Source: http://www.bclaws.ca/civix/document/id/consol18/consol18/02057_06
Timestamp: 2019-05-25 19:28:11
Document Index: 289992346

Matched Legal Cases: ['art 5', 'art 1', 'art 2', 'art 2', 'art 3', 'art 4', 'art 5', 'art 6', 'art 7', 'art 8', 'art 9', 'art 10', 'art 11', 'art 12', 'art 13', 'art 14']

This archived statute consolidation is current to February 7, 2008 and includes changes enacted and in force by that date. For the most current information, click here.
Part 5 — Management
Division 1 — Directors
120 A company must have at least one director and, in the case of a public company, must have at least 3 directors.
121 (1) Subject to subsection (2), the first directors of a company hold office as directors from the recognition of the company until they cease to hold office under section 128 (1).
(2) No designation of an individual as a first director of a company is valid unless,
(a) in the case of a company incorporated under this Act, the designated individual
(i) is an incorporator who has signed the articles, or
(ii) consents in accordance with section 123 to be a director of the company,
(b) in the case of a company recognized under this Act in the manner contemplated by section 3 (1) (c), the designated individual
(i) has signed the articles for the amalgamated company,
(ii) in the case of an amalgamation under section 273, was, immediately before the recognition of the amalgamated company, a director of the holding corporation,
(iii) in the case of an amalgamation under section 274, was, immediately before the recognition of the amalgamated company, a director of the amalgamating company the shares of which were not cancelled on the amalgamation, or
(iv) consents in accordance with section 123 to be a director of the amalgamated company, or
(c) in the case of a company recognized under this Act in the manner contemplated by section 3 (1) (b) or (d), the designated individual
(i) was, immediately before the recognition of the company, a director of the corporation or of the foreign corporation, as the case may be, or
(ii) consents in accordance with section 123 to be a director of the company.
Succeeding directors
122 (1) Directors, other than the first directors of a company who are in their first term of office, must be elected or appointed in accordance with this Act and with the memorandum and articles of the company.
(2) If the memorandum or articles so provide, the directors may, subject to subsection (3), appoint one or more additional directors.
(3) Despite any provision to the contrary in the memorandum or articles, the number of additional directors appointed under subsection (2) must not at any time exceed
(a) 1/3 of the number of first directors, if, at the time of the appointments under subsection (2), one or more of the first directors have not yet completed their first term of office, or
(b) in any other case, 1/3 of the number of the current directors who were elected or appointed as directors other than under subsection (2).
(4) No election or appointment of an individual as a director under this section is valid unless
(a) the individual consents in accordance with section 123 to be a director of the company, or
(b) the election or appointment is made at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director.
123 (1) An individual from whom a consent is required under section 121 or 122 may consent
(a) by providing a written consent, before or after the individual's designation, election or appointment,
(i) in the case of a director referred to in section 121 (2) (a) (ii) or 122 (4) (a), to the company,
(ii) in the case of a director referred to in section 121 (2) (b) (iv), to one of the amalgamating companies or to the amalgamated company, or
(iii) in the case of a director referred to in section 121 (2) (c) (ii), to the corporation or foreign corporation, as the case may be, or to the company, or
(b) by performing functions of, or realizing benefits exclusively available to, a director of the company,
(i) in the case of a director referred to in section 121, after the individual knew or ought to have known of the individual's designation as a director, or
(ii) in the case of a director referred to in section 122 (4) (a), after the individual knew or ought to have known of the individual's election or appointment as a director.
(2) After an individual from whom a consent is required under section 121 or 122 and who has been otherwise validly appointed or elected as a director consents in accordance with subsection (1) of this section,
(a) the designation, election or appointment, as the case may be, of the director is valid, and
(b) the director is deemed to have been a director for all purposes from the date of that designation, election or appointment.
(3) A consent to be a director is effective until
(a) the consent is revoked by the director,
(b) the term of office of the director expires without the director being promptly reappointed or re-elected,
(c) the director resigns, or
(d) the director is removed in accordance with section 128 (3) or (4).
Persons disqualified as directors
124 (1) A person must not become or act as a director of a company unless that person is an individual who is qualified to do so.
(2) An individual is not qualified to become or act as a director of a company if that individual is
(a) under the age of 18 years,
(b) found by a court, in Canada or elsewhere, to be incapable of managing the individual's own affairs,
(c) an undischarged bankrupt, or
(d) convicted in or out of British Columbia of an offence in connection with the promotion, formation or management of a corporation or unincorporated business, or of an offence involving fraud, unless
(i) the court orders otherwise,
(ii) 5 years have elapsed since the last to occur of
(A) the expiration of the period set for suspension of the passing of sentence without a sentence having been passed,
(B) the imposition of a fine,
(C) the conclusion of the term of any imprisonment, and
(D) the conclusion of the term of any probation imposed, or
(iii) a pardon was granted or issued under the Criminal Records Act (Canada).
(3) A director who ceases to be qualified to act as a director of a company must promptly resign.
125 Unless the memorandum or articles provide otherwise, a director of a company is not required to hold shares issued by the company.
126 A company must keep a register of its directors and enter in that register
(a) the full name and prescribed address for each of the directors,
(b) the date on which each current director became a director,
(c) the date on which each former director became a director and the date on which he or she ceased to be a director, and
(d) the name of any office in the company held by a director, the date of the director's appointment to the office and the date, if any, on which the director ceased to hold the office.
Companies to file notices as to directors
127 (1) A company must, within 15 days after a change in its directors or in the prescribed address of any of its directors, complete and file with the registrar a notice of change of directors in the form established by the registrar.
(2) At the time that a notice of change of directors is filed with the registrar under this section in relation to a company that has a notice of articles, the notice of articles is altered to reflect that change.
(3) After the notice of change of directors is filed with the registrar under this section, the registrar must, if requested to do so, furnish to the company,
(a) if the company has a notice of articles, a certified copy of the notice of articles as altered, or
(b) in any other case, confirmation of the change of directors.
When directors cease to hold office
128 (1) A director ceases to hold office when
(a) the term of office of that director expires in accordance with
(i) this Act or the memorandum or articles, or
(ii) the terms of his or her election or appointment,
(b) the director dies or resigns, or
(c) the director is removed in accordance with subsection (3) or (4).
(2) A resignation of a director takes effect on the later of
(a) the time that the director's written resignation is provided to the company or to a lawyer for the company, and
(b) if the written resignation specifies that the resignation is to take effect at a specified date, on a specified date and time or on the occurrence of a specified event,
(i) if a date is specified, the beginning of the specified date,
(ii) if a date and time is specified, the date and time specified, or
(iii) if an event is specified, the occurrence of the event.
(3) Subject to subsection (4), a company may remove a director before the expiration of the director's term of office
(a) by a special resolution, or
(b) if the memorandum or articles provide that a director may be removed by a resolution of the shareholders entitled to vote at general meetings passed by less than a special majority or may be removed by some other method, by the resolution or method specified.
(4) If the shareholders holding shares of a class or series of shares of a company have the exclusive right to elect or appoint one or more directors, a director so elected or appointed may only be removed
(a) by a special separate resolution of those shareholders, or
(b) if the memorandum or articles provide that such a director may be removed by a separate resolution of those shareholders passed by a majority of votes that is less than the majority of votes required to pass a special separate resolution or may be removed by some other method, by the resolution or method specified.
Application to remove self as director or officer
129 (1) In this section, "recorded individual" means an individual who is recorded as a director or officer of a company in a record filed with the registrar or kept at the records office of the company.
(2) A recorded individual, or any other person whom the court considers to be an appropriate person to bring an application under this section, may, on notice to the company, make application to the court for an order under subsection (3).
(3) If an application is brought under subsection (2) and if the court is satisfied as to the matters set out in subsection (4), the court may do one or more of the following:
(a) order that the recorded individual
(i) is not a director or officer, as the case may be, and has not been a director or officer, as the case may be, from a date specified by the order, or
(ii) was not a director or officer, as the case may be, within the period specified by the order;
(b) order that any or all of the references to the recorded individual in the records kept at the records office of the company that record the recorded individual as a director or officer, as the case may be, be removed from those records as of the date or in relation to the period specified by the order;
(c) direct that the company pay some or all of the costs of the application.
