1998/99 Legislative Session: 3rd Session, 36th Parliament
FIRST READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


BILL 98 -- 1999

COOPERATIVE ASSOCIATION ACT

... continued ...

 
Part 18 -- Transitional Provisions

Definitions

212 In this Part:

"memorandum" includes a certificate, under an enactment, evidencing the continuation, as an association, as defined in this Act, of a corporation incorporated in another jurisdiction;

"pre-existing association" means an association incorporated or continued under the Cooperative Association Act, R.S.B.C. 1996, c. 71, before the date this section comes into force, and includes an association to which section 74 or 75 of that Act applied before that date.

Membership shares of pre-existing associations
with one class of share

213 If the share capital of a pre-existing association consists of only one class of shares, the association's memorandum is deemed to be amended to provide that

(a) all the pre-existing association's shares are renamed membership shares, and

(b) there is no maximum number of membership shares that the pre-existing association is permitted to issue.

Membership shares of pre-existing associations
with 2 or more classes of shares

214 (1) If the share capital of a pre-existing association consists of more than one class of shares and the members of the pre-existing association have been required to purchase the shares of only one class of shares of the pre-existing association, its memorandum is deemed to be amended to provide

(a) that all the shares of the class of shares of the pre-existing association that members have been required to purchase are renamed membership shares,

(b) that all the shares of the other class or classes of shares of the pre-existing association are restricted for issue to members only and are renamed as investment shares, and

(c) that the number of membership shares, and the number of investment shares in each class, that may be issued is unlimited.

(2) If a pre-existing association

(a) has more than one class of shares but members have not been required to purchase shares of any of those classes of shares, or

(b) has more than one class of shares and members have been required to purchase shares of all or more than one of those classes of shares,

the pre-existing association, by a date prescribed for the purpose of this subsection, must change its memorandum, rules or both to comply with section 12 (f) and (g) and, if applicable, change its memorandum, rules or both to comply with sections 48 and 49.

Application of section 216 to certain pre-existing associations

215 Section 216 applies only to a pre-existing association described in section 214 (2) and continues to apply to that a pre-existing association until it has made the changes required under section 214 (2).

Notice of rights and restrictions

216 (1) A pre-existing association described in section 214 (2) must ensure that

(a) a full text of the special rights or restrictions attached to any class of shares is contained in or permanently attached to every share certificate representing that class of shares, or

(b) every share certificate representing shares of a particular class of shares states that

(i) special rights or restrictions are attached to that class of shares, and

(ii) a free copy of the full text of the special rights or restrictions may be obtained at the registered office of the pre-existing association.

(2) A pre-existing association must

(a) keep at its registered office a copy of the full text of the special rights or restrictions attached to any class of shares, and

(b) provide a free copy of that text to any person who requests one.

Former Act associations

217 (1) The rules of a subsisting association or society that was incorporated under a former Act, in so far as they are not contrary to this Act, continue in force until altered or rescinded, and if any of those rules have incorporated by reference any provisions of a schedule to a former Act, the appropriate provisions of that schedule are incorporated and are part of the rules of the association.

(2) If a subsisting association or society that was incorporated under a former Act has a nominal capital of a set amount, the part of its memorandum by whatever name called that provides for that nominal capital continues in force until the association or society passes a special resolution altering its memorandum by converting its nominal capital into a share capital consisting of a limited or unlimited number of membership shares with or without par value, as set by the resolution.

Powers of associations incorporated before June 30, 1988

218 (1) If the words "the objects for which the association is formed are" or words of similar effect are contained in the memorandum of an association incorporated before June 30, 1988, those words are deemed to be struck out and the words "the business that the association is permitted to carry on is restricted to the following:" are deemed to be substituted for them.

(2) If the business that an association is permitted to carry on is restricted under subsection (1), the association may, however, carry on and undertake any business that may be conveniently carried on in connection with the business to which the association is restricted.

Repeal

219 The Cooperative Association Act, R.S.B.C. 1996, c. 71, is repealed.

 
Consequential Amendments

 
Company Act, R.S.B.C. 1996, c. 62

220 Section 298 (3) (b) of the Company Act, R.S.B.C. 1996, c. 62, is repealed and the following substituted:

(b) is registered under section 181 of the Cooperative Association Act, except as provided by section 6 of that Act.

 

Company Act
, S.B.C. 1999

221 Section 373 (g) of the Company Act, S.B.C. 1999, is repealed and the following substituted:

(g) to the extent provided by section 6 of the Cooperative Association Act, a foreign corporation that is registered under section 181 of that Act.

 

Cooperative Association Act
, S.B.C. 1999

222 Sections 5 and 6 of the Cooperative Association Act, S.B.C. 1999, are repealed and the following substituted:

Application of the Company Act to associations

5 (1) The Lieutenant Governor in Council, by regulation, may adopt by reference for the purposes of this Act any provisions of the Company Act then in force, either without variation or with variations that the Lieutenant Governor in Council considers necessary or desirable to give effect to this Act according to its intent.

