply to the court for an order that the articles and certificate be cancelled and for an order determining the rights of the members, shareholders or creditors. 
  
  ### Notice to Director
  
  (5) An applicant under subsection (4) must give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel. 
  
  ### Return of certificate
  
  (6) The Director may demand the surrender of a cancelled certificate. 
  
  ### Inspection
  
  377 (1) A person who has paid the required fee is entitled during usual business hours to examine and make copies of or take extracts from a document, except a report sent to the Director under subsection 330(2), that is required to be sent to the Director under this Act, or that was required to be sent to a person performing a similar function under prior legislation. 
  
  ### Copies and extracts
  
  (2) The Director must, on request, provide any person with a copy, extract, certified copy or certified extract of a document that may be examined under subsection (1). 
  
  ## Records 
  
  ### Director’s obligation to keep documents
  
  378 (1) Documents that are received and accepted by the Director under this Act or that were received and accepted by a person performing a similar function under prior legislation must be kept by the Director in any form. 
  
  ### Obligation to furnish
  
  (2) If documents are kept by the Director otherwise than in written form, 
  (a) the Director must provide any copy required to be provided under subsection 377(2) in intelligible written form; and 
  (b) a report reproduced from those documents, if it is certified by the Director, is admissible in evidence to the same extent as the original documents would have been. 
  
  ### Time period for keeping and producing documents
  
  (3) The Director is not required to keep or produce any document or class of documents — other than a certificate and any attached articles or statement received under section 373 and other prescribed documents or prescribed class of documents — after the end of the prescribed period for the keeping or production of the document or class of documents. 
  
  ### Form of publication
  
  (4) Information or notices required by this Act to be summarized in a publication generally available to the public or to be published by the Director may be made available to the public or published by a system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information or notice in intelligible form within a reasonable time. 
  
  # PART 23 
  
  ## Continuance 
  
  ### Continuance under this Act
  
  379 (1) Subject to paragraphs 7(3)(b) and (c), on the coming into force of this subsection, 
  (a) each former Act cooperative is deemed to be a cooperative incorporated under this Act; 
  (b) any provision contained in the articles of association and the charter by-laws of a former Act cooperative that is required to be contained in the articles of incorporation of a cooperative under this Act is deemed to be contained in the articles of that cooperative; and 
  (c) any share that has been issued by the cooperative that is not a membership share is deemed to be an investment share. 
  
  ### Amendment to articles
  
  (2) Each former Act cooperative must, not later than five years after the coming into force of this subsection, amend its articles so that they comply with section 11 and file them with the Director. 
  
  ### Failure to comply
  
  (3) If a cooperative referred to in subsection (1) does not comply with subsection (2), the Director may, after giving not less than one hundred and eighty days notice after the end of the five years to the cooperative, dissolve the cooperative. 
  
  ### No member or shareholder rights
  
  (4) Any amendment to the articles of a cooperative to comply with subsection (2) does not give rise to any rights by a member or shareholder under section 302. 
  
  # PART 24 
  
  ## Consequential Amendments, Repeal and Coming into Force 
  
  ## Consequential Amendments 
  380 to 384 [Amendments] 
  
  ## Repeal 
  385 [Repeal] 
  
  ## Coming into Force 
  
  ### Coming into force
  
   * 386  This Act or any of its provisions or any provision of an Act enacted by this Act comes into force on a day or days to be fixed by order of the Governor in Council. 
  * [Note: Act in force December 31, 1999, see SI/99-69.]  
  
  