GreatNorthCollective/greatnorth-canada-federal-laws-text huggingface dataset:
Bank Act — B-1.01 203
Director to abstain 203 (1) A director who is required to make a disclosure under subsection 202(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction (a) relates primarily to their remuneration as a director, officer, employee or agent of the bank, an entity controlled by the bank or an entity in which the bank has a substantial investment; (b) is for indemnity under section 212 or insurance under section 213; or (c) is with an affiliate of the bank. Ineligibility (2) Any director who knowingly contravenes subsection (1) ceases to hold office as director and is not eligible, for a period of five years after the date on which the contravention occurred, for election or appointment as a director of any financial institution that is incorporated or formed by or under an Act of Parliament. Validity of acts (3) An act of the board of directors of a bank, or of a committee of the board of directors, is not invalid because a person acting as a director had ceased under subsection (2) to hold office as a director. 1991, c. 46, s. 203; 1997, c. 15, s. 26; 2005, c. 54, s. 40
Bank Act — B-1.01 204
General notice 204 (1) For the purposes of subsection 202(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party: (a) the director or officer is a director or officer of a party referred to in paragraph 202(1)(b) or (c) or a person acting in a similar capacity; (b) the director or officer has a material interest in the party; or (c) there has been a material change in the nature of the director’s or officer’s interest in the party. Access to disclosures (2) The shareholders and members of the bank may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 202(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank. 1991, c. 46, s. 204; 2001, c. 9, s. 77.1(F); 2005, c. 54, s. 41; 2010, c. 12, s. 1991
Bank Act — B-1.01 205
Avoidance standards 205 (1) A contract or transaction for which disclosure is required under subsection 202(1) is not invalid and a director or officer is not accountable to the bank or its shareholders or members for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if (a) the director or officer disclosed their interest in accordance with section 202 and subsection 204(1); (b) the directors approved the contract or transaction; and (c) the contract or transaction was reasonable and fair to the bank at the time that it was approved. Confirmation (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank or its shareholders or members for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if (a) the contract or transaction is approved or confirmed by special resolution at (i) in the case of a bank that is not a federal credit union, a meeting of shareholders, or (ii) in the case of a federal credit union, at a meeting of its members and, if it has shareholders, at a meeting of its shareholders; (b) disclosure of the interest was made to the shareholders or, in the case of a federal credit union, to the members and shareholders, if any, in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and (c) the contract or transaction was reasonable and fair to the bank at the time that it was approved or confirmed. 1991, c. 46, s. 205; 2005, c. 54, s. 41; 2010, c. 12, s. 1992
Bank Act — B-1.01 206
Court may set aside or require accounting 206 If a director or officer of a bank fails to comply with any of sections 202 to 205, a court, on application of the bank or any of its shareholders or members, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank for any profit or gain realized on it. 1991, c. 46, s. 206; 2005, c. 54, s. 41; 2010, c. 12, s. 1992
Bank Act — B-1.01 207
Director’s liability 207 (1) Directors of a bank who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 65(1), the issue of a membership share contrary to subsection 79.1(2) or the issue of subordinated indebtedness contrary to section 80 for a consideration other than money are jointly and severally, or solidarily, liable to the bank to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank would have received if the share, membership share or subordinated indebtedness had been issued for money on the date of the resolution. Further liability (2) Directors of a bank who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank any amounts so distributed or paid and not otherwise recovered by the bank and any amounts in relation to any loss suffered by the bank: (a) a redemption or purchase of shares or membership shares contrary to section 71; (b) a reduction of capital contrary to section 75; (c) a payment of a dividend or patronage allocation contrary to section 79; (d) a payment of an indemnity contrary to section 212; or (e) any transaction contrary to Part XI. 1991, c. 46, s. 207; 2005, c. 54, s. 42(E); 2010, c. 12, s. 1992
Bank Act — B-1.01 208
Contribution 208 (1) A director who has satisfied a judgment in relation to the director’s liability under section 207 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded. Recovery (2) A director who is liable under section 207 is entitled to apply to a court for an order compelling a shareholder, member or other person to pay or deliver to the director (a) any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212; or (b) an amount equal to the value of the loss suffered by the bank as a result of any transaction contrary to Part XI. Court order (3) Where an application is made to a court under subsection (2), the court may, where it is satisfied that it is equitable to do so, (a) order a shareholder, member or other person to pay or deliver to a director any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212 or any amount referred to in paragraph (2)(b); (b) order a bank to return or issue shares or membership shares to a person from whom the bank has purchased, redeemed or otherwise acquired shares or membership shares; or (c) make any further order it thinks fit. 1991, c. 46, s. 208; 2010, c. 12, s. 1993
Bank Act — B-1.01 209
Limitation 209 An action to enforce a liability imposed by section 207 may not be commenced after two years from the date of the resolution authorizing the action complained of.
