jswizzle3737/ontario_laws_and_regs huggingface dataset:
2 (1) For the purposes of this Act, two or more persons holding the same share or shares jointly are considered as one member or shareholder. Exception (2) Despite subsection (1), two or more persons jointly holding enough membership shares to entitle each of them to be a member in their own right are all considered as separate members.
3 For the purposes of this Act, a body corporate is a subsidiary of another body corporate if, (a)  it is controlled by, (i)  that other, (ii)  that other and one or more bodies corporate each of which is controlled by that other, or (iii)  two or more bodies corporate that are that other’s subsidiary; or (b)  it is a subsidiary of a body corporate that is that other’s subsidiary.
4 For the purposes of this Act, a body corporate is another’s holding body corporate if that other is its subsidiary.
5 (1) For the purposes of this Act, one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person. Affiliate by order (2) On application in writing by a credit union, the Chief Executive Officer may, by order and on the terms specified in the order, deem a corporate body named in the order to be an affiliate for the purposes of this Act or for the purpose of specific provisions of this Act. Revocation of order (3) The Chief Executive Officer may, by order, revoke an order under subsection (2) if the Chief Executive Officer believes that the credit union has failed to comply with a term set out in the order under subsection (2) or that it is no longer appropriate to deem the corporate body in respect of which the order under subsection (2) was made to be an affiliate. Procedural rules (4) Section 209 applies with respect to an order under this section.
6 For the purposes of this Act, a body corporate is controlled by another person or by two or more bodies corporate if, (a)  voting securities of the first mentioned body corporate carrying more than 50 per cent of the votes for the election of directors are held, other than by way of security only, by or for the benefit of the other person or by or for the benefit of the other bodies corporate; and (b)  the votes carried by the securities are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned body corporate.
7 (1) For the purposes of this Act, a person is a holder of a membership share of a credit union when, according to the register under section 202, the person is the owner of the membership share or is entitled to be entered in the register as the owner of the share. Holder of membership share (2) A reference in this Act to the holding of a membership share by or in the name of a person is a reference to the fact that the person is registered or is entitled to be registered in the register under section 202 as the holder of the share.
8 (1) For the purposes of this Act, a person is a shareholder of a body corporate when, according to the securities register of the body corporate, the person is the owner of a share of the body corporate or is entitled to be entered in the securities register or like record of the body corporate as the owner of a share. Holder of a share (2) A reference in this Act to the holding of a share by or in the name of any person is a reference to the fact that the person is registered or is entitled to be registered in the securities register or a similar register of the body corporate as the holder of that share. Part II   Establishing a Credit union Incorporation
9 (1) The certificate of incorporation, articles of incorporation and the by-laws of a credit union, together with this Act, constitute the charter of the credit union. Date of incorporation (2) A credit union comes into existence on the date set out in the certificate of incorporation.
10 (1) The required number of individuals, as determined by Authority rule, may incorporate a credit union by signing articles of incorporation and complying with section 12. Restriction (2) An individual is disqualified from being an incorporator if the individual, (a)  is less than 18 years of age; (b)  has been found under the Substitute Decisions Act, 1992 or under the Mental Health Act
to be incapable of managing property or has been found to be incapable by a court in Canada or elsewhere; or (c)  is an undischarged bankrupt or has been discharged as a bankrupt in the five years preceding the date the application to incorporate the credit union is made under subsection 12 (1).
11 (1) The articles of incorporation must set out the information prescribed by the regulations. Same (2) The articles may include any provision that is permitted under this Act to be set out in the articles or that could be the subject of a by-law of the credit union. Same (3) The articles must set out any restrictions on the business that the credit union may carry on or on the powers that the credit union may exercise. First directors (4) The articles must name at least five individuals who hold office as the first directors of the credit union. Affidavit (5) An affidavit verifying the following matters must accompany the articles: 1.  The signature of each incorporator and each first director. 2.  The fact that each first director meets the criteria for eligibility under section 83, and that each incorporator and first director is not disqualified under subsection 10 (2) or section 84, as applicable. Where consent required (6) If a person who is not an incorporator is named in the articles as a first director, the person’s consent to act as a first director must accompany the articles. Form of consent (7) The consent must be in a form approved by the Chief Executive Officer.
