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Trust and Loan Companies Act (S.C. 1991, c. 45)

Act current to 2022-11-16 and last amended on 2022-06-23. Previous Versions

PART VICorporate Governance (continued)

Financial Statements and Auditors (continued)

Annual Financial Statement (continued)

Marginal note:Annual statement — distribution

  •  (1) A company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 155(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 313(1) and (3) unless that time period is waived by the shareholder.

  • Marginal note:Exception

    (2) A company is not required to comply with subsection (1) with respect to a shareholder who has informed the company, in writing, that the shareholder does not wish to receive the annual statement.

  • Marginal note:Effect of default

    (3) Where a company is required to comply with subsection (1) and the company does not comply with that subsection, the annual meeting at which the documents referred to in that subsection are to be considered shall be adjourned until that subsection has been complied with.

  • 1991, c. 45, s. 316
  • 1997, c. 15, s. 370
  • 2005, c. 54, s. 436

Marginal note:Copy to Superintendent

  •  (1) Subject to subsection (2), a company shall send to the Superintendent a copy of the documents referred to in subsections 313(1) and (3) not later than twenty-one days before the date of each annual meeting of shareholders of the company.

  • Marginal note:Later filing

    (2) If a company’s shareholders sign a resolution under paragraph 155(1)(b) in lieu of an annual meeting, the company shall send a copy of the documents referred to in subsections 313(1) and (3) to the Superintendent not later than thirty days after the signing of the resolution.

  • 1991, c. 45, s. 317
  • 1997, c. 15, s. 371
  • 2001, c. 9, s. 515

Auditor

Marginal note:Definitions

 For the purposes of this section and sections 319 to 338,

firm of accountants

firm of accountants means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting; (cabinet de comptables)

member

member, in relation to a firm of accountants, means

  • (a) an accountant who is a partner in a partnership, the members of which are accountants engaged in the practice of accounting, or

  • (b) an accountant who is an employee of a firm of accountants. (membre)

Marginal note:Appointment of auditor

  •  (1) The shareholders of a company shall, by ordinary resolution at the first meeting of shareholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

  • Marginal note:Remuneration of auditor

    (2) The remuneration of an auditor may be fixed by ordinary resolution of the shareholders but, if not so fixed, shall be fixed by the directors.

Marginal note:Qualification of auditor

  •  (1) A natural person or firm of accountants is qualified to be an auditor of a company if

    • (a) in the case of a natural person, the person is an accountant who

      • (i) is a member in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province,

      • (ii) has at least five years experience at a senior level in performing audits of a financial institution,

      • (iii) is ordinarily resident in Canada, and

      • (iv) is independent of the company; and

    • (b) in the case of a firm of accountants, the member of the firm jointly designated by the firm and the company to conduct the audit of the company on behalf of the firm is qualified in accordance with paragraph (a).

  • Marginal note:Independence

    (2) For the purposes of subsection (1),

    • (a) independence is a question of fact; and

    • (b) a person is deemed not to be independent of a company if that person, a business partner of that person or a firm of accountants of which that person is a member

      • (i) is a business partner, director, officer or employee of the company or of any affiliate of the company or is a business partner of any director, officer or employee of the company or of any affiliate of the company,

      • (ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the company or of any affiliate of the company, or

      • (iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the company within the two years immediately preceding the person’s proposed appointment as auditor of the company, other than an affiliate that is a subsidiary of the company acquired pursuant to section 457 or through a realization of security pursuant to section 458.

  • Marginal note:Business partners

    (2.1) For the purposes of subsection (2),

    • (a) in the case of the appointment of a natural person as the auditor of a company, a business partner of the person includes a shareholder of the business partner; and

    • (b) in the case of the appointment of a firm of accountants as the auditor of a company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member.

  • Marginal note:Notice of designation

    (3) Within fifteen days after the appointment of a firm of accountants as auditor of a company, the company and the firm of accountants shall jointly designate a member of the firm who meets the qualifications described in subsection (1) to conduct the audit of the company on behalf of the firm and the company shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:New designation

    (4) Where for any reason a member of a firm of accountants designated pursuant to subsection (3) ceases to conduct the audit of the company, the company and the firm of accountants may jointly designate another member of the same firm of accountants who meets the qualifications described in subsection (1) to conduct the audit of the company and the company shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:Deemed vacancy

    (5) In any case where subsection (4) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit of the company, there shall be deemed to be a vacancy in the office of auditor of the company.

  • 1991, c. 45, s. 320
  • 2001, c. 9, s. 516
  • 2005, c. 54, s. 437

Marginal note:Duty to resign

  •  (1) An auditor who ceases to be qualified under section 320 shall resign forthwith after the auditor, where the auditor is a natural person, or any member of the firm of accountants, where the auditor is a firm of accountants, becomes aware that the auditor or the firm has ceased to be so qualified.

  • Marginal note:Disqualification order

    (2) Any interested person may apply to a court for an order declaring that an auditor of a company has ceased to be qualified under section 320 and declaring the office of auditor to be vacant.

Marginal note:Revocation of appointment

  •  (1) The shareholders of a company may, by ordinary resolution at a special meeting, revoke the appointment of an auditor.