(4) The court may make an order under subsection (3) if,
(a) in the case of an individual who has been recorded as a director,
(i) the designation, election or appointment, as the case may be, of the individual was never valid within the meaning of section 121 (2) or 122 (4), as the case may be, or
(ii) the individual was never designated, elected or appointed to the office in relation to which the order is sought under this section or, if designated, elected or appointed, held office as a director for a period other than the period in relation to which the order is sought, or
(b) in the case of an individual who has been recorded as an officer, the individual
(i) was never appointed to the office in relation to which the order is sought under this section,
(ii) if appointed to that office, refused the appointment and never held that office, or
(iii) held that office for a period other than the period in relation to which the order is sought.
(5) After an order is made under subsection (3) of this section,
(a) the recorded individual must provide to the company a copy of the entered order promptly after it is entered unless the company has otherwise received a copy of that order, and
(b) the company must promptly
(i) alter its records in accordance with the order, and
(ii) provide all of the information to, and make all of the filings with, the registrar that are necessary to alter the corporate register in accordance with the order.
Memorandum or articles may apply to vacancies among directors
130 A vacancy that occurs among the directors is to be filled in accordance with sections 131 to 135 unless the memorandum or articles provide otherwise.
Vacancies among directors
131 Subject to sections 132 and 133, a vacancy that occurs among the directors
(a) may, if the vacancy occurs as a result of the removal of a director under section 128 (3), be filled
(i) by the shareholders at the shareholders' meeting, if any, at which the director is removed, or
(ii) if not filled in the manner contemplated by subparagraph (i) of this paragraph, by the shareholders or by the remaining directors, or
(b) may, in the case of a casual vacancy, be filled by the remaining directors.
Vacancies among class or series directors
132 (1) Subject to section 133, if the shareholders holding shares of a class or series of shares have the exclusive right to elect or appoint one or more directors, a vacancy that occurs among those directors may, if the vacancy occurs as a result of the removal of a director under section 128 (4), be filled
(a) by those shareholders at the shareholders' meeting, if any, at which the director is removed, or
(b) if not filled in the manner contemplated by paragraph (a) of this subsection, by those shareholders or by the remaining directors elected or appointed by those shareholders.
(2) In the case of a casual vacancy that occurs among the directors referred to in subsection (1),
(a) the vacancy may be filled by the remaining directors elected or appointed by those shareholders, or
(b) if there are no remaining directors elected or appointed by those shareholders, the other directors must, unless the vacancy is filled by a unanimous resolution of those shareholders, promptly call a class meeting or a series meeting, as the case may be, of those shareholders to fill the vacancy.
End of term of replacement director
133 An individual appointed or elected as director under section 131 or 132 ceases to be a director on the earlier of
(a) the end of the unexpired portion of the term of office of the individual whose departure from office created the vacancy, and
(b) the date on which the individual ceases to hold office under section 128 (1).
134 (1) If, as a result of one or more vacancies that occur among the directors, the number of directors in office falls below the number required for a quorum, the remaining directors may do one or both of the following:
(a) appoint as directors the number of individuals that, when added to the number of remaining directors, will constitute a quorum;
(b) call a shareholders’ meeting to fill any or all vacancies among the directors and to conduct such other business, if any, that may be dealt with at that meeting;
but must not take any other action until a quorum is obtained.
(2) A person appointed as a director under subsection (1) (a) holds office until there is a sufficient number of directors, elected or appointed in any of the following ways, to constitute a quorum:
(a) under the memorandum or articles;
(b) by the shareholders under section 131 (a) or subsection (1) (b) of this section;
(c) in any manner contemplated by section 132.
If no directors in office
135 (1) If there are no directors in office,
(a) an individual may be empowered by the shareholders, incorporators or subscribers, as the case may be, under subsection (2), to
(i) call a meeting of the shareholders, incorporators or subscribers, as the case may be, for the election or appointment of directors, and
(ii) appoint as directors, to hold office until the vacancies are filled at that meeting, the number of individuals that will constitute a quorum, or
(b) there may be appointed, in the manner referred to in subsection (3), not more than the number of directors who, under the memorandum or articles, may be elected or appointed at an annual general meeting.
(2) An individual may be empowered under subsection (1) (a) by an instrument in writing
(a) signed by shareholders who, in the aggregate, hold shares carrying, in the aggregate, more than 1/2 of the votes that may be cast in an election or appointment of directors at a general meeting,
(b) if there are no shareholders whose shares carry the right to vote in an election or appointment of directors at a general meeting, signed by more than 1/2 of the shareholders, or
(c) if no shares have been issued, signed by more than 1/2 of the incorporators or, in the case of a pre-existing company, by more than 1/2 of the subscribers.
(3) An appointment under subsection (1) (b) may be effected by
(a) a unanimous resolution of the shareholders who hold shares carrying the right to vote in an election or appointment of directors at a general meeting,
(b) if there are no shareholders whose shares carry the right to vote in an election or appointment of directors at a general meeting, by a unanimous resolution of all of the shareholders, or
(c) if no shares have been issued, by an instrument in writing signed by all of the incorporators or, in the case of a pre-existing company, by all of the subscribers.
Division 2 — Powers and Duties of Directors, Officers, Attorneys, Representatives and Agents
Powers and functions of directors
136 (1) The directors of a company must, subject to this Act, the regulations and the memorandum and articles of the company, manage or supervise the management of the business and affairs of the company.
(2) Without limiting section 146, a limitation or restriction on the powers or functions of the directors is not effective against a person who does not have knowledge of the limitation or restriction.
Powers of directors may be transferred
137 (1) Subject to subsection (1.1) but despite any other provision of this Act, the articles of a company may transfer, in whole or in part, the powers of the directors to manage or supervise the management of the business and affairs of the company to one or more other persons.
(1.1) A provision of the articles transferring powers of the directors to manage or supervise the management of the business and affairs of the company is effective
(a) if the provision is included in the articles at the time of the company's recognition or if the company resolved, by special resolution, to add that provision to the articles, and
(b) if the provision clearly indicates, by express reference to this section or otherwise, the intention that the powers be transferred to the proposed transferee.
(2) If the whole or any part of the powers of the directors is transferred in the manner contemplated by subsection (1),
(a) the persons to whom those powers are transferred have all the rights, powers, duties and liabilities of the directors of the company, whether arising under this Act or otherwise, in relation to and to the extent of the transfer, including any defences available to the directors, and
(b) the directors are relieved of their rights, powers, duties and liabilities to the same extent.
(3) If and to the extent that the articles transfer to a person a right, power, duty or liability that is, under this Act, given to or imposed on a director or directors, the reference in this Act or the regulations to a director or directors in relation to that right, power, duty or liability is deemed to be a reference to the person.
(4) A company may resolve to alter its articles, by special resolution, to alter a provision referred to in subsection (1.1).
Application of this Act to persons performing functions of a director
138 (1) Without limiting section 137 but subject to subsection (2) of this section, if a person who is not a director of a company performs functions of a director of the company, sections 142, 231, 234, 251, 335, 347 and 354 and Divisions 3 to 5 of this Part apply to that person
(a) as if that person were a director of the company, and
(b) in relation to, and only to the extent of, those functions.
(2) Subsection (1) of this section does not apply to a person who is not a director of a company and who participates in the management of the company if
(a) the person participates in the management under the direction or control of a shareholder, director or senior officer of the company,
(b) the person is a lawyer, accountant or other professional whose primary participation in the management of the company is the provision of professional services to the company,
(c) the company is bankrupt and the person is a trustee in bankruptcy who participates in the management of the company or exercises control over its property, rights and interests primarily for the purposes of the administration of the bankrupt's estate, or
(d) the person is a receiver, receiver manager or creditor who participates in the management of the company or exercises control over any of its property, rights and interests primarily for the purposes of enforcing a debt obligation of the company.
Revocation of resolutions
139 The directors may
(a) revoke a special resolution before it is acted on if the directors are authorized to do so by that special resolution or by another special resolution,
(b) revoke a special separate resolution passed by shareholders holding shares of a class or series of shares before it is acted on if the directors are authorized to do so by that special separate resolution or by another special separate resolution passed by shareholders holding shares of that class or series of shares, or
(c) revoke an ordinary resolution before it is acted on if the directors are authorized to do so by that ordinary resolution or by another ordinary resolution.
140 (1) A director who is entitled to participate in, including vote at, a meeting of directors or of a committee of directors may participate
(b) unless the memorandum or articles provide otherwise, by telephone or other communications medium if all directors participating in the meeting, whether by telephone, by other communications medium or in person, are able to communicate with each other.
