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Canada Business Corporations Regulations, 2001 (SOR/2001-512)

Regulations are current to 2022-01-12 and last amended on 2020-01-15. Previous Versions

PART 2Corporate Names (continued)

General Prohibitions

 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if the name contains any of the following elements:

  • (a) “cooperative”, “coopérative”, “co-op” or “pool”, if it connotes a cooperative venture;

  • (b) “Parliament Hill” or “Colline du Parlement”;

  • (c) “Royal Canadian Mounted Police”, “Gendarmerie royale du Canada”, “RCMP” or “GRC”; and

  • (d) “United Nations”, “Nations Unies”, “UN” or “ONU”, if it connotes a relationship to the United Nations.

  • SOR/2010-72, s. 1

 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it connotes that the corporation

  • (a) carries on business under royal, vice-regal or governmental patronage, approval or authority, unless Her Majesty or a person, society, authority or organization referred to in paragraph 9(2)(a) of the Trademarks Act consents in writing to the use of the name;

  • (b) is sponsored or controlled by or is connected with the Government of Canada, the government of a province, the government of a country other than Canada or a political subdivision or agency of any such government, unless the appropriate government, political subdivision or agency consents in writing to the use of the name;

  • (c) is sponsored or controlled by or is connected with a university or an association of accountants, architects, engineers, lawyers, physicians or surgeons or another professional association recognized by the laws of Canada or a province, unless the appropriate university or professional association consents in writing to the use of the name;

  • (d) carries on the business of a bank, loan company, insurance company, trust company or another financial intermediary that is regulated by the laws of Canada, unless the Superintendent of Financial Institutions consents in writing to the use of the name; or

  • (e) carries on the business of a stock exchange that is regulated by the laws of a province, unless the relevant provincial securities regulator consents in writing to the use of the name.

 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it contains a word or phrase, or connotes a business, that is obscene.

  • SOR/2010-72, s. 1

 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if an element of the name is the family name of an individual, whether or not preceded by their given name or initials, unless the individual or their heir or personal representative consents in writing to the use of their name and the individual has or had a material interest in the corporation.

  • SOR/2010-72, s. 1

 For greater certainty, a corporate name is not prohibited only because it contains alphabetic or numeric characters, initials, punctuation marks or any combination of those elements.

  • SOR/2010-72, s. 1

Non-distinctive Names

  •  (1) For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it

    • (a) is only descriptive, in any language, of the business of the corporation, of the goods and services in which the corporation deals or intends to deal, or of the quality, function or other characteristic of those goods and services;

    • (b ) is primarily or only the name or family name, used alone, of an individual who is living or has died within 30 years before the day on which the Director receives any of the documents referred to in subsection 8(1), section 178 or subsection 185(4), 187(4), 191(5), 192(7) or 209(3) of the Act or a request to reserve a name under subsection 11(1) of the Act; or

    • (c) is primarily or only a geographic name that is used alone.

  • (2) Subsection (1) does not apply if a person proposing to use the corporate name establishes that it has been used in Canada or elsewhere by them or by their predecessors so as to have become distinctive in Canada on the day referred to in paragraph (1)(b).

  • SOR/2010-72, s. 1

Deceptively Misdescriptive Names

 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is deceptively misdescriptive if it is likely to mislead the public, in any language, with respect to any of the following:

  • (a) the business, goods or services in association with which it is proposed to be used;

  • (b) the conditions under which the goods or services will be produced or supplied or the persons to be employed in the production or supply of the goods or services; and

  • (c) the place of origin of the goods or services.

  • SOR/2010-72, s. 1

 For the purpose of subsection 10(3) of the Act, a combined English and French form of the name of a corporation shall include, from among the words and expressions set out in subsection 10(1) of the Act, only the expression “Inc.” which is to be placed at the end of the corporate name.