12 (1) An application to incorporate a credit union may be made by sending to the Chief Executive Officer a copy of the proposed articles of incorporation, the proposed by-laws of the credit union and such other information as may be prescribed by Authority rule and paying the application fee established by Authority rule. Inquiry before incorporation (2) The Chief Executive Officer shall inquire into the circumstances, sufficiency and regularity of the articles and by-laws and may do any of the following before issuing a certificate of incorporation: 1.  Require the incorporators to provide such additional information as the Chief Executive Officer considers relevant to the application. 2.  Require any matter set out in the articles or by-laws or in the additional information provided to the Chief Executive Officer to be verified under oath. 3.  Require the articles or by-laws to be amended if the Chief Executive Officer considers that they are inconsistent with this Act, the regulations or the Authority rules.
13 (1) Subject to subsection (2), the Chief Executive Officer shall issue a certificate of incorporation to the incorporators. 2020, c. 36, Sched. 7, s. 13 (1). Grounds for refusing certificate (2) The Chief Executive Officer shall not issue a certificate of incorporation if the articles do not meet the requirements of section 11 or 12 or if the incorporators do not satisfy the Chief Executive Officer of the following matters: 1.  The plans for the conduct and development of the business of the credit union are feasible and sound. 2.  The credit union will be operated on a co-operative basis in accordance with subsection 23 (2). 3.  The credit union will be operated in such a way that deposits will be safeguarded without the likelihood of a claim against the Authority. 4.  The credit union will be operated responsibly by individuals who, by virtue of their character, competence and experience, are suited to operating a financial institution. 5.  The incorporation of the credit union will serve the best interests of the co-operative financial system in Ontario. 2020, c. 36, Sched. 7, s. 13 (2); 2021, c. 40, Sched. 5, s. 2. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 2 - 01/03/2022
14 (1) A certificate of incorporation is conclusive proof that the incorporators have complied with all conditions precedent to incorporating a credit union and that the credit union was incorporated under this Act on the date set out in the certificate. Exception (2) Subsection (1) does not apply in a proceeding under section 241.
15 If the Chief Executive Officer decides, after giving the applicants for incorporation an opportunity to make written submissions, not to issue a certificate of incorporation, the Chief Executive Officer shall notify the incorporators, in writing, and set out the reasons for the decision.
16 (1) The corporate name of a credit union must be in the language and form authorized in the articles and approved by the Chief Executive Officer. Use of “credit union” (2) Subject to subsections (3) and (4), the corporate name of a credit union must include the words “credit union”, “caisse populaire” or “caisse”. Use of “caisse populaire” (3) Only a corporation incorporated under this Act or a predecessor of this Act that provides financial services to its members and promotes the interests of the French-speaking community in Ontario by providing management and democratic control in French may include “caisse populaire” or “caisse” in its corporate name, and all other corporations incorporated under this Act or a predecessor of this Act shall include “credit union” in their corporate names. Use of “Limited”, etc. (4) The corporate name of a credit union must have at the end of it one of the following: “Limited”, “Ltd”, “Limitée”, “Ltée”, “incorporated”, “incorporée” or “Inc”.
17 (1) A credit union shall not carry on business under or identify itself by a name other than its corporate name unless the Chief Executive Officer has approved that name. Restriction on approval (2) The Chief Executive Officer shall not approve a name under subsection (1), (a)  if the name includes “credit union”, “caisse populaire” or “caisse”, unless the name is derived from the credit union’s corporate name; or (b)  if the name would be precluded as a corporate name under section 19. Corporate name to be used in all documents (3) A credit union shall set out its corporate name in legible characters in all documents that evidence rights or obligations with respect to other parties (including contracts, invoices and negotiable instruments) and that are issued or made by or on behalf of the credit union.
18 No person, other than a credit union or person or entity prescribed by regulation, shall carry on business using a name in which “credit union” or “caisse populaire” is used.
19 (1) A credit union may not be incorporated under this Act with a corporate name that, (a)  is prohibited under an Act of the Parliament of Canada or a province or territory of Canada; (b)  does not meet the requirements prescribed by regulation; (c)  is reserved under section 20 for another credit union; (d)  is the same as or confusingly similar to any existing trade-mark or trade name or corporate name of a body corporate; (e)  is the same as or confusingly similar to the known name under or by which another entity carries on business or is identified; (f)  contains a word or phrase that indicates or suggests that it is incorporated for any object other than one set out in its articles; or (g)  is deceptively misdescriptive. Exception re trade-marks, etc. (2) Clause (1) (d) does not apply if the Chief Executive Officer is satisfied that, (a)  the trade-mark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name; and (b)  in the case of a corporate name, there is consent to the use of the corporate name. Exception for affiliate (3) Clauses (1) (d) and (e) do not apply with respect to a credit union that is affiliated with another entity if the Chief Executive Officer is satisfied that the entity consents to it having a corporate name substantially similar to the entity’s name. Change of corporate name (4) If a credit union has acquired a corporate name contrary to subsection (1), the Chief Executive Officer may, by order, issue a certificate of amendment to the articles changing the name of the credit union. Procedural rules (5) Section 209 applies with respect to an order under subsection (4).