(2) A director who participates in a meeting in a manner contemplated by subsection (1) (b) is deemed, for all purposes of this Act and of the memorandum and articles of the company, to be present at the meeting.
(3) A resolution of the directors or of any committee of the directors
(a) may be passed without a meeting in any of the following circumstances:
(i) in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, within the meaning of Division 3, if each of the other directors who have not made such a disclosure in respect of the contract or transaction and who are entitled to vote on the resolution consents in writing to the resolution;
(ii) in the case of a resolution not referred to in subparagraph (i), if each of the directors entitled to vote on the resolution consents to it in writing;
(iii) whether or not the resolution is one referred to in subparagraph (i), in any other manner permitted under this Act or under the memorandum or articles of the company, and
(b) is, if the resolution is passed in accordance with paragraph (a), deemed
(i) to be a proceeding at a meeting of directors or of a committee of directors, and
(ii) to be as valid and effective as if it had been passed at a meeting of directors or of a committee of directors that satisfies all the requirements of this Act, and all the requirements of the memorandum and articles of the company, relating to meetings of directors or of a committee of directors.
(4) If a company has only one director, that director may constitute a meeting.
(5) A resolution passed at a meeting of directors or of a committee of directors is, for all purposes, deemed to have been passed on the date and time on which it is in fact passed despite the fact that the meeting at which the resolution is passed is a continuation of an adjourned meeting.
(6) Minutes must be kept of all proceedings at meetings of directors or of committees of directors and section 179 (2) and (3) applies to those minutes.
141 (1) Subject to subsection (3) and to the memorandum and articles of a company, the directors may appoint officers and may specify their duties.
(2) Unless the memorandum or articles provide otherwise,
(a) any individual, including a director, may be appointed to any office of the company, and
(b) 2 or more offices of the company may be held by the same individual.
(3) An individual who is not qualified under section 124 to become or act as a director of a company is not qualified to become or act as an officer of the company.
(4) Unless the memorandum or articles provide otherwise, the directors may remove any officer.
(5) The removal of an officer is without prejudice to the officer's contractual rights or rights under law, but the appointment of an officer does not of itself create any contractual rights.
142 (1) A director or officer of a company, when exercising the powers and performing the functions of a director or officer of the company, as the case may be, must
(a) act honestly and in good faith with a view to the best interests of the company,
(b) exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances,
(c) act in accordance with this Act and the regulations, and
(d) subject to paragraphs (a) to (c), act in accordance with the memorandum and articles of the company.
(2) This section is in addition to, and not in derogation of, any enactment or rule of law or equity relating to the duties or liabilities of directors and officers of a company.
(3) No provision in a contract, the memorandum or the articles relieves a director or officer from
(a) the duty to act in accordance with this Act and the regulations, or
(b) liability that by virtue of any enactment or rule of law or equity would otherwise attach to that director or officer in respect of any negligence, default, breach of duty or breach of trust of which the director or officer may be guilty in relation to the company.
143 An act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.
Corporations may grant power of attorney in writing
144 (1) A British Columbia corporation may, in writing, designate a person as its attorney and empower that attorney, either generally or in respect of specified matters, to sign deeds, instruments or other records on its behalf.
(2) Every deed, instrument or other record signed by an attorney on behalf of a British Columbia corporation, so far as it is within the attorney's authority, binds the corporation.
145 (1) A British Columbia corporation may, by a resolution of its directors or other governing body, authorize a person to act as the representative of the corporation,
(a) if the corporation holds shares of another corporation, wherever incorporated, at a meeting of some or all of the holders of shares of that other corporation, and
(b) if the corporation is a creditor of another corporation, wherever incorporated, at a meeting of creditors of that other corporation.
(2) A person authorized under subsection (1) is entitled to exercise the same powers on behalf of the corporation that the person represents as that corporation could exercise if it were an individual who holds shares of the other corporation or is a creditor of the other corporation, as the case may be.
Persons may rely on authority of companies and their directors, officers and agents
146 (1) Subject to subsection (2), a company, a guarantor of an obligation of a company or a person claiming through a company may not assert against a person dealing with the company, or dealing with any person who has acquired rights from the company, that
(a) the company's memorandum or notice of articles, as the case may be, or articles have not been complied with,
(b) the individuals who are shown as directors in the corporate register are not the directors of the company,
(c) a person held out by the company as a director, officer or agent
(i) is not, in fact, a director, officer or agent of the company, as the case may be, or
(ii) has no authority to exercise the powers and perform the duties that are customary in the business of the company or usual for such director, officer or agent,
(d) a record issued by any director, officer or agent of the company with actual or usual authority to issue the record is not valid or genuine, or
(e) a record kept by or for the company under section 42 is not accurate or complete.
(2) Subsection (1) of this section does not apply in respect of a person who has knowledge, or, by virtue of the person's relationship to the company, ought to have knowledge, of a situation described in paragraphs (a) to (e) of that subsection.
Division 3 — Conflicts of Interest
147 (1) For the purposes of this Division, a director or senior officer of a company holds a disclosable interest in a contract or transaction if
(a) the contract or transaction is material to the company,
(b) the company has entered, or proposes to enter, into the contract or transaction, and
(c) either of the following applies to the director or senior officer:
(i) the director or senior officer has a material interest in the contract or transaction;
(ii) the director or senior officer is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction.
(2) For the purposes of subsection (1) and this Division, a director or senior officer of a company does not hold a disclosable interest in a contract or transaction if
(a) the situation that would otherwise constitute a disclosable interest under subsection (1) arose before the coming into force of this Act or, if the company was recognized under this Act, before that recognition, and was disclosed and approved under, or was not required to be disclosed under, the legislation that
(i) applied to the corporation on or after the date on which the situation arose, and
(ii) is comparable in scope and intent to the provisions of this Division,
(b) both the company and the other party to the contract or transaction are wholly owned subsidiaries of the same corporation,
(c) the company is a wholly owned subsidiary of the other party to the contract or transaction,
(d) the other party to the contract or transaction is a wholly owned subsidiary of the company, or
(e) the director or senior officer is the sole shareholder of the company or of a corporation of which the company is a wholly owned subsidiary.
(3) In subsection (2), "other party" means a person of which the director or senior officer is a director or senior officer or in which the director or senior officer has a material interest.
(4) For the purposes of subsection (1) and this Division, a director or senior officer of a company does not hold a disclosable interest in a contract or transaction merely because
(a) the contract or transaction is an arrangement by way of security granted by the company for money loaned to, or obligations undertaken by, the director or senior officer, or a person in whom the director or senior officer has a material interest, for the benefit of the company or an affiliate of the company,
(b) the contract or transaction relates to an indemnity or insurance under Division 5,
(c) the contract or transaction relates to the remuneration of the director or senior officer in that person's capacity as director, officer, employee or agent of the company or of an affiliate of the company,
(d) the contract or transaction relates to a loan to the company, and the director or senior officer, or a person in whom the director or senior officer has a material interest, is or is to be a guarantor of some or all of the loan, or
(e) the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the company and the director or senior officer is also a director or senior officer of that corporation or an affiliate of that corporation.
Obligation to account for profits
148 (1) Subject to subsection (2) and unless the court orders otherwise under section 150 (1) (a), a director or senior officer of a company is liable to account to the company for any profit that accrues to the director or senior officer under or as a result of a contract or transaction in which the director or senior officer holds a disclosable interest.
(2) A director or senior officer of a company is not liable to account for and may retain the profit referred to in subsection (1) of this section in any of the following circumstances:
(a) the disclosable interest was disclosed before the coming into force of this Act under the former Companies Act that was in force at the time of the disclosure, and, after that disclosure, the contract or transaction is approved in accordance with section 149 of this Act, other than section 149 (3);
(b) the contract or transaction is approved by the directors in accordance with section 149, other than section 149 (3), after the nature and extent of the disclosable interest has been disclosed to the directors;
(c) the contract or transaction is approved by a special resolution in accordance with section 149, after the nature and extent of the disclosable interest has been disclosed to the shareholders entitled to vote on that resolution;
(d) whether or not the contract or transaction is approved in accordance with section 149,
(i) the company entered into the contract or transaction before the director or senior officer became a director or senior officer of the company,
(ii) the disclosable interest is disclosed to the directors or the shareholders, and
(iii) the director or senior officer does not participate in, and, in the case of a director, does not vote as a director on, any decision or resolution touching on the contract or transaction.