  • SOR/2010-72, s. 1

 [Repealed, SOR/2010-72, s. 1]

 [Repealed, SOR/2010-72, s. 1]

PART 3Corporate Interrelationships

Interpretation

 The following definitions apply in this Part.

delivery shares

delivery shares means shares issued by a corporation to a particular subsidiary for the purpose of an acquisition made under subsection 31(4) of the Act. (actions remises)

particular subsidiary

particular subsidiary means a subsidiary body corporate referred to in subsection 31(4) of the Act. (filiale donnée)

Prescribed Conditions

 For the purpose of subsection 31(4) of the Act, the prescribed conditions are that

  • (a) the consideration received by the corporation for the delivery shares is equal to the fair market value of those shares at the time of their issuance;

  • (b) the class of shares of which the delivery shares are a part is widely held and shares of that class are actively traded on any of the following stock exchanges in Canada, namely,

    • (i) the Canadian Venture Exchange,

    • (ii) The Montreal Exchange, or

    • (iii) the Toronto Stock Exchange;

  • (c) the sole purpose of effecting the acquisition by the particular subsidiary of delivery shares is to transfer them, as set out in paragraph 37(b), to the shareholders of another body corporate;

  • (d) immediately before the acquisition of the delivery shares by the particular subsidiary, the other body corporate and its shareholders deal at arm’s length, to be determined in accordance with the Income Tax Act, with the corporation and the particular subsidiary; and

  • (e) immediately before the acquisition of the delivery shares by the particular subsidiary, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act.

 For the purposes of subsection 31(5) of the Act, the prescribed conditions are that

  • (a) the particular subsidiary does not acquire a beneficial interest in the delivery shares as a result of its acquisition of those shares and the beneficial interest is acquired by the shareholders of the other body corporate;

  • (b) the acquisition by the particular subsidiary of the delivery shares is followed immediately by a transfer of the delivery shares by the particular subsidiary to shareholders of the other body corporate;

  • (c) immediately after the transfer of the delivery shares to the shareholders of the other body corporate, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act; and

  • (d) after the transfer of the delivery shares to the shareholders of the other body corporate, the other body corporate is a subsidiary body corporate of the particular subsidiary.

 For the purpose of subsection 31(6) of the Act, the prescribed consequences are that within 30 days after one of the conditions described in section 36 or 37 is not met or ceases to be met, the corporation shall

  • (a) cancel the delivery shares on condition that, if the articles of the corporation limit the number of authorized shares, the delivery shares may be restored to the status of authorized but unissued shares;

  • (b) return the consideration received by the corporation for the delivery shares to the particular subsidiary; and

  • (c) cancel the entry for the consideration in the corporation’s stated capital account.

  • SOR/2010-128, s. 8

PART 4Insider Trading

 For the purpose of paragraph 126(2)(a) of the Act, the prescribed percentage of voting rights is 10%.

 For the purpose of paragraph 131(1)(d) of the Act, the prescribed percentage of voting rights is 10%.

 For the purpose of subsection 131(3) of the Act, take-over bid means take-over bid under any legislation that is set out in column 2 of an item of Schedule 2.

  • SOR/2010-128, s. 9(F)

 For the purpose of paragraph 131(4)(c) of the Act, the prescribed circumstances are that the insider

  • (a) entered into the purchase or sale as an agent or mandatary pursuant to a specific unsolicited order to purchase or sell;

  • (b) made the purchase or sale pursuant to participation in an automatic dividend reinvestment plan, share purchase plan or other similar automatic plan that the insider entered into before the acquisition of the confidential information;

  • (c) made the purchase or sale to fulfil a legally binding obligation that the insider entered into before the acquisition of the confidential information; or

  • (d) purchased or sold the security as agent, mandatary or trustee in the circumstances described in paragraph (b) or (c).

  • SOR/2010-128, s. 10(E)

PART 5Meetings of Shareholders

Record Date

  •  (1) For the purpose of paragraphs 134(1)(a), (b) and (e) of the Act, the prescribed period for the directors to fix the record date is not more than 60 days before the day on which the particular action is to be taken.

  • (2) For the purposes of paragraphs 134(1)(c) and (d) of the Act, the prescribed period for the directors to fix the record date is not less than 21 days and not more than 60 days before the date of the meeting.

