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.
143 A company must have at least one director and
(a) a majority of its directors must be individuals ordinarily resident in Canada, and
(b) one of its directors must be an individual ordinarily resident in British Columbia.
144 (1) Subject to subsection (2), the individuals who are designated as the first directors of a company on the notice of articles filed with the registrar under section 12 hold office as directors from the incorporation of the company until they cease to hold office under section 151 (1).
(2) No designation of an individual as a first director of a company is valid unless the designated individual
(a) is an incorporator who has taken the shares shown, in the articles, opposite the incorporator's name, or
(b) consents in writing to be a director of the company.
(3) An individual who is required under subsection (2) (b) to consent to be a director may deliver that consent to the company after the incorporation of the company and, in that event,
(a) the designation of the individual as a director is valid, and
(b) the director is deemed to have been a director, for all purposes, from the date of the incorporation of the company.
145 (1) Directors, other than the first directors of the company who are in their first term of office, must be elected or appointed in accordance with this Act and the articles of the company.
(2) If the articles so provide, the directors may, subject to subsection (3), appoint one or more additional directors.
(3) Despite any provision to the contrary in the articles, the number of additional directors appointed under subsection (2) must not at any time exceed 1/3 of the number of
(a) the first directors, if, at the time of the appointments under subsection (2), one or more of the first directors have not yet completed their first term of office, or
(b) in any other case, the individuals who have been elected or appointed as directors other than under subsection (2).
146 (1) Subject to subsection (2), no election or appointment of an individual as a director under section 145 is valid unless
(a) the individual consents in writing to be a director of the company, or
(b) the election or appointment is made at a meeting at which the individual is present and the individual does not refuse at the meeting to act as a director.
(2) An individual from whom a consent is required under subsection (1) (a) may deliver that consent to the company after that individual's election or appointment as director, in which event
(a) the election or appointment of the director is as valid as if the consent had been delivered to the company at the time of the election or appointment, and
(b) the director is deemed to have been a director for all purposes from the date of that election or appointment.
(3) A consent to be a director is effective,
(a) until it is revoked by the director, or
(b) if the director resigns, until the resignation takes effect.
(4) Despite subsection (3) (b), a consent remains effective despite the resignation of the director if promptly after the resignation takes effect, the director is reappointed or reelected as a director.
147 (1) A person must not become or act as a director of a company unless that person is an individual who is qualified to do so.
(2) An individual is not qualified to become or act as a director of a company if that individual is
(a) under the age of 18 years,
(b) found by a court, in Canada or elsewhere, to be incapable of managing the individual's own affairs,
(c) an undischarged bankrupt, or
(d) convicted in or out of British Columbia of an offence in connection with the promotion, formation or management of a corporation or of an offence involving fraud, unless
(i) the court orders otherwise,
(ii) 5 years have elapsed since the last to occur of
(A) the expiration of the period set for suspension of the passing of sentence without a sentence having been passed or without a fine having been imposed,
(B) the conclusion of the term of any imprisonment, and
(C) the conclusion of the term of any probation imposed, or
(iii) a pardon was granted or issued under the Criminal Records Act (Canada).
148 Unless the articles provide otherwise, a director of a company is not required to hold shares issued by the company.
149 A company must keep a register of its directors and enter in that register
(a) the full name of each of the directors and the prescribed address or addresses for each of those individuals,
(b) the date on which each director was elected or appointed,
(c) the date on which each former director ceased to hold office as a director, and
(d) the name of any office in the company held by a director, the date of the director's appointment to the office and the date on which the director ceased to hold the office.
150 (1) A company must, within 15 days after a change in its directors, complete and file with the registrar a prescribed notice of change of directors.
(2) At the time that a notice of change of directors is filed with the registrar under this section in relation to a company that has filed a notice of articles with the registrar, the notice of articles of the company is altered to reflect that change.
(3) After the notice of change of directors is filed with the registrar under this section, the registrar must provide to the company a notice confirming the change of directors and the corresponding alteration to the notice of articles.
151 (1) A director ceases to hold office at the time that
(a) the term of office of that director expires in accordance with the articles or this Act,
(b) the director dies or resigns,
(c) the director is removed in accordance with
(i) subsection (3) or (4), or
(ii) the memorandum or the articles, or
(d) the director ceases to be qualified under section 147 or 437 to act as a director.
(2) A resignation of a director becomes effective on the last to occur of
(a) the time that the director's resignation record is received by the company by being received
(i) at the delivery address of the registered office of the company,
(ii) at the delivery address of the records office of the company, or
(iii) by a director or senior officer of, or a lawyer for, the company,
(b) if a date but no time is specified by the resignation record, the beginning of the date specified,
(c) if a time, whether by reference to an event or otherwise, but no date is specified, the time specified, and
(d) if both a date and time are specified, the date and time specified.
(3) Subject to subsections (4) and (5), a company may
(a) remove a director before the expiration of the director's term of office by
(i) the type of resolution specified by the articles, or
(ii) if the articles do not specify the type of resolution required or if the type of resolution specified by the articles requires a majority of votes that is greater than the majority of votes required to pass a special resolution, by a special resolution, and
(b) unless the memorandum or articles provide otherwise, appoint, by an ordinary resolution, a replacement for that director.
(4) If the shareholders holding shares of a class or series of shares of a company have the exclusive right to elect or appoint one or more directors, a director so elected or appointed may only be removed,
(a) if the memorandum or articles require that such a director be removed by a specified type of resolution, by the specified type of resolution of those shareholders,
(b) if the memorandum or articles specify a different method by which such a director is to be removed, by the method required by the memorandum or articles, or
(c) if the memorandum or articles do not specify the resolution or method by which such a director may be removed, or if the number of shareholders required to pass the resolution or give effect to the method is greater than the number required to pass a special resolution, by a special resolution of those shareholders.
(5) If a director is removed under subsection (4), that director may be replaced by
(a) the type of resolution or other method required by the memorandum or articles, or
(b) if the memorandum or articles do not specify the type of resolution or other method required, by a separate resolution of the shareholders who have the right to elect or appoint that director, passed by a simple majority of the votes cast on it.
152 (1) In this section, "designated individual" means an individual who is designated as a director or officer of a company in a record filed with the registrar or kept at the records office of the company.
(2) A designated individual, or any other person whom the court considers to be an appropriate person to bring an application under this section, may make application to the court to remove the name of the designated individual from the record in which the designation is made.
(3) If an application is brought under subsection (2) and if the court is satisfied as to the matters set out in subsection (4), the court may
(a) order that the designated individual is not a director or officer, as the case may be, and has not been a director or officer, as the case may be, from a date specified by the order,
(b) order that any or all of the references to the designated individual on the notice of articles and in the records kept at the records office of the company that designate the designated individual as a director or officer, as the case may be, be removed from those records on the date specified by the order, and
(c) direct that the company pay some or all of the costs of the application.
(4) The court may make an order under subsection (3) if the court is satisfied that the application under subsection (2) has been brought within a reasonable time after the applicant became aware of the designation, and if,
(a) in the case of an individual who has been designated as a director, the designated individual has never, or in the case of an individual referred to in subparagraph (iii), has not, since leaving office, performed any of the functions of, or realized any of the benefits available to, a director of the company and
(i) never signed a consent to act as a director,
(ii) signed a consent to act as a director but was never validly elected or appointed as a director,
(iii) was a director but ceased to hold that office and, after the individual's term of office ceased, was not validly reelected or reappointed as a director, or
(iv) if purportedly elected or appointed as a director at a meeting referred to in section 146 (1) (b), was not present at the meeting or, if present, refused at the meeting to act as a director, or
(b) in the case of an individual who has been designated as an officer, the designated individual
(i) was never appointed as an officer of the company,
(ii) if appointed, refused the appointment and never held office as an officer, or
(iii) was an officer but ceased to hold that office and, after the individual's term of office ceased, was not validly reappointed as an officer.
(5) After an order is made under subsection (3),
(a) the registrar must, after receiving a copy of the entered order,
(i) alter the company's notice of articles, if and as necessary, in accordance with the order, and
(ii) if the notice of articles is altered under subparagraph (i), provide the company with a certified copy of the notice of articles as altered, and
(b) the company must promptly
(i) alter its records in accordance with the order, and
(ii) deposit a copy of the entered order at its records office.
