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LOAN AND TRUST CORPORATIONS ACT

LOAN AND TRUST CORPORATIONS ACT

Chapter L‑20

Table of Contents

Part 1
Interpretation and Application

                1       Interpretation

                2       Relationships

                3       Beneficial ownership

                4       Conflicting provisions

                5       Manner of issuing letters patent

Part 2
Incorporation

Letters Patent and Incidents of Incorporation

                6       Incorporation

                7       Application

                8       Conditions for issuing letters patent

                9       Contents of letters patent

              10       Provisions in letters patent

              11       Notice of issue of letters patent

              12       First directors

              13       Effective date of incorporation

              14       Capacity of provincial corporation

              15       No constructive notice

              16       Authority of directors, officers and agents

              17       Supplementary letters patent to amend

              18       Supplementary letters patent to amalgamate

              19       Issue of supplementary letters patent

              20       Names

Organization and Commencement

              21       First directors’ meeting

              22       Meeting of shareholders

              23       Term of first directors

              24       Carrying on business

              25       No payments before registration

              26       Deposit or investment before registration

Part 3
Registration

              27       Definition

              28       Registers

              29       Applications re registration

              30       Particulars of application

              31       Consents and undertakings

              32       Power of attorney

              33       Publication

              34       Names

              35       Rejection of application

              36       Registration subject to conditions

              37       Certificate of registration

              38       Time limit for registration

Part 4
Principal Place of Business,
Records and Returns

              39       Principal place of business and records office

              40       Record keeping

              41       Additional records

              42       Access to corporate records

              43       Right to list of shareholders

              44       Use of list

              45       Trafficking in list

              46       Annual return

              47       Other information to be given to Minister

              48       Form of records

              49       Legible copies

              50       Protection of records

Part 5
Shares and Shareholders

              51       Definition

              52       Interpretation

              53       Application of Business Corporations Act

              54       Non‑par value shares

              55       Classes of shares

              56       Issue of shares

              57       Stated capital account

              58       Shares in series

              59       Shareholder’s pre‑emptive right

              60       Conversion privileges, options and rights

              61       Prohibited shareholdings

              62       Restrictions on acquisition of shares

              63       Acquisition of own shares

              64       Alternative acquisition of own shares

              65       Redemption of shares

              66       Donated and escrowed shares

              67       Reduction of stated capital

              68       Adjustment of stated capital account

              69       Repayment, acquisition and reissue of debt obligations

              70       Enforceability of contract to purchase shares

              71       Commission on sale of shares

              72       Payment of dividend

              73       Lien on share

              74       Limited liability of shareholders

              75       Restrictions on issue, transfer

              76       Interpretation

              77       Minister’s consent to transfer or issue

              78       Minister’s right to information

              79       Exemption

              80       Bylaws re shareholder information

              81       Reliance on information

              82       Place of annual meeting

              83       Calling meetings

              84       Record dates

              85       Notice of meeting

              86       Shareholder proposals

              87       Shareholder list

              88       Quorum

              89       Meeting by electronic means

              90       Majority vote

              91       One share, one vote

              92       Corporate shareholder

              93       Joint ownership of share

              94       Voting

              95       Resolution instead of meeting

              96       Meeting on requisition of shareholders

              97       Meeting called by Court

              98       Disputed elections and appointments

      99,100       Application of Business Corporations Act

Part 6
Directors and Officers

            101       Directors

            102       Bylaws

            103       Unaffiliated directors

            104       Residency

            105       Persons disqualified from being a director

            106       Consent to election or appointment

            107       Shareholding not required

            108       Election and appointment of directors

            109       Cumulative voting

            110       Ceasing to hold office

            111       Removal of directors

            112       Director’s statement

            113       Notice of change of directors

            114       Filling vacancies

            115       Meetings of directors

            116       Meeting called by Minister

            117       Meetings called by board

            118       Notice of meeting

            119       Adjourned meetings

            120       Meeting by electronic means

            121       Quorum

            122       Resident Canadian requirement

            123       Majority vote

            124       Executive committee

            125       Officers

            126       Delegation of fiduciary powers

            127       Committees

            128       Irregularities

            129       Resolution instead of meeting

            130       Disclosure of interest

            131       Liability of directors and others

            132       Duty of care of directors and officers

            133       Relief from duty ineffective

            134       Dissent by director

            135       Indemnification

            136       Remuneration of directors

            137       Records of meetings

Part 7
Insider Trading

            138       Definitions

    139,140       Deemed insiders

            141       Civil liability of insiders

Part 8
Auditors and Financial Statements

            142       Qualifications of auditor

            143       Appointment of auditor

            144       Auditor ceasing to hold office

            145       Removal of auditor

            146       Filling vacancies

            147       Term of office

            148       Court‑appointed auditor

            149       Notice to Minister

            150       Rights and liabilities of auditor and former auditor

            151       Auditor’s statement privileged

            152       Auditor’s duty to examine

            153       Protection from liability

            154       Errors and misstatements

            155       Auditor to report changes

            156       Annual financial statements

            157       Generally accepted accounting principles and auditing standards

            158       Approval of annual financial statements

            159       Copies of financial statements ‑ provincial corporation

            160       Copies of financial statements ‑ registered
extra‑provincial corporation

            161       Duties of audit committee

Part 9
Restricted Party Transactions

            162       Interpretation

            163       Designation of restricted party

            164       Prohibited transactions, guarantees and investments

            165       Person previously a restricted party

            166       Type of approval required

            167       Board approval required ‑ general

            168       Board approval not required ‑ general

            169       Directors, officers, employees, etc.

            170       Financial institutions

            171       Prescribed limits

            172       Consent to prohibited or restricted transaction

            173       Transaction involving trust and estate funds

            174       Delegation

            175       Review procedures

            176       Disclosure by restricted party

            177       Duty to report contraventions

            178       Onus of proof

        178.1       Personal information

            179       Applications to Court

Part 10
Capacity and Powers

            180       Application

            181       General powers

            182       Restriction on engaging in deposit‑taking business

            183       Restriction on fiduciary activities

            184       Restriction on loan corporations

            185       Appointment as executor, etc.

            186       Securities restrictions

            187       Leasing restriction

            188       Receiving deposits

            189       Capital base

            190       Borrowing by subordinated notes

            191       Pledging assets

            192       Guarantees

            193       Limit on borrowing by trust corporation

            194       Other prohibited activities

Part 11
Investments

            195       Application

            196       Prudent investment standards

            197       Review procedures

            198       Liquidity

            199       Personal loans

            200       Commercial loans

            201       Mortgage lending

            202       Real estate acquired by realization of security

            203       Investment in real estate

            204       Prohibited investments

            205       Acquisition of assets in default

            206       Equity in unincorporated entity

            207       Limitation on shareholding

            208       Divestment order

            209       Collateral security

            210       Allocation of security

            211       Common trust funds

            212       Passing accounts

            213       Notice by registered extra‑provincial trust corporation

Part 12
Fundamental Changes
and Arrangements

            214       Amalgamation

            215       Special approval

            216       Purchase or sale of assets

            217       Agreement re amalgamation or purchase and sale

            218       Shareholder approval of agreement

            219       Approval of agreement by Minister

            220       Effect of agreement to purchase or sell

            221       Effect of amalgamation

            222       Purchase of shares for amalgamation or purchase of assets

            223       Continuation of fiduciary obligations

            224       Continuance in another jurisdiction

            225       Arrangements

Part 13
Liquidation and Dissolution

            226       Staying proceedings

            227       No property and no liabilities

            228       Proposing liquidation

            229       Certificate of intent to dissolve required

            230       Issue of certificate

            231       Effect of certificate

            232       Revocation of certificate of intent to dissolve

            233       Liquidation process

            234       Letters patent of dissolution

            235       Dissolution

            236       Application for Court supervision

            237       Notice to Minister

            238       Effect of order

            239       Commencement of liquidation

            240       Powers of Court

            241       Effect of order for liquidation

            242       Appointment of liquidator

            243       Vacancy in liquidator’s office

            244       Duties of liquidator

            245       Powers of liquidator

            246       Prohibition

            247       Reliance on statements

            248       Examination of others

            249       Restoration and compensation

            250       Final accounts and discharge of liquidator

            251       Shareholder’s right to distribution in money

            252       Letters patent of dissolution

            253       Existing rights unaffected by dissolution

            254       Unknown claimants

            255       Custody of documents, etc.

            256       Revival

Part 14
Administration and Enforcement

            257       Extension of time for filing

            258       Confidentiality of information

            259       Delegation of powers

            260       Agreements

            261       Indemnity agreements

            262       Approvals and consents

            263       Orders, etc., binding on successors

            264       Matters under oath

            265       Recording of evidence

            266       Notification of Minister’s decision

            267       Review by review board

            268       Consent to apply directly to Court

            269       Application

            270       Stay

            271       Duty to co‑operate with examinations, etc.

            272       Demand for information

            273       Periodic examination

            274       Special examination

            275       Powers of person conducting examination

            276       Examination of other persons

            277       Powers on special examination

            278       Appraisal of property

            279       Minister’s order to comply

            280       Voluntary compliance program

            281       Suspension and revocation of registration

            282       Protection from liability

            283       Order to freeze property

            284       Order for compliance

            285       Order imposing conditions or for possession and control

            286       Powers of Minister

            287       Termination of possession and control

            288       Application to Court

            289       Payment of expenses of proceedings

            290       Dissolution by Court

            291       Definitions

            292       Derivative action

            293       Relief by Court from oppression or unfairness

            294       Notice of application

            295       Costs

            296       Stay, etc. of application or action

Part 15
Offences and Penalties

            297       Deemed carrying on business

            298       Prohibition re use of name

            299       Holding out

            300       Activities by promoters, etc.

            301       Exemption

            302       Misuse of confidential information

            303       Representations prohibited

            304       False or deceptive statements

            305       Other offences

            306       Penalties

            307       Continuing offence

            308       Defence

            309       Liability of directors and officers

            310       Limitation on prosecution

            311       Order to comply and make restitution

            312       Penalty for late information

Part 16
General

            313       Priority of Government claim


            314       Unclaimed deposits

            315       Contracts with minors, etc.

            316       Certificate of Minister as evidence

            317       Published notice as evidence

            318       Copies of documents as evidence

            319       Certificate of corporation as evidence

            320       Photocopies of documents

            321       Notices to directors, shareholders

            322       Notices to corporation

            323       Waiver of notice

            324       Transfer on death of depositor

            325       Payments by mistake

            326       Regulations

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Part 1
Interpretation and Application

Interpretation

1(1)  In this Act,

                                 (a)    “auditor� means, with respect to a body corporate, its external auditor, and includes any individual who is responsible for conducting an external audit of the body corporate’s financial statements on behalf of its external auditor;

                                 (b)    “bank� means a bank named in Schedule I or II to the Bank Act (Canada);

                                 (c)    “body corporate� means any body corporate with or without share capital and wherever or however incorporated;

                                 (d)    “branch� means an office of a corporation where it offers services to or for the public;

                                 (e)    “capital base� means the shareholders’ equity of a corporation calculated in the prescribed manner;

                                  (f)    “common trust fund� means a fund maintained by a trust corporation in which money belonging to various estates and trusts in its care are combined for the purpose of facilitating investment;

                                 (g)    “corporation� means a loan corporation or a trust corporation whether incorporated in or outside Alberta;

                                 (h)    “Court� means the Court of Queen’s Bench;

                                  (i)    “debt obligation� means a bond, debenture, note or other evidence of indebtedness or guarantee of a provincial corporation, whether secured or unsecured;

                                  (j)    “deposit� means, subject to subsection (2), a sum of money that

                                           (i)    is paid on terms that are not referable to the provision of property or services or to the giving of security,

                                          (ii)    is repayable to the person making it

                                                 (A)    on demand,

                                                  (B)    after notice, or

                                                  (C)    on a fixed date or on the expiry of a specified term,

                                             and

                                         (iii)    is paid or payable in accordance with prescribed requirements,

                                          but does not include payments of sums of money that are prescribed;

                                 (k)    “deposit‑taking businessâ€? means, subject to subsection (3),

                                           (i)    the lending, in the ordinary course of business, of money received by way of deposit, or

                                          (ii)    any other activity that is financed wholly or to any material extent out of the capital of, or the interest on, money received by way of deposit;

                                  (l)    “eligible financial institution� means a treasury branch, credit union or member institution of the Canada Deposit Insurance Corporation or of any other deposit insurance or guarantee plan prescribed by the Minister;

                                (m)    “entity� includes a body corporate, trust, partnership, fund or other unincorporated association or organization, the Crown in right of Canada or in right of a province or territory, an agency of the Crown, a foreign government and any agency of a foreign government, but does not include an individual;

                                 (n)    “Executive Director� means the Executive Director of the Alberta Securities Commission as defined or otherwise provided for under the Securities Act;

                                 (o)    “extra‑provincial body corporateâ€? means a body corporate

                                           (i)    incorporated otherwise than by or under an Act of the Legislature or an Ordinance of the North‑West Territories, or

                                          (ii)    incorporated by or under an Ordinance of the North‑West Territories and not subject to the legislative authority of the Province by section 16 of the Alberta Act (Canada);

                                 (p)    “extra‑provincial corporationâ€? means a corporation that was incorporated under the laws of Canada or of any province or territory other than Alberta;

                                 (q)    “fair market rate� means

                                           (i)    in respect of the acquisition or disposition of property, including a lease or rental of property, and subject to regulations made with respect to the valuation of property, the most probable price in terms of money that the property should bring in a competitive and open market under all conditions requisite to a fair sale or lease, assuming that the price is not affected by undue stimuli, with both the seller and the buyer acting prudently and knowledgeably,

                                          (ii)    subject to subclause (iii), in respect of the acquisition or provision of services, a consideration that might reasonably be expected to be obtained or given for the services in question in an arm’s length transaction in an open market between willing parties to a transaction of that nature and on terms that, having regard to open market conditions, are competitive and not unreasonable, and

                                         (iii)    in respect of the provision of services that are provided generally to customers of the provincial corporation or subsidiary in question, the rate and terms that are offered in respect of those services to customers generally in the ordinary course of that corporation’s or subsidiary’s business;

                                  (r)    “financial institution� means

                                           (i)    a securities dealer;

                                          (ii)    an insurer;

                                         (iii)    any member institution of the Canada Deposit Insurance Corporation or of any other deposit insurance or guarantee plan prescribed by the Minister;

                                 (s)    “improved real estate� means

                                           (i)    land on which there exists a building or on which a building is being or is about to be constructed and the adjacent land used or to be used in connection with the building,

                                          (ii)    land on which bona fide farming operations are being conducted, and

                                         (iii)    vacant land that is restricted by law in its use to commercial, industrial or residential purposes, whether by zoning or otherwise;

                                  (t)    “instrument of incorporation� means the special Act, charter, letters patent or other document incorporating or amalgamating a corporation, and includes all amendments to it;