(3) The disclosure referred to in subsection (2) (b), (c) or (d) of this section must be evidenced in a consent resolution, the minutes of a meeting or any other record deposited in the company's records office.
(4) A general statement in writing provided to a company by a director or senior officer of the company is a sufficient disclosure of a disclosable interest for the purpose of this Division in relation to any contract or transaction that the company has entered into or proposes to enter into with a person if the statement declares that the director or senior officer is a director or senior officer of, or has a material interest in, the person with whom the company has entered, or proposes to enter, into the contract or transaction.
(5) In addition to the records that a shareholder of the company may inspect under section 46, that shareholder may, without charge, inspect
(a) the portions of any minutes of meetings of directors, or of any consent resolutions of directors, that contain disclosures under this section, and
(b) the portions of any other records that contain those disclosures.
(6) In addition to the records a former shareholder of the company may inspect under section 46, that former shareholder may, without charge, inspect the records referred to in subsection (5) (a) and (b) of this section that are kept under section 42 and that relate to the period when that person was a shareholder.
(7) Sections 46 (7) and (8), 48 (1) and (3) and 50 apply to the portions of minutes, resolutions and records referred to in subsections (5) and (6) of this section.
Approval of contracts and transactions
149 (1) A contract or transaction in respect of which disclosure has been made in accordance with section 148 may be approved by the directors or by a special resolution.
(2) Subject to subsection (3), a director who has a disclosable interest in a contract or transaction is not entitled to vote on any directors' resolution referred to in subsection (1) to approve that contract or transaction.
(3) If all of the directors have a disclosable interest in a contract or transaction, any or all of those directors may vote on a directors' resolution to approve the contract or transaction.
(4) Unless the memorandum or articles provide otherwise, a director who has a disclosable interest in a contract or transaction and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.
150 (1) On an application by a company or by a director, senior officer, shareholder or beneficial owner of shares of the company, the court may, if it determines that a contract or transaction in which a director or senior officer has a disclosable interest was fair and reasonable to the company,
(a) order that the director or senior officer is not liable to account for any profit that accrues to the director or senior officer under or as a result of the contract or transaction, and
(b) make any other order that the court considers appropriate.
(2) Unless a contract or transaction in which a director or senior officer has a disclosable interest has been approved in accordance with section 148 (2), the court may, on an application by the company or by a director, senior officer, shareholder or beneficial owner of shares of the company, make one or more of the following orders if the court determines that the contract or transaction was not fair and reasonable to the company:
(a) enjoin the company from entering into the proposed contract or transaction;
(b) order that the director or senior officer is liable to account for any profit that accrues to the director or senior officer under or as a result of the contract or transaction;
(c) make any other order that the court considers appropriate.
Validity of contracts and transactions
151 A contract or transaction with a company is not invalid merely because
(a) a director or senior officer of the company has an interest, direct or indirect, in the contract or transaction,
(b) a director or senior officer of the company has not disclosed an interest he or she has in the contract or transaction, or
(c) the directors or shareholders of the company have not approved the contract or transaction in which a director or senior officer of the company has an interest.
Limitation of obligations of directors and senior officers
152 Except as is provided in this Division, a director or senior officer of a company has no obligation to
(a) disclose any direct or indirect interest that the director or senior officer has in a contract or transaction, or
(b) subject to section 192, account for any profit that accrues to the director or senior officer under or as a result of a contract or transaction in which the director or senior officer has a disclosable interest.
Disclosure of conflict of office or property
153 (1) If a director or senior officer of a company holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer of the company, the director or senior officer must disclose, in accordance with this section, the nature and extent of the conflict.
(2) The disclosure required from a director or senior officer under subsection (1)
(a) must be made to the directors promptly
(i) after that individual becomes a director or senior officer of the company, or
(ii) if that individual is already a director or senior officer of the company, after that individual begins to hold the office or possess the property, right or interest for which disclosure is required, and
(b) must be evidenced in one of the ways referred to in section 148 (3).
Division 4 — Liability of Directors
154 (1) Subject to section 157, directors of a company who vote for or consent to a resolution that authorizes the company to do any of the following are jointly and severally liable to restore to the company any amount paid or distributed as a result and not otherwise recovered by the company:
(a) to do an act contrary to section 33 (1) as a result of which the company has paid compensation to any person;
(b) to pay a commission or allow a discount contrary to section 67;
(c) to pay a dividend contrary to section 70 (2);
(d) to purchase, redeem or otherwise acquire shares contrary to section 78 or 79;
(e) to make a payment or give an indemnity contrary to section 163.
(2) Subject to subsection (4) of this section and section 157, directors of a company who vote for or consent to a resolution that authorizes the issue of a share in contravention of section 63 (2) (b) or 64 are jointly and severally liable to compensate the company, or any shareholder or beneficial owner of shares of the company, for any losses, damages and costs sustained or incurred as a result by the company, the shareholder or the beneficial owner, as the case may be.
(3) The liability imposed by subsections (1) and (2) of this section is in addition to and not in derogation of any liability imposed on a director by this Act or any other enactment or by any rule of law or equity.
(4) A director is not liable under subsection (2) if the director did not know and could not reasonably have known that the value of the consideration for which the share was issued was less than the issue price set for the share under section 63.
(5) For the purposes of this section, a director of a company who is present at a meeting of the directors or of a committee of directors is deemed to have consented to a resolution referred to in subsection (1) or (2) of this section that is passed at the meeting unless that director's dissent
(a) is recorded in the minutes of the meeting,
(b) is put in writing by the director and is provided to the secretary of the meeting before the end of the meeting, or
(c) is, promptly after the end of the meeting, put in writing and delivered to the delivery address of, or mailed by registered mail to the mailing address of, the company's registered office.
(6) A director who votes in favour of a resolution referred to in subsection (1) or (2) is not entitled to dissent under subsection (5).
(7) Subject to subsection (8), a director who is not present at a meeting of the directors or of a committee of directors at which a resolution referred to in subsection (1) or (2) is passed is deemed to have consented to the resolution if,
(a) in the case of a resolution passed at a directors' meeting, the individual was a director at the time of the meeting, or
(b) in the case of a resolution passed at a meeting of a committee of directors, the individual was a member of that committee at the time of the meeting.
(8) Subsection (7) does not apply to a director who, within 7 days after becoming aware of the passing of a resolution referred to in subsection (1) or (2), delivers to the delivery address of, or mails by registered mail to the mailing address of, the company's registered office, a written dissent.
(9) A legal proceeding to enforce a liability imposed by this section may not be commenced more than 2 years after the date of the applicable resolution.
Dissent procedure by companies
155 The company must, on receipt of a written dissent referred to in section 154 (5) (c) or (8), and the secretary of the meeting referred to in section 154 (5) must, on receipt of a written dissent referred to in section 154 (5) (b), certify on the written dissent the date and time it is received.
Legal proceedings on liability
156 (1) Without limiting any other rights a director has at law, a director who has satisfied a liability arising under section 154 is entitled to contribution from the other directors who voted for or consented to the resolution that gave rise to the liability.
(2) In a legal proceeding under section 154, the court may, on the application of a company or of a director of a company,
(a) order a shareholder of the company or any other person to deliver to the director or the company any property, rights and interests that the court considers were improperly paid or distributed to that shareholder or person under this Act,
(b) join a director, shareholder or other person as a party to the legal proceeding,
(c) order the company to return or issue shares to a person from whom the company purchased, redeemed or otherwise acquired shares, and
(d) make any other order the court considers appropriate.
157 (1) A director of a company is not liable under section 154 and has complied with his or her duties under section 142 (1) if the director relied, in good faith, on
(a) financial statements of the company represented to the director by an officer of the company or in a written report of the auditor of the company to fairly reflect the financial position of the company,
(b) a written report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by that person,
(c) a statement of fact represented to the director by an officer of the company to be correct, or
(d) any record, information or representation that the court considers provides reasonable grounds for the actions of the director, whether or not
(i) the record was forged, fraudulently made or inaccurate, or
(ii) the information or representation was fraudulently made or inaccurate.
(2) [Repealed 2003-70-35.]
(2) A director of a company is not liable under section 154 if the director did not know and could not reasonably have known that the act done by the director or authorized by the resolution voted for or consented to by the director was contrary to this Act.
Liability if company's name not displayed
158 (1) A director or officer of a company who knowingly permits the company to contravene section 27 (1) (a), (b) or (c) or (2) is personally liable to indemnify any of the following persons who suffer loss or damage as a result of being misled by that contravention:
(a) a purchaser of goods or services from the company;
(b) a supplier of goods or services to the company;
(c) a person holding a security of the company.