20 (1) A person may reserve a corporate name for a period of up to 90 days by making an application to the Chief Executive Officer and paying the fee established by Authority rule. Effect of reservation (2) During the period that the corporate name is reserved, a body corporate is not entitled to acquire the name or a similar name without the written consent of the person for whose use and benefit the name is reserved. Renewal of reservation of corporate name (3) Within 30 days before the expiry of the reservation of a corporate name under subsection (1), the person who reserved the name may apply for a renewal of the reservation for a further period of not more than 90 days by submitting an application for the renewal to the Chief Executive Officer and paying the fee established by Authority rule.
21 A credit union may, but is not required to, have a corporate seal.
22 (1) A credit union shall have its head office in Ontario at the place indicated in its articles. Change (2) A credit union may by articles of amendment change the location of its head office to another place in Ontario. Objects and Powers
23 (1) The object of a credit union is to provide on a co-operative basis financial services primarily for its members. Co-operative basis (2) A credit union shall operate on a co-operative basis such that, (a)  membership is voluntary and is open to those that fall within its bond of association, if the credit union’s by-laws so provide; (b)  its business is carried on primarily for the benefit of its members; (c)  the net income that accrues from its business is, (i)  used to provide services for its members, (ii)  used to develop its business, (iii)  used to increase its reserves or retained earnings, (iv)  distributed to its members and shareholders, or (v)  used for another purpose approved by the members; and (d)  each member has only one vote at its general meetings or in respect of elections of its directors. Exception (3) Clause (2) (d) does not prevent a member from voting as a proxy holder as allowed under section 183.
24 (1) A credit union has the capacity of a natural person and, subject to this Act, the rights, powers and privileges of a natural person. Powers outside Ontario (2) A credit union may exercise its powers outside of Ontario to the extent permitted under the laws of the applicable jurisdiction. Extra-provincial powers (3) A credit union may accept extra-provincial powers and rights.
25 (1) No act of a credit union and no transfer of real or personal property to or by a credit union before or after this section comes into force, that is otherwise lawful, is invalid because the credit union was without capacity or power to do the act or make or receive the transfer, but a lack of capacity or power may be asserted, (a)  in a proceeding against the credit union by a member under subsection (2); (b)  in a proceeding by the credit union, whether acting directly or through a receiver, liquidator, trustee or their legal representative or through members in a representative capacity, against a director or officer or former director or officer of the credit union; or (c)  as a cause for the cancellation of the certificate of incorporation of the credit union. Restraining order (2) A member of a credit union may apply to court for an order restraining the credit union from doing any act on the ground that the credit union lacks capacity to do so. Granting order (3) Subject to subsection (4), the court may, if it considers it to be just and equitable, grant the order. Where contract (4) If the act or transfer that the member seeks to restrain is to be done under a contract to which the credit union is a party, (a)  all the parties to the contract are parties to the proceedings; (b)  the court may, (i)  grant the order and set aside the contract, and (ii)  award compensation to the credit union or other parties to the contract for any damages or loss, other than anticipated profits from the contract, sustained by them because the order is granted and the contract is set aside. Miscellaneous
26 (1) A credit union or a guarantor of an obligation of one shall not assert against a person dealing with the credit union or with a person who has acquired rights from the credit union any of the following matters: 1.  The articles or by-laws have not been complied with. 2.  The individuals named in the most recent notice filed under the Corporations Information Act or named in the articles, whichever is more current, are not the directors of the credit union. 3.  The location of its head office indicated in a notice filed under the Corporations Information Act, as named in the by-laws, or named in the articles, whichever is more current, is not the head office of the credit union. 4.  A person held out by the credit union as a director, officer or agent has not been duly appointed or does not have authority to exercise the powers and perform the duties that are customary in the business of the credit union or usual for the director, officer or agent. 5.  A document issued by a director, officer or agent of the credit union with actual or usual authority to issue the document is not valid or not genuine. 6.  Financial assistance was not authorized. 7.  The sale, lease, exchange or disposition of property of the credit union was not authorized under section 174. Exception (2) Subsection (1) does not apply if the person has or ought to have knowledge of the matter by virtue of the person’s position with or relationship to the credit union. No deemed notice (3) No person is affected by or is deemed to have knowledge of the contents of a document concerning a credit union by reason only that the document has been filed with the Chief Executive Officer or is available for inspection at an office of the credit union.
