48. (1) The shareholders of the company are not, as such, responsible for any act, default or liability of the company, or for any engagement, claim, payment, loss, injury, transaction, matter or thing relating to or connected with the company.

(2) The liability of a shareholder in respect of any share held by him in the company, in respect of which he is liable as a shareholder, is limited

(a) in the case of a share with nominal or par value, to the amount unpaid thereon; and

(b) in the case of a share without nominal or par value, to the unpaid amount of the consideration for which the share was issued by the company.

R.S., 1952, c. 53, s. 45.

49. No executor, administrator, tutor, curator, committee, guardian or trustee who is entered on the books of the company as a shareholder and therein described as representing in any such capacity a named estate, trust or person, is personally liable in respect of the share that he so represents, notwithstanding any neglect or omission on the part of the company to enter the proper description in its books; but the estate or person so represented continues to be liable as if the testator, intestate, minor, ward, lunatic or interdicted person, cestui que trust or other person were entered in the books of the company as the holder of such shares.

R.S., 1952, c. 53, s. 46.

50. (1) No mortgagee of any share in the company, or person holding such share as collateral security, notwithstanding that the mortgagee or other person is entered on the books of the company as the holder of the share, is personally liable in respect of that share, if the mortgagee or other person is described in the books of the company as representing a named mortgagor or person giving the collateral security, notwithstanding any neglect or omission on the part of the company to enter the proper description in its books; but the mortgagor or other person giving the collateral security is liable, as if he were entered on the books of the company, as the holder of the share.

(2) The word “mortgagee,” as used in this section includes a trustee for holders of debentures.

R.S., 1952, c. 53, s. 47.

51. (1) Subject to confirmation by supplementary letters patent, a company may from time to time by by-law,

(a) subdivide any shares with or without par value, of any class;

(b) consolidate all shares with par value, of any class, into shares of larger par value not exceeding the par value of one hundred dollars each;

(c) consolidate all shares without par value, of any class, so that the authorized number of such shares is reduced;

(d) change all or any of its previously authorized shares with par value, issued or unissued, into the same or a different number of shares of any class or classes without par value and not having priority as to capital or being subject to redemption;

(e) change all or any of its previously authorized shares without par value, issued or unissued, into the same or a different number of shares of any class or classes with par value;

(f) classify or reclassify any shares without par value;

(g) increase the capital of the company; and

(h) cancel any shares with or without par value, that at the date of the enactment of the by-law have not been subscribed for or agreed to be issued, and diminish the amount of the authorized capital of the company by the amount of the shares so cancelled.

(2) Subject to confirmation by supplementary letters patent, a company may from time to time by by-law alter its capital in any other way not provided for under subsection (1), if such alteration is not a reduction of capital to which sections 52 to 60 or section 134 would apply.

(3) No by-law under subsection (1) shall take effect until it is sanctioned by at least two-thirds of the votes of the holders of each class of shares thereby affected, cast at a special general meeting of shareholders called for the purpose and confirmed by supplementary letters patent.

(4) Subject to subsection (5), a by-law under subsection (2) shall not take effect until it is sanctioned by at least two-thirds of the votes cast at a special general meeting of the shareholders called for the purpose and confirmed by supplementary letters patent.

(5) Where the holders of any class of shares would be affected by a by-law under subsection (2), the by-law shall not take effect until, in addition to the sanction required under subsection (4),

(a) it has been unanimously approved in writing by the holders of all classes of shares affected;

(b) it has been unanimously approved by all classes of shares affected, by vote cast at a special general meeting of the shareholders called for the purpose; or

(c) it has been approved in the manner, and by the shareholders, specifically set out in the terms of the conditions attaching to such shares if such terms appear in the letters patent or supplementary letters patent of the company.

(6) For the purpose of any consolidation of shares pursuant to subsection (1), the company may purchase fractions of shares but the company shall sell any shares held from any such purchase within two years after such purchase.

(7) A cancellation of shares pursuant to paragraph (1)(h) shall be deemed not to be a reduction of capital within the meaning of this Part.

R.S., 1952, c. 53, s. 48; 1964-65, c. 52, s. 20.

52. (1) Subject to confirmation by supplementary letters patent, a company may by by-law reduce its capital in any way, and in particular without prejudice to the generality of the foregoing, may

(a) extinguish or reduce the liability on any of its shares in respect of capital not paid-up;

(b) either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up capital that is lost or unrepresented by available assets; and

(c) either with or without extinguishing or reducing liability on any of its shares and either with or without reducing the number of such shares pay off any paid-up capital that is in excess of the wants of the company.