153 (1) Unless the memorandum or articles provide otherwise, a casual vacancy that occurs among the directors may be filled by the remaining directors.
(2) If the number of remaining directors is below the number required for a quorum, the directors
(a) must, unless the vacancy is filled under subsection (3) within 15 months after the date on which the number of directors falls below the number required for a quorum, call a general meeting of the company, to be held within that 15 month period, for the purpose of filling the vacancy,
(b) may appoint as directors, to hold office until replaced in accordance with subsection (3), the number of individuals that, when added to the number of remaining directors, will provide a quorum, and
(c) must not take any other action until a quorum is obtained.
(3) Each individual appointed as a director under subsection (2) (b) holds office as an appointed director until that director ceases to hold office under section 151 or until a replacement director for that appointee is elected at a general meeting or is otherwise elected or appointed in accordance with section 200 (2) (b) or the memorandum or the articles, but nothing in this section prevents the appointee from being elected or appointed as a director in the manner contemplated by this subsection and, from that election or appointment, assuming office as a director.
(4) Unless the memorandum or articles provide otherwise, if there are no remaining directors, the shareholders may, by an ordinary resolution or by an instrument in writing signed by shareholders who, in the aggregate, hold shares carrying, in the aggregate, more than 1/2 of the votes for the election or appointment of directors, appoint a qualified individual as director for the sole purpose of performing the duty of the directors under subsection (2) (a).
(5) Despite subsections (2) to (4), if the shareholders holding shares of a class or series of shares have the exclusive right to elect or appoint one or more directors and if a vacancy occurs among those directors other than as set out in section 151 (4),
(a) the remaining directors elected or appointed by those shareholders may appoint a qualified individual to fill that vacancy,
(b) if there are no remaining directors elected or appointed by those shareholders, the remaining directors of the company must promptly
(i) call a meeting of those shareholders for the purpose of filling the vacancy, and
(ii) appoint an individual as a director to hold office until that meeting, or
(c) if the articles require that the holders of those shares fill that vacancy, those shareholders may elect or appoint a qualified individual to fill that vacancy in accordance with the memorandum or articles, and any holder of those shares may call a class meeting or a series meeting, as the case may be, for that purpose.
(6) Subject to subsection (3) and unless the memorandum or articles provide otherwise, the term of office of a director elected or appointed to fill a vacancy under this section is the unexpired portion of the term of office of the individual whose departure from office created the vacancy.
Division 2 -- Powers and Duties of Directors,
Officers,
Attorneys, Representatives and Agents
154 (1) The directors of a company must, subject to this Act, the regulations and the articles, manage or supervise the management of the affairs and business of the company.
(2) Without limiting section 162, a limitation or restriction on the powers or functions of the directors is not effective against a person who does not have knowledge of the limitation or restriction.
155 (1) The directors may, without further approval of the shareholders,
(a) revoke a special resolution before it is acted on if the directors are authorized to do so by the special resolution being revoked or by another special resolution, or
(b) revoke an ordinary resolution before it is acted on if the directors are authorized to do so by the ordinary resolution being revoked or by a special resolution.
(2) The authorization provided by a special resolution under subsection (1) may be general in nature or may be limited to specified matters or to a specific resolution.
156 (1) A director who is entitled to participate in or vote at a meeting of directors or of a committee of directors may participate or vote, as the case may be,
(a) in person, or
(b) unless the articles provide otherwise, by telephone or other communications medium if all directors participating in the meeting, whether by telephone, by other communications medium or in person, are able to communicate with each other.
(2) A director who participates in a meeting in a manner contemplated by subsection (1) is deemed, for all purposes of this Act and the articles, to be present at the meeting.
(3) A resolution of the directors or of any committee of the directors may be passed without a meeting
(a) if each of the directors entitled to vote on the resolution consents to it in writing, or
(b) in any other manner permitted under this Act or the articles.
(4) If a company has only one director, that director may constitute a meeting.
(5) A resolution passed at a meeting of the directors or of a committee of directors is, for all purposes, deemed to have been passed on the date and time on which it is in fact passed despite the fact that the meeting at which the resolution is passed is a continuation of an adjourned meeting.
(6) A company must ensure that minutes are kept of all proceedings at meetings of directors or of committees of directors.
157 (1) Subject to subsection (3) and the articles, the directors may appoint officers and may specify their duties.
(2) Unless the articles provide otherwise,
(a) a director may be appointed to any office of the company, and
(b) 2 or more offices of the company may be held by the same individual.
(3) An individual who is not qualified under section 147 (2) to become a director of a company is not qualified to become or act as an officer of the company.
(4) Despite subsection (3), an officer need not be a director.
(5) Unless the articles provide otherwise, the directors may remove any officer.
(6) The removal of an officer is without prejudice to the officer's contractual rights or rights under law, but the appointment of an officer does not of itself create any contractual rights.
158 (1) A director or officer of a company, when exercising the powers and performing the functions of a director or officer of the company, as the case may be, must
(a) act honestly and in good faith with a view to the best interests of the company,
(b) exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances,
(c) act in accordance with this Act and the regulations, and
(d) subject to paragraphs (a) to (c), act in accordance with the memorandum and the articles.
(2) This section is in addition to, and not in derogation of, any enactment or rule of law or equity relating to the duties or liabilities of directors and officers of a company.
(3) No provision in a contract, the memorandum or the articles relieves a director or officer from
(a) the duty to act in accordance with this Act and the regulations, or
(b) liability that by virtue of any enactment or rule of law or equity would otherwise attach to that director or officer in respect of any negligence, default, breach of duty or breach of trust of which the director or officer may be guilty in relation to the company.
159 Every act of a director or officer is valid, regardless of any defect or irregularity in the election, appointment or qualification of that director or officer.
160 A corporation created in British Columbia may, in writing, designate a person as its attorney and empower that attorney, either generally or in respect of specified matters, to sign deeds or other instruments on its behalf in any location inside or outside British Columbia, and every deed or other instrument signed by the attorney on behalf of the corporation, so far as it is within the attorney's authority, binds the corporation.
161 (1) A corporation created in British Columbia may, by resolution of its directors or other governing body, authorize a person to act as the representative of the corporation,
(a) if the corporation is a shareholder of another corporation, wherever incorporated, at a general meeting, class meeting or series meeting of that other corporation, and
(b) if the corporation is a creditor of another corporation, wherever incorporated, at a meeting of creditors of that other corporation.
(2) A person authorized under subsection (1) is entitled to exercise the same powers on behalf of the corporation that the person represents as that corporation could exercise if it were an individual who is a shareholder or creditor of the other corporation.
162 (1) Subject to subsection (2), a company, a guarantor of an obligation of a company or a person claiming through a company may not assert against a person dealing with the company, or dealing with any person who has acquired rights from the company, that
(a) the company's articles or notice of articles or memorandum, as the case may be, have not been complied with,
(b) the persons named in the notice of articles, or in any subsequently filed notice of change of directors, are not the directors of the company,
(c) a person held out by the company as a director, officer or agent
(i) has not been duly elected or appointed, or
(ii) has no authority to exercise the powers and perform the duties that are customary in the business of the company or usual for such director, officer or agent,
(d) a record issued by any director, officer or agent of the company with actual or usual authority to issue the record is not valid or genuine, or
(e) a record kept by or for the company under section 42 is not accurate or complete.
(2) Subsection (1) does not apply if, at the relevant time, the person against whom an assertion referred to in subsection (1) (a) to (e) is made knew, or by virtue of that person's position with or relationship to the company, ought to have known, of the facts asserted.
Division 3 -- Conflicts of Interest
163 (1) For the purposes of this Division, a director or senior officer of a company holds a disclosable interest in a contract or transaction if
(a) the contract is a material contract, or the transaction is a material transaction, to the company,
(b) the company is or proposes to become a party to the contract or has entered into or proposes to enter into the transaction, and
(c) either of the following applies to the director or senior officer:
(i) the director or senior officer has a material interest in the contract or transaction;
(ii) the director or senior officer is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction.
