Marginal note:Form of records

• 26. (1) All registers and other records required by this Act to be prepared and maintained may be in any form, provided that the records are capable of being reproduced in intelligible written form within a reasonable time.

• Marginal note:Precautions

  (2) A corporation and its agents and mandataries shall take reasonable precautions to prevent the loss or destruction of the registers and other records required under this Act, to prevent the falsification of entries in those registers and records and to facilitate the detection and correction of inaccuracies in them.

Marginal note:Validity of unsealed documents

27. A document executed or, in Quebec, signed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.

PART 5CORPORATE FINANCE

Marginal note:Borrowing powers

• 28. (1) Unless the articles, the by-laws or a unanimous member agreement otherwise provides, the directors of a corporation may, without authorization of the members,

  • (a) borrow money on the credit of the corporation;

  • (b) issue, reissue, sell, pledge or hypothecate debt obligations of the corporation;

  • (c) give a guarantee on behalf of the corporation to secure performance of an obligation of any person; and

  • (d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the corporation, owned or subsequently acquired, to secure any obligation of the corporation.

• Marginal note:Delegation of borrowing powers

  (2) Despite subsection 138(2) and paragraph 142(a), unless the articles, the by-laws or a unanimous member agreement otherwise provides, the directors may, by resolution, delegate the powers referred to in subsection (1) to a director, a committee of directors or an officer.

Marginal note:Repayment

• 29. (1) Debt obligations issued, pledged, hypothecated or deposited by a corporation are not redeemed by reason only that the indebtedness evidenced by the debt obligations or in respect of which the debt obligations are issued, pledged, hypothecated or deposited is repaid.

• Marginal note:Acquisition and reissue of debt obligations

  (2) Debt obligations issued by a corporation and purchased, redeemed or otherwise acquired by it may be cancelled or, subject to any applicable trust indenture or other agreement, may be reissued, pledged or hypothecated to secure any existing or future obligation of the corporation, and such an acquisition and reissue, pledge or hypothecation is not a cancellation of the debt obligations.

Marginal note:Annual contributions or dues

30. Subject to the articles, the by-laws and any unanimous member agreement, the directors may require members to make an annual contribution or pay annual dues and may determine the manner in which the contribution is to be made or the dues are to be paid.

Marginal note:Ownership of property

31. A corporation owns any property of any kind that is transferred to or otherwise vested in the corporation and does not hold any property in trust unless that property was transferred to the corporation expressly in trust for a specific purpose or purposes.

Marginal note:Directors not trustees

32. Directors are not, in that capacity, trustees for any property of the corporation, including property held in trust by the corporation.

Marginal note:Investments by corporation

33. Subject to the limitations accompanying any gift and the articles or by-laws, a corporation may invest its funds as its directors think fit.

Marginal note:Distribution of property, accretions or profits

• 34. (1) Subject to subsection (2), no part of a corporation’s profits or of its property or accretions to the value of the property may be distributed, directly or indirectly, to a member, a director or an officer of the corporation except in furtherance of its activities or as otherwise permitted by this Act.

• Marginal note:Distribution to member

  (2) If a member of a corporation is an entity that is authorized to carry on activities on behalf of the corporation, the corporation may distribute any of its money or other property to the member to carry on those activities.

Marginal note:Surrendered memberships

35. A corporation may accept a membership in the corporation surrendered to it as a gift including, in Quebec, a legacy and may extinguish or reduce a liability respecting an amount unpaid on that membership.

Marginal note:Liability

• 36. (1) The members of a corporation are not, in that capacity, liable for any liability of the corporation, including any arising under paragraph 253(3)(f) or (g), or any act or default of the corporation, except as otherwise provided by this Act.

• Marginal note:Lien on membership

  (2) Subject to subsection 42(2), the articles may provide that the corporation has a lien on a membership registered in the name of a member or the member’s personal representative for a debt of that member to the corporation, including an amount unpaid in respect of a membership issued by a body corporate on the date it was continued as a corporation under this Act.