(2) No such by-law shall take effect until it is sanctioned by at least two-thirds of the votes cast at a special general meeting of shareholders called for the purpose and confirmed by supplementary letters patent.

(3) Notwithstanding anything contained in this section, where pursuant to subsection 13(2) preferred shares are issued providing for redemption or purchase for cancellation out of capital, and such shares are so redeemed or purchased for cancellation, then, upon the filing of notice thereof with the Minister pursuant to section 63, they are thereupon cancelled, and the authorized and the issued capital of the company shall be thereby decreased; and subsections (1) and (2) of this section and sections 53 to 60 do not apply.

R.S., 1952, c. 53, s. 49; 1964-65, c. 52, s. 21.

53. (1) Where the proposed reduction of capital involves either diminution of liability in respect of unpaid capital or the payment to any shareholder of any paid-up capital, and in any other case if the Minister so directs, every creditor of the company who at the date of the petition for supplementary letters patent is entitled to any debt or claim that, if that date were the commencement of the winding-up of the company, would be admissible in proof against the company, is entitled to object to the reduction.

(2) The Minister shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction.

(3) Where a creditor entered on the list whose debt or claim is not discharged or determined does not consent to the reduction, the Minister may, if he thinks fit, dispense with the consent of that creditor, on the company securing payment of his debt or claim by appropriating, as the Minister may direct, the following amount, that is to say,

(a) if the company admits the full amount of the debt or claim, or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim; or

(b) if the company does not admit and is not willing to provide for the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the Minister after the like inquiry and adjudication as if the company were being wound up.

(4) Where a proposed reduction of capital involves either the diminution of any liability in respect of unpaid capital or the payment to any shareholder of any paid-up capital, the Minister may, if having regard to any special circumstances of the case he thinks proper so to do, direct that this section shall not apply as regards any class or any classes of creditors.

R.S., 1952, c. 53, s. 51.

54. The Minister may issue supplementary letters patent confirming a reduction of capital of a company on such terms as he thinks fit, if, with respect to every creditor of the company who under this Part is entitled to object to the reduction, the Minister is satisfied by the certificate of an authorized officer of the company that either each such creditor’s consent to the reduction has been obtained or his debt or claim has been discharged, determined or secured.

1964-65, c. 52, s. 23.

55. (1) Subject to subsections (2) and (3), in the case of a reduction of capital, a shareholder of the company, past or present, is not liable in respect of any share to any call or contribution, notwithstanding that such share was not fully paid up immediately prior to such reduction, if the by-law reducing the capital purports to extinguish the liability on such share, or beyond the reduced amount of the liability on such share, if such by-law purports to reduce the liability on such share.

(2) Where any creditor, entitled in respect of any debt or claim to object to the reduction of capital, is, by reason of his ignorance of the proceedings for reduction, or of their nature and effect with respect to his claim, not entered on the list of creditors, and, after the reduction, the company is unable, within the meaning of the Winding-up Act to pay the amount of his debt or claim, then

(a) every person who was a shareholder of the company at the date of the supplementary letters patent is liable to contribute for the payment of that debt or claim an amount not exceeding the amount that he would have been liable to contribute if the company had commenced to be wound up on the day before the date of the supplementary letters patent; and,

(b) if the company is wound up, the court, on the application of any such creditor and proof of his ignorance as aforesaid, may, if it thinks fit, settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list as if they were ordinary contributories in a winding-up.

(3) Nothing in this section affects the rights of the contributories among themselves.

R.S., 1952, c. 53, s. 53.

56. Any director, manager, or officer of the company who wilfully conceals the name of any creditor entitled to object to the reduction, or wilfully misrepresents the nature or amount of the debt or claim of any creditor, or aids or abets in or is privy to any such concealment or misrepresentation, is guilty of an indictable offence and liable to five years imprisonment or to a penalty not exceeding one thousand dollars, or to both.

R.S., 1952, c. 53, s. 54.

57. In any case of reduction of capital the Minister may require the company to publish, as he directs, the causes that led to the reduction, the reasons for reduction or such other information in regard thereto as he may think expedient with a view to giving proper information to the public.

R.S., 1952, c. 53, s. 55.

58. An application to the Minister for the issue of supplementary letters patent to confirm a by-law for any one or more of the purposes set forth in sections 51 and 52 may be made only within six months after the by-law has been sanctioned by the shareholders.

