Canada Business Corporations Act — C-44 131
Definitions 131 (1) In this section, insider means, with respect to a corporation, (a) the corporation; (b) an affiliate of the corporation; (c) a director or an officer of the corporation or of any person described in paragraph (b), (d) or (f); (d) a person who beneficially owns, directly or indirectly, shares of the corporation or who exercises control or direction over shares of the corporation, or who has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the corporation not including shares held by the person as underwriter while those shares are in the course of a distribution to the public; (e) a person, other than a person described in paragraph (f), employed or retained by the corporation or by a person described in paragraph (f); (f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the corporation; (g) a person who received, while they were a person described in any of paragraphs (a) to (f), material confidential information concerning the corporation; (h) a person who receives material confidential information from a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph; and (i) a prescribed person. Expanded definition of security (2) For the purposes of this section, the following are deemed to be a security of the corporation: (a) a put, call, option or other right or obligation to purchase or sell a security of the corporation; and (b) a security of another entity, the market price of which varies materially with the market price of the securities of the corporation. Deemed insiders (3) For the purposes of this section, a person who proposes to make a take-over bid (as defined in the regulations) for securities of a corporation, or to enter into a business combination with a corporation, is an insider of the corporation with respect to material confidential information obtained from the corporation and is an insider of the corporation for the purposes of subsection (6). Deemed insiders (3.1) An insider of a person referred to in subsection (3), and an affiliate or associate of such a person, is an insider of the corporation referred to in that subsection. Paragraphs (1)(b) to (i) apply in determining whether a person is such an insider except that references to “corporation” in those paragraphs are to be read as references to “person described in subsection (3)”. Insider trading — compensation to persons (4) An insider who purchases or sells a security of the corporation with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the corporation is liable to compensate the seller of the security or the purchaser of the security, as the case may be, for any damages suffered by the seller or purchaser as a result of the purchase or sale, unless the insider establishes that (a) the insider reasonably believed that the information had been generally disclosed; (b) the information was known, or ought reasonably to have been known, by the seller or purchaser; or (c) the purchase or sale of the security took place in the prescribed circumstances. Insider trading — compensation to corporation (5) The insider is accountable to the corporation for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances described in paragraph (4)(a). Tipping — compensation to persons (6) An insider of the corporation who discloses to another person confidential information with respect to the