Marginal note:Director to abstain

• 207. (1) A director who is required to make a disclosure under subsection 206(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction

  • (a) relates primarily to their remuneration as a director, officer, employee or agent of the association, an entity controlled by the association or an entity in which the association has a substantial investment;

  • (b) is for indemnity under section 216 or insurance under section 217; or

  • (c) is with an affiliate of the association.

Marginal note:General notice

• 208. (1) For the purposes of subsection 206(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:

  • (a) the director or officer is a director or officer of a party referred to in paragraph 206(1)(b) or (c) or a person acting in a similar capacity;

  • (b) the director or officer has a material interest in the party; or

  • (c) there has been a material change in the nature of the director’s or officer’s interest in the party.

• Marginal note:Access to disclosures

  (2) The members or shareholders of the association may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 206(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the association.

Marginal note:Avoidance standards

• 209. (1) A contract or transaction for which disclosure is required under subsection 206(1) is not invalid and a director or officer is not accountable to the association or its members or shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

  • (a) the director or officer disclosed their interest in accordance with section 206 and subsection 208(1);

  • (b) the directors approved the contract or transaction; and

  • (c) the contract or transaction was reasonable and fair to the association at the time that it was approved.

• Marginal note:Confirmation by members

  (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the association or its members or shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

  • (a) the contract or transaction is approved or confirmed by special resolution at a meeting of members;

  • (b) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

  • (c) the contract or transaction was reasonable and fair to the association at the time that it was approved or confirmed.

Marginal note:Court may set aside or require accounting

210. If a director or officer of an association fails to comply with any of sections 206 to 209, a court, on application of the association or any of its members or shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the association for any profit or gain realized on it.

Marginal note:Director liability

• 211. (1) Directors of an association who vote for or consent to a resolution of the directors authorizing the issue of a membership share or a share contrary to subsection 74(1) or the issue of subordinated indebtedness contrary to section 87 for a consideration other than money are jointly and severally, or solidarily, liable to the association to make good any amount by which the consideration received is less than the fair equivalent of the money that the association would have received if the membership share or share or subordinated indebtedness had been issued for money on the date of the resolution.

• Marginal note:Further liability

  (2) Directors of an association who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the association any amounts so distributed or paid and not otherwise recovered by the association and any amounts in relation to any loss suffered by the association:

  • (a) a redemption or purchase of membership shares or shares contrary to section 79;

  • (b) a reduction of capital contrary to section 82;

  • (c) a payment of a dividend contrary to section 86;

  • (d) a payment of an indemnity contrary to section 216; or

  • (e) any transaction contrary to Part XII.

Marginal note:Directors liable for wages

• 214. (1) Subject to subsections (2) and (3), the directors of an association are jointly and severally, or solidarily, liable to each employee of the association for all debts not exceeding six months wages payable to the employee for services performed for the association while they are directors.

Marginal note:Defence — due diligence

• 215. (1) A director, officer or employee of an association is not liable under section 211 or 214 or subsection 430(1) and has fulfilled their duty under subsection 168(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the association that were represented to them by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

• Marginal note:Defence — good faith

  (2) A director or officer of an association has fulfilled their duty under subsection 168(1) if they relied in good faith on

  • (a) financial statements of the association that were represented to them by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Indemnification

• 216. (1) An association may indemnify a director or officer of the association, a former director or officer of the association or another person who acts or acted, at the association’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the association or other entity.

• Marginal note:Advances

  (2) An association may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).

• Marginal note:No indemnification

  (3) An association may not indemnify a person under subsection (1) unless

  • (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the association or the other entity for which they acted at the association’s request as a director or officer or in a similar capacity; and

  • (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.

• Marginal note:Indemnification — derivative actions

  (4) An association may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the association or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the association or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).

• Marginal note:Right to indemnity

  (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the association in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of their association referred to in subsection (1) with the association or other entity described in that subsection if the person

  • (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and

  • (b) fulfils the conditions set out in subsection (3).

• Marginal note:Heirs and personal representatives

  (6) An association may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the association may indemnify under those subsections.

• (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the association’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

• (j) change the province in which the head office of the association is situated.

• (a) the name of the amalgamated association and the province in which its head office is to be situated;

Marginal note:Head office

• 234. (1) An association shall at all times have a head office in the province specified in its incorporating instrument or by-laws.

• Marginal note:Change of head office

  (2) The directors of an association may change the address of the head office within the province specified in the incorporating instrument or by-laws.

• Marginal note:Access to association records

  (4) Members, shareholders and creditors of an association and their personal representatives may examine the records referred to in subsection 235(1) during the usual business hours of the association and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the association is a distributing association, any other person may on payment of a reasonable fee examine those records during the usual business hours of the association and take extracts from them or have copies of them made.

• Marginal note:Entitlement to list

  (3) A member, shareholder or creditor of an association or their personal representative — or if the association is a distributing association, any person — is entitled to a basic list of members or shareholders of the association.

Marginal note:Location and processing of information or data

• 242. (1) Subject to subsection (3), an association shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 235 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the association from the application of this section.

• Marginal note:Copies

  (2) Subject to subsections (3) and (4), the association may maintain copies of the records referred to in section 235 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.

• Marginal note:Access to central securities register

  (3) Members, shareholders and creditors of an association and their personal representatives may examine the central securities register during the usual business hours of the association and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the association is a distributing association, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the association and take extracts from it or have copies of it made.

• Marginal note:Electronic access

  (4) The association may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.

• Marginal note:Affidavit and undertaking

  (5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the association with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of members or shareholders may be used under section 239. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.

• Marginal note:Supplementary information

  (6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the association or its agent to provide supplementary information setting out any changes made to the register.

• Marginal note:When supplementary information to be provided

  (7) An association or its agent shall provide the supplementary information within

  • (a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and

  • (b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.

Marginal note:Corporate seal

• 251. (1) An association may adopt a corporate seal and change one that it adopted.

• Marginal note:Validity of unsealed documents

  (2) A document executed on behalf of an association is not invalid merely because a corporate seal is not affixed to it.