• Marginal note:Enforcement of lien

  (3) A corporation may enforce a lien referred to in subsection (2) in accordance with its by-laws.

PART 6DEBT OBLIGATIONS, CERTIFICATES, REGISTERS AND TRANSFERS

Interpretation

Marginal note:Definitions

• 37. (1) The following definitions apply in this Part.

  “adverse claim”

  « opposition »

  “adverse claim”, in respect of a debt obligation, includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest or right in the debt obligation.

  “bearer”

  « porteur »

  “bearer” means the person who is in possession of a debt obligation that is payable to bearer or endorsed in blank.

  “broker”

  « courtier »

  “broker” means a person who is engaged in whole or in part in the business of buying and selling debt obligations and who, in the transaction concerned, acts for, buys a debt obligation from or sells a debt obligation to a customer.

  “delivery”

  « livraison » ou « remise »

  “delivery” means voluntary transfer of possession.

  “fiduciary”

  « représentant »

  “fiduciary” means any person who acts in a fiduciary capacity or as the administrator of the property of others and includes a personal representative of a deceased person.

  “good faith”

  « bonne foi »

  “good faith” means honesty in fact in the conduct of the transaction concerned.

  “good faith purchaser”

  « acquéreur de bonne foi »

  “good faith purchaser” means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a debt obligation.

  “holder”

  « détenteur »

  “holder” means a person who is in possession of a debt obligation that is issued or endorsed to the person, to bearer or in blank.

  “overissue”

  « émission excédentaire »

  “overissue” means the issue of debt obligations in excess of any maximum number of debt obligations that the issuer is authorized by a trust indenture to issue.

  “purchaser”

  « acquéreur »

  “purchaser” means a person who takes an interest or right in a debt obligation by sale, mortgage, hypothec, pledge, issue, reissue, gift or any other voluntary transaction.

  “transfer”

  « transfert »

  “transfer” includes transmission by operation of law.

  “trust indenture”

  « acte de fiducie »

  “trust indenture” means a trust indenture as defined in subsection 104(1).

  “valid”

  « valide »

  “valid” means issued in accordance with the applicable law and the by-laws of the issuer, or validated under section 54.

• Marginal note:Negotiable instruments

  (2) Except when a transfer is restricted and noted on a debt obligation in accordance with subsection 42(2), a debt obligation is a negotiable instrument.

• Marginal note:Registered form

  (3) A debt obligation is in registered form if

  • (a) it specifies a person who is entitled to the debt obligation or to the rights it evidences, and its transfer is capable of being recorded in a debt obligations register; or

  • (b) it bears a statement that it is in registered form.

• Marginal note:Order form

  (4) A debt obligation is in order form if, by its terms, it is payable to the order of a person specified with reasonable certainty in it or to a person to whom it is assigned.

• Marginal note:Bearer form

  (5) A debt obligation is in bearer form if it is payable to bearer according to its terms and not by reason of an endorsement.

• Marginal note:Guarantor or surety for issuer

  (6) A guarantor or, in Quebec, a surety for an issuer is deemed to be an issuer to the extent of the guarantee, whether or not the obligation is noted on the debt obligation.

Debt Obligation Certificates

Marginal note:Debt obligation certificate

38. An issuer shall provide a debt obligation holder, on request, with

• (a) a debt obligation certificate that complies with this Act; or

• (b) a non-transferable written acknowledgement of their right to obtain a debt obligation certificate.

Marginal note:Fee

39. An issuer may charge a reasonable fee for a debt obligation certificate issued in respect of a transfer.

Marginal note:Jointly held debt obligations

40. If debt obligations are held by more than one person,

• (a) an issuer is not required to issue more than one debt obligation certificate in respect of those debt obligations; and

• (b) delivery of a debt obligation certificate to one of the holders is sufficient delivery to them all.

Marginal note:Signatures

• 41. (1) A debt obligation certificate shall be signed by at least one of the following persons, or a facsimile of the signature shall be reproduced on the certificate:

  • (a) a director or officer of the issuer;

  • (b) a transfer agent or branch transfer agent of the issuer, or an individual acting on their behalf; or

  • (c) a trustee who certifies it in accordance with a trust indenture.