Bank Act — B-1.01 210
Directors liable for wages 210 (1) Subject to subsections (2) and (3), the directors of a bank are jointly and severally, or solidarily, liable to each employee of the bank for all debts not exceeding six months wages payable to the employee for services performed for the bank while they are directors. Conditions precedent (2) A director is not liable under subsection (1) unless (a) the bank has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part; (b) the bank has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proven within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution; or (c) a winding-up order has been issued in respect of the bank under the Winding-up and Restructuring Act and a claim for the debt has been allowed or proven within six months after the issue of the winding-up order. Limitations (3) A director is not liable under subsection (1) unless the director is sued for a debt referred to in that subsection while a director or within two years after the director has ceased to be a director. Amount due after execution (4) Where execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution. Subrogation of director (5) Where a director of a bank pays a debt referred to in subsection (1) that is proven in liquidation and dissolution or winding-up proceedings, the director is entitled to any preference that the employee would have been entitled to and, where a judgment has been obtained, the director is entitled to an assignment of the judgment. Contribution entitlement (6) A director of a bank who has satisfied a claim under this section is entitled to a contribution from the other directors of the bank who are liable for the claim. 1991, c. 46, s. 210; 1996, c. 6, s. 167; 2005, c. 54, s. 43(E)
Bank Act — B-1.01 211
Defence — due diligence 211 (1) A director, officer or employee of a bank is not liable under section 207 or 210 or subsection 506(1) and has fulfilled their duty under subsection 158(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on (a) financial statements of the bank that were represented to them by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or (b) a report of a person whose profession lends credibility to a statement made by them. Defence — good faith (2) A director or officer of a bank has fulfilled their duty under subsection 158(1) if they relied in good faith on (a) financial statements of the bank that were represented to them by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or (b) a report of a person whose profession lends credibility to a statement made by them. 1991, c. 46, s. 211; 2001, c. 9, s. 78; 2005, c. 54, s. 44
Bank Act — B-1.01 212
Indemnification 212 (1) A bank may indemnify a director or officer of the bank, a former director or officer of the bank or another person who acts or acted, at the bank’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the bank or other entity. Advances (2) A bank may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3). No indemnification (3) A bank may not indemnify a person under subsection (1) unless (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank or the other entity for which they acted at the bank’s request as a director or officer or in a similar capacity; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful. Indemnification — derivative actions (4) A bank may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the bank or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the bank or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3). Right to indemnity (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the bank in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the bank or other entity described in that subsection if the person (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and (b) fulfils the conditions set out in subsection (3). Heirs and personal representatives (6) A bank may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the bank may indemnify under those subsections. 1991, c. 46, s. 212; 2001, c. 9, s. 79(F); 2005, c. 54, s. 44
Bank Act — B-1.01 213
Directors’ and officers’ insurance 213 A bank may purchase and maintain insurance for the benefit of any person referred to in section 212 against any liability incurred by the person (a) in the capacity of a director or an officer of the bank, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the bank; or (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the bank’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity. 1991, c. 46, s. 213; 2005, c. 54, s. 45
Bank Act — B-1.01 214
Application to court for indemnification 214 (1) A bank or a person referred to in section 212 may apply to a court for an order approving an indemnity under that section and the court may so order and make any further order it thinks fit. Notice to Superintendent (2) An applicant under subsection (1) shall give the Superintendent written notice of the application and the Superintendent is entitled to appear and to be heard at the hearing of the application in person or by counsel. Other notice (3) On an application under subsection (1), the court may order notice to be given to any interested person and that person is entitled to appear and to be heard in person or by counsel at the hearing of the application.