(2) A director or officer of a company who issues or authorizes the issue of any instrument referred to in section 27 (1) (d) that does not display the name of the company is personally liable to the person holding that instrument for the amount of it, unless it is duly paid by the company.
Division 5 — Indemnification of Directors and Officers and Payment of Expenses
159 In this Division:
"associated corporation" means a corporation or entity referred to in paragraph (b) or (c) of the definition of "eligible party";
"eligible party", in relation to a company, means an individual who
(a) is or was a director or officer of the company,
(b) is or was a director or officer of another corporation
(i) at a time when the corporation is or was an affiliate of the company, or
(ii) at the request of the company, or
(c) at the request of the company, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity,
and includes, except in the definition of "eligible proceeding" and except in sections 163 (1) (c) and (d) and 165, the heirs and personal or other legal representatives of that individual;
"eligible penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
"eligible proceeding" means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the company or an associated corporation
(a) is or may be joined as a party, or
(b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;
"expenses" includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding;
"proceeding" includes any legal proceeding or investigative action, whether current, threatened, pending or completed.
Indemnification and payment permitted
160 Subject to section 163, a company may do one or both of the following:
(a) indemnify an eligible party against all eligible penalties to which the eligible party is or may be liable;
(b) after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.
Mandatory payment of expenses
161 Subject to section 163, a company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by the eligible party in respect of that proceeding if the eligible party
(a) has not been reimbursed for those expenses, and
(b) is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.
Authority to advance expenses
162 (1) Subject to section 163 and subsection (2) of this section, a company may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.
(2) A company must not make the payments referred to in subsection (1) unless the company first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by section 163, the eligible party will repay the amounts advanced.
163 (1) A company must not indemnify an eligible party under section 160 (a) or pay the expenses of an eligible party under section 160 (b), 161 or 162 if any of the following circumstances apply:
(a) if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the company was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;
(b) if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the company is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;
(c) if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the company or the associated corporation, as the case may be;
(d) in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party's conduct in respect of which the proceeding was brought was lawful.
(2) If an eligible proceeding is brought against an eligible party by or on behalf of the company or by or on behalf of an associated corporation, the company must not do either of the following:
(a) indemnify the eligible party under section 160 (a) in respect of the proceeding;
(b) pay the expenses of the eligible party under section 160 (b), 161 or 162 in respect of the proceeding.
Court ordered indemnification
164 Despite any other provision of this Division and whether or not payment of expenses or indemnification has been sought, authorized or declined under this Division, on the application of a company or an eligible party, the court may do one or more of the following:
(a) order a company to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding;
(b) order a company to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;
(c) order the enforcement of, or any payment under, an agreement of indemnification entered into by a company;
(d) order a company to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under this section;
165 A company may purchase and maintain insurance for the benefit of an eligible party or the heirs and personal or other legal representatives of the eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the company or an associated corporation.
Division 6 — Meetings of Shareholders
166 A general meeting of a company,
(a) subject to paragraph (b), must be held in British Columbia, or
(b) may be held at a location outside British Columbia if
(i) the location is provided for in the articles,
(ii) the articles do not restrict the company from approving a location outside of British Columbia for the holding of the general meeting and the location for the meeting is
(A) approved by the resolution required by the articles for that purpose, or
(B) if no resolution is required for that purpose by the articles, approved by ordinary resolution, or
(iii) the location for the meeting is approved in writing by the registrar before the meeting is held.
Requisitions for general meetings
167 (1) Shareholders referred to in subsection (2) may requisition a general meeting for the purpose of transacting any business that may be transacted at a general meeting.
(2) A requisition under this section may be made by shareholders who, at the date on which the requisition is received by the company, hold in the aggregate at least 1/20 of the issued shares of the company that carry the right to vote at general meetings.
(3) A requisition under this section
(a) must, in 1 000 words or less, state the business to be transacted at the meeting, including any special resolution or exceptional resolution to be submitted to the meeting,
(b) must be signed by, and include the names and mailing addresses of, all of the requisitioning shareholders,
(c) may be made in a single record or may consist of several records, in similar form and content, each of which is signed by one or more of the requisitioning shareholders, and
(d) must be delivered to the delivery address of, or mailed by registered mail to the mailing address of, the registered office of the company.
(4) If a requisition under this section consists of more than one record, the requisition is received by the company on the first date by which the company has received requisition records that comply with subsection (3) from shareholders who, in the aggregate, hold at least the number of shares necessary to qualify under subsection (2).
(5) On receiving a requisition that complies with subsections (2) and (3), the directors must, regardless of the memorandum or articles, call a general meeting to be held not more than 4 months after the date on which the requisition is received by the company to transact the business stated in the requisition and must, subject to subsection (7),
(a) send notice of the date, time and location of that meeting at least the prescribed number of days, but not more than 4 months, before the meeting
(i) to each shareholder entitled to attend the meeting, and
(ii) to each director, and
(b) send, in accordance with subsection (6), to the persons entitled to notice of the meeting, the text of the requisition referred to in subsection (3) (a).
(6) The text referred to in subsection (5) (b) must be sent
(a) in, or within the time set for the sending of, the notice of the requisitioned meeting, or
(b) in the company's information circular or equivalent, if any, sent in respect of the requisitioned meeting.
(7) The directors need not comply with subsection (5) if
(a) the directors have called a general meeting to be held after the date on which the requisition is received by the company and have sent notice of that meeting in accordance with section 169,
(b) substantially the same business was submitted to shareholders to be transacted at a general meeting that was held not more than the prescribed period before the receipt of the requisition, and any resolution to transact that business at that earlier meeting did not receive the prescribed amount of support,
(c) it clearly appears that the business stated in the requisition does not relate in a significant way to the business or affairs of the company,
(d) it clearly appears that the primary purpose for the requisition is
(i) securing publicity, or
(ii) enforcing a personal claim or redressing a personal grievance against the company or any of its directors, officers or security holders,
(e) the business stated in the requisition has already been substantially implemented,
(f) the business stated in the requisition, if implemented, would cause the company to commit an offence, or
(g) the requisition deals with matters beyond the company's power to implement.
(8) If the directors do not, within 21 days after the date on which the requisition is received by the company, send notice of a general meeting in accordance with subsection (5) of this section, the requisitioning shareholders, or any one or more of them holding, in the aggregate, more than 1/40 of the issued shares of the company that carry the right to vote at general meetings, may send notice of a general meeting to be held to transact the business stated in the requisition.
(9) A general meeting called, under subsection (8), by the requisitioning shareholders must
(a) be called in accordance with subsection (5),
(b) be held within 4 months after the date on which the requisition is received by the company, and
(c) as nearly as possible, be conducted in the same manner as a general meeting called by the directors.
(10) Unless the shareholders resolve otherwise by an ordinary resolution at the general meeting called, under subsection (8), by the requisitioning shareholders, the company must reimburse the requisitioning shareholders for the expenses actually and reasonably incurred by them in requisitioning, calling and holding that meeting.
168 No company or person acting on behalf of a company incurs any liability merely because the company or person complies with section 167 (5) (b) or (6).
169 (1) Subject to sections 167 and 170, a company must send notice of the date, time and location of a general meeting of the company at least the prescribed number of days but not more than 2 months before the meeting,
(a) to each shareholder entitled to attend the meeting, and
(b) to each director.
(2) The accidental omission to send notice of any general meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting.
170 (1) Despite any other provision of this Act, a shareholder and any other person entitled to notice of a meeting of shareholders may waive that entitlement or may agree to reduce the period of that notice.
(2) Despite section 7 (4), the right of a person to waive the entitlement to notice or to reduce the period of notice under subsection (1) of this section need not be exercised in writing.
(3) Without limiting subsection (2), attendance of a person at a meeting of shareholders is a waiver of entitlement to notice of the meeting, unless that person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
Setting record dates
171 (1) The directors may set a date as the record date under this section for any purpose, including for the purpose of determining shareholders
(a) entitled to receive payment of a dividend,
(b) entitled to participate in a liquidation distribution,
(c) entitled to notice of a meeting of shareholders, or
(d) entitled to vote at a meeting of shareholders.