1964-65, c. 52, s. 24.

59. (1) Before such supplementary letters patent are issued, the company shall establish to the satisfaction of the Minister the due passage and sanction of such by-law and the expediency andbona fide character of the increase or reduction or other alteration of capital provided for in the by-law.

(2) The Minister may, for that purpose, take any requisite evidence in writing, by oath or affirmation or by statutory declaration, and shall keep of record any such evidence as taken.

R.S., 1952, c. 53, s. 57.

60. (1) Upon the due passage and sanction of such by-law being so established, the Minister may grant such supplementary letters patent.

(2) Notice of the granting of such supplementary letters patent shall be forthwith given by the Minister in the Canada Gazette but the supplementary letters patent shall take effect from their date.

R.S., 1952, c. 53, s. 58.

61. Unless preferred shares, or shares to which are attached special rights, restrictions, conditions or limitations, are issued subject to redemption or conversion, the same shall not be subject to redemption or conversion without the consent of the holders thereof, unless such conversion or redemption is effected

(a) pursuant to an amendment or change of the provisions attaching to such shares, made or approved in the manner (if any) set forth in such provisions; or

(b) pursuant to an arrangement or compromise under section 134 or 135.

R.S., 1952, c. 53, s. 60; 1964-65, c. 52, s. 26.

62. (1) A company may, subject to subsection (2), purchase for cancellation or redeem any class of fully paid preferred shares of the company in respect of which the letters patent or supplementary letters patent provide a right in favour of the company to redeem or to purchase the shares for cancellation, otherwise than out of capital, if the purchase or redemption is made in accordance with the provisions of the letters patent or supplementary letters patent.

(2) A redemption or purchase for cancellation of shares shall be made either

(a) out of the proceeds of an issue of shares made for the purpose of the redemption or purchase, or

(b) by payments made without impairment of the capital of the company out of the ascertained net profits of the company set aside by the directors and available for the purpose of the redemption or purchase;

but no redemption or purchase for cancellation shall be made out of the ascertained net profits of the company when cumulative dividends are in arrears on the preferred shares to be so redeemed or purchased.

(3) The redemption or purchase for cancellation of its shares by a company in accordance with this section shall be deemed not to be a reduction of the paid-up capital of the company.

(4) The surplus resulting from a redemption or purchase for cancellation of shares of a company made in accordance with this section shall be designated as a capital surplus of the company and shall not be reduced or distributed except as provided in sections 52 to 60.

(5) Nothing in this section shall be construed to apply to a redemption or purchase for cancellation of shares that are redeemed or purchased for cancellation pursuant to subsection 52(3).

1964-65, c. 52, s. 27.

63. When any class of shares is created or becomes subject to redemption or purchase for cancellation or conversion into any other class, and such redemption or purchase for cancellation or conversion is effected in any month, notice thereof, setting forth the number of shares of the class redeemed or purchased for cancellation or converted and the number of shares and the class into which conversion is made in that month, and also setting forth whether and the extent to which any such redemption or purchase for cancellation was made out of capital, shall be filed with the Minister before the end of the following month.

1964-65, c. 52, s. 28.

64. When a company has issued any class of mutual fund shares within the meaning of section 14, the company shall each month file with the Department a statement giving the number of each class of such mutual fund shares that have been accepted for surrender during the preceding month.

1964-65, c. 52, s. 28.

65. (1) When authorized by by-law, duly passed by the directors and sanctioned by at least two-thirds of the votes cast at a special general meeting of the shareholders duly called for considering the by-law, the directors of a company may from time to time

(a) borrow money upon the credit of the company;

(b) limit or increase the amount to be borrowed;

(c) issue debentures or other securities of the company;

(d) pledge or sell such debentures or other securities for such sums and at such prices as may be deemed expedient; and

(e) secure any such debentures, or other securities, or any other present or future borrowing or liability of the company, by mortgage, hypothec, charge or pledge of all or any currently owned or subsequently acquired real and personal, movable and immovable, property of the company, and the undertaking and rights of the company.

(2) Any such by-law may provide for the delegation of such powers by the directors to such officers or directors of the company to such extent and in such manner as may be set out in the by-law.

(3) Nothing in this section limits or restricts the borrowing of money by the company on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the company.

R.S., 1952, c. 53, s. 63; 1964-65, c. 52, s. 29.