27 The financial year of a credit union must end on the date specified by Authority rule.
28 The Corporations Act does not apply to credit unions. Part iii   membership Who May Be Member
29 Membership in a credit union is governed by the credit union’s by-laws, subject to the provisions of this Act, the Authority rules and the credit union’s articles.
30 Each incorporator who has subscribed for the minimum number of membership shares in a credit union required by the by-laws of the credit union and who is issued those membership shares becomes a member upon the effective date of incorporation.
31 Subject to section 30, no person shall become a member of a credit union until the person’s application for membership has been approved by the board or an employee authorized by the board and the applicant has complied fully with the by-laws governing admission of members.
32 (1) The by-laws of a credit union may provide that the membership of the credit union is limited to persons, related persons and entities who come within a bond of association and shall specify the nature of the bond of association. Exception (2) Despite subsection (1), the by-laws may provide that an employee of a credit union may become a member. Same (3) Despite subsection (1), the by-laws may provide that certain persons, related persons and entities who do not come within the bond of association may become members. Same (4) A person or entity admitted as a member who does not come within the bond of association has all the rights and obligations of membership. Retaining membership (5) If authorized by the by-laws, a member who no longer falls within the bond of association may retain membership in the credit union.
33 (1) Every person or entity whose name is registered in the register under section 202 is entitled to, (a)  a record specifying the amount paid upon membership shares, deposits and loans by the person or entity; and (b)  such other information as may be specified by the by-laws of the credit union. Same (2) The record referred to in clause (1) (a) is admissible in evidence as proof, in the absence of evidence to the contrary, of membership and of the information entered therein. Rights and Liabilities
34 The members of a credit union are not, by reason only of holding membership shares of a credit union, liable for any liability, act or default of the credit union except as otherwise provided by this Act.
35 (1) A credit union is not bound to see to the execution of any trust to which any membership share is subject. Application (2) Subsection (1) applies whether the trust is express, implied or constructive.
36 Two or more members may hold their membership shares and deposits in a joint account and, in the absence of written notice to the contrary, payment by the credit union to any of the members or to the survivor or any of the survivors of the members of any money standing to the credit of the joint share or deposit account discharges the credit union from any further liability for such payment.
37 If permitted by the by-laws of a credit union, a person under the age of 18 years may be a member of the credit union, subject to such conditions and restrictions as may be set out in the by-laws. Death, etc.
38 (1) If a member of a credit union dies and the credit union makes a payment of an amount described in subsection (2) to such person as the credit union is satisfied is entitled to receive the amount, the payment discharges any obligation of the credit union and its board in respect of and to the extent of the amount paid even if the payment is made without letters probate or letters of administration being taken out. Type of payments (2) The payment referred to in subsection (1) is a payment of the following: 1.  An amount not exceeding the amount prescribed by regulation payable from the amount on deposit in the name of the deceased or in consideration for the membership shares of the deceased. 2.  An amount not exceeding the amount prescribed by regulation payable from any money that is received by the credit union under any policy of insurance on the life of the deceased. Restrictions (3) Subsection (1) applies only if the credit union pays the amount in good faith and the credit union receives, before the payment, (a)  a statutory declaration attesting to the person’s entitlement to receive the amount; or (b)  such other evidence of the person’s entitlement to the amount as the credit union considers to be appropriate in the circumstances. Credit union can require more (4) Nothing in this section prevents the credit union from requiring additional documentation or evidence as the credit union considers appropriate. Recovery from recipient (5) Subsection (1) does not affect any right of a person claiming to be entitled to recover the amount from the person to whom it was paid. No limit on other powers, requirements (6) For greater certainty, this section does not prevent a credit union from making a payment or transfer as otherwise allowed or required by law. If deceased member was trustee (7) If a member of a credit union dies holding membership shares or money on deposit in trust for a named beneficiary, the credit union may pay the amount of, or transfer, the membership shares or deposit and any interest or dividends on them, (a)  to the executor or administrator of the estate of the deceased member; or (b)  to the beneficiary if there is no executor or administrator of the estate of the deceased member or, if the beneficiary is a minor, to the beneficiary’s parent or guardian. Liens
39 (1) A credit union has a lien on the deposits and membership shares of a member for any liability to it by the member, and may set off any sum standing to the credit of the member on the books of the credit union towards the payment of the liability. Limitation, member’s share account (2) Despite subsection (1), a credit union shall not apply any service charges or other deductions against a member’s share account except upon the termination of the membership. Withdrawals and Expulsions
40 (1) A member of a credit union may withdraw from the credit union at any time by giving notice in accordance with the by-laws. Same, member’s death (2) A deceased member shall be deemed to have given notice to the credit union of intention to withdraw on the day of the member’s death. Same, Authority rules (3) The withdrawal of a member is subject to such conditions and requirements as may be prescribed by Authority rule.