(2) For the purposes of subsection (1) and this Division, a director or senior officer of a company does not hold a disclosable interest in a contract or transaction if the interest referred to in subsection (1) (c) arose before the coming into force of this Act and was not one for which disclosure was required under a former Companies Act.
(3) For the purposes of subsection (1) and this Division, a director or senior officer of a company does not hold a disclosable interest in a contract or transaction merely because
(a) the contract or transaction is an arrangement by way of security for money loaned to, or obligations undertaken by, the director or senior officer, or a person in whom the director or senior officer has a material interest, for the benefit of the company or an affiliate of the company,
(b) the contract or transaction relates to an indemnity or insurance under Division 5,
(c) the contract or transaction relates to the remuneration of the director or senior officer in that person's capacity as director, officer, employee or agent of the company or of an affiliate of the company,
(d) the contract or transaction relates to a loan to the company, and the director or senior officer, or a person in whom the director or senior officer has a material interest, has guaranteed or joined in guaranteeing the repayment of the loan or any part of the loan,
(e) the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the company and the director or senior officer is also a director or senior officer of that corporation, or
(f) the contract or transaction is between the company and
(i) its wholly owned subsidiary,
(ii) the holding corporation of which the company is a wholly owned subsidiary, or
(iii) an affiliate of the company, if both the company and its affiliate are wholly owned subsidiaries of the same holding corporation.
164 (1) A director or senior officer of a company must, in accordance with section 165, disclose the nature and extent of any disclosable interest held by that person in a contract or transaction unless, before the coming into force of this Act, the disclosable interest was disclosed in the manner and within the time required by the former Companies Act that was in force at the time of the disclosure.
(2) The disclosure required from a director under subsection (1) must be made promptly after the last to occur of
(a) the date on which he or she becomes a director,
(b) the date on which he or she becomes aware of having the disclosable interest, and
(c) the date on which he or she becomes aware of any of the following:
(i) the fact that the contract or transaction is to be considered at a meeting of the directors or is to be the subject of a consent directors' resolution;
(ii) the fact that the company is to become a party to the contract or is to enter into the transaction;
(iii) the fact that the contract or transaction has been considered at a meeting of the directors or has been the subject of a consent directors' resolution;
(iv) the fact that the company has become a party to the contract or has entered into the transaction.
(3) The disclosure required from a senior officer under subsection (1) must be made promptly after the last to occur of
(a) the date on which he or she becomes a senior officer,
(b) the date on which he or she becomes aware of having the disclosable interest, and
(c) the date on which he or she becomes aware of any of the following:
(i) the fact that the contract or transaction is to be considered at a meeting of the directors or is to be the subject of a consent directors' resolution;
(ii) the fact that the company is to become a party to the contract or is to enter into the transaction;
(iii) the fact that the contract or transaction has been considered at a meeting of the directors or has been the subject of a consent directors' resolution;
(iv) the fact that the company has become a party to the contract or has entered into the transaction.
165 (1) The disclosure required by section 164 is sufficiently given if
(a) it is entered in the minutes of a directors' meeting or of a general meeting,
(b) it appears in a resolution referred to in section 156 (3),
(c) it is contained in a record of disclosure provided to the company in relation to the particular contract or transaction, or
(d) it is made in a general notice given in accordance with subsection (2) of this section.
(2) A general notice in writing given by a director or senior officer of a company to the directors of the company is a sufficient disclosure of a disclosable interest for the purpose of this Division in relation to any contract or transaction that the company has entered into or proposes to enter into with a person if
(a) the notice
(i) declares that the director or senior officer giving the notice
(A) is a director or senior officer of, or has a material interest in, the person with whom the company has entered, or proposes to enter, into a contract or transaction, and
(B) is to be regarded as interested in any contract or transaction entered into or to be entered into by the company with that person, and
(ii) states the nature and extent of that interest, and
(b) at the time disclosure would otherwise be required under section 164, the extent of the director's or senior officer's interest in the person is not materially greater than that stated in the notice.
(3) Deviations in facts or circumstances from those set out in a general notice in writing given by a director or senior officer under subsection (2) that do not affect its substance or are not calculated to mislead do not invalidate the notice.
166 (1) Subject to this section and unless the court declares otherwise under section 170, a director or senior officer is liable to account to the company for any profit that accrues to the director or senior officer under or as a result of a contract or transaction in which the director or senior officer holds a disclosable interest.
(2) A director or senior officer is not obliged to account for and may retain the profit referred to in subsection (1) if
(a) the disclosable interest was disclosed before the coming into force of this Act in the manner and within the time required by the former Companies Act that was in force at the time of the disclosure, and the contract or transaction was approved
(i) in the manner and within the time required by that former Companies Act, or
(ii) in accordance with section 167 of this Act,
(b) the disclosable interest is disclosed in the manner and within the time required by this Act and the contract or transaction is approved in accordance with section 167,
(c) whether or not the contract or transaction is approved in accordance with section 167,
(i) the disclosable interest is disclosed in the manner and within the time required by this Act,
(ii) the company entered into the contract or transaction before the director or senior officer became a director or senior officer of the company, and
(iii) the director or senior officer does not participate in, and, in the case of a director, vote as a director on, any decision or resolution touching on the contract or transaction, or
(d) whether or not the disclosable interest is disclosed, or the contract or transaction is approved, in accordance with this Division, the contract or transaction is determined by the court, or by the shareholders by special resolution, to be fair and reasonable to the company.
(3) Unless the court declares otherwise under section 170, if the contract or transaction referred to in subsection (1) of this section is not one to which subsection (2) applies, a director or senior officer who holds a disclosable interest in the contract or transaction may, if the contract or transaction is, after the coming into force of this Act, approved in accordance with section 167, retain that part of the profit referred to in subsection (1) of this section that accrues after the date of approval.
(4) A director or senior officer is liable to account to the company for that part of the profit referred to in subsection (1) that the director or senior officer is not expressly permitted to retain by subsection (2) or (3) or by a declaration under section 170.
167 (1) For the purposes of section 166 (2) and (3), a contract or transaction may be approved by the directors or by a special resolution.
(2) The directors may approve a contract or transaction by
(a) a resolution passed at a meeting of the directors in which the director who has a disclosable interest in the contract or transaction abstains from voting on the approval, or
(b) a consent resolution signed by all of the directors except the director who has disclosed a disclosable interest in the contract or transaction.
(3) Unless the articles provide otherwise, a director who has a disclosable interest in a contract or transaction and who is present at the meeting of the directors referred to in subsection (2) may be counted in the quorum at the meeting even though the director does not vote on any or all of the resolutions considered at the meeting.
(4) Despite the articles or any other provision of this Act, the shareholders may, by a special resolution, approve the contract or transaction or determine that the contract or transaction is fair and reasonable to the company, even though the directors have voted not to approve the contract or transaction.
(5) Despite subsections (1) to (3), the directors have no authority to approve a contract or transaction if the shareholders have, in a properly constituted general meeting, voted not to approve the contract or transaction.
168 (1) This section does not apply to companies that are reporting issuers.
(2) Subject to subsection (4), if the contract or transaction in which a director or senior officer holds a disclosable interest is approved by the directors under section 167 (1), the directors must, in accordance with subsection (3) of this section, provide a brief description of the interest held by that person, including the nature and extent of the interest.
(3) The information required under subsection (2) must be provided,
(a) if an annual general meeting is held after the date on which approval or affirmation was given but in the financial year in which that date falls,
(i) at that annual general meeting, and
(ii) in the minutes of that meeting,
(b) if no such annual general meeting is held, as an attachment to the financial statements issued for that financial year, or
(c) if no such annual general meeting is held and the production of financial statements for that financial year is waived, in a record, including, without limitation, in the unanimous resolution referred to in section 200, deposited in the records office of the company promptly after the directors become aware that disclosure cannot be made under paragraph (a) or (b) of this subsection.
(4) Despite subsections (2) and (3), the information referred to in subsection (2)
(a) need not be disclosed in accordance with this section
(i) if disclosure is waived by the court under subsection (5), or
(ii) if, in the opinion of the directors acting reasonably, the disclosure of that information would be harmful to the business of the company or its subsidiaries, and
(b) must be disclosed in accordance with any order of the court under subsection (5) deferring disclosure.
