Canada Cooperatives Act (S.C. 1998, c. 1)

Marginal note:Contents of certificate

• 184 (1) Every share certificate for an investment share of a cooperative that is authorized to issue shares of more than one class or series must clearly state

  • (a) the rights, privileges, restrictions and conditions attached to the shares of each class and series that exist when the share certificate is issued; or

  • (b) that the class or series of shares that it represents has rights, privileges, restrictions or conditions attached to it and that the cooperative will provide a shareholder, on demand and without charge, with a full copy of the text of

    • (i) any rights, privileges, restrictions and conditions attached to each class authorized to be issued, and to each series, that have been fixed by the directors, and

    • (ii) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series.

• Marginal note:Copy of information

  (2) If a share certificate for an investment share contains the statement referred to in paragraph (1)(b), the cooperative must provide the shareholder, on demand and without charge, with a copy of

  • (a) the rights, privileges, restrictions and conditions attached to each class or series of investment shares authorized to be issued; and

  • (b) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series of investment shares in the same class.

Marginal note:Fractional shares

• 185 (1) A cooperative may issue for each fractional investment share, a certificate in registered form or scrip certificates in registered form that entitle the holder to receive a certificate for a full investment share in exchange for scrip certificates equalling a full investment share.

• Marginal note:Replacement

  (1.1) A cooperative must, on the request of a holder of a certificate for a fractional investment share or scrip certificate that is in bearer form and that was issued before the coming into force of this subsection, issue in exchange to that holder, in registered form, a certificate for a fractional investment share or a scrip certificate, as the case may be.

• Marginal note:Conditions

  (2) The directors may attach conditions to scrip certificates issued by the cooperative, including conditions that

  • (a) the scrip certificates become void or, in Quebec, null if not exchanged for an investment share representing a full investment share before a specified date; and

  • (b) any investment shares for which the scrip certificates are exchangeable may, despite any pre-emptive right, be issued by the cooperative to any person and the proceeds distributed rateably to the holders of the scrip certificates.

• Marginal note:Voting rights

  (3) A holder of a fractional investment share is not entitled to exercise voting rights or to receive a dividend in respect of the investment share unless

  • (a) the fractional share results from a consolidation of investment shares; or

  • (b) the articles of the cooperative provide otherwise.

• Marginal note:Exercise of voting rights

  (4) A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate.

Registers

Marginal note:Securities register

• 186 (1) A cooperative that issues securities must maintain a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series

  • (a) the names, in alphabetical order, and the latest known address of each person who holds or previously held the security;

  • (b) the number of securities held by each security holder; and

  • (c) the date and particulars of the issue and transfer of each security.

• Marginal note:Location of register

  (2) The securities register must be maintained at the cooperative’s registered office or at any other place in Canada designated by the directors.

• Marginal note:Branch registers

  (3) A cooperative may maintain additional branch securities registers in other places designated by the directors.

• Marginal note:Contents of branch register

  (4) A branch securities register only contains particulars of securities issued or transferred at the branch. The same information is also recorded in the central registry.

• Marginal note:Destruction of certificates

  (5) A cooperative, its agent or mandatary or a trustee as defined in section 266 is not required to produce

  • (a) a cancelled security certificate in registered form, an instrument referred to in any of subsections 142(1) to (3) that is cancelled or a like cancelled instrument in registered form six years after the date of its cancellation;

  • (b) a cancelled security certificate in bearer form or an instrument referred to in any of subsections 142(1) to (3) that is cancelled or a like cancelled instrument in bearer form after the date of its cancellation; or

  • (c) an instrument referred to in any of subsections 142(1) to (3) or a like instrument, irrespective of its form, after the date of its expiration.

Marginal note:Agent or mandatary

187 A cooperative may appoint an agent or mandatary to maintain securities registers on its behalf.

Marginal note:Registration

188 The registration of the issue or transfer of an investment share in a securities register maintained by the cooperative is complete and valid registration for all purposes.

Marginal note:Trustee

189 Subject to sections 51, 53 and 61, a cooperative or a trustee as defined in section 266 may treat the person whose name appears on the securities register as the owner of a security as its owner for all purposes.

Marginal note:Proof of ownership

190 If a cooperative restricts the right to transfer its investment shares, the cooperative may, despite section 189, treat a person as the registered holder of a security if the person provides the cooperative with evidence that reasonably meets the requirements of the cooperative that the person is

• (a) the heir of a deceased security holder, or the fiduciary of the estate or succession of a deceased security holder, or of a registered security holder who is a minor, an incapable person or a missing person; or

• (b) a liquidator of, or a trustee in bankruptcy for, a registered security holder.