  • (3) For the purpose of subsection 134(3) of the Act, the prescribed period for the directors to provide notice of the record date is at least seven days before the date fixed.

  • SOR/2010-128, s. 11

Notice of Meetings

 For the purpose of subsection 135(1) of the Act, the prescribed period for the directors to provide notice of the time and place of a meeting of shareholders is not less than 21 days and not more than 60 days before the meeting.

Communication Facilities

  •  (1) For the purpose of subsection 141(3) of the Act, when a vote is to be taken at a meeting of shareholders, the voting may be carried out by means of a telephonic, electronic or other communication facility, if the facility

    • (a) enables the votes to be gathered in a manner that permits their subsequent verification; and

    • (b) permits the tallied votes to be presented to the corporation without it being possible for the corporation to identify how each shareholder or group of shareholders voted.

  • (2) For the purpose of subsection 141(4) of the Act, a person who is entitled to vote at a meeting of shareholders may vote by means of a telephonic, electronic or other communication facility, if the facility

    • (a) enables the vote to be gathered in a manner that permits its subsequent verification; and

    • (b) permits the tallied vote to be presented to the corporation without it being possible for the corporation to identify how the person voted.

  • SOR/2003-317, s. 6
  • SOR/2010-128, s. 12

PART 6Shareholder Proposals

 For the purpose of subsection 137(1.1) of the Act,

  • (a) the prescribed number of shares is the number of voting shares

    • (i) that is equal to 1% of the total number of the outstanding voting shares of the corporation, as of the day on which the shareholder submits a proposal, or

    • (ii) whose fair market value, as determined at the close of business on the day before the shareholder submits the proposal to the corporation, is at least $2,000; and

  • (b) the prescribed period is the six-month period immediately before the day on which the shareholder submits the proposal.

  • SOR/2010-128, s. 13

 For the purpose of subsection 137(1.4) of the Act,

  • (a) a corporation may request that a shareholder provide the proof referred to in that subsection within 14 days after the corporation receives the shareholder’s proposal; and

  • (b) the shareholder shall provide the proof within 21 days after the day on which the shareholder receives the corporation’s request or, if the request was mailed to the shareholder, within 21 days after the postmark date stamped on the envelope containing the request.

  • SOR/2010-128, s. 14

 For the purpose of subsection 137(3) of the Act, a proposal and a statement in support of it shall together consist of not more than 500 words.

 For the purpose of paragraph 137(5)(a) of the Act, the prescribed number of days for submitting a proposal to the corporation is at least 90 days before the anniversary date.

 For the purpose of paragraph 137(5)(c) of the Act, the prescribed period before the receipt of a proposal is two years.

  •  (1) For the purpose of paragraph 137(5)(d) of the Act, the prescribed minimum amount of support for a shareholder’s proposal is

    • (a) 3% of the total number of shares voted, if the proposal was introduced at an annual meeting of shareholders;

    • (b) 6% of the total number of shares voted at its last submission to shareholders, if the proposal was introduced at two annual meetings of shareholders; and

    • (c) 10% of the total number of shares voted at its last submission to shareholders, if the proposal was introduced at three or more annual meetings of shareholders.

  • (2) For the purpose of paragraph 137(5)(d) of the Act, the prescribed period is five years.

  • SOR/2010-128, s. 15

 For the purpose of subsection 137(5.1) of the Act, the prescribed period during which the corporation is not required to set out a proposal in a management proxy circular is two years.

 For the purpose of subsection 137(7) of the Act, the prescribed period for giving notice is 21 days after the receipt by the corporation of the proposal or of proof of ownership under subsection 137(1.4) of the Act, as the case may be.

PART 7Proxies and Proxy Solicitation

Form of Proxy

 For the purpose of subsection 149(1) of the Act, a form of proxy shall be in the form provided for in section 9.4 (Content of Form of Proxy) of NI 51-102.

  • SOR/2008-315, s. 2
 
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