(5) The court may make an order waiving or deferring disclosure
(a) on application by a company or by a director or senior officer of the company, and
(b) if the court is satisfied that
(i) the contract or transaction is fair and reasonable to the company, and
(ii) disclosure would be harmful to the business of the company or its subsidiaries, or to the director or senior officer.
169 (1) If a director or senior officer who holds a disclosable interest in a contract or transaction fails to make the disclosure required by section 164 or if, after the disclosure is made, the contract or transaction is not approved under section 167, the court, on the application of any shareholder or beneficial owner of shares, may, unless the court, or the shareholders by special resolution, determine that the contract is fair and reasonable to the company,
(a) enjoin the company from entering into the proposed contract or transaction,
(b) order the director or senior officer to account for any profit for which the director or senior officer is liable to account under section 166, or
(c) make any other or further order that the court considers appropriate.
(2) In any application brought under subsection (1), the court must take into account the interests and rights of any persons involved in or affected by the contract or transaction in question.
170 On the application of any director or senior officer, the court may make one or more of the following declarations:
(a) whether a contract or transaction in which the director or senior officer has a disclosable interest is fair and reasonable to the company;
(b) whether the director or senior officer is obliged to account for any profit that accrues to the director or senior officer under or as a result of the contract or transaction in which the director or senior officer has a disclosable interest;
(c) whether the director or senior officer may retain any or all of the profit referred to in paragraph (b).
171 A contract or transaction with a company is not invalid merely because
(a) a director or senior officer of the company has an interest, direct or indirect, in the contract or transaction,
(b) a director or senior officer of the company has not disclosed an interest he or she has in the contract or transaction, or
(c) the directors or shareholders of the company have not approved a contract or transaction in which a director or senior officer of the company has an interest.
172 (1) If a director or senior officer of a company holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, as the case may be, of the company, the director or senior officer must disclose, in accordance with this section, the nature and extent of the conflict.
(2) Section 165 applies to the disclosure required from a director or senior officer under subsection (1) of this section and, in addition, a director may make the disclosure required by this section by declaring at a meeting of the directors of the company the nature and extent of the conflict.
(3) The disclosure required from a director or senior officer under subsection (1) must be made promptly
(a) after that individual becomes a director or senior officer, or
(b) if that individual is already a director or senior officer, after that individual begins to hold the office or possess the property, right or interest for which disclosure is required.
173 Except as is provided in this Division, a director or senior officer of a company has no obligation to
(a) disclose any direct or indirect interest that the director or senior officer has in a contract or transaction, or
(b) subject to section 219, account for any profit that accrues to the director or senior officer under or as a result of a contract or transaction in which the director or senior officer has a disclosable interest.
Division 4 -- Liability of Directors
174 (1) Subject to section 177, directors of a company who vote for or consent to a resolution that authorizes the company to do any of the following are jointly and severally liable to the company to make good any losses, damages and costs suffered or incurred by the company as a result:
(a) to do an act contrary to section 33 (1) as a result of which the company has paid compensation to any person;
(b) to pay a commission or allow a discount contrary to section 66;
(c) to pay a dividend contrary to section 69 (2);
(d) to purchase, redeem or otherwise acquire shares contrary to section 76 or 77;
(e) to make a payment or give an indemnity contrary to section 183.
(2) Subject to subsection (4) and section 177, directors of a company who vote for or consent to a resolution that authorizes the allotment or issue of a share in contravention of section 62 (3) or 63 are jointly and severally liable to compensate the company, or any shareholder or beneficial owner of shares of the company, for any losses, damages and costs sustained or incurred as a result by the company, the shareholder or the beneficial owner, as the case may be.
(3) The liability imposed by subsections (1) and (2) is in addition to and not in derogation of any liability imposed on a director by this Act or any other enactment or by any rule of law or equity.
(4) A director is not liable under subsection (2) if the director did not know and could not reasonably have known that the fair market value of the consideration for which the share was issued was less than the consideration set for the share under sections 61 and 62.
(5) For the purposes of this section, a director of a company who is present at a meeting of the directors or of a committee of directors is deemed to have consented to a resolution referred to in subsection (1) or (2) that is passed at the meeting unless that director's dissent
(a) is recorded in the minutes of the meeting,
(b) is put in writing and delivered to the secretary of the meeting before the end of the meeting, or
(c) is, promptly after the end of the meeting, put in writing and delivered to the delivery address of or mailed by registered mail to the mailing address of the registered office of the company.
(6) A director who votes in favour of a resolution referred to in subsection (1) or (2) is not entitled to dissent under subsection (5).
(7) Subject to subsection (8), a director who is not present at a meeting of the directors or of a committee of directors at which a resolution referred to in subsection (1) or (2) is passed, is deemed to have consented to the resolution if,
(a) in the case of a resolution passed at a directors' meeting, the individual was a director at the time of the meeting, or
(b) in the case of a resolution passed at a meeting of a committee of directors, the individual was a member of that committee at the time of the meeting.
(8) Subsection (7) does not apply to a director who, within 7 days after becoming aware of the passage of a resolution referred to in subsection (1) or (2), provides a written dissent to the company by delivering it to the delivery address of, or by mailing it by registered mail to, the mailing address of the registered office of the company.
(9) A legal proceeding to enforce a liability imposed by this section may not be commenced more than 2 years after the date of the applicable resolution.
175 The company must, on receipt of a written dissent referred to in section 174 (5) or (8), certify on the written dissent the date and place it is received.
176 (1) Without limiting any other rights a director has at law, a director who has satisfied a liability arising under section 174 is entitled to contribution from the other directors who voted for or consented to, or are deemed to have voted for or consented to, the resolution that gave rise to the liability.
(2) On application by a director of a company or by the company, the court may
(a) order a shareholder of the company or other person to deliver to the director or the company any property that the court considers was improperly paid or distributed to that shareholder or person under this Act,
(b) join a director, shareholder or other person as a party to the legal proceeding,
(c) order the company to return or issue shares to a person from whom the company purchased, redeemed or otherwise acquired shares, and
(d) make any other order it considers appropriate.
177 (1) A director of a company is not liable under section 158 or 174 if the director relied, in good faith, on
(a) financial statements of the company represented to the director by an officer of the company or in a written report of the auditor of the company to fairly reflect the financial position of the company,
(b) a written report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by that person,
(c) a statement of fact represented to the director by an officer of the company to be correct, or
(d) any other record, information or representation that the director believed and had reasonable grounds for believing was genuine and accurate and that, although forged, fraudulently made or inaccurate, the court considers would, if genuine and accurate, have provided reasonable grounds for the actions or opinion of the director.
(2) If the power to manage or supervise a matter is, by the articles, held by persons other than individuals who are designated as directors under section 144 or elected or appointed as directors under section 145, the individuals designated, elected or appointed as directors are not liable under section 174 in relation to any resolution respecting that matter for which they did not vote or to which they did not consent.
(3) If the individuals who are designated as directors under section 144 or elected or appointed as directors under section 145 are required by the articles to act in a certain manner, the individuals designated, elected or appointed as directors are not liable under section 174 for any action taken by them in compliance with that requirement.
(4) A director of a company is not liable under section 174 if the director did not know and could not reasonably have known that the act done by the director or authorized by the resolution voted for by the director was contrary to this Act.
178 (1) An officer or director of a company or of an extraprovincial company who knowingly permits the company to contravene section 27 (1) (a), (b) or (c) or (2) is personally liable to indemnify any of the following persons who suffer loss or damage as a result of being misled by that contravention:
(a) a purchaser of goods or services from the company;
(b) a supplier of goods or services to the company;
(c) a person holding a security of the company.
(2) An officer or director of a company who issues or authorizes the issue of any instrument referred to in section 27 (1) (d) that does not display the name of the company is personally liable to the person holding that instrument for the amount of it, unless it is duly paid by the company.