                                 (u)    “insurer� means an insurer within the meaning of that term in the Insurance Act;

                                 (v)    “loan corporationâ€? means a body corporate incorporated or operated for the purpose of carrying on a deposit‑taking business, but does not include a bank, a treasury branch, a trust corporation or a credit union;

                                (w)    “market conduct activities� means activities that are carried out in the course of or for the purpose of the marketing, sale or distribution to the public of, or the performance of, any of the fiduciary, financial or other services that a corporation offers to the public;

                                 (x)    “market value� means the most probable price in terms of money that property should bring in a competitive and open market under all conditions requisite to a fair sale, assuming that the price is not affected by undue stimuli, with both the seller and the buyer acting prudently and knowledgeably;

                                 (y)    “Minister� means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act;

                                 (z)    “officer� means, in relation to a corporation,

                                           (i)    its chief executive officer, president, chair, vice‑president, vice‑chair, treasurer, secretary, general manager or assistant general manager or any combination of those positions,

                                          (ii)    an individual who performs functions for the corporation normally performed by a person mentioned in subclause (i), or

                                         (iii)    any other person designated as an officer by bylaw or by the board of the corporation;

                               (aa)    “ordinary resolution� means a resolution passed by a majority of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution;

                              (bb)    “person� means an individual, entity or personal representative;

                               (cc)    “personal representative� means an executor, administrator, guardian, committee, trustee, assignee, receiver or liquidator;

                              (dd)    “prescribed� means,

                                           (i)    with respect to a form, in a form authorized or provided by the Minister and containing the information required by the Minister, or

                                          (ii)    in any other case, prescribed in or pursuant to the regulations;

                               (ee)    “professional advisor� means

                                           (i)    an auditor,

                                          (ii)    a lawyer, accountant, appraiser, architect or engineer, or

                                         (iii)    any other person whose membership in a profession would tend to lend credibility to a statement made or opinion given by that person,

                                          and includes an individual who is a member of or works in a professional capacity for a partnership, body corporate or other association of persons that is a professional advisor;

                                (ff)    “provincial corporation� means a corporation incorporated or continued under this Act;

                              (gg)    “real estate� means any estate or interest in land, including improvements;

                              (hh)    “registered corporation� means a corporation registered under this Act;

                                 (ii)    “registered form�, when applied to a security, means a security that

                                           (i)    specifies a person entitled to the security or to the rights it evidences, and the transfer of which is capable of being recorded in a securities register, or

                                          (ii)    bears a statement that it is in registered form;

                                 (jj)    “relative�, when used with respect to individuals, means related by blood, marriage or adoption or by virtue of an adult interdependent relationship;

                               (kk)    “reporting issuer� means a reporting issuer within the meaning of the Securities Act;

                                 (ll)    “securities dealer� means a dealer within the meaning of the Securities Act;

                             (mm)    “security� means, except in Part 5, a security within the meaning of the Securities Act, and includes a deposit and any instrument evidencing a deposit;

                              (nn)    “special resolution� means a resolution passed by a majority of not less than 2/3 of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution;

                              (oo)    “spouse� means the husband or wife of a married person but does not include a spouse who is living separate and apart from the person if the person and spouse have separated pursuant to a written separation agreement or if their support obligations and family property have been dealt with by a court order;

                              (pp)    “total assets� means the assets of a corporation calculated in the prescribed manner and, in the case of a trust corporation, includes cash and securities earmarked under section 188(5);

                              (qq)    “trust corporation� means a body corporate incorporated or operated for the purposes of

                                           (i)    offering its services to the public as executor, administrator, trustee, bailee, agent, custodian, receiver, liquidator, sequestrator, assignee or guardian or trustee of a minor’s estate or of the estate of a mentally incompetent person, and

                                          (ii)    carrying on the deposit‑taking business, except in the case of a body corporate whose registration is subject to a term, condition or restriction prohibiting it from carrying on the deposit‑taking business,

                                          but does not include a bank, a treasury branch, a loan corporation or a credit union;

                                (rr)    “voting share� means a share of any class of shares of a body corporate carrying voting rights under all circumstances and a share of any class of shares carrying voting rights by reason of the occurrence of any contingency that has occurred and is continuing.

(2)  For the purposes of subsection (1)(j)(i), money is paid on terms that are referable to the provision of property or services or to the giving of security if

                                 (a)    it is paid by way of advance or part payment for the sale, lease or other provision of property or services of any kind and is repayable only in the event that the property or services are not in fact sold, leased or otherwise provided,

                                 (b)    it is paid by way of security for payment for the provision of property or services of any kind provided or to be provided by the person by whom or on whose behalf the money is accepted, or

                                 (c)    it is paid by way of security for the delivery or return of any property, whether in a particular state of repair or otherwise.

(3)  Notwithstanding subsection (1)(l), a person is not to be considered to be carrying on the deposit‑taking business if

                                 (a)    the person does not hold out that the person accepts deposits on a day to day basis, and

                                 (b)    any deposits that are accepted are accepted only on particular occasions and on a basis that is ancillary to another business purpose, whether or not in connection with the issue of debentures or other securities.

RSA 2000 cL‑20 s1;RSA 2000 cI‑3 s861;2002 cA‑4.5 s51

Relationships

2(1)  For the purposes of this Act,

                                 (a)    an entity is affiliated with another entity if one of them is controlled by the other or both of them are controlled by the same person, and

                                 (b)    the affiliates of an entity are deemed to be affiliated with all other entities with which the entity is affiliated.

(2)  For the purposes of this Act,

                                 (a)    a person controls a body corporate if securities of the body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the body corporate are held or beneficially owned by the person and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate;

                                 (b)    a person controls a trust, partnership, fund or other unincorporated entity if more than 50% of the beneficial interest, however designated, into which the entity is divided is held or beneficially owned by that person and the person is able to direct the affairs of the entity;

                                 (c)    notwithstanding clauses (a) and (b), a person controls an entity if the person has, in relation to the entity, any direct or indirect influence that, if exercised, would result in control in fact of the entity.

(3)  A holding body corporate is deemed to control any entity that is controlled or deemed to be controlled by a subsidiary of the holding body corporate.

(4)  An entity that controls another entity is deemed to control any entity that is controlled or deemed to be controlled by the other entity.

(5)  For the purposes of this Act, a body corporate is the holding body corporate of all of its subsidiaries.

(6)  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)    2 or more bodies corporate each of which is controlled by that other,

                                     or

                                 (b)    it is a subsidiary of a body corporate that is that other’s subsidiary.

(7)  For the purposes of this Act, a person is a restricted party with respect to a provincial corporation if that person

                                 (a)    is a director or officer of the corporation,

                                 (b)    is an employee of the corporation of a prescribed class,

                                 (c)    holds or is the beneficial owner of 10% or more of any class of the issued and outstanding shares of the corporation,

                                 (d)    holds or is a beneficial owner of voting shares of an affiliate of the corporation to which are attached 10% or more of the voting rights attaching to all of the issued and outstanding voting shares of the affiliate,

                                 (e)    is the auditor of the corporation or of any of its affiliates, in a case where the auditor is a sole practitioner,

                                  (f)    is a partner in the firm that is the auditor of the corporation or of any of its affiliates, if that person is actually engaged in auditing the corporation or affiliate,

                                 (g)    is a spouse or adult interdependent partner of a person referred to in clause (a) or (c),

                                 (h)    is a relative of, or a relative of the spouse or adult interdependent partner of, a person referred to in clause (a) or (c), who has the same home as that person,

                                  (i)    where the holder or beneficial owner referred to in clause (c) is a body corporate, is a director or officer of that body corporate,

                                  (j)    is a body corporate in which an individual referred to in clause (a) or (c) is the holder or beneficial owner of voting shares to which are attached 10% or more of the voting rights attaching to all of the issued and outstanding voting shares of the body corporate,

                                 (k)    is a body corporate that is controlled by a person referred to in clause (b), (e), (f), (g) or (i),

                                  (l)    is a body corporate in which the corporation holds or beneficially owns voting shares to which are attached 10% or more of the voting rights attaching to all of the issued and outstanding voting shares of the body corporate,

                                (m)    is

                                           (i)    a partner of the corporation and has a 10% or greater beneficial interest in the partnership, or

                                          (ii)    a party to and has a 10% or greater interest in a joint venture agreement to which the corporation is also a party

                                          and the corporation has a 10% or greater beneficial interest in the partnership or joint venture,

                                 (n)    is an affiliate of the corporation or a director or officer of an affiliate of the corporation, or

                                 (o)    is designated under section 163 as a restricted party.

(8)  Where in contemplation of a person’s becoming a restricted party of a provincial corporation the person enters into a transaction with, or is given a guarantee by, the provincial corporation or its subsidiary, or the corporation or its subsidiary makes an investment in the securities of the person, the person is deemed to be a restricted party of the provincial corporation with respect to that transaction, guarantee or investment.

(9)  Notwithstanding subsection (7)(c) and (n), unless the regulations prescribe otherwise,

                                 (a)    a financial institution referred to in section 1(1)(r)(ii) or (iii) that wholly owns a provincial corporation is not a restricted party with respect to that corporation, and

                                 (b)    a wholly owned subsidiary of a provincial corporation is not a restricted party with respect to that corporation.

(10)  Where the Minister is satisfied that a subsidiary of a provincial corporation functions primarily for the purpose of providing a service, other than a financial service, to the provincial corporation or its subsidiaries, the Minister may, on application, exempt the subsidiary from the status of restricted party of the corporation, subject to any terms and conditions the Minister considers appropriate.

RSA 2000 cL‑20 s2;2002 cA‑4.5 s51

Beneficial ownership

3(1)  For the purposes of this Act, a security or other interest is beneficially owned by a person when it is held directly or through a personal representative or other intermediary for the use or benefit of that person otherwise than as a security interest.

(2)  For the purposes of this Act, a person is deemed to own beneficially securities that are beneficially owned by a body corporate controlled by that person.

(3)  For the purposes of this Act, where a person beneficially owns shares of a body corporate, the person is deemed to beneficially own that proportion of shares of every other body corporate that is beneficially owned by the first‑mentioned body corporate, that is equal to the proportion of shares of the first‑mentioned body corporate that is beneficially owned by the person.

(4)  Where subsections (2) and (3) apply to a person, only the subsection under which the person is deemed to beneficially own more securities applies to the person.

(5)  If a person owns securities in a corporation that itself owns securities in a body corporate, in determining the person’s beneficial ownership of securities in the body corporate for the purposes of subsection (2) or (3) no regard shall be taken of the securities of the body corporate that are owned by the corporation.

1991 cL‑26.5 s3

Conflicting provisions

4(1)  Where there is a conflict between

                                 (a)    the instrument of incorporation or the bylaws of a provincial corporation, and

                                 (b)    this Act or the regulations,

this Act or the regulations, as the case may be, prevail.

(2)  To the extent that there is a conflict between the Business Corporations Act and this Act or the regulations in their application to a restricted party, this Act or the regulations prevail.

(3)  Where a provision of

                                 (a)    the Securities Act or the Insurance Act,

                                 (b)    a statute of Canada or of any other province or territory equivalent to the Securities Act or the Insurance Act,

                                 (c)    any other prescribed statute, or

                                 (d)    the regulations under any statute referred to in clause (a), (b) or (c)

applies to a subsidiary of a registered corporation and a similar or corresponding provision of this Act or the regulations under it would, but for this subsection, also apply to that subsidiary, that other provision applies, and the provision of this Act or the regulations does not apply, to the subsidiary.

(4)  To the extent that there is any inconsistency in their application to a given situation between a provision in Part 9 that prohibits or restricts any activity and any other provision of this Act or the regulations, the provision in Part 9 prevails.

(5)  To the extent that there is any inconsistency in their application to a given situation between a provision in Part 9 that permits an activity and any provision of any other Part of this Act that prohibits or restricts the activity, that other provision prevails.

1991 cL‑26.5 s4

Manner of issuing letters patent

5(1)  Where this Act authorizes the Lieutenant Governor in Council to issue letters patent, letters patent of dissolution or letters patent of continuance, the letters patent are sufficiently issued if they are issued by the Minister pursuant to an order of the Lieutenant Governor in Council directing the Minister to do so.

(2)  Notwithstanding section 4 of Schedule 9 to the Government Organization Act, letters patent, supplementary letters patent, letters patent of continuance and letters patent of dissolution issued under this Act need not be issued under the Great Seal of the Province.

1991 cL‑26.5 s5;1994 cG‑8.5 s43

Part 2
Incorporation

Letters Patent and Incidents of Incorporation

Incorporation

6(1)  The Lieutenant Governor in Council may, on the recommendation of the Minister, incorporate a provincial loan corporation or a provincial trust corporation by the issue of letters patent on the application of one or more persons.

(2)  No loan corporation or trust corporation may be incorporated in Alberta otherwise than by letters patent under this Act.

1991 cL‑26.5 s6

Application

7(1)  An application for letters patent to incorporate a provincial corporation shall be in the prescribed form and shall be filed with the Minister.

(2)  On the filing of an application for letters patent, the Minister

                                 (a)    shall require the applicant to publish notice of the application, containing any information the Minister requires, in The Alberta Gazette and in a newspaper having general circulation in the locality where the principal place of business of the provincial corporation is to be located, and

                                 (b)    may require the applicant to provide any information, material and evidence that the Minister considers necessary in addition to the information, material and evidence required to be provided in or with the application.

1991 cL‑26.5 s7

Conditions for issuing letters patent

8   The Lieutenant Governor in Council shall not issue letters patent to incorporate a provincial corporation without being satisfied that

                                 (a)    it is in the public interest to establish an additional provincial loan or trust corporation, as the case may be,

                                 (b)    the proposed management is fit, both as to character and as to competence, to manage the corporation,

                                 (c)    the proposed capital structure and the rights, privileges, restrictions and conditions attaching to each class of shares are acceptable to the Minister,

                                 (d)    each person who, based on the subscriptions for shares of the proposed corporation, will hold or beneficially own 10% or more of any class of shares of the proposed corporation can demonstrate the adequacy of the person’s financial resources and is fit as to character to hold or own the shares subscribed for,

                                 (e)    each proposed director is fit, both as to character and as to competence, to be a director of the corporation,

                                  (f)    the depositors of the corporation will be adequately protected,

                                 (g)    the proposed plan of operation of the corporation is feasible, and

                                 (h)    the corporation intends to offer to the public the services set out in the application for incorporation.

1991 cL‑26.5 s8

Contents of letters patent

9   The letters patent of a provincial corporation shall set out

                                 (a)    the name of the corporation,

                                 (b)    the classes and any maximum number of shares that the corporation is authorized to issue and the rights, privileges, restrictions and conditions attaching to each class of shares,

                                 (c)    the number of directors or, subject to section 109(1)(a), the minimum and maximum number of directors of the corporation, and

                                 (d)    the full name, residential address, citizenship and occupation of

                                           (i)    each of the first directors of the corporation,

                                          (ii)    each person who, based on the subscriptions for shares of the corporation, will hold or beneficially own 10% or more of any class of shares of the corporation, and

                                         (iii)    each of the applicants.

