Canada Cooperatives Act

Marginal note:Sale of constrained shares

• 131 (1) A cooperative that has constraints on the issue, transfer or ownership of any class of investment shares may, in accordance with any regulations, sell any of the investment shares that are owned, or that the directors determine may be owned, contrary to those constraints, as if it owned the investment shares, for the purposes of

  • (a) attaining or maintaining the level of Canadian ownership or control specified in its articles or required by law to carry on a business or qualify for a benefit; or

  • (b) complying with any prescribed law.

• Marginal note:Selection of shares

  (2) The directors must select the investment shares to be sold under subsection (1) in good faith and in a manner that does not unfairly prejudice or disregard the interests of the holders of the investment shares in the constrained class as a whole.

• Marginal note:Right to proceeds

  (3) A person who owned an investment share that was sold under this section is divested of all interests or rights in the investment share and is entitled to receive only the net proceeds of the sale and any net income on the proceeds.

• Marginal note:Immunity

  (4) Sections 192, 193 and 194 apply to the person referred to in subsection (3) as if the proceeds were a security and the person were a registered owner of the security.