1998/99 Legislative Session: 3rd Session, 36th Parliament
THIRD READING
The following electronic version is for informational
purposes only.
The printed version remains the official version.
Part 13 -- Reporting Companies
Division 1 -- Application of this Part
426 In this Part, "reporting company" means a corporation, incorporated by or under an Act, that was or was deemed to be a reporting company immediately before the coming into force of this Act, but does not include
(a) a reporting issuer, or
(b) a corporation that the registrar orders is not a reporting company.
427 (1) Subject to subsection (5) (a), this Part applies only to reporting companies that have not altered their articles in accordance with subsection (2) of this section.
(2) A reporting company must, before or concurrently with filing a notice of articles under section 442 (1) (a), alter its articles, in accordance with section 277 and subsection (3) of this section, to include, in a separate part or division of its articles entitled "Statutory Reporting Company Provisions",
(a) those provisions, prescribed by the Lieutenant Governor in Council, that are designated in the regulations as the "Prescribed Statutory Reporting Company Provisions", or
(b) if exempted under subsection (5) (b) of this section from including in its articles one or more of the provisions referred to in paragraph (a), each of the provisions referred to in that paragraph for which an exemption was not obtained.
(3) A reporting company may resolve to alter its articles for the purposes of subsection (2) by an ordinary resolution or by a directors' resolution.
(4) Despite any wording to the contrary in a security agreement or other record to which a reporting company is a party, the alteration of the articles under subsection (2) does not constitute a breach or contravention of, or a default or offence under, the security agreement or other record if the only alteration made to the articles is the alteration required by that subsection.
(5) The executive director may, if the executive director considers that to do so would be fair and reasonable to all interested parties and would not be prejudicial to the public interest, in writing,
(a) order that one or more of the provisions of this Part do not apply to a reporting company, or
(b) exempt a reporting company from including in its articles one or more of the "Statutory Reporting Company Provisions" referred to in subsection (2).
(6) An appeal lies to the Securities Commission from
(a) an order made under subsection (5), or
(b) the refusal of the executive director to make an order under subsection (5).
428 (1) In this section, "registrant" means a person registered or required to be registered in any jurisdiction to trade in securities within the meaning of the Securities Act, but does not include a trustee with respect to shares held under a trust instrument that regulates the manner in which those shares are to be voted.
(2) A share of a reporting company must not, if the share is recorded in the name of a registrant or the registrant's nominee but is not beneficially owned by the registrant, be voted at a general meeting, a class meeting or a series meeting unless the registrant promptly sends to the beneficial owner of the share, at no expense to that beneficial owner,
(a) a copy of the notice of the meeting, together with copies of all financial statements, all information circulars and all other records, other than the forms of proxy, that were sent to shareholders of the reporting company for use in relation to the meeting, and
(b) a written request for voting instructions from the beneficial owner stating that if voting instructions are not received at least 24 hours, not including Saturdays and holidays, before the expiry of the time within which proxies are to be provided to the reporting company or its agent as specified by the notice calling, or in the information circular relating to, the meeting, the registrant may, in the registrant's discretion, vote the shares or appoint a proxy holder to vote the shares at the meeting.
(3) A registrant must not vote or appoint a proxy holder to vote shares referred to in subsection (2) if the registrant does not know the beneficial owner of the shares.
(4) The person by whom, or on whose behalf, a solicitation is made must, at the request of a registrant, promptly provide to the registrant, without charge, a sufficient number of copies of the records referred to in subsection (2) (a) to permit the registrant to comply with that subsection.
(5) A registrant must vote, or appoint a proxy holder to vote, any shares referred to in subsection (2) in accordance with any written instructions received from the beneficial owner within the time period referred to in subsection (2) (b).
(6) Nothing in this section gives a registrant the right to vote shares that the registrant is otherwise prohibited from voting.
429 (1) A shareholder entitled to vote at a general meeting, class meeting or series meeting of a reporting company, including a shareholder that is a corporation, may, by proxy, appoint a person as proxy holder for that meeting whether or not the person appointed is a shareholder.