41 (1) A member of a credit union may be expelled from membership, in accordance with the by-laws, by a resolution of the board on the grounds set out in the by-laws. Same, Authority rules (2) The expulsion of a member is subject to such conditions and requirements as may be prescribed by Authority rule. Representative Actions by Members
42 (1) Subject to subsection (2), a member of a credit union may maintain an action in a court of competent jurisdiction in a representative capacity for the member and all other members of the credit union suing for and on behalf of the credit union to enforce any right, duty or obligation owed to the credit union under this Act or under any other statute or rule of law or equity that could be enforced by the credit union itself, or to obtain damages for any breach of any such right, duty or obligation. Court order required (2) An action under subsection (1) shall not be commenced until the member has obtained an order of the court permitting the commencement of the action. Application to court (3) A member may, upon at least seven days notice to the credit union, apply to the court for an order referred to in subsection (2). Court order (4) The court may make the order upon such conditions as the court thinks fit if the court is satisfied that, (a)  the member was a member of the credit union at the time of the transaction or other event giving rise to the cause of action; (b)  the member has made reasonable efforts to cause the credit union to commence or prosecute diligently the action on its own behalf; and (c)  the member is acting in good faith and it is apparently in the interests of the credit union or its members that the action be commenced. Costs (5) At any time while an action commenced under this section is pending, the plaintiff may apply to the court for an order for the payment to the plaintiff by the credit union of reasonable interim costs, including legal fees and disbursements. Accountability for costs (6) The plaintiff is accountable to the credit union for the interim costs if the action is dismissed on final disposition at the trial or on appeal. Action, court approval (7) An action commenced under this section shall not be discontinued, settled or dismissed for want of prosecution without the approval of the court. Same (8) If the court determines that the interests of the members or any class of members may be substantially affected by a discontinuance, settlement or dismissal, the court may direct that notice in manner, form and content satisfactory to the court shall be given, at the expense of the credit union or any other party to the action as the court directs, to the members or class of members whose interests the court determines may be affected. Part iv   Capital Structure Shares
43 (1) The articles of a credit union must provide for a class of shares known as membership shares and may provide for additional classes of shares, including patronage shares referred to in section 45. Nature of shares (2) The shares of a credit union are personal property. Form (3) The shares of a credit union are without nominal or par value and, if they are not membership shares or patronage shares, must be in registered form.
44 (1) Membership shares confer on the holder the right to receive dividends declared on the shares and to receive the remaining property of the credit union on dissolution. Transfer prohibited (2) The holder of a membership share may not transfer an interest in the share to a person other than the credit union or another credit union and any transaction that purports to make such a transfer is void. Certificates not mandatory (3) The by-laws of a credit union may provide that membership share certificates need not be issued but, if this is the case, the credit union shall give each member who requests one a statement of the number of membership shares held by the member. Certificates (4) Membership share certificates issued after this subsection comes into force must include such information as may be prescribed by regulation.
45 (1) The articles of a credit union may provide for a class of shares known as patronage shares to be payable to members as a dividend under section 57 or as a patronage return under section 58. Nature of share (2) A patronage share does not confer on the holder the right to vote at meetings of the members of the credit union, the right to notice of any meeting of members of the credit union, the right to receive dividends or the right to receive the remaining property of the credit union on dissolution. Transfer prohibited (3) The holder of a patronage share may not transfer an interest in the share to a person other than the credit union or another credit union and any transaction that purports to make such a transfer is void.