1991 cL‑26.5 s9

Provisions in letters patent

10   The Lieutenant Governor in Council may set out in the letters patent incorporating a provincial corporation any provision not contrary to this Act that the Lieutenant Governor in Council considers advisable to take into account the particular circumstances of the corporation.

1991 cL‑26.5 s10

Notice of issue of letters patent

11   The Minister shall cause to be published in The Alberta Gazette a notice of the issuance of letters patent incorporating a provincial corporation.

1991 cL‑26.5 s11

First directors

12   The first directors of a provincial corporation are the directors named in the application for letters patent to incorporate the corporation.

1991 cL‑26.5 s12

Effective date of incorporation

13(1)  A provincial corporation comes into existence on the date set out in its letters patent.

(2)  Letters patent are conclusive proof for the purposes of this Act and for all other purposes

                                 (a)    that the provisions of this Act in respect of incorporation and all requirements precedent and incidental to incorporation have been complied with, and

                                 (b)    that the provincial corporation has been incorporated under this Act as of the date shown in the letters patent.

1991 cL‑26.5 s13

Capacity of provincial corporation

14(1)  Subject to this Act, the regulations, the bylaws and any terms, conditions and restrictions imposed on its registration, a provincial corporation

                                 (a)    has the capacity and the rights, powers and privileges of an individual, and

                                 (b)    has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Alberta to the extent that the laws of that jurisdiction permit.

(2)  A provincial corporation shall not

                                 (a)    carry on business or exercise any power that it is prohibited from carrying on or exercising by this Act, the regulations, the bylaws or any terms or conditions imposed on its registration, or

                                 (b)    exercise any of its powers in a manner that is contrary to this Act or the regulations.

1991 cL‑26.5 s14

No constructive notice

15   No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a provincial corporation by reason only that the document has been filed by the Minister or is available for inspection at an office of the corporation.

1991 cL‑26.5 s15

Authority of directors, officers and agents

16   A provincial corporation, a guarantor of an obligation of the corporation or a person claiming through the corporation may not assert against a person dealing with the corporation or dealing with any person who has acquired rights from the corporation

                                 (a)    that the instrument of incorporation or the bylaws have not been complied with,

                                 (b)    that the persons named in the most recent notice of directors filed by the Minister under this Act are not the directors of the corporation,

                                 (c)    that a person held out by the corporation as a director, an officer or an agent of the corporation

                                           (i)    has not been duly appointed, or

                                          (ii)    has no authority to exercise a power or perform a duty that the director, officer or agent might reasonably be expected to exercise or perform,

                                     or

                                 (d)    that a document issued by any director, officer or agent of the corporation with actual or usual authority to issue the document is not valid or not genuine,

unless the person has, or by virtue of the person’s position with or relationship to the corporation ought to have, knowledge of those facts at the relevant time.

1991 cL‑26.5 s16

Supplementary letters patent to amend

17(1)  On the application of a provincial corporation, the Minister may issue supplementary letters patent to amend the letters patent of the corporation

                                 (a)    to change its name,

                                 (b)    in the case of a provincial loan corporation, to continue it as a provincial trust corporation,

                                 (c)    in the case of a provincial trust corporation, to continue it as a provincial loan corporation,

                                 (d)    to change any maximum number of shares that the corporation is authorized to issue,

                                 (e)    to create new classes of shares,

                                  (f)    to change the designation of all or any of its shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its shares, whether issued or unissued,

                                 (g)    to change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series,

                                 (h)    to divide a class of shares, whether issued or unissued, into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions attaching to those shares,

                                  (i)    to authorize the directors to divide any class of unissued shares into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions attaching to those shares,

                                  (j)    to authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series,

                                 (k)    to revoke, diminish or enlarge any authority conferred under clause (i) or (j), or

                                  (l)    to add, change or remove restrictions on the transfer of shares.

(2)  No application shall be made under subsection (1) unless it has been authorized by a special resolution of the provincial corporation.

(3)  The holders of shares of a class or, subject to subsection (4), of a series, are entitled to vote separately as a class or series on a proposal to amend the letters patent

                                 (a)    to increase or decrease any maximum number of authorized shares of that class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of that class,

                                 (b)    to effect an exchange, reclassification or cancellation of all or part of the shares of that class,

                                 (c)    to add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, without limiting the generality of the foregoing, are entitled to vote on a proposal

                                           (i)    to remove or change prejudicially rights to accrued dividends or rights to cumulative dividends,

                                          (ii)    to add, remove or change prejudicially redemption rights,

                                         (iii)    to reduce or remove a dividend preference or a liquidation preference, or

                                         (iv)    to add, remove or change prejudicially conversion privileges, options, voting, transfer or pre‑emptive rights, rights to acquire securities of the provincial corporation, or sinking fund provisions,

                                 (d)    to increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class,

                                 (e)    to create a new class of shares having rights or privileges equal or superior to the rights or privileges attached to the shares of that class,

                                  (f)    to make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class, or

                                 (g)    to effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class.

(4)  The holders of a series of shares of a class are entitled to vote separately as a series under subsection (3) if that series of a class is affected by an amendment differently than other shares of the same class are affected.

(5)  Subsections (3) and (4) apply whether or not the shares of a class otherwise carry the right to vote.

(6)  A proposal to amend referred to in subsection (3) is adopted when the holders of the shares of each class entitled to vote separately on it as a class have approved the amendment by a special resolution.

(7)  The directors of a provincial corporation may, if authorized by the shareholders in the special resolution authorizing the amendment, revoke the resolution before it is acted on without further approval of the shareholders.

1991 cL‑26.5 s17;1994 c39 s2

Supplementary letters patent to amalgamate

18   On the application of the corporations involved the Minister may, after having approved an amalgamation agreement under section 219, issue supplementary letters patent to amalgamate the corporations and continue them as one provincial corporation.

1991 cL‑26.5 s18

Issue of supplementary letters patent

19(1)  An application for supplementary letters patent shall be in the prescribed form and shall be filed with the Minister together with any information, material and evidence the form specifies and, in the case of an application under section 17(1)(b) or (c), evidence that the continued provincial corporation will meet the capital account and capital base requirements referred to in section 35(b).

(2)  On the filing of an application for supplementary letters patent, the Minister

                                 (a)    may require the applicant to publish notice of the application, containing any information the Minister requires, in The Alberta Gazette and in a newspaper having general circulation in the locality where the principal place of business of the provincial corporation is located, and

                                 (b)    may require the applicant to provide any information, material and evidence the Minister considers necessary in addition to the information, material and evidence required to be provided in or with the application.

(3)  The Minister shall not issue supplementary letters patent

                                 (a)    to continue a provincial loan corporation as a provincial trust corporation or to continue a provincial trust corporation as a provincial loan corporation unless the Minister is satisfied that

                                           (i)    it is in the public interest to so continue the corporation,

                                          (ii)    the management of the applicant is fit, both as to character and as to competence, to manage the continued corporation,

                                         (iii)    the proposed capital structure of the continued corporation and the rights, privileges, restrictions and conditions attaching to each class of shares are acceptable to the Minister,

                                         (iv)    each person who, based on the subscriptions for shares in the continued corporation, will hold or beneficially own 10% or more of any class of shares of the continued corporation, or who holds or beneficially owns or on the issue of the supplementary letters patent will hold or beneficially own such shares, can demonstrate the adequacy of the person’s financial resources and is fit as to character to hold or own the shares subscribed for,

                                          (v)    each director of the applicant is fit, both as to character and as to competence, to be a director of the continued corporation,

                                         (vi)    the depositors of the continued corporation will be adequately protected,

                                        (vii)    the proposed plan of operation of the continued corporation is feasible, and

                                       (viii)    the continued corporation intends to offer to the public the services set out in the application for supplementary letters patent;

                                 (b)    to continue a provincial trust corporation as a provincial loan corporation unless the Minister is satisfied that arrangements have been made to transfer to another registered trust corporation the business in relation to which the provincial trust corporation acted in a fiduciary capacity, and those arrangements are adequate to protect the persons in relation to which the provincial trust corporation acted in a fiduciary capacity.

(4)  Subsection (3)(b) does not apply so as to require a provincial trust corporation that has applied to be continued as a provincial loan corporation to transfer money received by it as deposits.

(5)  Where supplementary letters patent have been issued to continue a provincial loan corporation as a provincial trust corporation,

                                 (a)    deposits received by the provincial loan corporation under section 188(1)(a) are deemed to be deposits received under section 188(2)(a), and

                                 (b)    deposits received by the provincial loan corporation under section 188(1)(b) are deemed to be deposits received under section 188(2)(b).

(6)  Where supplementary letters patent have been issued to continue a provincial trust corporation as a provincial loan corporation,

                                 (a)    deposits received by the provincial trust corporation under section 188(2)(a) are deemed to be deposits received under section 188(1)(a), and

                                 (b)    deposits received by the provincial trust corporation under section 188(2)(b) are deemed to be deposits received under section 188(1)(b).

1991 cL‑26.5 s19

Names

20(1)  Subject to the regulations, neither letters patent nor supplementary letters patent shall be issued to a provincial corporation if the corporation has a name

                                 (a)    that is prohibited by the regulations or contains a word or expression that is prohibited by the regulations,

                                 (b)    that is identical to the name of

                                           (i)    a body corporate, whether in existence or not, incorporated under the laws of Alberta,

                                          (ii)    an extra‑provincial body corporate registered in Alberta, or

                                         (iii)    a body corporate incorporated by or under an Act of the Parliament of Canada,

                                 (c)    that is similar to the name of

                                           (i)    a body corporate incorporated under the laws of Alberta,

                                          (ii)    an extra‑provincial body corporate registered in Alberta, or

                                         (iii)    a body corporate incorporated by or under an Act of the Parliament of Canada,

                                          if the use of that name is confusing or misleading,

                                 (d)    that does not meet the requirements prescribed by the regulations,

                                 (e)    that, in the case of a trust corporation, does not include “trust� or “fiducie� together with “corporation�, “company�, “compagnie�, “limited�, “limitée� or “société�, or

                                  (f)    that, in the case of a loan corporation, does not include “loan� or “prêts� together with “corporation�, “company�, “compagnie�, “limited�, “limitée�, or “société�.

(2)  Subject to this Act and the regulations, a provincial corporation may have a name in an English form, a French form, an English form and a French form or a combined English and French form, and it may be legally designated by any such name.

(3)  Where, through inadvertence or otherwise, a provincial corporation obtains a name contrary to this section, the Minister may issue supplementary letters patent changing the name of the corporation to a name specified in the supplementary letters patent.

1991 cL‑26.5 s20

Organization and Commencement

First directors’ meeting

21(1)  After the issue of letters patent incorporating a provincial corporation under this Part, a meeting of the directors of the corporation shall be held, and at that meeting the directors may, subject to this Part,

                                 (a)    make bylaws,

                                 (b)    adopt forms of security certificates and corporate records,

                                 (c)    authorize the issue of securities of the corporation,

                                 (d)    appoint officers,

                                 (e)    appoint an auditor to hold office until the first meeting of shareholders,

                                  (f)    make banking arrangements, and

                                 (g)    deal with any other matters necessary to organize the corporation.

(2)  An applicant for letters patent to incorporate the provincial corporation or a director named in the application for letters patent may call the meeting of the directors referred to in subsection (1) by giving not less than 5 days’ notice to each director, stating the time and place of the meeting.

1991 cL‑26.5 s21

Meeting of shareholders

22(1)  When the capital base and the capital accounts of a provincial corporation incorporated under this Part reach the applicable amounts referred to in section 35(b), the directors shall forthwith call a meeting of the shareholders of the corporation.

(2)  The directors shall give notice of the meeting referred to in subsection (1) in accordance with section 85.

(3)  The shareholders shall by ordinary resolution at the meeting referred to in subsection (1)

                                 (a)    approve, amend or reject any bylaws made by the directors,

                                 (b)    elect directors to hold office for a term expiring not later than the close of the first annual meeting of shareholders following the election, and

                                 (c)    appoint an auditor to hold office until the close of the first annual meeting of shareholders.

1991 cL‑26.5 s22

Term of first directors

23   A director named in the application for letters patent to incorporate a provincial corporation holds office until the election of directors at the meeting of shareholders referred to in section 22.

1991 cL‑26.5 s23

Carrying on business

24   Except as permitted in sections 25 and 26, a provincial corporation incorporated under this Part shall not carry on any business until it is registered under Part 3.

1991 cL‑26.5 s24

No payments before registration

25   Until a provincial corporation incorporated under this Part is registered under Part 3, no payments on account of incorporation or organization expenses shall be made out of money received from the issue of securities of the corporation, or from the interest on that money, except reasonable sums

                                 (a)    for the payment of the remuneration of not more than 2 officers,

                                 (b)    for the payment of costs related to the issue of securities of the corporation,

                                 (c)    for the payment of clerical assistance, legal services, accounting services, office accommodation at one location, office expenses, advertising, stationery, postage and travel expenses, if any, and

                                 (d)    for other prescribed purposes.

1991 cL‑26.5 s25

Deposit or investment before registration

26   A provincial corporation incorporated under this Part may, before it becomes registered under Part 3,

                                 (a)    deposit paid‑up capital of the corporation in an eligible financial institution, and

                                 (b)    invest paid‑up capital of the corporation in securities issued or guaranteed by the Government of Canada or any province.

1991 cL‑26.5 s26

Part 3
Registration

Definition

27   In this Part, “application for registrationâ€? means any of the applications referred to in section 29.

1991 cL‑26.5 s27

Registers

28(1)  The register known as the “Trust Companies Registerâ€? is hereby continued as the “Trust Corporations Registerâ€? for the purposes of this Act.

(2)  There is hereby established a register called the “Loan Corporations Registerâ€?.

(3)  The Minister shall maintain the registers and shall cause to be recorded in the appropriate register

                                 (a)    the name of each trust corporation or loan corporation that has been granted registration,

                                 (b)    all terms, conditions and restrictions imposed on the registration of a trust corporation or a loan corporation,

                                 (c)    the suspension or revocation of the registration of a trust corporation or a loan corporation, and

                                 (d)    any other information that is prescribed.

(4)  On payment of the prescribed fee any person may, during usual business hours, examine the registers and take extracts from or obtain copies of them.

1991 cL‑26.5 s28

Applications re registration

29(1)  A corporation that is duly constituted or incorporated under the laws of Alberta or of Canada or of another province or territory may apply for initial registration as a trust corporation or a loan corporation.

(2)  A registered loan corporation may apply to change its registration to that of a trust corporation and a registered trust corporation may apply to change its registration to that of a loan corporation.

(3)  A registered corporation may apply to amend the terms, conditions and restrictions of its registration.

1991 cL‑26.5 s29

Particulars of application

30(1)  An application for registration shall be in the prescribed form and shall be filed with the Minister together with any other information, material and evidence the form specifies.