(2) A proxy holder appointed under subsection (1), whose proxy is received by the reporting company within the time, if any, set under subsection (9), may attend and act at the meeting as the appointing shareholder's nominee in the manner, to the extent and with the power conferred by the proxy.
(3) A proxy holder referred to in subsection (2) has the same rights to speak at the meeting that the appointing shareholder had but, unless the articles provide otherwise, the proxy holder is not entitled, except on a poll, to vote the shares represented by the proxy.
(4) A proxy must
(a) be signed by
(i) the appointing shareholder,
(ii) an attorney authorized in writing by the appointing shareholder, or
(iii) if the appointing shareholder is a corporation, a duly authorized director, officer or attorney of the corporation,
(b) include the date on which the proxy is signed, and
(c) contain the name of the proxy holder.
(5) A proxy ceases to be valid on revocation or, if not revoked,
(a) one year after the date on which it is signed under subsection (4),
(b) if issued in respect of a specific vote or meeting, one year after the conclusion of that vote or meeting, or
(c) if issued in respect of a specific matter, one year after all votes on that matter have been held.
(6) The form of proxy
(a) must contain
(i) any matters the Lieutenant Governor in Council may prescribe, and
(ii) if solicited by or on behalf of the management of the reporting company, space for a shareholder to appoint alternate proxy holders, and
(b) must comply with the provisions of the articles to the extent that those provisions are not inconsistent with
(i) this Act, and
(ii) the regulations prescribed under paragraph (a) (i).
(7) A shareholder may appoint, or in writing authorize a proxy holder to appoint, an alternate proxy holder to act in the place of an absent proxy holder.
(8) A proxy may be revoked in any manner provided by law including by a written instrument that is
(a) signed by
(i) the appointing shareholder,
(ii) an attorney authorized in writing by the appointing shareholder, or
(iii) if the appointing shareholder is a corporation, a duly authorized director, officer or attorney of the corporation, and
(b) received by
(i) the delivery address of the registered office of the reporting company on or before the last business day preceding the date of the meeting, or any adjournment of it, at which the proxy is to be used, or
(ii) the chair of the meeting on the date of the meeting or any adjournment of it before the taking of any vote in respect of which the proxy is to be used.
(9) Subject to subsection (10), the directors may set a time before which proxies to be used at a meeting must be received by the reporting company or its agent.
(10) A time set under subsection (9)
(a) must not be more than 48 hours, not including Saturdays and holidays, before the meeting at which the proxy is to be used, and
(b) must be specified in the notice calling the meeting or in the information circular relating to it.
(11) Without limiting any other provision of this section, if a reporting company is bound by any provision in this Act that imposes any requirements on the manner, form or contents of a proxy or a proxy solicitation, or that otherwise relates to proxies or proxy solicitations, any person soliciting or granting a proxy to vote shares of the reporting company is also bound by those provisions.
430 The management of a reporting company must, concurrently with or before giving notice of a general meeting, class meeting or series meeting, send to each of the shareholders entitled to vote at the meeting, at the latest addresses shown for those shareholders in the central securities register, a form of proxy that complies with section 433 for use at that meeting.
431 (1) A person must not solicit proxies to vote shares of a reporting company unless,
(a) in the case of a solicitation by or on behalf of the management of the reporting company, an information circular, either as an appendix to or as a separate record accompanying the notice of the meeting, is prepared in accordance with the provisions of section 432 and sent to each of the shareholders of the reporting company whose proxy is solicited, or
(b) in the case of any other solicitation, the person making the solicitation, concurrently with or before it, sends an information circular to each of the shareholders of the reporting company whose proxy is solicited.
(2) Subsection (1) does not apply to
(a) a solicitation made by or on behalf of persons other than the management of the reporting company, if those persons solicit proxies from fewer than 16 shareholders of the reporting company,
(b) a solicitation made under section 428 of this Act, or under Part 14 of the Securities Act, its regulations or the rules made or deemed to be made by the Securities Commission under section 184 of that Act, or
(c) a solicitation made in respect of shares of which the person making the solicitation is the beneficial owner.