(2) A record date set under subsection (1) must not
(a) precede by more than 2 months the date on which the action referred to in subsection (1) (a) or (b) is to be taken,
(b) precede by more than 2 months, or, in the case of a meeting referred to in section 167, 4 months, or by fewer than the prescribed number of days the date on which the meeting referred to in subsection (1) (c) of this section is to be held, or
(c) precede by more than 2 months, or, in the case of a meeting referred to in section 167, 4 months, the date on which the meeting referred to in subsection (1) (d) of this section is to be held.
(3) If no record date is set under this section,
(a) the record date for determining the shareholders who are entitled to notice of, or to vote at, a meeting of shareholders is
(i) 5 p.m. on the day immediately preceding the first date on which notice is sent, or
(ii) if no notice is sent, the beginning of the meeting, and
(b) the record date for determining shareholders for any other purpose is 5 p.m. on the date on which the directors pass the resolution relating to the matter for which the record date is required.
Quorum for shareholders' meetings
172 (1) The quorum for the transaction of business at a meeting of shareholders of a company is
(a) the quorum established by the memorandum or articles,
(b) if no quorum is established by the memorandum or articles, 2 shareholders entitled to vote at the meeting whether present in person or by proxy, or
(c) if the number of shareholders entitled to vote at the meeting is less than the quorum applicable to the company under paragraph (a) or (b), all of the shareholders entitled to vote at the meeting whether present in person or by proxy.
(2) Unless the memorandum or articles provide otherwise, if a quorum is not present at the opening of a meeting of shareholders, the shareholders entitled to vote at the meeting who are present in person or by proxy at the meeting may adjourn the meeting to a set time and place but may not transact any other business.
(3) If the company has only one shareholder entitled to vote at a meeting of shareholders, one person who is, or who represents by proxy, that shareholder may constitute that meeting.
173 (1) Subject to sections 69 (2), 82 (6) and 177 and subsection (9) (a) of this section and unless the memorandum or articles provide otherwise, a shareholder has one vote in respect of each share held by that shareholder and is entitled to vote in person or by proxy.
(2) Unless the memorandum or articles provide otherwise, voting at a meeting of shareholders must,
(a) if one or more shareholders vote at the meeting in a manner contemplated by section 174 (1), be by poll or be conducted in any other manner that adequately discloses the intentions of the shareholders,
(b) if a poll is demanded by a shareholder or proxy holder entitled to vote at the meeting or is directed by the chair, be by poll, or
(c) in any other case, be by show of hands.
(3) At any meeting of shareholders at which a resolution is submitted, a declaration of the chair that the resolution is carried by the necessary majority or is defeated is, unless a poll is required or demanded under subsection (2) or (4) of this section or is directed by the chair, conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
(4) At any meeting of shareholders at which a resolution is submitted, a shareholder or proxy holder entitled to vote at the meeting may, before or promptly after the declaration of the results of a vote taken by a show of hands, demand a poll.
(5) A company must, for at least 3 months after a meeting of shareholders, keep at its records office each ballot cast on a poll and each proxy voted at the meeting.
(6) Any shareholder or proxy holder who was entitled to vote at a meeting referred to in subsection (5) may, without charge, inspect the ballots and proxies kept by the company under that subsection in respect of that meeting.
(7) Sections 46 (7) and (8), 48 (1) and (3) and 50 apply to the records referred to in subsection (6) of this section.
(8) Unless otherwise provided under this Act or in the memorandum or articles, any action that must or may be taken or authorized by the shareholders under this Act may be taken or authorized by an ordinary resolution.
(9) If a shareholder whose shares do not otherwise carry the right to vote is, by this Act, given the right to vote on a matter,
(a) the shareholder has, on that matter, the greatest of
(i) one vote in respect of each of those shares,
(ii) the same number of votes per share as are attached, under the memorandum or articles, to shares of the class or series of shares to which is attached the least number of votes per share that may be cast in relation to that matter, and
(iii) the number of votes per share as are, under the memorandum or articles, attached to those shares in relation to that matter, and
(b) the provisions of the memorandum or articles or this Division, as the case may be, that apply in relation to the exercise of voting rights held by shareholders whose shares carry the right to vote at general meetings also apply in relation to the exercise by that shareholder of the voting rights given by this Act on that matter.
Participation at meetings of shareholders
174 (1) Unless the memorandum or articles provide otherwise, a shareholder or proxy holder who is entitled to participate in, including vote at, a meeting of shareholders may do so by telephone or other communications medium if all shareholders and proxy holders participating in the meeting, whether by telephone, by other communications medium or in person, are able to communicate with each other.
(2) Nothing in subsection (1) obligates a company to take any action or provide any facility to permit or facilitate the use of any communications medium at a meeting of shareholders.
(3) If one or more shareholders or proxy holders participate in a meeting of shareholders in a manner contemplated by subsection (1),
(a) each such shareholder or proxy holder is deemed, for the purposes of this Act and of the memorandum and articles of the company, to be present at the meeting, and
(b) the meeting is deemed to be held at the location specified in the notice of the meeting.
175 Two or more shareholders may, in a written agreement, agree that when exercising voting rights in relation to the shares held by them, they will vote those shares in accordance with the terms of the agreement.
176 A resolution passed at a meeting of shareholders is, for all purposes, deemed to have been passed on the date and time on which it is in fact passed despite the fact that the meeting at which the resolution is passed is a continuation of an adjourned meeting.
Subsidiary not to vote
177 If a subsidiary is a shareholder of its holding corporation and the holding corporation is a British Columbia corporation, the subsidiary is not entitled to vote at a meeting of shareholders of the holding corporation.
178 Unless the memorandum or articles of a company provide otherwise, the shareholders who are present in person or by proxy at a meeting of shareholders and who are entitled to vote at the meeting may elect as the chair of the meeting any shareholder or proxy holder who is entitled to vote at the meeting.
179 (1) A company must ensure that minutes are kept of all proceedings at meetings of shareholders.
(2) The minutes of a meeting referred to in subsection (1), if purported to be signed by the chair of the meeting or by the chair of the next succeeding meeting, are evidence of the proceedings.
(3) Until the contrary is proved, if minutes of a meeting have been signed in accordance with this section,
(a) the meeting is deemed to have been duly held and convened,
(b) all proceedings at the meeting are deemed to have been duly taken, and
(c) all elections and appointments of directors, officers, auditors or liquidators made at the meeting are deemed to be valid.
Consent resolutions of shareholders
180 A consent resolution of shareholders is deemed
(a) to be a proceeding at a meeting of those shareholders, and
(b) to be as valid and effective as if it had been passed at a meeting of shareholders that satisfies all the requirements of this Act and the regulations, and all the requirements of the memorandum and articles of the company, relating to meetings of shareholders.
Rules applicable to general meetings apply to other shareholders' meetings
181 To the extent that this Act or the regulations or the memorandum or articles of a company do not make provision for any particular meeting of shareholders, the provisions of this Act, the regulations, the memorandum and the articles relating to the call, holding and conduct of general meetings apply, with the necessary changes and so far as they are applicable, to that meeting of shareholders.
182 (1) Subject to subsections (2) to (5), a company must hold an annual general meeting,
(a) for the first time, not more than 18 months after the date on which it was recognized, and
(b) after its first annual reference date, at least once in each calendar year and not more than 15 months after the annual reference date for the preceding calendar year.
(2) Subject to subsection (3), all of the shareholders entitled to vote at an annual general meeting of a company may,
(a) by a unanimous resolution passed on or before the date by which that annual general meeting is required to be held under this section, defer the holding of that annual general meeting to a date that is later than the date by which the meeting is required to be held under subsection (1),
(b) by a unanimous resolution, consent to all of the business required to be transacted at that annual general meeting, or
(c) by a unanimous resolution, waive the holding of
(i) that annual general meeting,
(ii) the previous annual general meeting, or
(iii) any earlier annual general meeting that the company had been obliged to hold.
(3) The shareholders must, in any unanimous resolution passed under subsection (2) (a), (b) or (c) (i) or (ii), select, as the company's annual reference date, a date that would, under subsection (1), be appropriate for the holding of the applicable annual general meeting.
(4) If a unanimous resolution is not passed under subsection (2) with respect to an annual general meeting of a company, on the application of the company, the registrar may, if satisfied that it is appropriate to do so and on the terms and conditions the registrar considers appropriate, allow the company to hold that annual general meeting on a date that is later than the date by which the meeting is required to be held under subsection (1).
(5) If a unanimous resolution is passed in relation to an annual general meeting under subsection (2) (b) or (c), the company need not hold that annual general meeting.