(2)  On receipt of an application for registration, the Minister may require the applicant to provide any information, material and evidence the Minister considers necessary in addition to the information, material and evidence required to be provided in or with the application.

(3)  Where a trust corporation wishes to have a term, condition or restriction imposed on its registration prohibiting it from carrying on the deposit‑taking business, it shall so request in the application for registration.

(4)  An application for registration as a trust corporation shall set out the classes of service in relation to which the corporation proposes to act in a fiduciary capacity.

(5)  An application by a provincial corporation incorporated under Part 2 shall set out the sums of money paid or to be paid by the corporation in connection with its incorporation and organization.

1991 cL‑26.5 s30;1996 c19 s2(3)

Consents and undertakings

31(1)  Where an extra‑provincial loan or trust corporation applies for registration, the application must be accompanied with

                                 (a)    a consent in writing authorizing the Minister to conduct examinations under section 274 at the head office of the corporation or any of its subsidiaries, wherever located, and at branches of the corporation, wherever located, and

                                 (b)    a written undertaking signed by the proper officers of the corporation that the corporation and its subsidiaries will provide to the Minister any information that the Minister is entitled to under this Act and that the corporation will comply with the applicable provisions of this Act and with any terms, conditions and restrictions imposed on its registration.

(2)  An undertaking under subsection (1) shall be accompanied with a certified copy of the resolution of the board of directors authorizing the extra‑provincial loan or trust corporation’s officers to apply for registration under this Act and authorizing the execution of the undertaking.

(3)  Where a provincial corporation applies for registration, the application shall be accompanied with

                                 (a)    a consent in writing authorizing the Minister to conduct examinations under sections 273 and 274 at the head office of any of its subsidiaries, wherever located, and

                                 (b)    a written undertaking that the subsidiaries of the corporation will provide to the Minister any information that the Minister requires in the administration of this Act.

1991 cL‑26.5 s31;1996 c19 s2(4)

Power of attorney

32(1)  Where an extra‑provincial loan or trust corporation applies for registration, the application shall be accompanied with

                                 (a)    a power of attorney from the corporation, in the prescribed form, naming an agent or agents resident in Alberta for the purposes of section 322(2), and

                                 (b)    the consent of the agent to act in the prescribed form.

(2)  A power of attorney under this section shall be signed by the proper officers of the corporation in the presence of a witness.

(3)  When an extra‑provincial loan or trust corporation changes any of its agents in Alberta, it shall forthwith file with the Minister a new power of attorney complying with subsection (2).

(4)  An extra‑provincial loan or trust corporation shall send to the Minister a notice in the prescribed form of any change in the address of its agents within 15 days after the change occurs.

(5)  A copy of a power of attorney under this section certified by the Minister is sufficient evidence for all purposes of the power and authority of the person or persons named in it to act on behalf of the extra‑provincial loan or trust corporation.

1991 cL‑26.5 s32;1994 c39 s3

Publication

33   Where the Minister receives an application for registration, the Minister may require the applicant to publish notice of the application, containing any information the Minister requires, in The Alberta Gazette and in a newspaper having general circulation in any locality the Minister directs.

1991 cL‑26.5 s33

Names

34(1)  Subject to the regulations, no corporation may be registered with a name that does not meet the requirements of section 20(1).

(2)  The Minister may exempt a corporation from the operation of subsection (1) if the Minister is satisfied that the name of the corporation will not mislead the general public into believing that the corporation is of a kind other than that for which the application for registration was made.

(3)  Subject to this Act and the regulations, a corporation may be registered that has a name in an English form, a French form, an English form and a French form or a combined English and French form, and it may be legally designated in Alberta by any such name.

(4)  Where a corporation has a name that contravenes subsection (1), the Minister may register the corporation if it undertakes either to change its name to a name that does not contravene subsection (1) or to carry on business in Alberta under a name that does not contravene subsection (1).

(5)  Where, through inadvertence or otherwise, a corporation becomes registered with a name that contravenes subsection (1), the Minister may order as a condition of registration that the corporation carry on business under a name specified in the order.

1991 cL‑26.5 s34;1992 c21 s24

Rejection of application

35   Subject to section 36, the Minister shall reject an application for registration

                                 (a)    unless the Minister is satisfied that, in the case of an applicant that is a provincial corporation incorporated under Part 2,

                                           (i)    the meeting of shareholders referred to in section 22 has been held, and

                                          (ii)    the expenses of incorporation or organization that have been paid or are to be paid by the corporation are reasonable,

                                 (b)    unless

                                           (i)    the amount of the corporation’s stated capital account for issued common shares or the amount of any other prescribed capital account of the corporation, or a combination of those amounts,

                                                 (A)    in the case of a trust corporation whose registration is going to be subject to a term, condition or restriction prohibiting it from carrying on the deposit‑taking business and that is not wholly owned by a financial institution, is at least equal to the greater of

                                                            (I)    $2 000 000, and

                                                           (II)    any greater amount required by the Minister, taking into account the nature of the business that the corporation proposes to engage in, the expected volume of its business and any restrictions on its business,

                                                  (B)    in the case of a trust corporation whose registration is going to be subject to a term, condition or restriction prohibiting it from carrying on the deposit‑taking business and that is wholly owned by a financial institution, is at least equal to an amount required by the Minister, taking into account the nature of the business that the corporation proposes to engage in, the expected volume of its business and any restrictions on its business, or

                                                  (C)    in the case of a provincial loan corporation or provincial trust corporation other than one to which paragraph (A) or (B) applies, is at least equal to the greater of

                                                            (I)    $3 000 000 in the case of a provincial loan corporation and $5 000 000 in the case of a provincial trust corporation, and

                                                           (II)    any greater amount required by the Minister, taking into account the nature of the business that the corporation proposes to engage in, the expected volume of its business and any restrictions on its business,

                                             and

                                          (ii)    in the case of a provincial corporation, the corporation has a capital base that is adequate, taking into account the nature of the business that it proposes to engage in, the expected volume of its business and any restrictions on its business, and that is in an amount that is at least equal to the corresponding capital account amount for that corporation required under subclause (i),

                                 (c)    unless the corporation satisfies the Minister that it has the capacity and power to engage in the activities of a trust corporation or a loan corporation, as the case may be,

                                 (d)    in the case of an extra‑provincial corporation, unless the corporation satisfies the Minister that the corporation is authorized to engage in the activities of a trust corporation or loan corporation, as the case may be, in the jurisdiction in which the corporation was incorporated,

                                 (e)    unless the corporation satisfies the Minister that it is a member of the Canada Deposit Insurance Corporation or has its deposits insured by another public agency prescribed by the Minister,

                                  (f)    if the applicant is not a corporation referred to in section 29(1),

                                 (g)    in the case of a provincial corporation, unless it is shown to the satisfaction of the Minister that

                                           (i)    it is in the public interest to register an additional trust corporation or loan corporation,

                                          (ii)    the management is fit, both as to character and as to competence, to manage the corporation,

                                         (iii)    the capital structure and the rights, privileges, restrictions and conditions attaching to each class of shares are acceptable to the Minister,

                                         (iv)    each person who, immediately after the registration, will hold or beneficially own 10% or more of any class of the issued and outstanding shares of the corporation can demonstrate the adequacy of the person’s financial resources and is fit as to character to hold or own those shares,

                                          (v)    each director is fit, both as to character and as to competence, to be a director of the corporation,

                                         (vi)    the depositors of the corporation will be adequately protected,

                                        (vii)    the proposed plan of operation of the corporation is feasible, and

                                       (viii)    the corporation intends to offer to the public the services set out in the application for registration and the applicant has the capability to provide those services,

                                     or

                                 (h)    if the Minister is not satisfied as to the adequacy of any information received with or in support of the application for registration.

1991 cL‑26.5 s35;1996 c19 s2(5)

Registration subject to conditions

36(1)  Subject to subsections (2) and (3), where the Minister is not satisfied as to any or all of the matters referred to in section 35(b), (c), (d), (e), (f), (g) or (h) or where for any other reason the Minister considers it appropriate to do so, the Minister may, instead of rejecting the application, approve the registration of the applicant

                                 (a)    as a corporation of a kind other than that for which the application for registration was made and subject to any terms, conditions and restrictions that the Minister considers appropriate, or

                                 (b)    as the kind of corporation for which the application for registration was made but subject to any terms, conditions and restrictions that the Minister considers appropriate.

(2)  Subsection (1) applies in respect of an extra‑provincial corporation incorporated under the laws of Canada only where the matter giving rise to the Minister’s action relates to market conduct activities of the corporation.

(3)  Subsection (1) applies in respect of an extra‑provincial corporation incorporated under the laws of another province or territory, but where the matter giving rise to the Minister’s action does not relate to market conduct activities of the corporation, subsection (1) applies only if the Minister receives a request in writing from the government of the province or territory in which the corporation was incorporated requesting that the action be taken and setting out the basis on which the action is requested.

(4)  Where a trust corporation’s application for registration contains a request referred to in section 30(3), the Minister may impose such a term, condition or restriction on the registration of the corporation accordingly.

(5)  The Minister may at the request or with the consent of a registered corporation

                                 (a)    impose terms, conditions and restrictions on the registration of the corporation in addition to those imposed under subsection (1), or

                                 (b)    revoke the corporation’s registration, subject to any terms, conditions and restrictions that the Minister considers appropriate.

1991 cL‑26.5 s36;1996 c19 s2(6)

Certificate of registration

37(1)  Where the Minister registers a corporation, the Minister shall issue a certificate of registration in the prescribed form and the certificate of registration is conclusive proof for the purposes of this Act and for all other purposes that the provisions of this Act in respect of registration of the corporation and all requirements precedent and incidental to registration have been complied with, and that the corporation has been registered under this Part as of the date shown in the certificate of registration.

(2)  The Minister shall publish in The Alberta Gazette notice of the registration of a corporation.

1991 cL‑26.5 s37

Time limit for registration

38   Where a provincial corporation that is incorporated under Part 2 does not become registered within one year after the date of its letters patent, or within any further period that the Minister may on application allow,

                                 (a)    the directors shall ensure that the corporation forthwith takes all reasonable steps under Part 13 toward its dissolution, and

                                 (b)    the corporation shall not carry on any business or activity except for the sole purpose of dissolving the corporation.

1991 cL‑26.5 s38

Part 4
Principal Place of Business,
Records and Returns

Principal place of business and records office

39(1)  A provincial corporation shall at all times have a principal place of business in Alberta.

(2)  A notice of

                                 (a)    the principal place of business, and

                                 (b)    a separate records office, if any,

must be sent to the Minister with the application for registration under section 29.

(3)  The directors of a provincial corporation may at any time

                                 (a)    change the address of the principal place of business, or

                                 (b)    designate or revoke a designation of a records office

in Alberta.

(4)  Unless the directors designate a separate records office, the principal place of business of a provincial corporation is its records office.

(5)  A provincial corporation shall send to the Minister a notice of any change under subsection (3) in the prescribed form within 15 days after that change.

(6)  A provincial corporation shall ensure that its principal place of business and its records office are

                                 (a)    accessible to the public during normal business hours, and

                                 (b)    readily identifiable from the address or other description given in a notice under subsection (2) or (5).

1991 cL‑26.5 s39

Record keeping

40(1)  A provincial corporation shall keep at its records office

                                 (a)    a copy of its instrument of incorporation and its bylaws,

                                 (b)    minutes of meetings and resolutions of shareholders,

                                 (c)    a register of directors setting out, with respect to each person who is or has been a director,

                                           (i)    the person’s name,

                                          (ii)    the dates on which the person became and ceased to be a director, and

                                         (iii)    the person’s full residential address and any mailing address while a director,

                                 (d)    a securities register complying with Part 6 of the Business Corporations Act as incorporated by section 53 of this Act,

                                 (e)    a copy of the procedures referred to in section 197, and

                                  (f)    copies of the financial statements, documents and information referred to in section 156(1).

(2)  Notwithstanding subsection (1), a central securities register may be maintained at an office in Alberta of a provincial corporation’s agent referred to in section 49(3)(a) of the Business Corporations Act, as incorporated by section 53 of this Act, and a branch securities register may be kept at any place in or out of Alberta designated by the directors.

(3)  If a central securities register is maintained under subsection (2) at a place other than the records office, the provincial corporation shall maintain at its records office a record containing the names and addresses of all agents and offices at which securities registers are maintained and descriptions of all those registers.

RSA 2000 cL‑20 s40;2003 cP‑6.5 s70

Additional records

41(1)  In addition to the records described in section 40, a provincial corporation shall maintain in Alberta or at another place in Canada consented to by the Minister

                                 (a)    adequate accounting records that will enable the Minister to determine the financial position of the corporation and whether it is in compliance with this Act and the regulations,

                                 (b)    records containing minutes of meetings and resolutions of the directors and every committee of directors,

                                 (c)    a record of all investments held by the corporation,

                                 (d)    copies of all returns to the Minister required by this Act or the regulations, and

                                 (e)    in the case of a trust corporation, full and adequate records relating to the fiduciary activities of the corporation.

(2)  A provincial corporation may keep at any place where it carries on business the parts of the accounting records that relate to the operations, business and assets and liabilities of the corporation carried on, supervised or accounted for at that place, but the corporation shall ensure that there is kept at the records office of the corporation or at another place authorized under this Part records that are adequate to enable the directors to ascertain the financial position of the corporation.

(3)  A registered extra‑provincial trust corporation shall maintain in Alberta or at another place in Canada consented to by the Minister full and adequate records relating to the fiduciary activities of the corporation.

1991 cL‑26.5 s41;1996 c19 s2(8)

Access to corporate records

42(1)  The directors and shareholders of a provincial corporation and their agents and legal representatives may examine the records referred to in section 40(1) during the usual business hours of the corporation free of charge.

(2)  A shareholder of a provincial corporation is entitled on request and without charge to one copy of the instrument of incorporation and the bylaws and amendments to them.

(3)  Creditors of a provincial corporation and their agents and legal representatives may examine the records referred to in section 40(1)(a), (c) and (d) during the usual business hours of the corporation on payment of a reasonable fee and may make copies of those records.

(4)  Any person may examine the records referred to in section 40(1)(c) and (d) during the usual business hours of the provincial corporation on payment of a reasonable fee and may make copies of those records.

(5)  Notwithstanding anything in this section, a provincial corporation shall not disclose any residential address kept by the provincial corporation under section 40.

RSA 2000 cL‑20 s42;2003 cP‑6.5 s70

Right to list of shareholders

43(1)  In the case of a provincial corporation that is a reporting issuer, on payment of a reasonable fee and on sending to the corporation or its agent the statutory declaration referred to in subsection (5), any person may on application require the corporation or its agent to furnish within 10 days from the receipt of the statutory declaration a list, referred to in this section as the “basic listâ€?, made up to a date not more than 10 days before the date of receipt of the statutory declaration, setting out

                                 (a)    the names of the shareholders of the corporation,

                                 (b)    the number of shares owned by each shareholder, and

                                 (c)    the address of each shareholder,

as shown on the records of the corporation.