Division 5 -- Indemnification of Directors
and Payment of Expenses
179 (1) In this Division:
"associated corporation" means a corporation or entity referred to in paragraph (b) or (c) of the definition of "eligible party";
"eligible party", in relation to a company, means an individual who is or was a director or officer of, or who holds or held a position equivalent to that of a director or officer of,
(a) the company,
(b) another corporation if
(i) the corporation is or was an affiliate of the company, or
(ii) the individual acts or acted as a director or officer of the corporation at the request of the company, or
(c) a partnership, trust, joint venture or other unincorporated entity if the individual acts or acted as or holds or held a position equivalent to that of a director or officer of that entity at the request of the company,
and includes, except in the definition of "eligible proceeding" and except in sections 183 (1) (c) and (d) and 185, the heirs and personal or other legal representatives of that individual;
"eligible penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
"eligible proceeding" means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the company or an associated corporation
(a) is or may be joined as a party, or
(b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;
"expenses" includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding;
"proceeding" includes any legal proceeding or investigative action, whether current, threatened, pending or completed.
(2) Section 212 does not apply to an indemnification or payment under this Division.
180 Subject to section 183, a company may do one or both of the following:
(a) indemnify an eligible party against all eligible penalties to which the eligible party is or may be liable;
(b) after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.
181 Subject to section 183, a company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by the eligible party in respect of that proceeding if the eligible party
(a) has not been reimbursed for those expenses, and
(b) is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.
182 (1) Subject to subsection (2), a company may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.
(2) A company must not make the payments referred to in subsection (1) unless the company first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by section 183, the eligible party will repay the amounts advanced.
183 (1) A company must not indemnify an eligible party under section 180 (a) or pay the expenses of an eligible party under section 180 (b), 181 or 182 if any of the following circumstances apply:
(a) if the indemnity is made or proposed in accordance with an earlier agreement to indemnify and, at the time that the agreement to indemnify was made, the company was prohibited from giving the indemnity by its memorandum or articles ;
(b) if the indemnity is made or proposed otherwise than in accordance with an earlier agreement to indemnify and, at the time that the indemnity is made or proposed, the company is prohibited from giving the indemnity by its memorandum or articles;
(c) if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the company or the associated corporation, as the case may be;
(d) in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party's conduct in respect of which the proceeding was brought was lawful.
(2) If an eligible proceeding is brought against an eligible party by or on behalf of the company or by or on behalf of an associated corporation,
(a) the company must not indemnify the eligible party under section 180 (a) in respect of the proceeding, and
(b) the company must not, unless the court orders otherwise, pay the expenses of the eligible party under section 180 (b), 181 or 182 in respect of the proceeding.
184 Despite any other provision of this Division and whether or not payment of expenses or indemnification has been sought, authorized or declined under this Division, on an application by a company or an eligible party, the court may do one or more of the following:
(a) order a company to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding other than an eligible proceeding referred to in section 183 (2);
(b) order a company to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;
(c) order the enforcement of, or any payment under, an agreement of indemnification entered into by a company;
(d) order a company to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under this section;
(e) make any other order the court considers appropriate.
185 A company may purchase and maintain insurance for the benefit of an eligible party or the heirs and personal or other legal representatives of the eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the company or an associated corporation.
Division 6 -- Meetings of Shareholders
186 (1) A general meeting of a company must be held
(a) in British Columbia, or
(b) at a location outside of British Columbia if the location at which the meeting may be held is approved in writing by the registrar under subsection (2).
(2) On an application made to the registrar before a general meeting, the registrar may approve, in writing, the holding of the general meeting at a location outside of British Columbia.
(3) A shareholder or proxy holder who is entitled to do one or both of participate in and vote at a general meeting may participate or vote, as the case may be,
(a) in person, or
(b) unless the articles provide otherwise, by telephone or other communications medium if all shareholders participating in the meeting, whether by telephone or by other communications medium or in person, are able to communicate with each other.
(4) Nothing in subsection (3) obligates a company to take any action or provide any facility to permit or facilitate the use of any communications medium at a general meeting.
(5) If a meeting is held in the manner contemplated by subsection (3) (b),
(a) a shareholder or proxy holder who participates in the meeting, whether in person, by telephone or by other communications medium, is deemed, for the purposes of this Act, to be present at the meeting, and
(b) the meeting is deemed, for the purposes of this section, to be held in the location where the greatest number of the shareholders and proxy holders who are participating in the meeting in person are located.
187 (1) Shareholders referred to in subsection (2) may requisition a general meeting for the purpose of allowing discussion on any matter that may be made the subject of a shareholders' resolution.
(2) A requisition for a general meeting under this section may be made by shareholders who, at the date on which the requisition is received by the company, hold in the aggregate at least 1/20 of the issued shares of the company that carry the right to vote at a general meeting of the company.
(3) A requisition made under this section must be signed by all of the requisitioning shareholders and may be made in a single record or may consist of several records, in similar form and content, each of which is signed by one or more of the requisitioning shareholders.
(4) The requisition must or, if the requisition consists of more than one record, each of the records comprising the requisition must
(a) state
(i) the business to be transacted at the meeting in sufficient detail to permit shareholders to form a reasoned judgment concerning that business, and
(ii) the text of any special resolution or exceptional resolution to be submitted to the meeting, and
(b) be delivered to the delivery address or mailed by registered mail to the mailing address of the registered office of the company.
(5) If a requisition for a general meeting under this section consists of more than one record, the requisition is received by the company on the first date by which the company has received requisition records that comply with subsections (3) and (4) from shareholders who, in the aggregate, hold at least the number of shares necessary to qualify under subsection (2).
(6) On receiving the requisition referred to in subsection (1), the directors must, regardless of the articles, call a general meeting to transact the business stated in the requisition and give notice of that meeting in accordance with section 188 unless
(a) the directors have called a general meeting and have given notice of that meeting in accordance with section 188,
(b) substantially the same business was submitted to shareholders to be transacted in a general meeting that was held not more than 3 years before the receipt of the requisition and the earlier request to transact that business was defeated,
(c) it clearly appears that the rights conferred by this section are being abused to secure publicity or to enforce a personal claim or redress a personal grievance against the company or its directors, officers or security holders,
(d) the business stated in the requisition has already been substantially transacted, or
(e) the business stated in the requisition, if transacted, would cause the company to commit an offence.
(7) A meeting called as a result of a requisition under this section must be held by the company within 4 months after the date on which the requisition is received by the company.
(8) If the directors do not, within 21 days after the date on which the requisition is received by the company, give notice of a general meeting, the requisitioning shareholders, or any one or more of them holding, in the aggregate, more than 1/40 of the issued shares of the company that carry the right to vote at a general meeting of the company, may give notice of a general meeting to be held within 4 months after the date on which the requisition is received by the company.
(9) A general meeting called, under subsection (8), by the requisitioning shareholders must, as nearly as possible, be conducted in the same manner and called with the same notice as a general meeting called by the directors.
(10) Unless the shareholders resolve otherwise by an ordinary resolution at the general meeting called, under subsection (8), by the requisitioning shareholders, the company must reimburse the requisitioning shareholders for the expenses actually and reasonably incurred by them in requisitioning, calling and holding that meeting.
(11) Notice is not required with respect to a resolution under subsection (10).
188 (1) Subject to sections 187 and 189, a company must give notice of the date, time and location of a general meeting of the company at least 21 days but not more than 2 months before the meeting,
(a) to each shareholder entitled to attend the meeting,
(b) to each director, and
(c) to the auditor of the company.
(2) The accidental omission to give notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to receive notice does not invalidate any proceedings at that meeting.
189 (1) A shareholder and any other person entitled to receive notice of a meeting of shareholders may waive the right to receive notice of that meeting or may agree to reduce the period of that notice.
(2) Despite section 9 (4), the right of a person to waive the right to receive notice or to reduce the period of notice under subsection (1) of this section need not be exercised in writing.
(3) Without limiting subsection (2), attendance of a person at a meeting of shareholders is a waiver of notice of the meeting, unless that person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
190 (1) The directors may set a date as the record date under this section for any purpose including for the purpose of determining shareholders
(a) entitled to receive payment of a dividend,
(b) entitled to participate in a liquidation distribution,
(c) entitled to receive notice of a meeting of shareholders, or
(d) entitled to vote at any meeting of shareholders.