(2) A regulation under subsection (1) adopting a provision of the Company Act by reference may

(a) limit the application of the provision to or in respect of circumstances specified in the regulation or to or in respect of one or more categories of associations or other persons, and

(b) for the purpose of paragraph (a), define the circumstances and categories on any basis the Lieutenant Governor in Council considers appropriate.

(3) This section is repealed on December 31, 2001.

 

Corporation Capital Tax Act

223 Section 4 (3) (g) of the Corporation Capital Tax Act, R.S.B.C. 1996, c. 73, is repealed and the following substituted:

(g) a housing cooperative as defined in the Cooperative Association Act; .

 

Farmers and Womens Institutes Act

224 Section 29 (1) (d) of the Farmers and Womens Institutes Act, R.S.B.C. 1996, c. 133, is repealed and the following substituted:

(d) with the approval of the registrar under the Cooperative Association Act.


Home Owner Grant Act

225 Section 1 of the Home Owner Grant Act, R.S.B.C. 1996, c. 194, is amended by repealing paragraphs (b) and (c) of the definition of "housing cooperative building" and substituting the following:

(b) is owned by a housing cooperative under the Cooperative Association Act, and

(c) has a taxable improvement on it that is used by the housing cooperative to provide the accommodation referred to in the definition of "housing cooperative" in section 1 of the Cooperative Association Act; .

 

Pacific North Coast Native Cooperative Act

226 Section 1 of the Pacific North Coast Native Cooperative Act, R.S.B.C. 1996, c. 343, is amended by striking out "under the Cooperative Associations Act on May 15, 1970." and substituting "on May 15, 1970 under the Co-operative Associations Act, R.S.B.C. 1960, c. 77."

 

Securities Act

227 Section 46 (h) of the Securities Act, R.S.B.C. 1996, c. 418, is repealed and the following substituted:

(h) membership shares, as defined in the Cooperative Association Act, issued by an association to which that Act applies, if the aggregate acquisition cost to the members, not counting the cost to the members of membership shares paid for by the application of patronage returns as defined in that Act, is not greater than a prescribed amount in any one year;

(h.1) membership shares and investment shares, both as defined in the Cooperative Association Act, issued by an association to which that Act applies, if the shares are paid for by the application of patronage returns as defined in that Act credited to the members or holders of investment shares;

(h.2) investment shares, as defined in the Cooperative Association Act, issued by an association to which that Act applies, if the investment shares are purchased only by members of the association who have been members of the association for at least 12 months immediately before the trade and if other prescribed conditions are complied with; .

 

Telephone (Rural) Act

228 Section 7 of the Telephone (Rural) Act, R.S.B.C. 1996, c. 450, is repealed and the following substituted:

Application of the Cooperative Association Act, R.S.B.C. 1996, c. 71

7 (1) Despite the repeal of the provisions of the Cooperative Association Act, R.S.B.C. 1996, c. 71, that are specified in Schedule B of this Act, those provisions continue to apply, as though they had not been repealed, to every company as defined in this Act, to the extent that those provisions are not inconsistent with this Act, and to the extent and subject to the modifications specified in Column 3 of Schedule B.

(2) Despite the repeal of the Company Act, R.S.B.C. 1996, c. 62, if a provision specified in Schedule B of this Act adopts by reference any provisions of the Company Act, R.S.B.C. 1996, c. 62, those provisions of that Act continue to apply, as though the Company Act, R.S.B.C. 1996, c. 62, had not been repealed, to every company as defined in this Act.

Commencement

229 (1) This Act, except sections 5 (4) and 222, comes into force by regulation of the Lieutenant Governor in Council.

(2) Section 222 comes into force on the date section 445 of the Company Act, S.B.C. 1999, comes into force.

 
Explanatory Note

This Bill repeals and replaces the Cooperative Association Act, R.S.B.C. 1996, c. 71.

In doing so, this Bill establishes for the incorporation and operation of cooperative associations a non-regulatory regime similar to that in place for companies under the Company Act. The regulatory functions performed by the Superintendent of Cooperatives under the present Cooperative Association Act are, consequentially, eliminated.

In addition, this Bill

  • enables cooperative associations to issue investment shares to members and non-members;
  • modernizes the cooperative sector legislation by allowing cooperatives to establish classes of members and to provide for joint memberships;
  • incorporates as part of the new Cooperative Associations Act provisions modelled on the new Company Act, (for example disclosure and conflict of interest rules for directors and officers and provisions respecting the indemnification of directors and officers);
  • gives greater self regulation and flexibility to cooperative associations by
  • incorporates as part of the new Act certain frequently used provisions of the Company Act that the present Cooperative Association Act adopts by reference (for example, requirements for the qualifications, appointment, duties and rights of auditors and provisions governing record keeping and access to records);
  • adopts the modern definition of "cooperative basis", modelled on the International Co-operative Alliance principles for defining cooperative organizations.

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