(2)  A person requiring a provincial corporation to supply a basic list may, by stating in the statutory declaration that the person requires supplemental lists, require the corporation or its agent on payment of a reasonable fee to furnish supplemental lists setting out any changes from the basic list in the information provided in it for each business day following the date the basic list is made up to.

(3)  The provincial corporation or its agent shall furnish a supplemental list required under subsection (2)

                                 (a)    on the date the basic list is furnished, if the information relates to changes that took place before that date, and

                                 (b)    on the business day following the day to which the supplemental list relates, if the information relates to changes that took place on or after the date the basic list was furnished.

(4)  A person requiring a provincial corporation to supply a basic list or a supplemental list may also require the corporation to include in that list the name and address of any known holder of an option or right to acquire shares in the corporation.

(5)  A statutory declaration shall state

                                 (a)    the name and address of the applicant,

                                 (b)    the name and address for service of the body corporate if the applicant is a body corporate, and

                                 (c)    that the basic list and any supplemental lists obtained pursuant to subsection (2) will not be used except as permitted under section 44.

(6)  If the applicant is a body corporate, the statutory declaration shall be made by a director or officer of the body corporate.

1991 cL‑26.5 s43

Use of list

44   No person shall use a list of shareholders obtained under this section except in connection with

                                 (a)    an effort to influence the voting of shareholders of the provincial corporation,

                                 (b)    an offer to acquire shares of the provincial corporation, or

                                 (c)    any other matter relating to the affairs of the provincial corporation.

1991 cL‑26.5 s44

Trafficking in list

45   No person shall sell or purchase, offer for sale or purchase or otherwise traffic in a list of holders of securities of a provincial corporation.

1991 cL‑26.5 s45

Annual return

46(1)  A registered corporation shall prepare annually and send to the Minister not later than 3 months after the end of each fiscal year an annual return in the prescribed form relating to the fiscal year.

(2)  In the case of a provincial corporation, the annual return shall be accompanied with

                                 (a)    the financial statements and report of the auditor for the fiscal year to which the return relates, prepared in accordance with sections 156(2) and 157,

                                 (b)    a copy of the resolution of the directors approving the annual return, and

                                 (c)    any other documents and information prescribed by the Minister.

(3)  In the case of an extra‑provincial corporation, the annual return shall be accompanied with the financial statements and auditor’s report on them for the fiscal year to which the return relates that the corporation must provide or has provided to a Minister of the Crown or a government official or agency in accordance with the requirements of applicable trust or loan corporation legislation governing the corporation in its home jurisdiction.

(4)  Where,

                                 (a)    in the case of a provincial corporation, the financial statements referred to in subsection (2) would be required by section 157 to be on a consolidated basis, or

                                 (b)    in the case of an extra‑provincial corporation, the financial statements referred to in subsection (3) are on a consolidated basis or would be required by section 157 to be on a consolidated basis if the extra‑provincial corporation were a provincial corporation,

the financial statements shall be accompanied with

                                 (c)    separate audited financial statements in respect of the provincial corporation or extra‑provincial corporation, as the case may be, where it is a holding body corporate, and

                                 (d)    separate audited financial statements in respect of the provincial corporation or extra‑provincial corporation, as the case may be, where the provincial corporation or extra‑provincial corporation is a subsidiary.

(5)  Where the provincial corporation or extra‑provincial corporation is a subsidiary, the Minister may by notice in writing require the holding body corporate of the provincial corporation or extra‑provincial corporation to forward to the Minister the holding body corporate’s financial statements and auditor’s report, and may in the notice direct the basis on which those financial statements are to be prepared and the period of time to which they are to relate.

(6)  Where the provincial corporation or extra‑provincial corporation is a holding body corporate, the Minister may by notice in writing require the provincial corporation or extra‑provincial corporation to forward to the Minister separate audited financial statements in respect of any of its subsidiaries, and may in the notice direct the basis on which those financial statements are to be prepared and the period of time to which they are to relate.

1991 cL‑26.5 s46

Other information to be given to Minister

47(1)  A registered provincial corporation shall send to the Minister a copy of every statement of a financial nature relating to the corporation that is furnished to its shareholders within 5 days after the furnishing of the statement to the shareholders.

(2)  A registered corporation shall send to the Minister

                                 (a)    a copy of any application and supporting documents made under a law of Canada or of a province or territory other than Alberta for a change to its instrument of incorporation or its registration status, together with a copy of the approval or refusal of the application, within 7 days after the making of the application or the receipt of the approval or refusal, and

                                 (b)    a copy of any change made to its instrument of incorporation or to its ability to carry on business in any other jurisdiction in Canada, within 7 days after the effective date of the change.

(3)  A registered extra‑provincial corporation shall send to the Minister notice

                                 (a)    of the making of an order by a court or person in another jurisdiction that is in the nature of an order or direction under section 274, 279, 283, 284 or 285 of this Act, and

                                 (b)    of the corporation’s being subject to an arrangement in another jurisdiction that is in the nature of a program of voluntary compliance under section 280 of this Act.

(4)  A registered provincial corporation shall send to the Minister notice of any change in the membership of its board of directors within 30 days after the effective date of the change.

(5)  A registered corporation shall provide to the Minister at the times prescribed by the Minister any financial or other information that is prescribed by the Minister.

1991 cL‑26.5 s47;1996 c19 s2(9)

Form of records

48   All registers and other records required by this Act to be prepared and maintained by a registered corporation may be in bound or loose‑leaf form or in photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in legible written form within a reasonable time.

1991 cL‑26.5 s48

Legible copies

49(1)  If a person is entitled to examine any register or record that is maintained by a registered corporation in a form other than written form and makes a request of the corporation to do so, the corporation shall

                                 (a)    make available to that person within a reasonable time a reproduction of the text of the register or record in legible written form, or

                                 (b)    provide facilities to enable that person to examine the text of the register or record in legible written form otherwise than by providing a reproduction of that text,

and shall allow that person to make copies of that register or record.

(2)  A registered corporation may charge a reasonable fee for providing a reproduction of the text of a register or record under subsection (1).

1991 cL‑26.5 s49

Protection of records

50   A registered corporation and its agents shall take reasonable precautions to

                                 (a)    prevent loss or destruction of,

                                 (b)    prevent falsification of entries in, and

                                 (c)    facilitate detection and correction of inaccuracies in,

the registers and other records required by this Act to be prepared and maintained.

1991 cL‑26.5 s50

Part 5
Shares and Shareholders

Definition

51   In this Part, “securityâ€? means, subject to Part 6 of the Business Corporations Act as incorporated by section 53 of this Act, a share of any class or series of shares or a debt obligation of a body corporate, and includes a certificate evidencing such a share or debt obligation and includes a warrant, but does not include a deposit or any instrument evidencing a deposit in a corporation.

1991 cL‑26.5 s51

Interpretation

52   For the purposes of sections 63, 64, 65, 67 and 72, deposits in a provincial trust corporation are deemed to be a liability of the corporation notwithstanding that the deposits are held by it as trustee.

1991 cL‑26.5 s52

Application of Business Corporations Act

53   Part 6 of the Business Corporations Act applies with respect to a provincial corporation as if it were a corporation within the meaning of that Act, and a reference in that Part to a section in that Act, other than to a section in that Part, is deemed to be a reference to the corresponding section in this Act that deals with the same subject‑matter.

1991 cL‑26.5 s53

Non-par value shares

54(1)  Shares of a provincial corporation shall be in registered form and shall be without nominal or par value.

(2)  Shares with a nominal or par value of a provincial corporation incorporated before January 16, 1992 are, for the purposes of subsection (1), deemed to be shares without nominal or par value.

1991 cL‑26.5 s54

Classes of shares

55(1)  A provincial corporation shall have a class of shares designated as “common sharesâ€?.

(2)  The rights of the holders of common shares are equal in all respects and include

                                 (a)    the right to vote at all meetings of shareholders,

                                 (b)    the right to receive dividends of the provincial corporation if declared on those shares, and

                                 (c)    the right to receive the remaining property of the provincial corporation on dissolution.

(3)  The instrument of incorporation may provide for classes of shares in addition to common shares, and in that case

                                 (a)    the rights, privileges, restrictions and conditions attaching to the shares of each class shall be set out in the instrument of incorporation, and

                                 (b)    those shares shall not be designated as common shares or by any similar term.

(4)  Subject to section 58, if a provincial corporation has more than one class of shares the rights of the holders of the shares of a class are equal in all respects.

1991 cL‑26.5 s55

Issue of shares

56(1)  Subject to this Act and the instrument of incorporation, shares of a provincial corporation may be issued at the times, to the persons and for the consideration determined by the directors.

(2)  Shares issued by a provincial corporation are non‑assessable and the shareholders are not liable to the corporation or to its creditors in respect of them.

(3)  A provincial corporation shall not issue a share until the consideration for the share is fully paid in money and received by the corporation.

(4)  The requirement in subsection (3) that the consideration be in money does not apply

                                 (a)    in a case where the share is issued as part of an amalgamation, or

                                 (b)    in any other circumstances with respect to which the Minister has given the Minister’s prior approval.

1991 cL‑26.5 s56

Stated capital account

57(1)  A provincial corporation shall maintain a separate stated capital account for each class and series of shares it issues.

(2)  Unless the Minister approves otherwise, a provincial corporation shall add to the appropriate stated capital account in respect of any shares it issues the full amount of the consideration it receives for the shares.

(3)  On the issue of a share, a provincial corporation shall not add to a stated capital account in respect of the share an amount greater than the amount referred to in subsection (2).

(4)  If a provincial corporation proposes to add any amount to a stated capital account it maintains in respect of a class or series of shares and

                                 (a)    the amount to be added was not received by the corporation as consideration for the issue of shares, and

                                 (b)    the corporation has issued outstanding shares of more than one class or series,

the addition to the stated capital account must be approved by special resolution unless all the issued and outstanding shares are shares of not more than 2 classes of convertible shares referred to in section 68(5).

(5)  Where, in the case of a proposed addition of an amount to a stated capital account in a situation where a special resolution is required under subsection (4), a class or series of shares of a provincial corporation would be affected differently from how any other class or series of shares of the corporation would be affected by that action, the holders of shares of the differently affected class or series are entitled to vote separately as a class or series, as the case may be, on the proposal to take the action, whether or not those shares otherwise carry the right to vote.

(6)  Subject to subsections (4) and (5), a provincial corporation may add to a stated capital account any amount it has credited to a retained earnings or other surplus account.

(7)  On January 16, 1992, the stated capital of each class and series of shares of a provincial trust corporation is deemed to equal the paid‑up capital of each class and series of shares of the body corporate immediately prior to that day.

1991 cL‑26.5 s57

Shares in series

58(1)  Subject to its instrument of incorporation, the directors of a provincial corporation may authorize the issue of any class of shares, other than common shares, in one or more series, and they may fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series.

(2)  If any cumulative dividends 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 ratably in respect of accumulated dividends and return of capital.

(3)  No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section shall confer on shares of a series

                                 (a)    greater voting rights than are attached to shares of any other series in the same class that are then outstanding, or

                                 (b)    a priority in respect of dividends or return of capital over shares of any other series in the same class that are then outstanding.

(4)  Subsection (3) does not apply to a right or privilege to exchange a share or shares for, or to convert a share or shares into, a share or shares of another class.

1991 cL‑26.5 s58

Shareholder’s pre‑emptive right

59(1)  If the letters patent of a provincial corporation so provide, no shares of a class shall be issued unless the shares have first been offered to the shareholders holding shares of that class, and 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 terms as those shares are to be offered to others.

(2)  Notwithstanding that the letters patent provide the pre‑emptive right referred to in subsection (1), shareholders have no pre‑emptive right in respect of shares to be issued

                                 (a)    for a consideration other than money,

                                 (b)    as a share dividend, or

                                 (c)    pursuant to the exercise of conversion privileges, options or rights previously granted by the provincial corporation.

1991 cL‑26.5 s59

Conversion privileges, options and rights

60(1)  A provincial corporation may issue certificates, warrants or other evidences of conversion privileges or options or rights to acquire securities of the corporation, and shall set out the conditions to which the conversion privileges, options or rights are subject

                                 (a)    in the certificates, warrants or other evidences, or

                                 (b)    in certificates evidencing the securities to which the conversion privileges, options or rights are attached.

(2)  Conversion privileges and options or rights to purchase securities of a provincial corporation may be made transferable or non‑transferable, and options and rights to purchase may be made separable or inseparable from any securities to which they are attached.

(3)  If a provincial corporation has granted privileges to convert any securities issued by the corporation into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, the corporation shall reserve and continue to reserve sufficient authorized shares to meet the exercise of those conversion privileges, options and rights.

1991 cL‑26.5 s60

Prohibited shareholdings

61(1)  A provincial corporation

                                 (a)    shall not hold shares in itself or in its holding body corporate, and

                                 (b)    shall not permit any of its subsidiaries to hold shares in the corporation or in the holding body corporate of the corporation

except in accordance with this section and sections 62 to 66 or unless the Minister consents in writing to the holding.

(2)  Subsection (1) does not apply to shares held in contravention of subsection (1) immediately before December 8, 1988.

(3)  A provincial corporation may in the capacity of personal representative hold shares in itself or in its holding body corporate unless it or the holding body corporate or a subsidiary of either of them has a beneficial interest in the shares.

(4)  A provincial corporation may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of its business.

(5)  A provincial corporation holding shares in itself or in its holding body corporate shall not vote or permit those shares to be voted unless the corporation

                                 (a)    holds the shares in the capacity of personal representative, and

                                 (b)    has complied with section 153 of the Business Corporations Act, as incorporated into this Act by section 99 of this Act.

1991 cL‑26.5 s61

Restrictions on acquisition of shares

62(1)  Subject to this section, section 77 applies to a purchase, acquisition or redemption for cancellation of voting shares by a provincial corporation under section 63, 64 or 65 as if the purchase, acquisition or redemption of voting shares were a transfer or issue of voting shares.

(2)  Notwithstanding subsection (1),

                                 (a)    section 77(6) does not apply, and

                                 (b)    the provincial corporation must make the application referred to in section 77(7) on behalf of the persons referred to in that subsection

in the case of a purchase, acquisition or redemption of shares referred to in subsection (1).

1991 cL‑26.5 s62

Acquisition of own shares

63(1)  Subject to subsection (2) and to its bylaws, a provincial corporation may purchase or otherwise acquire shares issued by it.

(2)  A provincial corporation shall not make any payment to purchase or otherwise acquire shares issued by it if there are reasonable grounds for believing that

                                 (a)    the corporation is, or after the payment would be, unable to pay its liabilities as they become due, or

                                 (b)    the realizable value of the corporation’s assets after the payment would be less than the aggregate of its liabilities and stated capital of all classes.