432 A reporting company must, at its expense, reproduce and distribute, as a separate part of any information circular sent under section 431 (1) (a),
(a) a written statement explaining the position of the shareholders who are requisitioning the meeting under section 187 if
(i) the meeting in relation to which the solicitation is being made was requisitioned by those shareholders,
(ii) the requisitioning shareholders provided the written statement to the registered office of the reporting company at least 50 days before the meeting, and
(iii) the written statement does not exceed 1 000 words in length, and
(b) a nomination for a director and the information for that nominee that is required by the regulations to be included in the information circular, if that nomination and information is submitted
(i) by shareholders who, in the aggregate, hold shares carrying, in the aggregate, more than 1/10 of the voting rights that may be exercised in the election of directors who may be elected at a general meeting, and
(ii) to the registered office of the reporting company at least 35 days before the date of the meeting.
433 If section 430, 431 or 432 applies,
(a) the form of proxy sent to a shareholder by the person soliciting proxies must
(i) indicate in bold face type, or other conspicuous manner, whether or not the proxy is solicited by or on behalf of the management of the reporting company,
(ii) provide a specifically designated blank space for recording the date on which the proxy is signed, and
(iii) subject to paragraph (e) of this section, provide a method for the appointing shareholder to specify how the shares recorded in that shareholder's name are to be voted by the proxy holder on each matter or group of related matters identified in the proxy or in the information circular as intended to be acted on, other than the election of directors and the appointment of auditors,
(b) a proxy may confer discretionary authority with respect to matters in respect of which a choice is not specified under paragraph (a) (iii) if the form of proxy, or the information circular, states in bold face type or other conspicuous manner how it is intended to vote the shares represented by the proxy in each case,
(c) a proxy may confer discretionary authority with respect to
(i) amendments or variations to matters identified in the notice of meeting, or
(ii) other matters that may properly come before the meeting,
but only if
(iii) the person by whom, or on whose behalf, a solicitation is made is not made aware, a reasonable time before the time that the solicitation is made, that those amendments, variations or other matters are to be presented at the meeting, and
(iv) a specific statement is made in the information circular or in the form of proxy that the proxy is conferring that discretionary authority,
(d) no proxy confers authority to vote
(i) for the election of an individual as a director of the reporting company unless a proposed nominee for the election is named in an information circular sent to the shareholders, or
(ii) at a meeting other than the meeting specified in the notice of meeting or any adjournment of that meeting,
(e) if an information circular contains the names of nominees for election as directors or the name of a nominee for appointment as auditor,
(i) the form of proxy accompanying the information circular must provide a method for the appointing shareholder to specify that the shares recorded in that shareholder's name are or are not to be voted by the proxy holder for the nominees, or for those of the nominees that the appointing shareholder may specify, and
(ii) the proxy holder must not vote the shares of the appointing shareholder for any director if, for any reason, the instructions of that shareholder are uncertain as they relate to the election of directors,
(f) an information circular or form of proxy must state that, if the instructions are certain,
(i) the shares represented by the proxy will be voted on any poll, and
(ii) if the appointing shareholder specifies a choice with respect to any matter to be acted on, the shares will be voted on any poll in accordance with the specifications so made,
(g) an information circular or form of proxy must
(i) indicate in bold face type, or other conspicuous manner, that the appointing shareholder has the right to appoint a person, other than the person, if any, designated in the form of proxy, to attend and act for the shareholder at the meeting and that the person appointed need not be a shareholder of the reporting company, and
(ii) contain instructions as to the manner in which the appointing shareholder may exercise the right to appoint a person, and
(h) if the form of proxy contains a designation of a named person as proxy holder, a method must be provided by which the appointing shareholder may designate, in the form of proxy, some other person as the shareholder's proxy holder.
Division 3 -- Financial Statements
434 Subject to section 436 (8), the directors of a reporting company must, if the reporting company has, by an annual reference date, completed 2 or more financial years for which financial statements are required under Part 6, produce or cause to be produced and publish or cause to be published
(a) a comparative financial statement for the last 2 completed financial years, and
(b) any other financial statements required under this Part or Part 6.
