PART 7Trust Indentures (continued)
Marginal note:Contents of declaration, etc.
109 Evidence of compliance as required by section 108 shall consist of a statutory declaration or certificate made by a director or an officer of the issuer, the guarantor or, in Quebec, the surety stating that the conditions referred to in that section have been complied with. If compliance with any of those conditions is subject to review by legal counsel, evidence of compliance also includes an opinion of legal counsel that those conditions have been complied with. If compliance with any of those conditions is subject to review by an auditor or accountant, evidence of compliance also includes an opinion or report of the public accountant of the issuer, guarantor or surety, or any other accountant that the trustee selects, that those conditions have been complied with.
Marginal note:Further evidence of compliance
110 The evidence of compliance referred to in section 109 shall include a statement by the person giving the evidence
(a) declaring that they have read and understand the conditions of the trust indenture referred to in section 108;
(b) describing the nature and scope of the examination or investigation on which the statutory declaration, certificate, opinion or report is based; and
(c) declaring that they have made the examination or investigation that they believe necessary to enable them to make their statutory declaration, certificate, opinion or report.
Marginal note:Trustee may require evidence of compliance
111 (1) On the demand of a trustee, the issuer, the guarantor or, in Quebec, the surety of debt obligations issued under a trust indenture shall provide the trustee with evidence in any form that the trustee may require for compliance with any condition relating to any action required or permitted to be taken by the issuer, guarantor or surety under the trust indenture.
Marginal note:Certificate of compliance
(2) At least once in each prescribed period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer, the guarantor or, in Quebec, the surety of debt obligations issued under a trust indenture shall provide the trustee with
(a) a certificate that the issuer, the guarantor or, in Quebec, the surety has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default; or
(b) a certificate of the particulars of any failure to comply with the requirements.
Marginal note:Notice of default
112 The trustee shall give notice to the holders of debt obligations issued under a trust indenture of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs in writing the issuer, the guarantor or, in Quebec, the surety. The notice shall be given within the prescribed period.
Marginal note:Duties of trustee
113 A trustee in exercising their powers and discharging their duties shall
(a) act honestly and in good faith with a view to the best interests of the holders of the debt obligations issued under the trust indenture; and
(b) exercise the care, diligence and skill of a reasonably prudent trustee.
Marginal note:Reliance on statements
114 Despite section 113, a trustee is not liable if they rely in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.
Marginal note:No exculpation
115 No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued under the trust indenture or between the trustee and the issuer, the guarantor or, in Quebec, the surety shall operate so as to relieve a trustee from the duties imposed on the trustee by section 113.
PART 8Receivers, Receiver-managers and Sequestrators
Marginal note:Functions of receiver or sequestrator
116 A receiver or sequestrator of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property, pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver or sequestrator is appointed, but, except to the extent permitted by a court, the receiver or sequestrator may not carry on the activities of the corporation.
Marginal note:Functions of receiver-manager
117 A receiver-manager of the corporation may carry on any activities of the corporation to protect the security interest of those on behalf of whom the receiver-manager is appointed.
Marginal note:Directors’ powers cease
118 If a receiver-manager or sequestrator is appointed by a court or under an instrument or act, the powers of the directors of the corporation that a receiver-manager or sequestrator is authorized to exercise may not be exercised by the directors until the receiver-manager or sequestrator is discharged.
Marginal note:Duty to act
119 A receiver, receiver-manager or sequestrator appointed by a court shall act in accordance with the orders of the court.
Marginal note:Duty under instrument or act
120 A receiver, receiver-manager or sequestrator appointed under an instrument or act shall act in accordance with that instrument or act and any order of a court made under section 122.
Marginal note:Duty of care
121 A receiver, receiver-manager or sequestrator of a corporation appointed under an instrument or act shall
(a) act honestly and in good faith; and
(b) deal with any property of the corporation in their possession or control in a commercially reasonable manner.
Marginal note:Orders given by court
122 On the application of a receiver, receiver-manager or sequestrator, whether appointed by a court or under an instrument or act, or of any interested person, a court may make
(a) an order appointing, replacing or discharging a receiver, receiver-manager or sequestrator and approving their accounts;
(b) an order determining the notice to be given to any interested person or dispensing with notice to any person;
(c) an order fixing the remuneration of the receiver, receiver-manager or sequestrator;
(d) an order requiring the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom the receiver, receiver-manager or sequestrator is appointed, to make good any default in connection with the receiver’s, receiver-manager’s or sequestrator’s custody or management of the property and activities of the corporation, or relieving the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom the receiver, receiver-manager or sequestrator was appointed, from any default on any terms that the court thinks fit;
(e) an order confirming any act of the receiver, receiver-manager or sequestrator;
(f) an order giving directions on any matter relating to the duties of the receiver, receiver-manager or sequestrator; and
(g) any other order that it thinks fit.
Marginal note:Duties of receiver and receiver-manager
123 A receiver or receiver-manager shall
(a) immediately notify the Director of their appointment and discharge;
(b) take into their custody and control the property of the corporation in accordance with the court order, instrument or act under which they are appointed;
(c) open and maintain a bank account in their name as receiver or receiver-manager of the corporation for the money of the corporation coming under their control;
(d) keep detailed accounts of all transactions carried out as receiver or receiver-manager;
(e) keep accounts of their administration that shall be available during usual business hours for inspection by the directors of the corporation;
(f) prepare at least once in every prescribed period after the date of their appointment financial statements of their administration as far as is practicable in the form required by section 172; and
(g) on completion of their duties, render a final account of their administration in the form adopted for interim accounts under paragraph (f).