Marginal note:Proof of ownership

191 A cooperative must treat a person, other than one described in section 190, as being entitled to exercise the rights and privileges attached to a security if the person provides proof that the person has acquired ownership of the security by operation of law or has legal authority to exercise the rights and privileges.

Marginal note:Joint owners

192 If satisfactory proof of the death of a joint holder of a security is provided to a cooperative, it may treat any surviving joint holders as the owner of the security.

Marginal note:Duties of cooperative

193 A cooperative is not required to inquire into the existence of, or see to the performance of, any duty owed to a third person by a registered holder or a person who may be treated as a registered holder of a security.

Marginal note:Minors

194 If an individual who is less than 18 years of age exercises a right of ownership in a security of a cooperative, no subsequent repudiation or avoidance or, in Quebec, annulment or reduction of obligations is effective against the cooperative.

Marginal note:Deceased owner

• 195 (1) Subject to any applicable law relating to the collection of taxes, a person who is an heir or a fiduciary of an estate or succession of a deceased security holder is entitled to become the registered holder or to designate a registered holder if the person deposits the following information with the cooperative or its transfer agent, together with any reasonable assurances that the cooperative may require:

  • (a) the security certificate or, in default of one, a document proving that the deceased was the security holder;

  • (b) a document proving the death of the security holder; and

  • (c) a document proving that the heir or fiduciary has the right under the law of the place in which the deceased was domiciled immediately before their death to deal with the security.

• Marginal note:Endorsement

  (2) A security certificate referred to in paragraph (1)(a) must be endorsed

  • (a) in the case of a transfer to an heir or fiduciary, by that person; and

  • (b) in any other case, in a manner acceptable to the cooperative.

• Marginal note:Right of cooperative

  (3) Deposit of the documents required by subsection (1) empowers a cooperative or its transfer agent to record in a securities register the transmission of a security from the deceased holder to the heir or fiduciary or to any person that the heir or fiduciary may designate and to treat the person who becomes a registered holder as the owner of the securities.

Marginal note:Overissue

• 196 (1) Subject to this section, the provisions of this Part that validate a security or compel its issue or reissue do not apply if the validation, issue or reissue of a security would result in overissue.

• Marginal note:Identical security

  (2) The person who is entitled to a validation or issue may, if there has been an overissue and if a valid security that is similar in all respects to the security involved in the overissue is reasonably available for purchase, compel the issuer to purchase and deliver that security against the surrender of the security that the person holds.

• Marginal note:If identical security not available

  (3) If a valid security that is similar in all respects to the security involved in the overissue is not reasonably available for purchase, the person who is entitled to the validation or issue may recover from the issuer an amount equal to the price the last purchaser for value paid for the invalid security.

• Marginal note:Increase in capital

  (4) The overissued securities are valid from the date they were issued only if the issuer increases the number of its authorized securities to a number equal to or greater than the number of securities previously authorized plus the number of the securities overissued.

Marginal note:Exemptions

197 Sections 147 to 149 and 152 do not apply to a payment or purchase by an issuer under section 196.

Proceedings

Marginal note:Rules of action

198 The following rules apply in an action on a security:

• (a) each signature on the security certificate or in a necessary endorsement is admitted unless specifically denied in the pleadings;

• (b) a signature on the security is presumed to be genuine and authorized but, if the effectiveness of the signature is in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature;

• (c) if a signature is admitted or established, production of a certificate entitles the holder to recover on it unless the other party establishes a defence or defect going to the validity of the security; and

• (d) if the other party establishes the defence or defect, the plaintiff has the burden of establishing that the defect is ineffective against the plaintiff or some other person under whom the claim is made.

Delivery

Marginal note:Delivery of securities

• 199 (1) A person who is required to deliver securities may deliver any security of the specified issue

  • (a) in bearer form;

  • (b) in registered form in the name of the transferee; or

  • (c) endorsed to the person or in blank.

• Marginal note:Limitation

  (2) Subsection (1) is subject to any agreement to the contrary, to the provisions of this Act, of any other applicable Act of Parliament, of any applicable Act of the legislature of a province or of any applicable regulation made under any such Act or to any applicable stock exchange rule.