Bank Act — B-1.01 66
Stated capital account 66 (1) A bank shall maintain a separate stated capital account for each class and series of shares it issues. Stated capital account — membership shares (1.1) A federal credit union must also maintain a stated capital account for the membership shares it issues. Addition to stated capital account (2) A bank must record in the appropriate stated capital account the full amount of any consideration it receives for any shares or membership shares it issues. Exception (3) Despite subsection (2), a bank may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares (a) in exchange for (i) property of a person who immediately before the exchange did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act , (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act , or (iii) property of a person who immediately before the exchange dealt with the bank at arm’s length within the meaning of that expression in the Income Tax Act if the person, the bank and all of the holders of shares in the class or series of shares so issued consent to the exchange; (b) under an agreement referred to in subsection 224(1); or (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank. Exception (3.1) Despite subsection (2), a federal credit union may, subject to subsection (4), record in the stated capital account maintained for its membership shares any part of the consideration it receives in an exchange if it issues membership shares (a) in exchange for (i) property of a person who immediately before the exchange did not deal with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act , (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act , or (iii) property of a person who immediately before the exchange dealt with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act if the person, the federal credit union and all of the holders of the membership shares so issued consent to the exchange; (b) under an agreement referred to in subsection 224(1); or (c) to shareholders of an amalgamating body corporate who receive the membership shares in addition to or instead of securities of the amalgamated bank. Limit on addition to a stated capital account (4) On the issuance of a share or membership share, a bank must not add to the appropriate stated capital account an amount greater than the amount of the consideration it receives for the share or membership share. Constraint on addition to a stated capital account (5) Where a bank that has issued any outstanding shares of more than one class or series proposes to add to a stated capital account that it maintains in respect of a class or series of shares an amount that was not received by the bank as consideration for the issue of shares, the addition must be approved by special resolution unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 77(4). Constraint — federal credit union (6) If the bank referred to in subsection (5) is a federal credit union, the addition must be approved by special resolution of the members and by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the special resolution, unless all the issued and outstanding shares are of not more than two