Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

Act current to 2017-06-19 and last amended on 2015-02-26. Previous Versions

Marginal note:Limited duty of inquiry
  •  (1) An issuer to whom a debt obligation is presented for registration has a duty to inquire into adverse claims if

    • (a) the issuer receives written notice of an adverse claim at a time and in a manner that provide the issuer with a reasonable opportunity to act on it before the issue of a new, reissued or re-registered debt obligation and the notice discloses the name and address of the claimant, the registered owner and the issue of which the debt obligation is a part; or

    • (b) the issuer is deemed to have notice of an adverse claim from a document that it obtained under section 96.

  • Marginal note:Discharge of duty

    (2) An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address provided by the adverse claimant or, if no such address has been provided, to the adverse claimant’s residence or regular place of business, that a debt obligation has been presented for registration of transfer by a named person and that the transfer will be registered unless, no later than the prescribed period after the date of sending the notice, the issuer

    • (a) is served with a court order; or

    • (b) is provided with an indemnity bond or, in Quebec, a guarantee sufficient in the issuer’s judgement to protect the issuer and any transfer agent or other agent or mandatary of the issuer from any loss that may be incurred by any of them as a result of complying with the adverse claim.

Marginal note:Inquiry into adverse claim

 Unless an issuer is deemed to have notice of an adverse claim from a document that is obtained under section 96 or has received notice of an adverse claim under subsection 97(1), if a debt obligation presented for registration is endorsed by an appropriate person, the issuer has no duty to inquire into adverse claims and, in particular,

  • (a) an issuer registering a debt obligation in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and the issuer may then assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular debt obligation;

  • (b) an issuer registering a transfer on an endorsement by a fiduciary has no duty to inquire into whether the transfer is made in compliance with the document or with the law of the jurisdiction governing the fiduciary relationship; and

  • (c) an issuer is deemed not to have notice of the contents of a court record or a registered document even if the record or document is in the issuer’s possession and the transfer is made on the endorsement of a fiduciary to the fiduciary specifically or to the fiduciary’s nominee.

Marginal note:Duration of notice of adverse claim

 A written notice of adverse claim received by an issuer is effective for the prescribed period unless the notice is renewed in writing.

Marginal note:Limitation on issuer’s liability
  •  (1) Except as provided otherwise in any applicable law relating to the collection of taxes, an issuer is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a debt obligation if

    • (a) the necessary endorsements were on or with the debt obligation; and

    • (b) the issuer had no duty to inquire into adverse claims or had discharged that duty.

  • Marginal note:Duty of issuer on wrongful registration

    (2) If an issuer has registered a transfer of a debt obligation to a person not entitled to it, the issuer shall on demand deliver a similar debt obligation to the owner unless

    • (a) the issuer is not liable by virtue of subsection (1);

    • (b) the owner is precluded by subsection 101(1) from asserting a claim; or

    • (c) the delivery would result in an overissue to which section 54 applies.

Marginal note:Lost or stolen debt obligation
  •  (1) The owner of a debt obligation who fails to notify the issuer of an adverse claim, in writing, within a reasonable time after the owner knows of the loss, apparent destruction or wrongful taking of the debt obligation is precluded from asserting against the issuer a claim to a new debt obligation if the issuer has registered a transfer of the debt obligation.

  • Marginal note:Duty to issue new debt obligation

    (2) If the owner of a debt obligation claims that the debt obligation has been lost, destroyed or wrongfully taken, the issuer shall issue a new debt obligation in place of the original one if the owner

    • (a) so requests before the issuer has notice that the debt obligation has been acquired by a good faith purchaser;

    • (b) provides the issuer with a sufficient indemnity bond or, in Quebec, a sufficient guarantee; and

    • (c) satisfies any other reasonable requirements imposed by the issuer.

  • Marginal note:Duty to register transfer

    (3) If, after the issue of a new debt obligation under subsection (2), a good faith purchaser of the original debt obligation presents the original one for registration of transfer, the issuer shall register the transfer unless registration would result in an overissue to which section 54 applies.

  • Marginal note:Right of issuer to recover

    (4) In addition to the rights that an issuer has by reason of an indemnity bond or, in Quebec, a guarantee, the issuer may recover the new debt obligation issued under subsection (2) from the person to whom it was issued or any person taking under that person other than a good faith purchaser.

Marginal note:Duty

 An authenticating trustee, transfer agent or other agent or mandatary of an issuer has, in respect of the issue, registration of transfer and cancellation of a debt obligation of the issuer,

  • (a) a duty to the issuer to exercise good faith and reasonable diligence; and

  • (b) the same obligations to the holder or owner of the debt obligation and the same rights, privileges and immunities as the issuer.

Marginal note:Notice to agent or mandatary

 Notice to an authenticating trustee, transfer agent or other agent or mandatary of an issuer is notice to the issuer in respect of the functions performed by the agent or mandatary.

PART 7Trust Indentures

Marginal note:Definitions
  •  (1) The following definitions apply in this Part.

    event of default

    défaut

    event of default means an event specified in a trust indenture on the occurrence of which a security interest effected by the trust indenture becomes enforceable, or the principal, interest or other money payable under the trust indenture becomes or may be declared to be payable before maturity, once all conditions — such as the giving of notice or the lapse of time — provided for by the trust indenture in connection with the event have been satisfied. (défaut)

    trustee

    fiduciaire

    trustee means any person appointed as trustee, including the administrator of the property of others, under the terms of a trust indenture to which a corporation is a party and includes any successor trustee. (fiduciaire)

    trust indenture

    acte de fiducie

    trust indenture means any deed, indenture or other instrument or act, including any supplement or amendment to one, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations issued under the deed, indenture or other instrument. (acte de fiducie)

  • Marginal note:Application

    (2) This Part applies to a trust indenture if the debt obligations issued or to be issued under the trust indenture are part of a distribution to the public.

  • Marginal note:Application for exemption

    (3) On application, the Director may exempt a trust indenture from the application of this Part if the trust indenture, the debt obligations issued under it and the security interest effected by it are subject to a law of a province or a country other than Canada that is substantially equivalent to this Part.

Marginal note:Conflict of interest
  •  (1) No person shall accept an appointment as trustee if there is a material conflict of interest between their role as trustee and their role in any other capacity.

  • Marginal note:Eliminating conflict of interest

    (2) A trustee shall, within the prescribed period after becoming aware that a material conflict of interest exists, eliminate the conflict of interest or resign.

  • Marginal note:Validity

    (3) A trust indenture, any debt obligations issued under it and a security interest effected by it are valid despite a material conflict of interest of the trustee.

  • Marginal note:Removal of trustee

    (4) The court may, on the application of an interested person, order, on any terms that it thinks fit, that a trustee who has contravened subsection (1) or (2) be replaced.

 
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