PART 9Directors and Officers
Marginal note:Duty to manage or supervise management
124 Subject to this Act, the articles and any unanimous member agreement, the directors shall manage or supervise the management of the activities and affairs of a corporation.
Marginal note:Number of directors
125 A corporation shall have one or more directors, but a soliciting corporation shall not have fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates.
Marginal note:Qualifications of directors
126 (1) The following persons are disqualified from being a director of a corporation:
(a) anyone who is less than 18 years of age;
(b) anyone who is incapable;
(c) a person who is not an individual; and
(d) a person who has the status of a bankrupt.
(2) Unless the by-laws otherwise provide, a director of a corporation is not required to be a member of the corporation.
Marginal note:No alternate directors
(3) No person shall act for an absent director at a meeting of directors.
- 2009, c. 23, s. 126
- 2018, c. 8, s. 100
Marginal note:Organization meeting
127 (1) After the issue of the certificate of incorporation, the directors of a corporation shall hold a meeting at which the directors may
(a) make by-laws;
(b) adopt forms of debt obligation certificates and corporate records;
(c) authorize the issue of debt obligations;
(d) appoint officers;
(e) appoint a public accountant to hold office until the first annual meeting of members;
(f) issue memberships;
(g) make banking arrangements; and
(h) transact any other business.
(2) Subsection (1) does not apply to a body corporate to which a certificate of amalgamation has been issued under subsection 208(4) or to which a certificate of continuance has been issued under subsection 211(5).
Marginal note:Calling meeting
(3) An incorporator or a director may call the meeting by giving notice of the time and place of the meeting to each director within the prescribed period.
Marginal note:Waiver of notice
(4) A director may waive notice of the meeting, and attendance of a director at the meeting is a waiver of notice of the meeting, except if the director 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.
Marginal note:Resolution in lieu of meeting
(5) If all directors sign a resolution dealing with any matter referred to in paragraphs (1)(a) to (g), they are not required to hold the meeting referred to in subsection (1).
Marginal note:Filing resolution
(6) A copy of the resolution shall be kept with the minutes of the meetings of directors.
Marginal note:Notice of directors
128 (1) At the time of sending articles of incorporation, a notice of directors in the form that the Director fixes shall be sent to the Director.
Marginal note:Term of office
(2) Each director named in the notice holds office from the issue of the certificate of incorporation until the first meeting of members.
Marginal note:Election of directors
(3) Members shall, by ordinary resolution at each annual meeting at which an election of directors is required, elect directors to hold office for a term expiring within the prescribed period.
Marginal note:Staggered terms
(4) It is not necessary that all directors elected at a meeting of members hold office for the same term.
Marginal note:No stated terms
(5) A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of members following the director’s election.
Marginal note:Incumbent directors
(6) Despite subsections (2), (3) and (5), if directors are not elected at a meeting of members, the incumbent directors continue in office until their successors are elected.
Marginal note:Vacancy among candidates
(7) If a meeting of members fails to elect the number or the minimum number of directors required by the articles by reason of a lack of consent, a disqualification under section 126 or the death of any candidate, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.
Marginal note:Appointment of directors
(8) The directors may, if the articles of the corporation so provide, appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of members, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of members.
Marginal note:Election or appointment as director
(9) An individual who is elected or appointed to hold office as a director is not a director, and is deemed not to have been elected or appointed to hold office as a director, unless
(a) the individual was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or
(b) the individual was not present at the meeting when the election or appointment took place and
(i) consented to hold office as a director in writing before the election or appointment or within the prescribed period, or
(ii) has acted as a director after the election or appointment.
- 2009, c. 23, s. 128
- 2018, c. 8, s. 101
Marginal note:Ceasing to hold office
129 (1) A director of a corporation ceases to hold office when the director dies, resigns, is removed in accordance with section 130 or becomes disqualified under section 126.
Marginal note:Effective date of resignation
(2) A resignation of a director becomes effective at the time a written resignation is sent to the corporation or at the time specified in the resignation, whichever is later.
Marginal note:Removal of directors
130 (1) The members of a corporation may by ordinary resolution at a special meeting remove any director or directors from office.
(2) A director elected by a class or group of members that has an exclusive right to elect the director may only be removed by an ordinary resolution of those members.
(3) A vacancy created by the removal of a director may be filled at the meeting of the members at which the director is removed or, if not so filled, may be filled under section 132.
Marginal note:Resignation or removal
(4) If all of the directors have resigned or have been removed without replacement, a person who manages or supervises the management of the activities or affairs of the corporation is deemed to be a director for the purposes of this Act.
(5) Subsection (4) does not apply to
(a) an officer who manages the activities or affairs of the corporation under the direction or control of a member or other person;
(b) a lawyer, a notary, an accountant or other professional who participates in the management of the corporation solely by providing professional services; or
(c) a trustee in bankruptcy, receiver, receiver-manager, sequestrator or secured creditor who participates in the management of the corporation or exercises control over its property solely for the purpose of the realization of security or, in the case of bankruptcy, the administration of a bankrupt’s estate.
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