46 (1) For each class of shares, the articles must set out, (a)  the rights, privileges, restrictions and conditions attaching to the shares of the class; and (b)  the maximum number, if any, of shares of the class that the credit union is authorized to issue. Restrictions (2) Shares, other than membership shares, do not confer on their holder the right to vote at meetings of the members of the credit union except as permitted under this Act or the right to receive any of the remaining property of the credit union on dissolution.
47 (1) The articles of a credit union may authorize the issue of any class of shares, other than membership shares, in one or more series and may fix the number of shares in, and set out the designation, rights, privileges, restrictions and conditions attaching to the shares of each series. Same (2) The articles may authorize the board to fix the maximum number, if any, of shares in each series and to determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series, subject to the limitations set out in the articles and the limitations under this Act. Series participation (3) If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital. Voting rights (4) If voting rights are attached to any series of a class of shares, the shares of every other series of that class have the same voting rights. Restriction on series (5) No rights, privileges, restrictions or conditions attached to a series of shares confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding. Information to Chief Executive Officer (6) Before issuing shares in series, the credit union must file with the Chief Executive Officer articles of amendment designating the series and setting out the rights, privileges, restrictions and conditions attaching to the shares.
48 (1) If the articles so provide, a credit union shall not issue shares of a class, other than membership shares or patronage shares, unless the shares have first been offered to shareholders holding shares of that class. Same (2) Those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at the same price and on the same conditions as the shares are to be offered to others. Exception (3) A shareholder has no pre-emptive right in respect of shares that are to be issued, (a)  as a share dividend; (b)  pursuant to the exercise of conversion privileges, options or rights previously granted by the credit union; (c)  if the issuance of shares to the shareholder is prohibited under this Act; or (d)  if, to the knowledge of the board, the offer of shares to a shareholder whose recorded address is outside Ontario ought not to be made unless the appropriate authority in that jurisdiction is provided with information in addition to that submitted to the shareholders at the most recent annual meeting.
49 (1) A credit union may issue conversion privileges, options or rights to acquire its securities, other than membership shares or patronage shares, and shall set out the applicable conditions, (a)  in the documents that evidence the conversion privileges, options or rights; or (b)  in the securities to which the conversion privileges, options or rights are attached. Transferable rights (2) Conversion privileges, options and rights to acquire securities of a credit union may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from the securities to which they are attached. Reserved shares (3) If a credit union has granted privileges to convert its securities into shares or into shares of another class or series, or has issued or granted options or rights to acquire shares, and if the articles limit the number of authorized shares, the credit union shall reserve and continue to reserve sufficient authorized shares to meet the exercise of the conversion privileges, options and rights. Issuing Shares
50 (1) A credit union may issue shares at such times, to such persons and for such consideration as the board may determine. Restrictions re shares (2) A credit union may issue shares only in accordance with this Act and the articles and by-laws of the credit union.
51 (1) A credit union shall not issue any share, other than a patronage share, until the credit union has received full payment for it in cash or, with the approval of the Chief Executive Officer, in property. Exception for certain asset purchases (2) Subsection (1) does not apply to the issue of shares by a credit union if the issue is part of a transaction in which the credit union acquires the assets of another credit union and, as part of that transaction, shareholders of the vendor credit union are to be issued with shares of the purchaser credit union. Prohibition re commission (3) No person shall charge or accept payment of a commission on the purchase or sale of a membership share of a credit union.
52 Shares issued by a credit union are non-assessable and no person is liable to the credit union or to its creditors in respect of the person’s shares. Redemption and Cancellation of Shares
53 (1) Except as permitted under this Act or prescribed by regulation, a credit union shall not, (a)  hold shares of the credit union; (b)  permit a subsidiary to hold a greater number of membership shares than the minimum number required for membership in the credit union; or (c)  permit a subsidiary to hold any other shares of the credit union. Holding as personal representative (2) A credit union may hold its shares in the capacity of a personal representative and may permit a subsidiary to do so, but only if neither the credit union nor any subsidiary has a beneficial interest in the shares. Security interest (3) A credit union may hold its shares by way of a security interest and may permit a subsidiary to do so if the security interest is nominal or immaterial when measured by criteria established by the credit union that have been approved in writing by the Chief Executive Officer. Transition (4) Nothing in this section precludes a credit union or any of its subsidiaries from holding a security interest held immediately before this Part comes into force. Exception (5) Section 28 of the Business Corporations Act does not apply to prevent a subsidiary of a credit union from holding membership shares in a credit union that is its holding body corporate.