(3)  A provincial corporation that is not a reporting issuer shall, within 30 days after the purchase of any of its issued shares, notify its shareholders

                                 (a)    of the number of shares it has purchased,

                                 (b)    of the names of the shareholders from whom it has purchased the shares,

                                 (c)    of the price paid for the shares, and

                                 (d)    of the balance, if any, remaining due to the shareholders from whom it purchased the shares.

(4)  A shareholder of a provincial corporation other than a reporting issuer is entitled on request and without charge to a copy of the agreement between the corporation and any of its other shareholders under which the corporation has agreed to purchase, or has purchased, any of its own shares.

1991 cL‑26.5 s63

Alternative acquisition of own shares

64(1)  Subject to subsection (2) and to its bylaws, a provincial corporation may purchase or otherwise acquire shares issued by it

                                 (a)    to settle or compromise a debt or claim asserted by or against the corporation,

                                 (b)    to eliminate fractional shares, or

                                 (c)    to fulfil the terms of a non‑assignable agreement under which the corporation has an option or is obliged to purchase shares owned by a director, officer or employee of the corporation.

(2)  Notwithstanding section 63(2), a corporation may purchase or otherwise acquire shares issued by it to comply with an order under section 293.

(3)  A provincial corporation shall not make any payment to purchase or acquire under subsection (1) shares issued by it if there are reasonable grounds for believing that

                                 (a)    the corporation is, or after the payment would be, unable to pay its liabilities as they become due,

                                 (b)    the realizable value of the corporation’s assets after the payment would be less than the aggregate of

                                           (i)    its liabilities, and

                                          (ii)    the amount that would be required to pay the holders of shares who have a right to be paid, on a redemption or in a liquidation, prior to the holders of the shares to be purchased or acquired,

                                     or

                                 (c)    the purchase or acquisition would cause the corporation to be in contravention of this Act or the regulations.

1991 cL‑26.5 s64

Redemption of shares

65(1)  Subject to subsection (2) and to its bylaws, a provincial corporation may purchase or redeem any redeemable shares issued by it at prices not exceeding the redemption price calculated according to a formula stated in the bylaws.

(2)  A provincial corporation shall not make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that

                                 (a)    the corporation is, or after the payment would be, unable to pay its liabilities as they become due,

                                 (b)    the realizable value of the corporation’s assets after the payment would be less than the aggregate of

                                           (i)    its liabilities, and

                                          (ii)    the amount that would be required to pay the holders of shares who have a right to be paid, on a redemption or in a liquidation, ratably with or prior to the holders of the shares to be purchased or redeemed,

                                     or

                                 (c)    the redemption would cause the corporation to be in contravention of this Act or the regulations.

1991 cL‑26.5 s65

Donated and escrowed shares

66   A provincial corporation may accept from any shareholder a share of the corporation

                                 (a)    that is surrendered to it as a gift, or

                                 (b)    that has been held in escrow pursuant to an escrow agreement required by the Executive Director and that is surrendered pursuant to that agreement.

1991 cL‑26.5 s66;1995 c28 s70

Reduction of stated capital

67(1)  Subject to subsection (4) and its instrument of incorporation, a provincial corporation, by special resolution and with the approval of the Minister, may reduce its stated capital for any purpose.

(2)  Where a class or series of shares of a provincial corporation would be affected by a reduction of stated capital under subsection (1) differently from how any other class or series of shares of the corporation would be affected by that action, the holders of shares of the differently affected class or series are entitled to vote separately as a class or series, as the case may be, on the proposal to take the action, whether or not the shares otherwise carry the right to vote.

(3)  A special resolution under this section shall specify the stated capital account or accounts from which the reduction of stated capital affected by the special resolution will be made.

(4)  A provincial corporation shall not reduce its stated capital, other than for the purpose of declaring it to be reduced by an amount that is not represented by realizable assets, if there are reasonable grounds for believing that

                                 (a)    the corporation is, or after the reduction would be, unable to pay its liabilities as they become due,

                                 (b)    the realizable value of the corporation’s assets after the reduction would be less than the aggregate of its liabilities, or

                                 (c)    the reduction would cause the corporation to be in contravention of this Act or the regulations.

(5)  A shareholder, creditor or depositor of a provincial corporation may apply to the Court for an order compelling another shareholder or another recipient

                                 (a)    to pay to the corporation an amount equal to any liability of that other shareholder that was extinguished or reduced contrary to this section, or

                                 (b)    to pay or deliver to the corporation any money or property that was paid or distributed to that other shareholder or recipient as a consequence of a reduction of capital made contrary to this section.

(6)  A proceeding to enforce a liability imposed by this section may not be commenced after 2 years from the date of the action complained of.

(7)  This section does not affect any liability that arises under section 131.

1991 cL‑26.5 s67;1994 c39 s4

Adjustment of stated capital account

68(1)  On a purchase, redemption or other acquisition by a provincial corporation under section 63, 64, 65, 73 or 293(3)(e) of shares or fractions of shares issued by it, the corporation shall deduct from the stated capital account maintained for the class or series of shares of which the shares purchased, redeemed or otherwise acquired form a part, 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 or fractions of shares of that class or series purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

(2)  A provincial corporation shall deduct the amount of a payment made by the corporation to a shareholder under section 293(3)(f) from the stated capital account maintained for the class or series of shares in respect of which the payment was made.

(3)  A provincial corporation shall adjust its stated capital account or accounts in accordance with any special resolution referred to in section 67(3).

(4)  On a conversion or change of issued shares of a provincial corporation into shares of another class or series, the corporation shall

                                 (a)    deduct from the stated capital account maintained for the class or series of shares converted or changed 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 or changed, and dividing by the number of issued shares of that class or series immediately before the conversion or change, and

                                 (b)    add the result obtained under clause (a) and any additional consideration received pursuant to the conversion or change to the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed.

(5)  For the purposes of subsection (4), where a provincial corporation issues 2 classes or series of shares and there is attached to each class or series a right to convert a share of one class or series into a share of the other class or series, the amount of stated capital attributable to a share in either class or series is the amount obtained when the sum of the stated capital of both classes or series of shares is divided by the number of issued shares of both classes or series of shares immediately before the conversion.

(6)  Shares or fractions of shares issued by a provincial corporation and purchased, redeemed or otherwise acquired by it must be cancelled or restored to the status of authorized but unissued shares.

(7)  For the purposes of this section, a provincial corporation holding shares in itself as permitted by section 61(3) and (4) is deemed not to have purchased, redeemed or otherwise acquired those shares.

(8)  Where shares of a class or series are converted or changed into the same or another number of shares of another class or series, those shares become the same in all respects as the shares of the class or series into which they are converted or changed.

1991 cL‑26.5 s68

Repayment, acquisition and reissue of debt obligations

69(1)  Debt obligations issued, pledged, hypothecated or deposited by a provincial 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, and those obligations remain obligations of the corporation until they are discharged.

(2)  Debt obligations issued by a provincial 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 obligation of the corporation then existing or incurred afterwards, and any such acquisition and reissue, pledge or hypothecation is not a cancellation of the debt obligations.

1991 cL‑26.5 s69

Enforceability of contract to purchase shares

70(1)  A contract with a provincial corporation providing for the purchase by it of its own shares is specifically enforceable against the corporation, except to the extent that it cannot perform the contract without contravening section 63 or 64.

(2)  In any action brought on a contract referred to in subsection (1), the provincial corporation has the burden of proving that performance of the contract is prevented by section 63 or 64.

(3)  Until the provincial corporation has fully performed a contract referred to in subsection (1), the other party to the contract retains the status of a claimant and is entitled

                                 (a)    to be paid as soon as the corporation is lawfully able to perform the contract, or

                                 (b)    in a liquidation, to be ranked subordinate to the rights of depositors, creditors, holders of subordinated notes and any class of shareholders whose rights were in priority to the rights given to the class of shares that other party contracted to sell to the corporation, but in priority to the rights of other shareholders.

1991 cL‑26.5 s70

Commission on sale of shares

71   The directors of a provincial corporation may authorize the corporation to pay a reasonable commission to any person in consideration of the person’s

                                 (a)    purchasing or agreeing to purchase shares of the corporation from it or from any other person, or

                                 (b)    procuring or agreeing to procure purchasers for any such shares.

1991 cL‑26.5 s71

Payment of dividend

72(1)  The directors of a provincial corporation may declare, and a provincial corporation may pay, a dividend by issuing fully paid shares of the corporation and, subject to subsection (3), a corporation may pay a dividend in money or property.

(2)  If a provincial corporation issues shares of the corporation in payment of a dividend, it shall add to the stated capital account for the shares of the class or series issued the declared amount of the dividend, stated as an amount of money.

(3)  The directors shall not declare and a provincial corporation shall not pay a dividend if there are reasonable grounds for believing that

                                 (a)    the corporation is, or after the payment would be, unable to pay its liabilities as they become due,

                                 (b)    the realizable value of the corporation’s assets after the payment would be less than the aggregate of

                                           (i)    its liabilities, and

                                          (ii)    its stated capital of all classes,

                                     or

                                 (c)    the payment would cause the corporation to be in contravention of this Act or the regulations.

1991 cL‑26.5 s72

Lien on share

73(1)  The bylaws of a provincial corporation may provide that the corporation has a lien on a share registered in the name of a shareholder or the shareholder’s personal representative for a debt of that shareholder to the corporation.

(2)  A provincial corporation may enforce a lien referred to in subsection (1) in accordance with its bylaws.

1991 cL‑26.5 s73

Limited liability of shareholders

74   Except as otherwise provided in this Act, the shareholders of a provincial corporation are not, as shareholders, liable for any liability, act or default of the corporation.

1991 cL‑26.5 s74

Restrictions on issue, transfer

75   A provincial corporation shall not impose restrictions on the issue, transfer or ownership of shares of any class or series except to the extent that it is authorized to do so by its instrument of incorporation or this Act.

1991 cL‑26.5 s75

Interpretation

76(1)  For the purposes of this section and sections 77 to 81, a person is deemed to be related to

                                 (a)    every body corporate the person controls and every affiliate of that body corporate,

                                 (b)    every partner of the person,

                                 (c)    every trust or estate in which the person has a substantial beneficial interest or in respect of which the person serves as trustee or in a similar capacity,

                                 (d)    the spouse or adult interdependent partner of the person,

                                 (e)    every relative of the person, or of the person’s spouse or adult interdependent partner, who has the same home as the person, and

                                  (f)    every other person the Minister considers is acting in concert with the person to acquire and control voting shares of a provincial corporation and so designates by order as a related person.

(2)  For the purpose of sections 77, 78 and 80, a person who, alone or with any related person,

                                 (a)    controls a body corporate that does not control a provincial corporation but that holds or beneficially owns 10% or more of the total number of issued and outstanding voting shares of a class of voting shares of the corporation, or

                                 (b)    holds or beneficially owns 10% or more of the total number of issued and outstanding voting shares of a class of voting shares of a body corporate that controls a provincial corporation

is deemed to be a holding body corporate, and the voting shares and transfer or issue of voting shares of those persons in the body corporate referred to in clause (a) or (b) are deemed to be shares or a transfer or issue of shares to which sections 77, 78 and 80 apply.

RSA 2000 cL‑20 s76;2002 cA‑4.5 s51

Minister’s consent to transfer or issue

77(1)  The directors of a provincial corporation shall refuse to allow the transfer or issue of voting shares of the corporation to be entered in the securities register without the Minister’s consent in either of the following circumstances:

                                 (a)    if, in a case where a person and other persons related to that person hold or beneficially own immediately before the entry of the transfer or issue more than 10% of any class of the issued and outstanding voting shares of the corporation, the entry of the transfer or issue would cause that percentage to increase, based on the number of issued and outstanding voting shares after the entry of the transfer or issue;

                                 (b)    if, in a case where a person and other persons related to that person hold or beneficially own immediately before the entry of the transfer or issue 10% or less of any class of the issued and outstanding voting shares of the corporation, the entry of the transfer or issue would cause that percentage to increase to more than 10%, based on the number of issued and outstanding voting shares after the entry of the transfer or issue.

(2)  Until the Minister’s consent is obtained under subsection (1) no person shall in person or by proxy exercise the voting rights attaching to any of the voting shares that are held or beneficially owned by the person or related persons referred to in subsection (1).

(3)  Notwithstanding subsection (1), where a consent is given under subsection (1) with respect to a person and other persons related to that person, no consent under subsection (1) is required with respect to those persons in respect of a subsequent transfer or issue of voting shares unless, as a result of the entry of the transfer or issue, the shareholdings or beneficial ownership of those persons calculated under subsection (1) would undergo an increase of more than 5% from the shareholdings or beneficial ownership calculated immediately after the previous consent was given.

(4)  The exception set out in subsection (3) does not apply

                                 (a)    to a transfer or issue of shares that would result in a change of control of the provincial corporation, or

                                 (b)    where, since the previous consent was given under this section, the shareholdings or beneficial ownership of the person and other persons related to that person calculated under subsection (1) have decreased by more than 5% from the shareholdings or beneficial ownership calculated immediately after the previous consent was given.

(5)  Where, on January 16, 1992, a person and other persons related to that person hold or beneficially own more than 10% of any class of issued and outstanding voting shares of a corporation, the Minister is, for the purposes of this section, deemed to have given a consent in respect of that holding or ownership on January 16, 1992.

(6)  The consent of the Minister under this section is not required in respect of a transfer or issue of shares to an underwriter, as defined in the Securities Act, who receives them in that capacity.

(7)  Where a consent is required under this section,

                                 (a)    the person to whom the shares are to be transferred or issued, or

                                 (b)    where the person referred to in clause (a) will not be the beneficial owner of the shares, that person and the beneficial owner jointly,

shall apply for the consent and shall provide the Minister with any information the Minister requires in support of the application.

(8)  On an application under subsection (7), the Minister may refuse consent where

                                 (a)    any of the holders or beneficial owners to whom the consent relates

                                           (i)    is or has been bankrupt,

                                          (ii)    has been convicted of a criminal offence, an offence under this Act or an offence under the Securities Act or comparable legislation of another jurisdiction in Canada,

                                         (iii)    is or has been subject to a cease trading order under the Securities Act or comparable legislation of another jurisdiction in Canada,

                                         (iv)    is the subject of a special examination under section 274,

                                          (v)    is contravening any provision of this Act or the regulations or of any comparable legislation of another jurisdiction or of any undertaking given to the Minister, or

                                         (vi)    fails to provide the information requested under subsection (7),

                                     or

                                 (b)    it would, in the Minister’s opinion, be in the public interest to do so, having regard to the following:

                                           (i)    the nature and sufficiency of the financial resources of the holders or beneficial owners to whom the consent relates as a source of continuing financial support for the provincial corporation;

                                          (ii)    where the transfer or issue would result in a change in control of the provincial corporation, the soundness and feasibility of plans of the holders or beneficial owners to whom the consent relates for the future conduct and development of the business of the provincial corporation;

                                         (iii)    the business record and experience of the holders or beneficial owners to whom the consent relates;

                                         (iv)    whether the provincial corporation will be operated responsibly by persons who are fit as to character and are competent for that purpose;

                                          (v)    the best interests of the financial system in Alberta.