(2) Subject to subsection (3), a record date set under subsection (1) may precede the date on which the particular action for which the record date is set is to be taken but must not precede that date by more than 2 months.
(3) The directors may set a date as the record date for the purpose of determining shareholders entitled to receive notice of a meeting of shareholders, but that record date must not precede by more than 2 months or by fewer than 21 days the date on which the meeting is to be held.
(4) If no record date is set under this section,
(a) the record date for determining the shareholders who are entitled to receive notice of or to vote at a meeting of shareholders is
(i) 5 p.m. on the day immediately preceding the first date on which notice is sent, or
(ii) if no notice is sent, the beginning of the meeting, and
(b) the record date under this section for the determination of shareholders for any purpose other than to establish a shareholder's right to receive notice of a meeting or to vote is 5 p.m. on the date on which the directors pass the resolution relating to the matter for which the record date is required.
191 (1) Subject to subsection (2) and section 192, and unless the articles provide otherwise, the quorum for the transaction of business at a general meeting, a class meeting or a series meeting is 2 persons who are, or who represent by proxy, shareholders entitled to vote at the meeting.
(2) Despite the articles, if the number of shareholders who are entitled to vote at any general, class or series meeting is less than the number required for a quorum at that meeting, the quorum is those persons who are, or who represent by proxy, all of the shareholders entitled to vote at that meeting.
(3) Unless the articles provide otherwise, if a quorum is not present at the opening of a general meeting, a class meeting or a series meeting, the shareholders present in person or by proxy, who are entitled to vote at the meeting, may adjourn the meeting to a set time and place but may not transact any other business.
192 If the articles provide that the quorum for transacting business at a meeting is one shareholder or if the company has only one shareholder entitled to vote at that meeting, one person who is, or who represents by proxy, a shareholder entitled to vote at the meeting may constitute that meeting.
193 (1) Subject to section 196 and unless the memorandum or articles provide otherwise, a shareholder has one vote in respect of each share held by that shareholder.
(2) Unless the articles provide otherwise, voting at a general meeting, a class meeting or a series meeting must,
(a) if one or more shareholders vote at the meeting in a manner contemplated by section 186 (3) (b), be by poll or be conducted in any other manner that adequately discloses the intentions of the shareholders, or
(b) in any other case, be by show of hands unless a poll is demanded by a shareholder or proxy holder entitled to vote at the meeting or is requested by the chair.
(3) At any meeting at which a resolution is submitted, a declaration of the chair that the resolution is carried by the necessary majority is, unless a poll is required or demanded under subsection (2) or is requested by the chair, conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
(4) At any meeting at which a resolution is submitted, a shareholder or proxy holder entitled to vote at the meeting may, before or promptly after the declaration of the results of a vote taken by a show of hands, demand a poll.
(5) On a poll, a shareholder who votes in person or by proxy may cast the number of votes to which that shareholder is entitled
(a) under the memorandum or articles, or
(b) if the memorandum or articles do not set out the number of votes to which the shareholder is entitled, under subsection (1).
(6) A company must, for at least 3 months after a meeting, keep at its records office each ballot cast on a poll and each proxy voted at the meeting.
(7) Any shareholder or proxy holder who was entitled to vote at a meeting referred to in subsection (6) may, without charge, examine the ballots and proxies kept by the company under that subsection in respect of that meeting.
(8) Section 48 applies to the records referred to in subsection (7) of this section.
(9) Unless a vote is conducted by a poll, an entry in the minutes of a meeting of shareholders to the effect that the chair of the meeting declared a motion to be carried or defeated is evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the motion.
194 Two or more shareholders may, in a written agreement, agree that when exercising voting rights in relation to the shares held by them they will vote those shares in accordance with the terms of the agreement.
195 A resolution passed at a general meeting, a class meeting or a series meeting is, for all purposes, deemed to have been passed on the date and time on which it is in fact passed despite the fact that the meeting at which the resolution is passed is a continuation of an adjourned meeting.
196 If a subsidiary is a shareholder of its holding corporation and the holding corporation is incorporated in British Columbia,
(a) the subsidiary does not form part of the quorum at, and must not vote its shares or permit its shares to be voted at, a general meeting, a class meeting or a series meeting of the holding corporation, and
(b) the holding corporation must not count the votes of the subsidiary in any vote at a general meeting, a class meeting or a series meeting of the holding corporation.
197 Unless the articles of a company provide otherwise, the shareholders and proxy holders present at a meeting who are entitled to vote at the meeting may elect any shareholder or proxy holder who is entitled to vote to chair the meeting.
198 (1) A company must ensure that minutes are kept of all proceedings at
(a) general meetings,
(b) class meetings, and
(c) series meetings.
(2) The minutes of a meeting referred to in subsection (1), if purported to be signed by the chair of the meeting or by the chair of the next succeeding meeting, are evidence of the proceedings.
(3) Until the contrary is proved, if minutes of a meeting have been signed in accordance with this section,
(a) the meeting is deemed to have been duly held and convened,
(b) all proceedings at the meeting are deemed to have been duly taken, and
(c) all elections and appointments of directors, officers, auditors or liquidators made at the meeting are deemed to be valid.
(4) A resolution consented to in writing in the manner provided by this Act is deemed to be
(a) a proceeding at a meeting of shareholders, if the number and type of shareholders consenting to the resolution is in accordance with the requirements of this Act for the passage of that type of resolution, or
(b) a proceeding at a meeting of the directors or of a committee of directors, if the resolution is passed in accordance with section 156 (3).
199 To the extent that this Act does not or the articles of a company do not make provision for a class meeting or a series meeting, the provisions of this Act and the articles relating to the call and conduct of general meetings apply, with the necessary changes and so far as applicable, to a class meeting or a series meeting.
200 (1) Subject to subsections (2) to (4), a company must hold an annual general meeting
(a) for the first time, not more than 18 months after the date on which it was recognized, and
(b) afterward, at least once in each calendar year and not more than 15 months after the annual reference date for the preceding calendar year.
(2) Subject to subsection (3), all of the shareholders entitled to vote at an annual general meeting of a company may,
(a) by a unanimous resolution passed on or before the date by which that annual general meeting is required to be held under this section, defer the holding of that annual general meeting to a date that is later than the date by which the meeting is required to be held under subsection (1),
(b) by a unanimous resolution, consent to all of the business required to be transacted at that annual general meeting, or
(c) by a unanimous resolution, waive the holding of
(i) that annual general meeting, or
(ii) any annual general meeting that the company had been obliged to hold earlier.
(3) The shareholders must, in any resolution passed under subsection (2), select, as the company's annual reference date, a date that would, under subsection (1), be appropriate for the holding of the applicable annual general meeting.
(4) If a unanimous resolution is not passed under subsection (2), on application by a company, the registrar may, if satisfied that it is appropriate to do so and on the terms and conditions the registrar considers appropriate, do one or both of the following:
(a) allow the company to hold its annual general meeting on a date that is later than the date by which the meeting is required to be held under subsection (1);
(b) select an annual reference date for the company.
201 (1) A general meeting, class meeting or series meeting of a company that was, immediately before the coming into force of this Act, a reporting company within the meaning of the Companies Act, 1973, and any action taken at the meeting, is not invalid merely because a registrant fails to comply with one or more of the provisions of this Act or of any part or division in the company's articles entitled "Statutory Reporting Company Provisions".
(2) If a company referred to in subsection (1) is bound by any provision in any part or division of its articles entitled "Statutory Reporting Company Provisions" 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 that company is also bound by those provisions.
202 (1) The directors of a company must, at least 10 days before each annual reference date of the company, send a copy of the following records to the auditor, if any:
(a) unless the requirement to produce and publish those financial statements is waived under section 219, the financial statements that the directors are required, under section 217, to produce and publish on or before that annual reference date;
(b) if the company proposes to change its auditor, the information the Lieutenant Governor in Council prescribes, except to the extent that that information has already been provided to the auditor under section 229 (2) (a);
(c) any other information respecting the company that the articles may require or that the Lieutenant Governor in Council may prescribe.