54 (1) A credit union may purchase or redeem its shares only in accordance with this section and the articles and by-laws of the credit union. Same (2) A credit union may purchase, for the purpose of cancellation, any of its shares or redeem any of its redeemable shares at a price not exceeding the redemption price of the share calculated according to a formula stated in its articles or, in the case of shares other than membership shares, according to the conditions attaching to the shares. Restrictions (3) A credit union shall not make any payment to purchase or redeem its shares if there are reasonable grounds for believing that the credit union is, or the payment would cause it to be, in contravention of section 77. Donations (4) A credit union may accept a share surrendered to it as a gift but may not extinguish or reduce a liability in respect of an amount unpaid on the share except in accordance with section 64.
55 A credit union shall cancel its shares or fractions of its shares that it has purchased, redeemed or otherwise acquired, other than through the realization of security.
56 (1) If a credit union acquires shares of the credit union through the realization of security, the credit union shall sell, cancel or otherwise dispose of them within six months after the day of the realization. Same (2) If a subsidiary of a credit union acquires shares of the credit union through the realization of security, the credit union shall cause the subsidiary to sell or otherwise dispose of them within six months after the day of the realization. Dividends and Patronage Returns
57 (1) The board may declare, subject to the by-laws, and the credit union may pay a dividend. Form of dividend (2) A dividend may be paid, (a)  in cash; (b)  by issuing patronage shares; (c)  by issuing fully paid shares, other than membership shares, or options or rights to acquire fully paid shares, other than membership shares, in any class or series of shares; (d)  in a combination of two or more forms of dividends described in clauses (a), (b) and (c); or (e)  in property, with the approval of the Chief Executive Officer.
58 (1) The board may declare, subject to the by-laws, and the credit union may pay, a patronage return to its members. Form of patronage return (2) A patronage return may be paid, (a)  in cash; (b)  by issuing patronage shares; (c)  by issuing fully paid shares, other than membership shares, or options or rights to acquire fully paid shares, other than membership shares, in any class or series of shares; or (d)  in a combination of two or more forms of patronage returns described in clauses (a), (b) and (c). Rebate of interest (3) A patronage return may include a rebate of interest paid by members during a financial year in respect of loans from the credit union.
59 The board shall not declare, and the credit union shall not pay, a dividend or patronage return if there are reasonable grounds for believing that the credit union is, or the payment would cause it to be, in contravention of section 77. Stated Capital
60 (1) A credit union shall maintain a separate stated capital account for each class and series of shares it issues. Addition to account (2) A credit union shall record in the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.
61 (1) On a conversion of outstanding shares, other than membership shares or patronage shares, of a credit union into shares of another class or series, the credit union shall, (a)  deduct from the stated capital account maintained for the class or series of shares converted an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted, and dividing by the number of outstanding shares of that class or series immediately before the conversion; and (b)  record the result obtained under clause (a) and any additional consideration received on the conversion in the stated capital account maintained for the class or series of shares into which the shares have been converted. Stated capital of convertible shares (2) For the purposes of subsection (1) and subject to the articles, if a credit union issues two classes of shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of outstanding shares of both classes immediately before the conversion. Conversion or change of shares (3) Shares issued by a credit union and converted into shares of another class or series become issued shares of the class or series into which the shares have been converted. Definition (4) In this section, “conversion” of a share includes a change made under subsection 253 (1) into another class or series.
62 On conversion of a debt obligation of a credit union into shares, the credit union shall, (a)  deduct from the liabilities of the credit union the nominal value of the debt obligation; and (b)  record the result obtained under clause (a) and any additional consideration received for the conversion in the stated capital account maintained for the class or series of shares into which the debt obligation has been converted.
63 (1) On a purchase, redemption or other acquisition of shares or fractions of shares by a credit union, the credit union shall deduct from the stated capital account maintained for the applicable class or series of shares an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series by the number of shares purchased, redeemed or acquired and dividing by the number of shares of that class or series outstanding immediately before the purchase, redemption or acquisition. Exception (2) This section does not apply with respect to shares acquired as described in subsection 53 (2) or acquired through the realization of security and sold in accordance with subsection 56 (1).