66. A condition contained in any debentures or in any deed for securing any debentures is not invalid by reason only that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long, any rule of equity to the contrary notwithstanding.

R.S., 1952, c. 53, s. 64.

67. (1) Where either before or after the 1st day of October 1934, a company has redeemed any debentures previously issued, then

(a) unless any provision to the contrary, whether express or implied, is contained in the debentures or in any contract entered into by the company; or

(b) unless the company has, by resolution of its shareholders or by some other act, manifested its intention that the debentures shall be cancelled,

the company shall have power to reissue the debentures, either by reissuing the same debentures or by issuing other debentures in their place, but the reissue of a debenture or the issue of another debenture in its place, under the power by this section given to a company, shall not be treated as the issue of a new debenture for the purposes of any provision limiting the amount or number of debentures to be issued.

(2) On a reissue of redeemed debentures, the person entitled to the debentures has the same rights and priorities as if the debentures had never been redeemed.

(3) Where a company has power to reissue debentures that have been redeemed, particulars with respect to the debentures that can be so reissued shall be included in every balance sheet of the company.

(4) Where a company has deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit while the debentures remained so deposited.

(5) Nothing in this section prejudices any power to issue debentures in the place of any debentures, paid off or otherwise satisfied or extinguished, reserved to a company by its debentures or by any deed securing payment of the same.

R.S., 1952, c. 53, s. 65.

68. (1) In respect of every mortgage or charge created by a company after the 1st day of October 1934, being either

(a) a mortgage or charge for the purpose of securing any issue of debentures,

(b) a mortgage or charge on uncalled share capital of the company,

(c) a floating charge on the undertaking or property of the company,

(d) a mortgage or charge on calls made but not paid, or

(e) a mortgage or charge on goodwill, on any patent or licence under a patent, on any trade mark or on any copyright or licence under a copyright,

the company shall deliver to the Minister the prescribed particulars of the mortgage or charge, and a copy of the instrument, if any, by which the mortgage or charge is created or evidenced, certified by the secretary of the company, or, in the Province of Quebec, a notarial copy of such instrument within thirty days after the date of its creation.

(2) Subsection (1) does not apply to the giving by a company of any warehouse receipt or bill of lading or any security under the provisions of the Bank Act as collateral security for the payment of any debt or liability of the company, nor to a floating charge created by a company on its accounts receivable or any of them after the 1st day of October 1934.

(3) In the case of a mortgage or charge created out of Canada comprising solely property situated outside Canada, it is sufficient if the prescribed particulars and the certified copy of the instrument by which the mortgage or charge is created or evidenced are delivered to the Minister within ninety days after the date on which the instrument or copy could in due course of post and if dispatched with due diligence have been received in Canada.

(4) Where after the 1st day of October 1934 a company acquires any property that is subject to a mortgage or charge of any such kind that, if it had been created by the company after the acquisition of the property, particulars thereof would have been required to be delivered to the Minister under subsection (1), the company shall deliver to the Minister the prescribed particulars of the mortgage or charge and a copy of the instrument, if any, by which the mortgage or charge is created or evidenced, certified by the secretary of the company, or, in the Province of Quebec, a notarial copy of such instrument, within ninety days after the date on which the acquisition is completed.

(5) The Minister shall keep with respect to each company a register in the prescribed form in which shall be entered with respect to every mortgage or charge a copy of which has been delivered to the Minister the date of the mortgage or charge, the amount secured by it, short particulars of the property mortgaged or charged and the names of the mortgagees or persons entitled to the charge or the particulars required to be delivered to the Minister under subsection (6) as the case may be.

(6) Where a series of debentures containing or giving by reference to any other instrument any charge to the benefit of which the debenture holders of that series are entitledpari passu is created by a company, it is sufficient if there are delivered to the Minister within thirty days after the execution of the deed containing the charge or if there is no such deed after the execution of any debentures of the series, the following particulars:

(a) the total amount secured by the whole series;

(b) the date of the covering deed, if any, by which the security is created or defined or if there is no such deed the date of the issuance of the first debenture of the series;

(c) a general description of the property charged; and

(d) the names of the trustees, if any, for the debenture holders;

together with a copy of the covering deed, if any, certified by the secretary of the company under the corporate seal or in the Province of Quebec a notarial copy thereof, or if there is no such deed a copy of one of the debentures of the series certified by the secretary of the company under its corporate seal; and the Minister shall on payment of the prescribed fee enter those particulars in the register.