(9)  The consent of the Minister under this section takes effect on the date set out in the consent, and the effective date may be a date before the date the consent is given.

1991 cL‑26.5 s77

Minister’s right to information

78(1)  The Minister may in writing direct a provincial corporation to obtain from a person in whose name a share is registered in the securities register of the corporation or who is the beneficial owner of a share of the corporation a declaration containing any or all of the following information:

                                 (a)    information concerning the ownership or beneficial ownership of the share;

                                 (b)    information as to whether the share is held or beneficially owned by a person who is related to that person, and the name of the related person where applicable;

                                 (c)    information as to the place in which the shareholder and any person for whose use or benefit the share is held are ordinarily resident;

                                 (d)    information concerning the ownership or beneficial ownership of the shares of a holding body corporate;

                                 (e)    information concerning any other matters specified by the Minister.

(2)  The directors of a provincial corporation that is the subject of a direction under subsection (1) shall ensure that the corporation forthwith complies with the direction.

(3)  A provincial corporation that is the subject of a direction under subsection (1) may request a person who has possession of or access to the information required to provide a declaration containing the information to the Minister, and that person shall forthwith comply with the request.

1991 cL‑26.5 s78

Exemption

79(1)  The Minister may by order exempt any provincial corporation or other person from the application of section 77 or 78 in whole or in part and on any terms and conditions set out in the order.

(2)  The Regulations Act does not apply to an order under subsection (1).

1991 cL‑26.5 s79

Bylaws re shareholder information

80(1)  The directors of a provincial corporation may make bylaws

                                 (a)    requiring any person holding any voting share of the corporation to submit written declarations

                                           (i)    with respect to the ownership and beneficial ownership of a share of the corporation or of a holding body corporate,

                                          (ii)    with respect to the place in which the shareholder and any person for whose use or benefit the share is held are ordinarily resident,

                                         (iii)    as to whether the shareholder is related to other persons, and

                                         (iv)    with respect to any other matters the directors consider relevant for the purposes of sections 76 to 79,

                                 (b)    prescribing the times at which and the manner in which any declarations required under clause (a) are to be submitted, and

                                 (c)    requiring any person desiring to have a transfer of a share to the person entered in the securities register of the corporation to submit a declaration referred to in clause (a) as if the person were a shareholder.

(2)  Where under any bylaw made under subsection (1) a declaration is required to be submitted by any shareholder or person in respect of the transfer of any share, the directors may refuse to allow the entry of the transfer of the share in the securities register of the provincial corporation until the required declaration has been submitted.

1991 cL‑26.5 s80

Reliance on information

81   A director of a provincial corporation and any other person acting as proxy for a shareholder of the corporation may rely on a statement made in a declaration made pursuant to a bylaw under section 80(1) and on their own knowledge of the circumstances for the purposes of determining

                                 (a)    the residence of a person,

                                 (b)    who controls a body corporate, or

                                 (c)    any other circumstances relevant to the performance of their duties under sections 76 to 79,

and the director or other person is not liable in any action for anything done or omitted by the director or other person in good faith in reliance on that statement or that knowledge.

1991 cL‑26.5 s81

Place of annual meeting

82(1)  Subject to the bylaws, a meeting of shareholders of a provincial corporation shall be held at any place in Canada that the directors determine, or in the absence of such a determination, at its principal place of business.

(2)  Notwithstanding subsection (1), a meeting of shareholders of a provincial corporation may be held outside Canada if all the shareholders entitled to vote at that meeting so agree, and a shareholder who attends a meeting of shareholders held outside Canada is deemed to have so agreed except where the shareholder attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully held.

1991 cL‑26.5 s82

Calling meetings

83(1)  The directors of a provincial corporation shall call annual meetings of shareholders in accordance with this section.

(2)  In the case of a provincial corporation incorporated under Part 2, the directors shall, after the meeting called pursuant to section 22, call an annual meeting, to be held not later than 4 months after the end of the first fiscal year of the corporation, and subsequently not later than 4 months after the end of each fiscal year.

(3)  In the case of a provincial corporation that is continued under section 328, the directors shall call an annual meeting not later than 4 months after the end of the fiscal year in which letters patent of continuance are issued, and subsequently not later than 4 months after the end of each fiscal year.

(4)  In the case of an amalgamated provincial corporation, the directors shall call an annual meeting not later than 4 months after the date set out in the supplementary letters patent of amalgamation, and subsequently not later than 4 months after the end of each fiscal year.

(5)  A provincial corporation may apply to the Court for an order extending the time within which the first or the next annual meeting of the corporation shall be held.

(6)  Notice of any application under subsection (5) by a provincial corporation that is a reporting issuer shall be filed with the Executive Director.

(7)  If, on an application under subsection (5), the Court is satisfied that it is in the best interests of the provincial corporation, the Court may extend the time in which the first or the next annual meeting of the corporation shall be held, in any manner and on any terms it thinks fit.

(8)  The directors of a provincial corporation may call a special meeting of shareholders at any time.

1991 cL‑26.5 s83;1995 c28 s70

Record dates

84(1)  For the purpose of determining shareholders of a provincial corporation

                                 (a)    entitled to receive payment of a dividend,

                                 (b)    entitled to participate in a liquidation or distribution, or

                                 (c)    for any other purpose except the right to receive notice of or to vote at a meeting,

the directors may fix in advance a date as the record date for that determination of shareholders, but the record date shall not precede by more than 50 days the date of the particular action to be taken.

(2)  For the purpose of determining shareholders entitled to receive notice of or to vote at a meeting of shareholders, the directors may fix in advance a date as the record date for that determination of shareholders, but that record date shall not precede by more than 50 days or by less than 21 days the date on which the meeting is to be held.

(3)  If no record date is fixed,

                                 (a)    the record date for the determination of shareholders entitled to receive notice of or to vote at a meeting of shareholders shall be

                                           (i)    at the close of business on the last business day immediately preceding the day on which the notice is sent, or

                                          (ii)    if no notice is sent, the day on which the meeting is held,

                                     and

                                 (b)    the record date for the determination of shareholders for any purpose other than to establish a shareholder’s right to receive notice of a meeting or to vote shall be at the close of business on the day on which the directors pass the resolution relating to that purpose.

(4)  If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register of the provincial corporation at the close of business on the day the directors fix the record date, notice of the record date shall be given not less than 7 days before the date so fixed

                                 (a)    by advertisement in a newspaper published or distributed in the locality where the corporation has its principal place of business and in each place in Canada where it has a transfer agent or where a transfer of its shares may be recorded, and

                                 (b)    by written notice to each stock exchange in Canada on which the shares of the corporation are listed for trading.

1991 cL‑26.5 s84

Notice of meeting

85(1)  Notice of the time and place of a meeting of shareholders of a provincial corporation shall be sent not less than 21 days and not more than 50 days before the meeting

                                 (a)    to each shareholder entitled to vote at the meeting,

                                 (b)    to each director, and

                                 (c)    to the auditor of the corporation.

(2)  Notwithstanding section 321(2), a notice of a meeting of shareholders sent by mail to a shareholder, director or auditor in accordance with section 321(1) is deemed to be sent on the day on which it is deposited in the mail.

(3)  A notice of a meeting is not required to be sent to shareholders who were not registered on the securities register of the provincial corporation on the date determined under section 84(2) or (3), but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

(4)  If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of less than 30 days, it is not necessary, unless the bylaws otherwise provide, to give notice of the adjourned meeting other than by announcement at the time of an adjournment.

(5)  If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting, but unless the meeting is adjourned by one or more adjournments for an aggregate of more than 90 days, section 149(1) of the Business Corporations Act as incorporated into this Act by section 99 of this Act does not apply.

(6)  All business transacted at a special meeting of shareholders and all business transacted at an annual meeting of shareholders, except consideration of the financial statements and auditor’s report, fixing the number of directors for the following year, election of directors and reappointment of the incumbent auditor, are deemed to be special business.

(7)  Notice of a meeting of shareholders at which special business is to be transacted shall state

                                 (a)    the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment on that business, and

                                 (b)    the text of any special resolution or bylaw to be submitted to the meeting.

(8)  The text of a special resolution may be amended at a meeting of shareholders if the amendments correct manifest errors or are not material.

(9)  A shareholder and any other person entitled to attend a meeting of shareholders of a provincial corporation may in any manner waive notice of a meeting of shareholders, and attendance of any such person at a meeting of shareholders is a waiver of notice of the meeting except where the person attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called.

1991 cL‑26.5 s85

Shareholder proposals

86(1)  A shareholder of a provincial corporation who is entitled to vote at an annual meeting of shareholders may

                                 (a)    submit to the corporation notice of any matter that the shareholder proposes to raise at the meeting, referred to in this section as a proposal, and

                                 (b)    require that the matter be included in the next notice of meeting sent by the corporation as business to be transacted at that meeting.

(2)  Where a provincial corporation receives notice of a proposal and the corporation solicits proxies, it shall set out the proposal in the management proxy circular required by section 150 of the Business Corporations Act as incorporated into this Act by section 99 of this Act, or it shall attach the proposal to the proxy circular.

(3)  If so requested by a shareholder giving notice of a proposal, the provincial corporation shall include in the management proxy circular or attach to it a statement by the shareholder of not more than 200 words in support of the proposal, along with the name and address of the shareholder.

(4)  A proposal may include nominations for the election of directors if the proposal is signed by one or more holders of shares representing in the aggregate not less than 5% of the shares, or 5% of the shares of a class or series of shares, of the provincial corporation entitled to vote at the meeting at which the proposal is to be presented, but this subsection does not preclude the making of nominations at a meeting of shareholders.

(5)  A provincial corporation is not required to comply with subsections (2) and (3) where

                                 (a)    the proposal is submitted to the corporation less than 90 days before the anniversary date of the previous annual meeting,

                                 (b)    it clearly appears that the proposal is submitted by the shareholder primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the corporation or any of its directors, officers or security holders, or for a purpose that is not related in any significant way to the business or affairs of the corporation,

                                 (c)    the corporation, at the shareholder’s request, included a proposal in a management proxy circular relating to a meeting of shareholders held within 2 years preceding the receipt of the request and the shareholder failed to present the proposal, in person or by proxy, at the meeting,

                                 (d)    substantially the same proposal was submitted to shareholders in a management proxy circular or a dissident’s proxy circular relating to a meeting of shareholders held within 2 years preceding the receipt of the shareholder’s request and the proposal was defeated, or

                                 (e)    the rights conferred by this section are being abused to secure publicity.

(6)  No provincial corporation or person acting on its behalf incurs any liability by reason only of circulating a proposal or statement in compliance with this section.

(7)  Where a provincial corporation refuses to include a proposal in a management proxy circular, it shall, within 10 days after receiving the proposal, send to the shareholder who submitted the proposal notice of its intention to omit the proposal from the management proxy circular and a statement of reasons for the refusal.

(8)  On the application of a shareholder claiming to be aggrieved by a provincial corporation’s refusal under subsection (7), the Court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

(9)  A provincial corporation or any person claiming to be aggrieved by a proposal may apply to the Court for an order permitting the corporation to omit the proposal from the management proxy circular, and the Court, if it is satisfied that subsection (5) applies, may make any order it thinks fit.

(10)  An applicant under subsection (8) or (9) shall give the Minister notice of the application, and the Minister is entitled to appear and be heard in person or by counsel.

1991 cL‑26.5 s86

Shareholder list

87(1)  A provincial corporation shall prepare a list of shareholders entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of shares held by each shareholder, which shall be prepared,

                                 (a)    if a record date is fixed under section 84(2), not later than 10 days after that date, or

                                 (b)    if no record date is fixed,

                                           (i)    at the close of business on the last business day immediately preceding the day on which the notice is sent, or

                                          (ii)    if no notice is sent, on the day on which the meeting is held.

(2)  Subject to sections 76 to 79, where a provincial corporation fixes a record date under section 84(2), a person named in the list prepared under subsection (1)(a) is entitled to vote the shares shown opposite the person’s name at the meeting to which the list relates, except to the extent that

                                 (a)    the person has transferred the ownership of the shares after the record date, and

                                 (b)    the transferee of those shares

                                           (i)    produces properly endorsed share certificates, or

                                          (ii)    otherwise establishes ownership of the shares,

                                          and demands, not later than 10 days before the meeting, or any shorter period before the meeting that the bylaws of the corporation provide, that the transferee’s name be included in the list before the meeting,

in which case the transferee is entitled to vote those shares at the meeting.

(3)  Subject to sections 76 to 79, where a provincial corporation does not fix a record date under section 84(2), a person named in a list prepared under subsection (1)(b) is entitled to vote the shares shown opposite the person’s name at the meeting to which the list relates, except to the extent that

                                 (a)    the person has transferred the ownership of the shares after the date on which the list was prepared, and

                                 (b)    the transferee of those shares

                                           (i)    produces properly endorsed share certificates, or

                                          (ii)    otherwise establishes ownership of the shares,

                                          and demands, not later than 10 days before the meeting, or any shorter period before the meeting that the bylaws of the corporation provide, that the transferee’s name be included in the list before the meeting,

in which case the transferee is entitled to vote those shares at the meeting.

(4)  A shareholder of a provincial corporation may examine the list of shareholders

                                 (a)    during usual business hours at the principal place of business of the corporation or at the place where its securities register is maintained, and

                                 (b)    at the meeting of shareholders for which the list was prepared.

1991 cL‑26.5 s87

Quorum

88(1)  Unless the bylaws of the provincial corporation otherwise provide, the holders of a majority of the shares entitled to vote at a meeting of shareholders, whether present in person or represented by proxy, constitute a quorum.

(2)  If a quorum is present at the opening of a meeting of shareholders, the shareholders present may, unless the bylaws otherwise provide, proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting.

(3)  If a quorum is not present at the time appointed for a meeting of shareholders, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business.

1991 cL‑26.5 s88

Meeting by electronic means

89   A shareholder or any other person entitled to attend a meeting of shareholders may participate in the meeting by means of telephone or other communication devices that permit all persons participating in the meeting to hear each other if

                                 (a)    the bylaws so provide, or

                                 (b)    subject to the bylaws, all the shareholders entitled to vote at the meeting consent,

and a person participating in such a meeting by those means is deemed for the purposes of this Act to be present at the meeting.

1991 cL‑26.5 s89

Majority vote

90   Unless the bylaws of the provincial corporation otherwise provide, all questions proposed for the consideration of the shareholders shall be determined by the majority of the votes cast, and the chair presiding at the meeting shall not have a 2nd or casting vote in case of an equality of votes.

1991 cL‑26.5 s90

One share, one vote

91   Unless the bylaws of the provincial corporation otherwise provide, each share of the corporation entitles the holder to one vote at a meeting of shareholders.