• Marginal note:Former director or officer

  (2) An issuer may issue debt obligation certificates that contain the signature of a person who is no longer a director or officer and the validity of the certificate is not adversely affected.

Marginal note:Contents of certificate

• 42. (1) The following information shall be stated on the face of each debt obligation certificate issued by an issuer:

  • (a) the name of the issuer;

  • (b) the words “Incorporated under the Canada Not-for-profit Corporations Act”, “constituée sous l’autorité de la Loi canadienne sur les organisations à but non lucratif”, “Subject to the Canada Not-for-profit Corporations Act” or “assujettie à la Loi canadienne sur les organisations à but non lucratif”;

  • (c) the name of the person to whom it was issued unless it is in bearer form; and

  • (d) the value represented by the certificate.

• Marginal note:Restrictions

  (2) No restriction on transfer, lien or hypothec in favour of the issuer or unanimous member agreement is effective against a transferee of a debt obligation, issued by an issuer or by a body corporate before it is continued under this Act, who has no actual knowledge of the restriction, lien, hypothec or agreement unless it or a reference to it is noted conspicuously on the debt obligation certificate.

• Marginal note:Restrictions

  (3) If the issued debt obligations of an issuer remain outstanding and are held by more than one person, the issuer shall not restrict the transfer or ownership of its debt obligations of any class or series.

Marginal note:Contents of certificate

• 43. (1) Every debt obligation certificate, if the articles authorize more than one class or series of debt obligations, shall legibly

  • (a) state the rights, privileges, restrictions and conditions attached to the debt obligations of each class and series that exist when the debt obligation certificate is issued; or

  • (b) state that the class or series of debt obligations that it represents has rights, privileges, restrictions or conditions attached to it and that the issuer will provide a debt obligation holder, on demand and without charge, with a full copy of the text of the rights, privileges, restrictions and conditions attached to each class or series authorized to be issued.

• Marginal note:Copy of text

  (2) If a debt obligation certificate contains a statement referred to in paragraph (1)(b), the issuer shall, on request, provide the debt obligation holder with the copy of the text referred to in that paragraph.

Registers

Marginal note:Registers

• 44. (1) A corporation that issues debt obligations shall maintain a debt obligations register in which it records the debt obligations issued by it in registered form, showing the prescribed information with respect to each class or series.

• Marginal note:Location of register

  (2) The debt obligations register shall be maintained at the issuer’s registered office or at any other place in Canada designated by the directors.

• Marginal note:Branch registers

  (3) An issuer may maintain additional branch debt obligations registers in other places designated by the directors.

• Marginal note:Contents of branch register

  (4) A branch debt obligations register shall only contain particulars of debt obligations issued or transferred at the branch. The same information shall also be recorded in the central register.

• Marginal note:Production of certificates

  (5) An issuer, its agent or mandatary, or a trustee as defined in subsection 104(1) is not required to produce a cancelled debt obligation certificate in registered form after the prescribed period.

Marginal note:Agent or mandatary

45. An issuer may appoint an agent or mandatary to maintain debt obligations registers on its behalf.

Marginal note:Registration

46. The registration of the issue or transfer of a debt obligation in any debt obligations register is complete and valid registration for all purposes.

Marginal note:Trustee

47. An issuer or a trustee as defined in subsection 104(1) may treat the person whose name appears on the debt obligations register as the debt obligation’s owner for all purposes.

Marginal note:Constructive registered holder

48. If an issuer restricts the right to transfer its debt obligations, the issuer may, despite section 47, treat a person as the registered holder of a debt obligation if the person provides the issuer with evidence that meets the requirements of the issuer that the person is

• (a) the heir or legatee of a deceased debt obligation holder or the fiduciary of the estate or succession of a deceased debt obligation holder or of a registered debt obligation holder who is a minor, an incapable person or a missing person; or

• (b) a liquidator of, or a trustee in bankruptcy for, a registered debt obligation holder.