(7) Where any commission, allowance, or discount has been paid or made either directly or indirectly by the company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to be delivered for registration under this section shall include particulars as to the amount or rate per cent of the commission, discount, or allowance so paid or made.

(8) The deposit of any debentures as security for any debt of the company shall not, for the purposes of subsection (7), be treated as the issue of the debentures at a discount.

(9) Failure to comply with this section does not affect the validity of the mortgage or charge or of the debentures issued, but every director or officer knowingly and wilfully authorizing or permitting such default and the company are liable on summary conviction to a fine not exceeding twenty dollars for every day during which the default continues.

(10) The register kept in pursuance of this section shall be open to inspection by any person on payment of the prescribed fee.

(11) Every company shall cause a copy of every instrument creating any mortgage or charge particulars of which are required to be delivered to the Minister under this section to be kept at the head office of the company.

R.S., 1952, c. 53, s. 66.

69. (1) Where any person obtains an order for the appointment of a receiver or receiver and manager of the property of a company, or appoints such receiver or receiver and manager under any powers contained in any instrument, he shall, within fourteen days from the date of the order or of the appointment under the powers contained in the instrument, give notice of the fact to the Minister who shall on payment of the prescribed fee enter the fact in the register.

(2) Where any person wilfully makes default in complying with the requirements of this section he is liable on summary conviction to a fine not exceeding twenty dollars for every day during which the default continues.

R.S., 1952, c. 53, s. 67.

70. The Minister, on evidence being given to his satisfaction that the debt, for which any mortgage or charge was created and entered on the register kept by him, has been paid or satisfied, may order that a memorandum of satisfaction be entered on such register, and shall if required furnish the company with a copy thereof.

R.S., 1952, c. 53, s. 68.

71. (1) Every company shall keep a register of mortgages and enter therein all mortgages and charges particulars of which are required to be delivered to the Minister and of all other mortgages and charges specifically affecting property of the company, not being mortgages or charges to which subsection 68(1) does not apply, giving in each case a short description of the property mortgaged or charged, the amount of the mortgage or charge, and, except in the case of securities to bearer, the names and addresses, if known, of the mortgagees or persons entitled thereto unless such names and addresses, if known, are entered in a register of holders of debentures kept by or on behalf of the company.

(2) Where any director, manager, or other officer of the company wilfully authorizes or permits the omission of any entry required to be made in pursuance of this section, he is liable on summary conviction to a fine not exceeding two hundred dollars.

R.S., 1952, c. 53, s. 70.

72. (1) The copies of instruments creating any mortgage or charge that, under this Act, are required to be delivered to the Minister, and the register of mortgages kept in pursuance of section 71, shall be open at all reasonable times to the inspection of any creditor or shareholder of the company without fee, and the register of mortgages shall also be open to the inspection of any other person on payment of such fee, not exceeding twenty-five cents for each inspection, as the company may prescribe.

(2) Where inspection of the said copies or register is refused, any officer of the company wrongfully refusing inspection, and every director or officer of the company wilfully authorizing or permitting such refusal, is liable on summary conviction to a fine not exceeding twenty dollars, and a further fine not exceeding ten dollars for every day during which the wrongful refusal continues.

R.S., 1952, c. 53, s. 71.

73. (1) Every register of holders of debentures of a company shall, except when closed in accordance with the by-laws of the company or the provisions of the debentures or the covering deed, if any, during such period or periods, not exceeding in the whole thirty days in any year, as may be specified in the said by-laws or provisions, be open to the inspection of the registered holder of any such debentures, and of any shareholder, but subject to such reasonable restrictions as the company may impose, so that at least two hours in each day are appointed for inspection, and every such holder may require a copy of the register or any part thereof on payment of ten cents for every hundred words required to be copied.

(2) A copy of any trust deed for securing payment of any issue of debentures shall be forwarded to every holder of any such debentures at his request, on payment in the case of a printed trust deed of the sum of twenty-five cents, or such less sum as may be prescribed by by-law of the company, or, where the trust deed has not been printed, on payment of ten cents for every hundred words required to be copied.

(3) Where inspection is wrongfully refused, or a copy is wrongfully refused or not forwarded, the company is liable on summary conviction to a fine not exceeding twenty dollars, and to a further fine not exceeding ten dollars for every day during which the refusal or neglect to forward a copy continues, and every director, manager, secretary, or other officer of the company who wilfully authorizes or permits such refusal shall incur the like penalty.

R.S., 1952, c. 53, s. 72.