First annual reference date for pre-existing companies
183 For the purposes of section 182 (1) (b), a pre-existing company that has neither held an annual general meeting under this Act nor passed a resolution under section 182 (2) has, as its first annual reference date,
(a) if the company was recognized not more than 18 months before the coming into force of this Act, the earlier of
(i) the date of the company's first annual general meeting, if any, that was held, or was deemed to have been held, under the Company Act, 1996, and
(ii) the date that is 18 months after the recognition of the company, or
(b) if the company was recognized more than 18 months before the coming into force of this Act, the later of
(i) the date that is 13 months after the date of the company's most recent annual general meeting, if any, that was held, or was deemed to have been held, under the Company Act, 1996, and
(ii) the date that is 6 months before the day on which this Act comes into force.
Pre-existing reporting company meetings
184 (1) In this section, "registrant" means a person registered or required to be registered in any jurisdiction to trade in securities within the meaning of the Securities Act, but does not include a trustee with respect to shares held under a trust instrument that regulates the manner in which those shares are to be voted.
(2) A meeting of shareholders of a pre-existing reporting company, and any action taken at the meeting, is not invalid merely because a registrant fails to comply with one or more of the provisions applicable to registrants, in their capacity as registrants, of the Statutory Reporting Company Provisions or the company's articles.
(3) If a pre-existing reporting company is bound by any provision in the Statutory Reporting Company Provisions or in the articles of the company that imposes any requirements on the manner, form or contents of a proxy or a proxy solicitation, or that otherwise relates to proxies or proxy solicitations, any person soliciting or granting a proxy to vote shares of that company is also bound by those provisions.
185 (1) The directors of a company that holds an annual general meeting must place the following before that meeting:
(a) in the case of a reporting issuer, the annual financial statements that the company is required to file with the Securities Commission under the Securities Act in relation to the most recently completed financial year;
(b) in the case of a reporting issuer equivalent or of a company within a prescribed class of companies, the annual financial statements that the company is required to produce or file in relation to the most recently completed financial year under the legislation that
(i) applies to the company, and
(ii) has provisions that are comparable in scope and intent to the financial disclosure provisions of the Securities Act and the regulations made under that Act;
(c) in any other case, the financial statements, if any, that the directors are, under section 198 (2) of this Act, required to produce and publish on or before the annual reference date that relates to that annual general meeting;
(d) any auditor's report made under section 212 (1) (a) on those financial statements.
(2) The directors of a company who are required under subsection (1) of this section to place financial statements before an annual general meeting must, on the request of any shareholder or proxy holder present at that meeting, provide a copy of those financial statements and of any auditor's report made under section 212 (1) (a) on those financial statements to that shareholder or proxy holder.
(3) If, within 6 months after an annual reference date, a shareholder of the company requests a copy of the company's financial statements referred to in subsection (1) (a), (b) or (c) of this section, the directors must promptly send to that shareholder a copy of those financial statements and of any auditor's report made under section 212 (1) (a) on those financial statements.
186 (1) The court may, on its own motion or on the application of the company, the application of a director or the application of a shareholder entitled to vote at the meeting,
(a) order that a meeting of shareholders be called, held and conducted in the manner the court considers appropriate, and
(b) give directions it considers necessary as to the call, holding and conduct of the meeting.
(2) The court may make an order under subsection (1)
(a) if it is impracticable for any reason for the company to call or conduct a meeting of shareholders in the manner required under this Act, the memorandum or the articles,
(b) if the company fails to hold a meeting of shareholders in accordance with this Act or the regulations or its memorandum or articles, or
(c) for any other reason the court considers appropriate.
(3) Without limiting subsection (1), the court may order that the quorum or notice required by the memorandum or articles or this Act or the regulations be varied or dispensed with in respect of a meeting.
Division 7 — Shareholders' Proposals
187 (1) In this Division:
"proposal" means a written notice setting out a matter that the submitter wishes to have considered at the next annual general meeting of the company;
"qualified shareholder" means, in relation to a proposal, a person who
(a) is a registered owner or beneficial owner of one or more shares of the company that carry the right to vote at general meetings, and
(b) has been a registered owner or beneficial owner of one or more such shares for an uninterrupted period of at least 2 years before the date of the signing of the proposal,
but does not include a person referred to in subsection (2);
"submitter" means the qualified shareholder who submits a proposal to a company;
"supporter" means a person who signs a proposal under section 188 (1) (b).
(2) A person is not a qualified shareholder if, within 2 years before the date of the signing of the proposal, the person failed to present, in person or by proxy, at an annual general meeting, an earlier proposal
(a) of which the person was the submitter, and
(b) in response to which the company had complied with section 189 (1) to (3).
(3) This Division does not apply to a company unless the company is a public company.
Requirements for valid proposals
188 (1) A proposal is valid if
(a) the proposal is signed by the submitter,
(b) the proposal is signed by qualified shareholders who, together with the submitter, are, at the time of signing, registered owners or beneficial owners of shares that, in the aggregate,
(i) constitute at least 1/100 of the issued shares of the company that carry the right to vote at general meetings, or
(ii) have a fair market value in excess of the prescribed amount,
(c) the proposal, and the declarations referred to in paragraph (d), are received at the registered office of the company at least 3 months before the anniversary of the previous year's annual reference date, and
(d) the proposal is accompanied by a declaration from the submitter and each supporter, signed by the submitter or supporter, as the case may be, or, in the case of a submitter or supporter that is a corporation, by a director or senior officer of the signatory,
(i) providing the name of and a mailing address for that signatory,
(ii) declaring the number and class or series of shares carrying the right to vote at general meetings that are owned by that signatory as a registered owner or beneficial owner, and
(iii) unless the name of the registered owner has already been provided under subparagraph (i), providing the name of the registered owner of those shares.
(2) A proposal may be accompanied by one written statement in support of the proposal.
(3) A proposal, or, if a statement is provided under subsection (2), the statement and proposal together, must not exceed 1 000 words in length and, for the purposes of this subsection, the proposal does not include the signatures referred to in subsection (1) (a) or (b) and the declarations referred to in subsection (1) (d).
Rights and obligations arising from proposal
189 (1) Subject to subsections (4) (b) and (5), a company that receives a proposal must send, in accordance with subsection (2), to all of the persons who are entitled to notice of the annual general meeting in relation to which the proposal is made,
(a) the text of the proposal,
(b) the names and mailing addresses of the submitter and the supporters, and
(c) the text of the statement, if any, accompanying the proposal under section 188 (2).
(2) The information referred to in subsection (1) of this section must be sent
(a) in, or within the time set for the sending of, the notice of the applicable annual general meeting under section 169, or
(b) in the company's information circular or equivalent, if any, sent in respect of the applicable annual general meeting.
(3) Subject to subsections (4) (b) and (5) of this section, the company must allow a submitter to present the proposal, in person or by proxy, at the annual general meeting in relation to which the proposal was made if the submitter is a qualified shareholder at the time of that meeting.
(4) If a company receives more than one proposal in relation to an annual general meeting, the company, if the proposals relate to substantially the same matter,
(a) must comply with subsections (1) to (3) in relation to the first of those proposals to be received at its registered office, and
(b) need not comply with subsections (1) to (3) in relation to any other of those proposals.
(5) Subject to section 191 (3), the company need not process a proposal in accordance with subsections (1) to (4) of this section if any of the following circumstances applies:
(a) the directors have called an annual general meeting to be held after the date on which the proposal is received by the company and have sent notice of that meeting in accordance with section 169;
(b) the proposal is not valid within the meaning of section 188 (1) or exceeds the maximum length established by section 188 (3);
(c) substantially the same proposal was submitted to shareholders in a notice of meeting, or an information circular or equivalent, relating to a general meeting that was held not more than the prescribed period before the receipt of the proposal, and did not receive the prescribed amount of support at the meeting;
(d) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the company;
(e) it clearly appears that the primary purpose for the proposal is
(ii) enforcing a personal claim or redressing a personal grievance against the company or any of its directors, officers or security holders;
(f) the proposal has already been substantially implemented;
(g) the proposal, if implemented, would cause the company to commit an offence;
(h) the proposal deals with matters beyond the company's power to implement.
190 No company or person acting on behalf of a company incurs any liability merely because the company or person complies with section 189 (1), (2), (3) or (4).