(2) If, within 6 months after an annual reference date, a shareholder of the company requests a copy of the financial statements that the directors were required, under section 217, to publish before that annual reference date, the directors must promptly send to that shareholder a copy of the following records:
(a) unless the requirement to publish financial statements is waived under section 219, those financial statements;
(b) unless a resolution has been passed under section 222 (2) to waive the appointment of an auditor, the report of the auditor required under section 230 (1) (a) in relation to those financial statements;
(c) if the company proposes to change its auditor, the information the Lieutenant Governor in Council prescribes.
(3) Unless the requirement to produce and publish financial statements is waived under section 219 before an annual reference date, the directors of a company must, if an annual general meeting is held,
(a) place before the annual general meeting,
(i) in the case of a reporting issuer, the financial statements that the directors are required to file under the Securities Act, or
(ii) in any other case, the financial statements that the directors are required to produce and publish under section 217 of this Act, and
(b) provide a copy of those financial statements to any shareholder, present at that meeting, who requests it.
203 (1) On its own motion or on the application of the company, the application of a director or the application of a shareholder entitled to vote at the meeting, the court may
(a) order a general meeting, a class meeting or a series meeting to be called, held and conducted in the manner the court considers appropriate, and
(b) give directions it considers necessary as to the calling, holding or conduct of the meeting.
(2) The court may make an order under subsection (1)
(a) if it is impracticable for any reason for the company
(i) to call a general meeting, a class meeting or a series meeting in the manner in which meetings of the company may be called, or
(ii) to conduct the meeting in the manner required by this Act, the regulations or the articles,
(b) if the company fails to hold a general meeting in accordance with this Act or the regulations or its articles, or
(c) for any other reason the court considers appropriate.
(3) Without limiting subsection (1), the court may order that the quorum or notice required by the articles or this Act be varied or dispensed with at a meeting called, held and conducted under this section.
(4) A meeting called, held and conducted in accordance with an order under this section is deemed to be a meeting duly called, held and conducted.
Division 7 -- Shareholders' Proposals
204 (1) In this Division:
"proposal" means a written notice, signed by one or more qualified shareholders, disclosing a matter that the submitters wish to have considered at the next annual general meeting of the company;
"qualified shareholder" means a person referred to in section 205 (1);
"submitter" means a signatory to a proposal.
(2) This Division applies to
(a) a company that is a reporting issuer, or
(b) a company that was, immediately before the coming into force of this Act, a reporting company within the meaning of the Companies Act, 1973 and that has not, since that date, been the subject of an order made under section 439 of this Act.
205 (1) A person is qualified to sign a proposal under this section if the person
(a) is the beneficial owner of one or more shares of the company that carry the right to vote at a general meeting, and
(b) has been the beneficial owner of one or more such shares for an uninterrupted period of at least 2 years before the date of the signing of the proposal.
(2) A proposal is valid if
(a) it has been signed by one or more persons who, at the time of signing, were qualified shareholders of the company,
(b) the qualified shareholders who signed the proposal beneficially own, at the time of signing, shares that, in the aggregate,
(i) carry 1/100 of the votes that may be cast by shareholders of the company at a general meeting, or
(ii) have a fair market value in excess of the prescribed amount, and
(c) the following are received by the registered office of the company at least 4 months before the anniversary of the previous year's annual reference date:
(i) the proposal;
(ii) a declaration from each submitter, signed by the submitter or, in the case of a submitter that is a corporation, by a director or senior officer of the submitter, declaring the number of shares carrying the right to vote at a general meeting that are beneficially owned by that submitter and providing a mailing address for that submitter.
(3) A proposal may include one written statement, not exceeding 500 words in length, that is in support of the proposal.
206 (1) Subject to subsections (4) (b) and (5), a company that receives a proposal must provide, to all of the shareholders to whom it provides an information circular,
(a) the text of the proposal,
(b) the names and addresses of the submitters, and
(c) the statement, if any, provided under section 205 (3) if that statement is received by the company's registered office at least 4 months before the anniversary of the previous year's annual reference date.
(2) The information referred to in subsection (1) must be provided by
(a) setting out that information in the body of its information circular,
(b) including a copy of that information with its information circular, or
(c) sending that information, in a separate mailing, within the time set for the provision of the notice of the meeting under section 188.
(3) Subject to subsections (4) (b) and (5) , a submitter who is the beneficial owner of one or more shares may present the proposal at the annual general meeting in relation to which the proposal was sent if the shares of which the submitter is the beneficial owner
(a) carry the right to vote at that meeting, and
(b) give to the holder of the share a right to attend that meeting.
(4) If a company receives more than one proposal in relation to an annual general meeting, the company, if the proposals relate to substantially the same matter,
(a) must comply with subsections (1) to (3) in relation to the first of those proposals to be received by its registered office, and
(b) need not comply with subsections (1) to (3) in relation to any other of those proposals.
(5) The company need not process a proposal in accordance with subsections (1) to (3) if
(a) any of the following circumstances applies:
(i) the proposal is not valid within the meaning of section 205 (2);
(ii) the proposal clearly appears to be made for the purpose of enforcing a personal claim or redressing a personal grievance against the company or its directors, officers or security holders;
(iii) any of the submitters had failed to present an earlier proposal, either in person or by proxy, at an annual general meeting held within 2 years before the annual general meeting in relation to which the current proposal is sent, if the company had, at the request of that submitter, complied with subsections (1) and (2) of this section in relation to the earlier proposal;
(iv) the current proposal deals with substantially the same matter as an earlier proposal that was presented to an annual general meeting held within 3 years before the annual general meeting to which the current proposal relates, and the earlier proposal was supported by less than 1/10 of the votes cast on it at that earlier annual general meeting;
(v) the proposal has already been substantially implemented by the company;
(vi) the proposal, if implemented, would cause the company to commit an offence;
(vii) the proposal deals with matters beyond the company's power to implement;
(viii) the proposal relates to specific amounts of cash paid or to be paid by way of dividend or specific shares issued or to be issued by way of dividend;
(ix) the proposal clearly appears to be made to secure publicity for a defamatory or personal matter, and
(b) the submitters consent in accordance with section 208 (2) or the court orders that the company need not process the proposal.
207 No company or person acting on behalf of a company incurs any liability merely because the company or person complies with section 206 (1), (2), (3) or (4).
208 (1) A company that does not wish to process a proposal in compliance with section 206 (1), (2) or (3), on the basis that section 206 (5) (a) applies to the proposal or on the basis that the proposal is one referred to in section 206 (4) (b), must, within 21 days after the proposal is received by its registered office, send to each submitter
(a) a written explanation as to the company's reasons including a specific reference to the provision in this Division that the company is relying on in its belief that it is not required to process the proposal and the reasons why the company believes that provision applies, and
(b) a request that the submitters consent to the company not processing the proposal.
(2) For the purposes of this Division, the submitters consent to the company not processing the proposal if, within 21 days after the request is sent under subsection (1) of this section, written consents are provided to the company by more than 1/2 of the submitters.
(3) If the company does not receive the consent of the submitters in accordance with subsection (2), the company must process the proposal in compliance with section 206 (1), (2) or (3) unless the court, on the application of the company, orders otherwise.
(4) On an application by the company under subsection (3), the court may make any order it considers appropriate, including
(a) an order that the company need not process the proposal, if the court is satisfied that
(i) one or more of subparagraphs (i) to (ix) of section 206 (5) (a) apply, or
(ii) the proposal is one referred to in section 206 (4) (b),
(b) an order that the company comply with section 206 (1) to (4) in the manner and within the time ordered by the court, or
(c) if the information referred to in section 206 (1) cannot be provided to the shareholders within a reasonable period of time before the annual general meeting, an order that the company
(i) hold, at its sole expense, an extraordinary general meeting for the purpose of considering the proposal, and
(ii) comply with section 206 (1) to (4) in relation to that extraordinary meeting on the terms and conditions imposed by the court.