64 (1) The stated capital of a credit union may be reduced by special resolution of the members of the credit union. Contents of special resolution (2) The special resolution must specify each stated capital account to be affected by the reduction. Approval (3) The special resolution has no effect until it is approved in writing by the Chief Executive Officer. Conditions for approval (4) The Chief Executive Officer may not approve the special resolution unless an application for the Chief Executive Officer’s approval is made within three months after the resolution is passed and a copy of the resolution, together with a notice of intention to apply for approval, has been published on the website of the Authority. Information (5) An application for approval must include such information and documents as the Chief Executive Officer may require. Restriction (6) A credit union shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the credit union is, or the reduction would cause it to be, in contravention of section 77. Reducing capital account (7) A credit union shall adjust its stated capital account or accounts in accordance with any special resolution referred to in subsection (1).
65 (1) If money has been paid or property distributed as a consequence of a reduction of capital made contrary to section 64, a creditor of the credit union may apply to a court for an order compelling the member, shareholder or other person to pay the money or deliver the property to the credit union. Shares held by personal representative (2) A person holding shares as a personal representative who is registered in the register under section 202 as a member or shareholder and described as the personal representative for a named person is not personally liable under subsection (1) of this section, but the named person is liable. Remedy preserved (3) This section does not affect any liability that arises under section 119. Transfer of Securities
66 The Securities Transfer Act, 2006 applies, with necessary modifications, with respect to the transfer of securities, other than membership shares or patronage shares.
67 (1) A security issued under circumstances described in clause 68 (1) (a) shall not be transferred except to another member of the credit union or to a person prescribed by regulation. Same (2) The transfer of a security that is permitted under subsection (1) shall be made in the manner prescribed by regulation and subject to the conditions prescribed by regulation. Same (3) The transfer of a security that is permitted under subsection (1) is effective when the transfer is recorded in the register under section 202. Offering Statements
68 (1) A credit union may sell its securities to a member or accept from a member, directly or indirectly, consideration for its securities if, (a)  the credit union has obtained a receipt under section 71 for an offering statement respecting the securities and the receipt has not been revoked or expired; (b)  the credit union has provided the Chief Executive Officer with a copy of receipts from the Ontario Securities Commission under the Securities Act for a preliminary prospectus and a prospectus respecting the offering of the securities; or (c)  the sale is exempt from the prospectus requirements of the Securities Act under one of the following exemptions: i.  Section 2.3 of National Instrument 45-106 Prospectus Exemptions. ii.  Section 2.5 of National Instrument 45-106 Prospectus Exemptions. iii.  Section 2.9 of National Instrument 45-106 Prospectus Exemptions. iv.  Section 2.10 of National Instrument 45-106 Prospectus Exemptions. v.  Section 5 of Multilateral Instrument 45-108 Crowdfunding. When Securities Act does not apply (2) The Securities Act
does not apply to securities sold or disposed of by a credit union pursuant to a receipt, under section 71, for an offering statement. Exception (3) Subsection (1) and the Securities Act do not apply with respect to the issuance of, (a)  membership shares; (b)  patronage shares; or (c)  shares under section 57 or 58. Interpretation (4) When, in subsection (1), credit union is read to mean central, a member of a central includes a member of a credit union that is a member of the central.
69 Securities sold under the circumstances described in clause 68 (1) (a) may be sold by, (a)  the directors, officers and employees of the issuing credit union; (b)  in the case of an issuing central, the directors, officers and employees of the central or of a credit union that is a member of the central; or (c)  a person registered under the Securities Act as an investment dealer. 2020, c. 36, Sched. 7, s. 69; 2021, c. 40, Sched. 5, s. 4. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 4 - 01/03/2022
70 (1) Application for a receipt for an offering statement is made by filing with the Chief Executive Officer a copy of the offering statement and paying the fee established by Authority rule. Contents (2) The offering statement must contain such information as may be prescribed by regulation. Standard of disclosure (3) The offering statement must provide full, true and plain disclosure of all material facts relating to the securities that the credit union proposes to issue. Certificate (4) The offering statement must be accompanied by a disclosure certificate signed by the chair of the board and the chief executive officer of the credit union, certifying that the offering statement satisfies the requirements of subsections (2) and (3). Additional material (5) The Chief Executive Officer may require, (a)  the credit union to provide additional documents, reports and other material; and (b)  that the information contained in the material referred to in clause (a) form part of the offering statement. Examination (6) Before issuing a receipt, the Chief Executive Officer may require the credit union to permit an examination of its affairs, at its own expense, by a person authorized in writing by the Chief Executive Officer.