Refusal to process proposal
191 (1) A company that does not intend to process a proposal in accordance with section 189 (1) to (4) on the basis that subsection (5) of that section applies to the proposal or on the basis that the proposal is one referred to in subsection (4) (b) of that section must, within 21 days after the proposal is received by its registered office, send to the submitter
(a) written notice of the company's decision in relation to the proposal, and
(b) a written explanation as to the company's reasons for its decision, including a specific reference to the provision of section 189 that the company is relying on in refusing to process the proposal and the reasons why the company believes that that provision applies.
(2) The submitter to whom a notice is sent under subsection (1) (a) of this section may apply to the court for a review of the company's decision.
(3) On an application under subsection (2), the court may restrain the holding of the annual general meeting in relation to which the proposal is made and may, if it determines that the company did not have proper grounds to refuse to process the proposal in accordance with section 189 (1) to (4), make any order it considers appropriate, including one or more of the following:
(a) an order that the company comply with section 189 (1) to (4) in the manner and within the time ordered by the court;
(b) if the information referred to in section 189 (1) cannot be provided to the shareholders within a reasonable period of time before the annual general meeting, an order that the company
(i) hold, at its sole expense, a general meeting for the purpose of considering the proposal, and
(ii) comply with section 189 (1) to (4) in relation to that meeting on the terms and conditions imposed by the court;
(c) an order that the company reimburse the submitter for all reasonable legal expenses, including all reasonable disbursements, incurred in the application.
(4) The company or any person claiming to be aggrieved by a proposal may apply to the court for an order permitting or requiring the company to refrain from processing the proposal in accordance with section 189 (1) to (4) and the court, if it is satisfied that section 189 (4) (b) or (5) applies, may make such order as it considers appropriate.
Division 8 — Insiders
Liability of insiders
192 (1) In this section:
"associate", if used to indicate a relationship with a person, means
(a) a partner, other than a limited partner, of the person,
(b) a trust or estate in which the person has a substantial beneficial interest or for which the person serves as trustee or in a similar capacity,
(c) a spouse, son or daughter of the person, or
(d) a relative of the person or of the person's spouse, other than a relative referred to in paragraph (c), who has the same home as the person;
"insider" means, in respect of a private company,
(a) a director or senior officer of the private company,
(b) a person who beneficially owns shares of the private company that carry, in the aggregate, more than the prescribed fraction of the votes that may be cast in an election or appointment of directors at a general meeting,
(c) an associate of a person referred to in paragraph (a) or (b),
(d) the private company itself,
(e) an affiliate of the private company,
(f) a person who is employed by the private company or who is retained by it on a professional or consulting basis, or
(g) a director or senior officer of another corporation if that other corporation is itself an insider of the private company;
"private company" means a company that is not
(a) a reporting issuer,
(b) a reporting issuer equivalent, or
(c) a company within a prescribed class of companies.
(2) This section applies if
(a) an insider makes use of specific confidential information
(i) in connection with a transaction relating to any security of the private company, and
(ii) for the benefit or advantage of the insider or of any associate or affiliate of the insider, and
(b) the information, if generally known, might reasonably be expected to materially affect the value of the security.
(3) In the circumstances referred to in subsection (2), the insider is
(a) liable to compensate any person for any direct loss suffered by the person as a result of the transaction, unless
(i) the information was known, or ought reasonably to have been known, at the time of the transaction, to the person who suffered the loss, or
(ii) the insider proves that, at the time of the transaction, the insider reasonably believed that the specific confidential information was known to the person who suffered the loss, and
(b) accountable to the private company for any direct benefit or advantage received or receivable by the insider or the insider's associate or affiliate, as the case may be, as a result of the transaction unless the insider proves that, at the time of the transaction, the insider reasonably believed that the specific confidential information was generally known.
(4) An action under subsection (3) must not be brought more than 2 years after discovery of the facts that gave rise to the cause of action.
(5) If the parties to a contract involving the transfer of a private company's securities agree in writing that this section does not apply to the transfer, the agreement is binding on those parties.
Form and effect of contracts
193 (1) A contract that, if made between individuals, would, by law, be required to be in writing and under seal, may be made for a company in writing and under seal and may, in the same manner, be varied or discharged.
(2) A contract that, if made between individuals, would, by law, be required to be in writing and signed by the parties to be charged, may be made for a company in writing signed by a person acting under the express or implied authority of the company and may, in the same manner, be varied or discharged.
(3) A contract that, if made between individuals, would, by law, be valid although made orally and not reduced to writing, may be made in like manner for a company by a person acting under the express or implied authority of the company and may, in the same manner, be varied or discharged.
(4) A contract made according to this section is effectual in law and binds the company and all other parties to it.
(5) A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, by, on behalf of or on account of the company by a person acting under its authority.
Authentication or certification of records
194 (1) A record that requires authentication or certification by a company may be authenticated or certified by a director or officer of the company or by a lawyer for the company and need not be under the company's seal.
(2) Any certified record referred to in subsection (1), if introduced as evidence in any legal proceeding, is evidence of the contents of the record without proof of the signature or official capacity of the person appearing to have signed the record.
(3) An entry in a central securities register or branch securities register of a company, or a share certificate or a non-transferable written acknowledgement issued by a company, is evidence that the person in whose name the shares are registered or to whom the share certificate or non-transferable written acknowledgement is issued is the owner of the shares described in that securities register or in that certificate or non-transferable written acknowledgement.
(4) Without limiting subsection (3), a register of members or a register of debentureholders prepared under a former Companies Act is evidence of any matters directed or authorized by that Act to be inserted in it.
195 (1) In this section, "associate", if used to indicate a relationship with a person, has the same meaning as in section 192 (1), and includes a corporation of which the person beneficially owns shares carrying, in the aggregate, more than 1/10 of the votes that may be cast in an election or appointment of directors at a general meeting of the corporation.
(2) A company may give financial assistance to any person for any purpose by means of a loan, a guarantee, the provision of security or otherwise.
(3) Subject to subsections (4) and (5), a company must disclose, in accordance with subsection (7), any financial assistance that is material to the company and that the company gives to
(a) a person known to the company to be a shareholder of, a beneficial owner of a share of, a director of, an officer of or an employee of
(i) the company, or
(ii) an affiliate of the company,
(b) a person known to the company to be an associate of any of the persons referred to in paragraph (a), or
(c) any person for the purpose of a purchase by that person of a share issued or to be issued by the company or an affiliate of the company.
(4) A company need not make disclosure under subsection (3) in respect of financial assistance that is given
(a) to a person in the ordinary course of business, if the lending of money is part of the ordinary business of the company,
(b) to a person on account of expenditures incurred or to be incurred on behalf of the company,
(c) to a corporation of which the company is a wholly owned subsidiary,
(d) to a corporation that is a wholly owned subsidiary of the company,
(e) to a corporation if the company and the corporation are
(i) wholly owned subsidiaries of the same holding corporation, or
(ii) wholly owned by the same person,
(f) to the person, other than a corporation, who holds all of the shares of the company or of a corporation of which the company is a wholly owned subsidiary,
(g) to employees of the company or of any affiliate of the company to enable or assist them to purchase or erect living accommodation for their own occupancy, or
(h) to employees, or trustees for employees, of the company or of any affiliate of the company in accordance with a plan for the purchase of shares of the company or of any affiliate of the company to be beneficially owned by those employees.
(5) A company need not make disclosure under subsection (3) if that disclosure is waived by the court.
(6) The following information must be disclosed in respect of financial assistance for which disclosure is required under this section:
(a) a brief description of the financial assistance, including the nature and extent of the financial assistance given;
(b) the terms on which the financial assistance was given;
(c) the amount of the financial assistance given.
(7) The information required under subsection (6) must be disclosed
(a) in a written record deposited in the company's records office before or promptly after the giving of the financial assistance,
(b) in a consent resolution of the directors passed before or promptly after, or in order to authorize, the giving of the financial assistance,
(c) in the minutes of the directors' meeting at which the giving of the financial assistance is authorized, or
(d) in the minutes of the directors' meeting that follows the giving of the financial assistance.
(8) In addition to the records that a shareholder of the company may inspect under section 46, that shareholder may, without charge, inspect
(9) In addition to the records a former shareholder of the company may inspect under section 46, that former shareholder may, without charge, inspect the records referred to in subsection (8) (a) and (b) of this section that relate to the period when that person was a shareholder.
(10) Sections 46 (7) and (8), 48 (1) and (3) and 50 apply to the portions of minutes, resolutions and records referred to in subsections (8) and (9) of this section.
Contents | Part 1 | Part 2 | Part 2.1 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Schedule