435 (1) A pre-existing company that, within 6 months after its incorporation, becomes a reporting company must, within 8 months after its incorporation, send to each shareholder an interim financial statement for the 6 month period that began on the date of incorporation.
(2) The interim financial statement referred to in subsection (1) must contain
(a) a statement of cash flows, and
(b) sufficient relevant financial information in summary form to present fairly the results of the operations of the reporting company for that period, including
(i) a statement of sales or gross operating revenue,
(ii) extraordinary items of income or expense,
(iii) net income before income taxes imposed by any taxing authority,
(iv) income taxes imposed by any taxing authority, and
(v) net profit or loss.
436 (1) In this section, "comparative interim financial statement" means the comparative interim financial statement required under subsection (2).
(2) Subject to subsection (8), the directors of a reporting company must produce or cause to be produced and publish or cause to be published a comparative interim financial statement in accordance with subsection (3) if
(a) the reporting company completes a financial year, and
(b) the reporting company is, at the end of that financial year, a reporting company.
(3) A comparative interim financial statement must
(a) be prepared for
(i) the 6 month period that began immediately after the end of the reporting company's most recently completed financial year, and
(ii) the same 6 month period of the previous year, and
(b) contain
(i) a statement of cash flows for each period, and
(ii) sufficient relevant financial information in summary form to present fairly the results of the operations of the reporting company for each period, including
(A) a statement of sales or gross operating revenue,
(B) extraordinary items of income or expense,
(C) net income before income taxes imposed by any taxing authority,
(D) income taxes imposed by any taxing authority, and
(E) net profit or loss.
(4) A comparative interim financial statement required under this section must be prepared in addition to any financial statement that the reporting company is required to produce and publish under this Division or under Part 6.
(5) There must be stated, by way of a note to a comparative interim financial statement,
(a) particulars of any change in accounting principle or practice, or in the method of applying any accounting principle or practice, made during the period covered that affects the comparability of the comparative interim financial statement with the financial statement for the preceding financial year or with the interim financial statement for the comparable 6 month period, and
(b) the effect, if material, of the change on the profit or loss for the periods covered by the comparative interim financial statement.
(6) For the purposes of subsection (5), a change in accounting principle or practice, or in the method of applying any accounting principle or practice, affects the comparability of a financial statement with the financial statement for the preceding financial year or comparable 6 month period, even though the change did not have a material effect on the profit or loss for the period covered by the comparative interim financial statement.
(7) A comparative interim financial statement must,
(a) if it is prepared without audit, be clearly marked to that effect, and
(b) be mailed, within 2 months after the end of the 6 month period referred to in subsection (3) (a) (i), to each shareholder at the shareholder's last address as shown on the reporting company's central securities register.
(8) Directors may be relieved of one or both of their obligations under section 434 and their obligation under subsection (2) of this section, and for that purpose section 219 applies.
437 An individual must not become or act as a director of a reporting company if that individual is a person whose registration in any capacity has been cancelled under the Securities Act by the Securities Commission or the executive director or under the Mortgage Brokers Act by the commission or the registrar under that Act unless
(a) the Securities Commission or the executive director under the Securities Act, or the commission or the registrar under the Mortgage Brokers Act, as the case may be, orders otherwise, or
(b) 5 years have elapsed since the cancellation of the registration.
438 A reporting company must form an audit committee, and sections 242 to 244 apply.
439 (1) A reporting company that has been authorized to do so by an ordinary resolution may apply to the registrar for an order that the reporting company is not a reporting company.
(2) An application under subsection (1) must be in the prescribed form and must contain the prescribed information.
(3) Promptly after making an order that a company is not a reporting company, the registrar must mail a certified copy of the order to the mailing address of the registered office of the company and to the Securities Commission.
440 This Part is repealed on the day following the third anniversary of the coming into force of this Act.
[ . . . PREVIOUS PART | BILL CONTENTS
| NEXT PART . . . ]
[ Return to: Legislative Assembly Home Page ]
Copyright © 1999: Queen's Printer, Victoria, British Columbia, Canada