Bank Act — B-1.01 215
Incorporating instrument 215 On the application of a bank duly authorized by special resolution, the Minister may approve a proposal to add, change or remove any provision that is permitted by this Act to be set out in the bank’s incorporating instrument. 1991, c. 46, s. 215; 2001, c. 9, s. 80
Bank Act — B-1.01 216
Letters patent to amend 216 (1) On receipt of an application referred to in section 215, the Minister may issue letters patent to effect the proposal. Effect of letters patent (2) Letters patent issued pursuant to subsection (1) become effective on the day stated in the letters patent. 1991, c. 46, s. 216; 2001, c. 9, s. 81
Bank Act — B-1.01 216.01
Conversion into federal credit union 216.01 On the application of a bank that is not a federal credit union, the Minister may, by letters patent, amend the bank’s incorporating instrument to convert the bank into a federal credit union. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.02
Shareholder approval of conversion proposal 216.02 (1) Before a bank makes an application under section 216.01, the directors of the bank must obtain from the shareholders, by special resolution, (a) approval of a conversion proposal that meets the requirements of the regulations and that has been approved by the Superintendent; (b) confirmation of any by-law or of any amendment to or repeal of a by-law that is necessary to implement the conversion proposal; and (c) authorization to make the application. Additional information (2) The Minister may require the federal credit union to provide the Minister with any additional information that he or she considers necessary. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.03
Right to vote 216.03 (1) For the purposes of subsection 216.02(1), each share of the bank carries the right to vote in respect of any matter referred to in that subsection whether or not it otherwise carries the right to vote. Class vote (2) For the purposes of subsection 216.02(1), the holders of shares of a class or series of shares of the bank are entitled to vote separately as a class or series in respect of any matter referred to in that subsection. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.04
Time of application 216.04 An application under section 216.01 may be made no later than three months after the bank’s conversion proposal has been approved by the shareholders. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.05
Criteria for issuance of letters patent 216.05 In determining whether to issue letters patent to amend a bank’s incorporating instrument to convert it into a federal credit union, the Minister must consider all matters that the Minister considers relevant, including whether (a) the applicant bank will, on the issuance of the letters patent, be organized and carry on business on a cooperative basis in accordance with section 12.1; (b) there are no reasonable grounds for believing that the issuance of the letters patent would cause the federal credit union to be in contravention of subsection 485(1), any regulation made under subsection 485(2) or any order made under subsection 485(3); (c) the bank’s conversion proposal was approved by special resolution of the shareholders; (d) the conversion of the bank into a federal credit union may reasonably be expected to be achieved under the terms of the conversion proposal; (e) the conversion is fair and reasonable to the shareholders; and (f) the conversion is in the best interests of the financial system in Canada, including the best interests of the cooperative financial system in Canada. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.06
Effect of letters patent 216.06 If the Minister issues letters patent to amend a bank’s incorporating instrument to convert it into a federal credit union, then, on the day stated in the letters patent, (a) the holders of the common shares of the bank are deemed to be the members of the federal credit union; (b) any common shares of the bank that are not to be converted into shares of the federal credit union according to the bank’s conversion proposal are deemed to be membership shares of the federal credit union to which are attached the rights, privileges and restrictions set out in this Act; and (c) any common shares of the bank that are to be converted into shares of the federal credit union according to the bank’s conversion proposal are deemed to be shares of the federal credit union to which are attached the rights, privileges and restrictions set out in this Act. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.07
Regulations 216.07 (1) The Governor in Council may make regulations (a) respecting applications under section 216.01, including their form and the information to be contained in them; (b) respecting conversion proposals to become a federal credit union, including the information to be contained in them; (c) respecting the by-laws that must be made or repealed, or the amendments that must be made to by-laws, to give effect to a conversion proposal to become a federal credit union; and (d) generally, respecting the conversion of a bank into a federal credit union. Conversion of common shares (2) Regulations made under paragraph (1)(b) must provide that a conversion proposal must provide that at least one common share held by every holder of common shares is converted into a membership share. Canada Deposit Insurance Corporation Act (3) A regulation made under subsection (1) may provide for different provisions respecting a bank that is subject to an order under paragraph 39.13(1)(a) of the Canada Deposit Insurance Corporation Act or is a bridge institution within the meaning of that Act. Exemption by Superintendent (4) A regulation made under subsection (1) may provide that the Superintendent may, on any terms and conditions that the Superintendent considers appropriate, exempt a bank from any requirements of that regulation. Exemption by Minister (5) The Minister may, on any terms and conditions that the Minister considers appropriate, exempt a bank from any requirement of this Act or the regulations if the bank is applying for the approval of a proposal to convert itself into a federal credit union and (a) the Minister is of the opinion that the bank is, or is about to be, in financial difficulty and that the exemption would help to facilitate an improvement in the financial condition of the bank; or (b) is subject to an order under paragraph 39.13(1)(a) of the Canada Deposit Insurance Corporation Act or is a bridge institution within the meaning of that Act. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.08
Conversion into bank with common shares 216.08 On the application of a federal credit union, the Minister may, by letters patent, amend the federal credit union’s incorporating instrument to convert the federal credit union into a bank with common shares. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.09
Approval of conversion proposal 216.09 (1) Before a federal credit union makes an application under section 216.08, the directors of the federal credit union must obtain from the members by special resolution and, if the federal credit union has issued shares, from the shareholders, by separate special resolution, (a) approval of a conversion proposal that meets the requirements of the regulations and that has been approved by the Superintendent; (b) confirmation of any by-law or of any amendment to or repeal of a by-law that is necessary to implement the conversion proposal; and (c) authorization to make the application. Additional information (2) The Minister may require the federal credit union to provide the Minister with any additional information that he or she considers necessary. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.1
Right to vote 216.1 (1) For the purposes of subsection 216.09(1), each share of the federal credit union carries the right to vote in respect of any matter referred to in that subsection whether or not it otherwise carries the right to vote. Class vote (2) For the purposes of subsection 216.09(1), the holders of shares of a class or series of shares of the federal credit union are entitled to vote separately as a class or series in respect of any matter referred to in that subsection. 2010, c. 12, s. 1995
Bank Act — B-1.01 216.11
Time of application 216.11 An application under section 216.08 may be made no later than three months after the bank’s conversion proposal has been approved by the members and shareholders, if any. 2010, c. 12, s. 1995