209 (1) In this section:
"associate", if used to indicate a relationship with a person, means
(a) a partner, other than a limited partner, of the person,
(b) a trust or estate in which the person has a substantial beneficial interest or for which the person serves as trustee or in a similar capacity,
(c) a spouse, son or daughter of the person, or
(d) a relative of the person or of the person's spouse, other than a relative referred to in paragraph (c), who has the same home as the person;
"private company" means a company that
(a) is not a reporting issuer,
(b) is not a reporting issuer under the laws of any other Canadian jurisdiction,
(c) has not registered its securities under the Securities Exchange Act of 1934 of the United States of America,
(d) does not have any of its securities, within the meaning of the Securities Act, traded on or through the facilities of an exchange prescribed under this Act, and
(e) does not have any of its securities, within the meaning of the Securities Act, reported through the facilities of a quotation and trade reporting system prescribed under this Act;
"related person" means, in respect of a private company,
(a) a director or senior officer of the private company,
(b) a person who beneficially owns, directly or indirectly, shares of the private company that carry, in the aggregate, a sufficient number of votes that, if voted against a resolution proposed as a special resolution at a general meeting, would defeat that resolution,
(c) an associate of a person referred to in paragraph (a) or (b),
(d) the private company itself,
(e) an affiliate of the private company,
(f) a director or senior officer of another corporation if that other corporation is itself a related person of the private company,
(g) a director or senior officer of another corporation if that other corporation is a subsidiary of the private company, or
(h) a person who is employed by the private company or who is retained by it on a professional or consulting basis,
and for the purposes of this definition, a person is deemed to beneficially own shares referred to in paragraph (b) if those shares are beneficially owned by a corporation that is directly or indirectly controlled by the person, and a corporation is deemed to beneficially own shares referred to in paragraph (b) if those shares are beneficially owned by one or more of its affiliates.
(2) This section applies if
(a) a related person makes use of specific confidential information
(i) in connection with a transaction relating to any security of the private company, and
(ii) for the benefit or advantage of the related person or of any associate or affiliate of the related person, and
(b) the information, if generally known, might reasonably be expected to materially affect the value of the security.
(3) In the circumstances referred to in subsection (2), the related person is
(a) liable to compensate any person for any direct loss suffered by the person as a result of the transaction, unless the information was known or ought reasonably to have been known to the person at the time of the transaction, and
(b) accountable to the private company for any direct benefit or advantage received or receivable by the related person or the related person's associate or affiliate, as the case may be, as a result of the transaction.
(4) Subsection (3) does not apply if the related person proves that, at the time of the transaction, the related person reasonably believed that the specific confidential information was generally known or was known to the parties to the relevant transaction.
(5) If parties to a contract involving the transfer of a company's securities agree in writing that this section does not apply to the transfer, the agreement is binding on the parties to it.
210 (1) A contract that, if made between individuals, would, by law, be required to be in writing and under seal, may be made for a company in writing and under seal and may, in the same manner, be varied or discharged.
(2) A contract that, if made between individuals, would, by law, be required to be in writing and signed by the parties to be charged, may be made for a company in writing signed by a person acting under the express or implied authority of the company and may in the same manner be varied or discharged.
(3) A contract that, if made between individuals, would, by law, be valid although made orally and not reduced to writing, may be made in like manner for a company by a person acting under the express or implied authority of the company and may in the same manner be varied or discharged.
(4) A contract made according to this section is effectual in law and binds the company and all other parties to it.
(5) A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, by, on behalf of or on account of the company by a person acting under its authority.
211 (1) A record that requires authentication or certification by a company may be authenticated or certified by a director or officer of the company or by a lawyer for the company and need not be under the company's seal.
(2) Any certified record referred to in subsection (1), if introduced as evidence in any legal proceeding, is evidence of the contents of the record without proof of the signature or official capacity of the person appearing to have signed the certificate.
(3) An entry in a securities register of, or on a security certificate issued by, the company is evidence that the person in whose name the securities are recorded or to whom the security certificate is issued is the owner of the securities described in the securities register or in the certificate.
212 (1) A company may give financial assistance to any person for any purpose by means of a loan, a guarantee, the provision of security or otherwise.
(2) Subject to subsections (3) and (4), a company must disclose, in writing, to its shareholders any financial assistance that is material to the company and that the company gives to
(a) a shareholder of, a person known to the company to be a beneficial owner of a share of, a director of, an officer of or an employee of
(i) the company,
(ii) an affiliate of the company, or
(iii) an associate of any of the persons referred to in subparagraphs (i) and (ii), or
(b) any person for the purpose of a purchase by that person of a share issued or to be issued by the company or an affiliate of the company.
(3) A company need not make disclosure in accordance with subsection (2) in respect of financial assistance that is given
(a) to a person in the ordinary course of business, if the lending of money is part of the ordinary business of the company,
(b) to a person on account of expenditures incurred or to be incurred on behalf of the company,
(c) to a holding corporation, if the company is a wholly owned subsidiary of the holding corporation,
(d) to a wholly owned subsidiary of the company,
(e) to a corporation if the company and the corporation are
(i) wholly owned subsidiaries of the same holding corporation , or
(ii) wholly owned by the same person,
(f) to the sole shareholder of the company,
(g) to employees of the company or of any affiliate of the company to enable or assist them to purchase or erect living accommodation for their own occupancy, or
(h) to employees, or trustees for employees, of the company or of any affiliate of the company in accordance with a plan for the purchase of shares of the company or of any affiliate of the company to be held beneficially by those employees.
(4) Subject to section 213 (1), the following information must be disclosed under subsection (2) of this section in respect of financial assistance for which disclosure is required under that subsection:
(a) a brief description of the financial assistance, including the nature and extent of the financial assistance given;
(b) the terms on which the financial assistance was given;
(c) the amount of the financial assistance initially given and, unless the financial assistance is given within 30 days before the date on which disclosure is to be provided under subsection (5) or (6), as the case may be, the amount, if any, of the financial assistance that is outstanding as at a date specified by the disclosure, which specified date must be not more than 30 days before the date on which disclosure is provided under subsection (5) or (6), as the case may be.
(5) If the company is not a reporting issuer, the information required under subsection (4) must be disclosed at or before the first annual reference date to follow the giving of the financial assistance, and at or before each subsequent annual reference date on which any of the financial assistance remains outstanding, by providing the disclosure
(a) at the annual general meeting held on that date,
(b) if no annual general meeting is held on that date, in the financial statements issued under Part 6 in anticipation of that date, or
(c) if no annual general meeting is held on that date and no financial statements are issued under Part 6 in anticipation of that date, in a record deposited in the records office of the company on that date.
(6) If the company providing the financial assistance is a reporting issuer, the information required under subsection (4) must, until the financial assistance no longer remains outstanding, be provided in each of the information circulars that, under section 117 (2) of the Securities Act, the reporting issuer is required to send to its security holders in respect of each meeting held after the giving of the financial assistance.
213 (1) Despite section 212 (2), (5) and (6), the information referred to in section 212 (4) need not be disclosed in accordance with that section if disclosure is waived by the court.
(2) The court may make an order under subsection (1) waiving disclosure
(a) on application by
(i) the company giving the financial assistance,
(ii) a director or officer of the company,
(iii) a person who has received financial assistance from the company, or
(iv) any other interested person, and
(b) if the court is satisfied that
(i) the financial assistance is fair and reasonable to the company, and
(ii) disclosure would be harmful to the company, the applicant or any other person.
214 (1) If a company distributes among its shareholders any money or assets, including dividends or the proceeds of a redemption or a reduction of capital, and if any shareholder entitled to share in that distribution cannot, after reasonable efforts, be found, the company must, not later than 36 months after the date on which the distribution is made,
(a) pay the money, or deliver the assets, to which that shareholder was entitled under the distribution, to the minister for the purposes of subsection (4), and
(b) provide, with that payment or delivery, a statement showing the full name and last known address of that shareholder.
(2) The minister must, after receipt of the money or assets referred to in subsection (1), give a receipt to the company.
(3) The receipt given to the company under subsection (2) discharges the company from
(a) any liability for the money or assets so paid or delivered, and
(b) any claims in respect of the money or assets so paid or delivered that might be made by or on behalf of the shareholder entitled to the money or assets.
(4) The minister may, in respect of any money or assets paid or delivered under this section, invest the money or realize the assets and invest the proceeds, and the money so received or realized is deemed to be unclaimed money deposits within the meaning of the Unclaimed Money Act, and the provisions of that Act apply.
(5) This section does not apply to a distribution required by section 339 (n).
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