  • Marginal note:Idem

    (2) The Superintendent may at any time revoke the appointment of an auditor made under subsection (3) or 319(1) or section 324 by notice in writing signed by the Superintendent and sent by registered mail to the auditor and to the company addressed to the usual place of business of the auditor and the company.

  • Marginal note:Filling vacancy

    (3) A vacancy created by the revocation of the appointment of an auditor under subsection (1) may be filled at the meeting at which the appointment was revoked and, if not so filled, shall be filled by the directors under section 324.

Marginal note:Ceasing to hold office

  •  (1) An auditor of a company ceases to hold office when

    • (a) the auditor resigns;

    • (b) the auditor, where the auditor is a natural person, dies; or

    • (c) the appointment of the auditor is revoked by the shareholders or the Superintendent.

  • Marginal note:Effective date of resignation

    (2) The resignation of an auditor becomes effective at the time a written resignation is sent to the company or at the time specified in the resignation, whichever is later.

Marginal note:Filling vacancy

  •  (1) Subject to subsection 322(3), where a vacancy occurs in the office of auditor of a company, the directors shall forthwith fill the vacancy, and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.

  • Marginal note:Where Superintendent may fill vacancy

    (2) Where the directors fail to fill a vacancy in accordance with subsection (1), the Superintendent may fill the vacancy and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.

  • Marginal note:Designation of member of firm

    (3) Where the Superintendent has, pursuant to subsection (2), appointed a firm of accountants to fill a vacancy, the Superintendent shall designate the member of the firm who is to conduct the audit of the company on behalf of the firm.

Marginal note:Right to attend meetings

  •  (1) The auditor of a company is entitled to receive notice of every meeting of shareholders and, at the expense of the company, to attend and be heard thereat on matters relating to the duties of the auditor.

  • Marginal note:Duty to attend meeting

    (2) If a director or shareholder of a company, whether or not the shareholder is entitled to vote at the meeting, gives written notice, not less than ten days before a meeting of shareholders, to an auditor or former auditor of the company that the director or shareholder wishes the auditor’s attendance at the meeting, the auditor or former auditor shall attend the meeting at the expense of the company and answer questions relating to the auditor’s or former auditor’s duties as auditor.

  • Marginal note:Notice to company

    (3) A director or shareholder who gives notice under subsection (2) shall send concurrently a copy of the notice to the company and the company shall forthwith send a copy thereof to the Superintendent.

  • Marginal note:Superintendent may attend

    (4) The Superintendent may attend and be heard at any meeting referred to in subsection (2).

Marginal note:Statement of auditor

  •  (1) An auditor of a company who

    • (a) resigns,

    • (b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of revoking the appointment of the auditor, or

    • (c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed in the auditor’s stead, whether because of the auditor’s resignation or revocation of appointment or because the auditor’s term of office has expired or is about to expire,

    shall submit to the company and the Superintendent a written statement giving the reasons for the resignation or the reasons why the auditor opposes any proposed action.

  • Marginal note:Other statements

    (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.

  • Marginal note:Statements to be sent

    (2) The company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.

  • 1991, c. 45, s. 326
  • 2005, c. 54, s. 438

Marginal note:Duty of replacement auditor

  •  (1) Where an auditor of a company has resigned or the appointment of an auditor has been revoked, no person or firm shall accept an appointment as auditor of the company or consent to be the auditor of the company until the person or firm has requested and received from the other auditor a written statement of the circumstances and reasons why the other auditor resigned or why, in the other auditor’s opinion, the other auditor’s appointment was revoked.

  • Marginal note:Exception

    (2) Notwithstanding subsection (1), a person or firm may accept an appointment or consent to be appointed as auditor of a company if, within fifteen days after a request under that subsection is made, no reply from the other auditor is received.

  • Marginal note:Effect of non-compliance

    (3) Unless subsection (2) applies, an appointment as auditor of a company is void if subsection (1) has not been complied with.

Marginal note:Auditor’s examination

  •  (1) The auditor of a company shall make such examination as the auditor considers necessary to enable the auditor to report on the annual statement and on other financial statements required by this Act to be placed before the shareholders, except such annual statements or parts thereof as relate to the period referred to in subparagraph 313(1)(a)(ii).

  • Marginal note:Auditing standards

    (2) The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Superintendent, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada.

  • 1991, c. 45, s. 328
  • 2017, c. 26, s. 62

Marginal note:Right to information

  •  (1) On the request of the auditor of a company, the present or former directors, officers, employees or agents of the company shall, to the extent that such persons are reasonably able to do so,

    • (a) permit access to such records, assets and security held by the company or any entity in which the company has a substantial investment, and

    • (b) provide such information and explanations

    as are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the company.

  • Marginal note:Directors to provide information

    (2) On the request of the auditor of a company, the directors of the company shall, to the extent that they are reasonably able to do so,

    • (a) obtain from the present or former directors, officers, employees and agents of any entity in which the company has a substantial investment the information and explanations that such persons are reasonably able to provide and that are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the company; and

    • (b) provide the auditor with the information and explanations so obtained.

  • Marginal note:No civil liability

    (3) A person who in good faith makes an oral or written communication under subsection (1) or (2) shall not be liable in any civil action arising from having made the communication.

 
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