1991 cL‑26.5 s91

Corporate shareholder

92(1)  Where a body corporate or association is a shareholder of a provincial corporation, the corporation shall recognize any individual authorized by a resolution of the directors or governing body of the body corporate or association to represent it at meetings of shareholders of the corporation.

(2)  An individual authorized in accordance with subsection (1) may exercise on behalf of the body corporate or association the individual represents all the powers it could exercise if it were an individual shareholder.

1991 cL‑26.5 s92

Joint ownership of share

93   Unless the bylaws of the provincial corporation otherwise provide, where 2 or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if 2 or more of those persons are present, in person or by proxy, they shall vote as one on the shares jointly held by them.

1991 cL‑26.5 s93

Voting

94(1)  Unless the bylaws of the provincial corporation otherwise provide, voting at a meeting of shareholders shall be by show of hands except where a ballot is demanded by a shareholder or proxyholder entitled to vote at the meeting.

(2)  A shareholder or proxyholder may demand a ballot either before or on the declaration of the result of a vote by show of hands.

1991 cL‑26.5 s94

Resolution instead of meeting

95(1)  A resolution in writing signed by all the shareholders entitled to vote on that resolution is as valid as if it had been passed at a meeting of the shareholders.

(2)  A resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of shareholders.

(3)  The provincial corporation shall keep a copy of every resolution referred to in subsection (1) or (2) with the minutes of the meetings of shareholders.

1991 cL‑26.5 s95

Meeting on requisition of shareholders

96(1)  The holders of not less than 5% of the issued and outstanding shares of a provincial corporation that carry the right to vote at a meeting of shareholders sought to be held may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition.

(2)  The requisitioners shall give notice to the Minister of a requisition made under subsection (1).

(3)  The requisition referred to in subsection (1) shall state the business to be transacted at the meeting and shall be sent to the principal place of business of the provincial corporation and to each director.

(4)  On receiving the requisition referred to in subsection (1), the directors shall call a meeting of shareholders to transact the business stated in the requisition unless

                                 (a)    a record date has been fixed under section 84(2) and notice of the record date has been given under section 84(4),

                                 (b)    the directors have called a meeting of shareholders and have given notice of the meeting under section 85, or

                                 (c)    the business of the meeting as stated in the requisition includes matters described in section 86(5)(b), (c) or (d).

(5)  If the directors do not within 21 days after receiving the requisition referred to in subsection (1) call a meeting, any shareholder who signed the requisition may call a meeting.

(6)  A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called under the bylaws and this Part.

(7)  The provincial corporation shall reimburse the shareholders for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting unless the shareholders otherwise provide by a resolution passed at the meeting.

1991 cL‑26.5 s96

Meeting called by Court

97(1)  The Court, on the application of a director or of a shareholder entitled to vote at a meeting of shareholders, may order a meeting to be called, held and conducted in the manner the Court directs if the Court

                                 (a)    is satisfied that it is impracticable to call the meeting in the manner in which meetings of those shareholders may be called, or to conduct the meeting in the manner prescribed by the bylaws and this Act, or

                                 (b)    considers it appropriate to so order for any other reason.

(2)  Without restricting the generality of subsection (1), the Court may order that the quorum required by the bylaws or this Act be varied or dispensed with at a meeting called, held and conducted under this section.

(3)  A meeting called, held and conducted under this section is for all purposes a meeting of shareholders of the provincial corporation duly called, held and conducted.

(4)  A person applying under subsection (1) shall give notice of the application to the Minister before the hearing and shall deliver a copy of the Court’s order, if any, to the Minister.

1991 cL‑26.5 s97

Disputed elections and appointments

98(1)  A shareholder or director of a provincial corporation or the corporation may apply to the Court to determine any controversy with respect to an election or appointment of a director or auditor of the corporation.

(2)  A person applying under subsection (1) shall give notice of the application to the Minister and shall deliver a copy of the Court’s order, if any, to the Minister.

(3)  On an application under this section, the Court may make any order it considers appropriate, including, without limitation, any one or more of the following orders:

                                 (a)    an order restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute;

                                 (b)    an order declaring the result of the disputed election or appointment;

                                 (c)    an order requiring a new election or appointment and including in the order directions for the management of the business and affairs of the provincial corporation until a new election is held or appointment made;

                                 (d)    an order determining the voting rights of shareholders and of persons claiming to own shares.

1991 cL‑26.5 s98

Application of Business Corporations Act

99   Part 12 of the Business Corporations Act and the regulations made under that Act in relation to that Part apply to every provincial corporation as if it were a corporation within the meaning of that Act, and for the purposes of the application of that Part to a provincial corporation,

                                 (a)    a reference in that Part to a prescribed form is to be read as if it were a reference to a form prescribed by the Minister for the purposes of this Act, and

                                 (b)    a reference in that Part to a distributing corporation is to be read as if it were a reference to a reporting issuer.

1991 cL‑26.5 s99

Application of Business Corporations Act

100   Part 16 of the Business Corporations Act, except section 195(3) of that Act, applies with respect to a provincial corporation as if it were a corporation within the meaning of that Act, and a reference in that Part to a section in that Act, other than to a section in that Part, is deemed to be a reference to the corresponding section in this Act that deals with the same subject‑matter.

1991 cL‑26.5 s100

Part 6
Directors and Officers

Directors

101(1)  The directors shall manage the business and affairs of a provincial corporation.

(2)  A provincial corporation shall have at least 5 directors.

(3)  Subject to section 109, a provincial corporation may by special resolution increase or decrease the number of directors or the minimum or maximum number of directors, but not so as to shorten the term of an incumbent director or to reduce the number of directors to fewer than 5.

1991 cL‑26.5 s101

Bylaws

102(1)  Unless the instrument of incorporation, this Act or the bylaws otherwise provide, the directors may, by resolution, make, amend or repeal bylaws that regulate the business or affairs of a provincial corporation.

(2)  Where a bylaw is made, amended or repealed under subsection (1), the directors shall submit the bylaw, amendment or repeal to the shareholders at the next meeting of shareholders, and the shareholders shall confirm, reject or amend the bylaw, amendment or repeal.

(3)  Where a bylaw is made, amended or repealed under subsection (1), the bylaw, amendment or repeal is effective from the date of the resolution of the directors until it is confirmed, confirmed as amended or rejected by the shareholders under subsection (2) or until it ceases to be effective under subsection (4), and where the bylaw is confirmed or confirmed as amended, it continues in effect in the form in which it was confirmed.

(4)  If a bylaw or an amendment or repeal of a bylaw is rejected by the shareholders, or if the directors do not submit the bylaw, amendment or repeal to the shareholders as required under subsection (2), the bylaw, amendment or repeal ceases to be effective on the date on which it is rejected or on the date of the meeting of shareholders at which it should have been submitted, as the case may be, and no subsequent resolution of the directors to make, amend or repeal a bylaw having substantially the same purpose or effect is effective until it is confirmed or confirmed as amended by the shareholders.

(5)  If a shareholder proposal to make, amend or repeal a bylaw is made in accordance with section 86 and is adopted by shareholders at a meeting, the bylaw, amendment or repeal is effective from the date of its adoption and requires no further confirmation.

1991 cL‑26.5 s102

Unaffiliated directors

103(1)  In this section, “significant borrowerâ€? means

                                 (a)    an entity that has outstanding indebtedness for money borrowed from the provincial corporation and from any affiliate of the provincial corporation in an aggregate principal amount that exceeds a prescribed amount, and

                                 (b)    an individual who has outstanding indebtedness for money borrowed from the provincial corporation and from any affiliate of the provincial corporation, other than a loan secured by a mortgage on the principal residence of that person, in an aggregate principal amount that exceeds a prescribed amount.

(2)  Not more than 1/3 of the directors of a provincial corporation may be persons who are, or within the preceding 2 years have been, remunerated officers or employees of the corporation or any of its affiliates.

(3)  At least 1/3 of the directors of a provincial corporation shall be unaffiliated directors.

(4)  An individual is not eligible to be an unaffiliated director of a provincial corporation for the purposes of subsection (3) if the individual

                                 (a)    holds or beneficially owns more than 5% of the issued and outstanding voting shares of the corporation or of any of its affiliates,

                                 (b)    is an officer or employee of the corporation or any of its affiliates or has been an officer or employee of the corporation or any of its affiliates within 2 years of the date on which the individual would become or became a director,

                                 (c)    holds or beneficially owns

                                           (i)    10% or more of the issued and outstanding voting shares of a significant borrower that is a body corporate, or

                                          (ii)    a 10% or greater interest in a significant borrower that is an entity other than a body corporate,

                                 (d)    is a significant borrower or a director, officer or employee of a significant borrower,

                                 (e)    has a loan from the corporation that is more than a prescribed number of days in arrears of repayment of principal or interest,

                                  (f)    is a director, officer or employee of an entity that has a loan from the corporation that is in arrears within the meaning of clause (e),

                                 (g)    is the spouse or adult interdependent partner of an individual described in clause (a), (b), (c), (d), (e) or (f),

                                 (h)    is a relative of an individual described in clause (a), (b), (c), (d), (e) or (f) who has the same home as the individual, or

                                  (i)    is a professional advisor to the corporation.

RSA 2000 cL‑20 s103;2002 cA‑4.5 s51

Residency

104   At least 3/4 of the directors of a provincial corporation must be ordinarily resident in Canada.

1991 cL‑26.5 s104

Persons disqualified from being a director

105(1)  The following persons are disqualified from being or remaining as directors of a provincial corporation:

                                 (a)    a person who is not an individual;

                                 (b)    an individual who is less than 18 years of age;

                                 (c)    an individual who

                                           (i)    is a dependent adult as defined in the Dependent Adults Act or is the subject of a certificate of incapacity under that Act,

                                          (ii)    is a formal patient as defined in the Mental Health Act, or

                                         (iii)    has been found to be a person of unsound mind by a court elsewhere than in Alberta;

                                 (d)    an individual who has the status of bankrupt;

                                 (e)    an individual who is a director of a corporation that is not affiliated with the provincial corporation of which the individual is or wishes to become a director;

                                  (f)    an individual who, within the immediately preceding 5 years,

                                           (i)    has been convicted of an indictable offence that is of a kind that is related to the qualifications, functions or duties of a corporate director, and either the time for making an appeal has expired without an appeal having been made or the appeal has been finally disposed of by the courts, or

                                          (ii)    has been convicted of an offence against this Act;

                                 (g)    an individual who is disqualified by, or fails to meet any other qualification requirements of, the bylaws.

(2)  Subsection (1)(e) does not prevent a director of a corporation that is in the process of amalgamating with a provincial corporation from being a director of the provincial corporation.

1991 cL‑26.5 s105

Consent to election or appointment

106(1)  A person who is elected or appointed a director of a provincial corporation is not a director unless

                                 (a)    that person was present at the meeting when that person was elected or appointed and did not refuse to act as a director, or

                                 (b)    if that person was not present at the meeting when that person was elected or appointed,

                                           (i)    that person consented to act as a director in writing before that person’s election or appointment or within 10 days after it, or

                                          (ii)    that person has acted as a director pursuant to the election or appointment.

(2)  A person who is elected or appointed as a director and refuses under subsection (1)(a) or fails to consent or act under subsection (1)(b) is deemed not to have been elected or appointed as a director.

1991 cL‑26.5 s106

Shareholding not required

107   Unless the instrument of incorporation or the bylaws otherwise provide, a director of a provincial corporation is not required to hold shares issued by the corporation.

1991 cL‑26.5 s107

Election and appointment of directors

108(1)  The shareholders of a provincial corporation shall elect, at each annual meeting of shareholders, directors to hold office for a term expiring not later than the close of the next annual meeting of shareholders following the election.

(2)  A director ceases to hold office at the close of the first annual meeting of shareholders following the election of the director.

(3)  Notwithstanding this section, if directors are not elected at a meeting of shareholders, the incumbent directors continue in office until their successors are elected.

(4)  If a meeting of shareholders fails to elect the number of directors required by the bylaws or by section 101(2) by reason of the disqualification, incapacity or death of one or more candidates, the directors elected at that meeting, if they constitute a quorum, may exercise all the powers of the directors of the provincial corporation pending the holding of a meeting of shareholders in accordance with section 114(2).

(5)  On the election of a director, the provincial corporation shall give notice of the election to the Minister in the prescribed form.

1991 cL‑26.5 s108

Cumulative voting

109(1)  Where the bylaws provide for cumulative voting,

                                 (a)    the bylaws shall require a fixed number and not a minimum and maximum number of directors,

                                 (b)    each shareholder entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected, and may cast all of those votes in favour of one candidate or distribute them among the candidates in any manner,

                                 (c)    a separate vote of shareholders shall be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting 2 or more persons to be elected by a single resolution,

                                 (d)    if a shareholder has voted for more than one candidate without specifying the distribution of votes among the candidates, the shareholder is deemed to have distributed the votes equally among the candidates for whom the shareholder voted,

                                 (e)    if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled,

                                  (f)    each director ceases to hold office at the close of the first annual meeting of shareholders following the election of the director,

                                 (g)    a director may not be removed from office if the votes cast against removal would be sufficient to elect a director if they were voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the bylaws were being elected, and

                                 (h)    the number of directors required by the bylaws may not be decreased if the votes cast against the motion to decrease would be sufficient to elect a director if they were voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the bylaws were being elected.

(2)  Where the bylaws of a provincial corporation provide for cumulative voting, no holders of any class of shares of the corporation shall have an exclusive right to elect one or more directors.

1991 cL‑26.5 s109

Ceasing to hold office

110(1)  A director of a provincial corporation ceases to hold office when the director

                                 (a)    dies or resigns,

                                 (b)    is removed in accordance with section 111, or

                                 (c)    becomes disqualified under section 105.

(2)  A resignation of a director becomes effective at the time a written resignation is received by the provincial corporation or at the time specified in the resignation, whichever is later.

(3)  On receipt of the resignation of a director, the provincial corporation shall send notice of the resignation to the Minister together with a copy of any statement submitted under section 112(2) or (3).

1991 cL‑26.5 s110

Removal of directors

111(1)  Subject to section 109, the shareholders of a provincial corporation may by ordinary resolution at an annual or special meeting remove any director from office.

(2)  Where the holders of any class or series of shares of a provincial corporation have an exclusive right to elect one or more directors, a director so elected may be removed only by resolution at a meeting of the shareholders of that class or series.

(3)  Subject to section 109, a vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed or, if not so filled, may be filled in accordance with section 114.

1991 cL‑26.5 s111

Director’s statement

112(1)  A director of a provincial corporation is entitled to receive notice of and to attend and be heard at every meeting of shareholders.

(2)  A director of a provincial corporation who

                                 (a)    resigns,

                                 (b)    receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing the director from office, or

                                 (c)    receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire,

may submit to the corporation a written statement giving the reasons for the director’s resignation or the reasons, if any, why the director opposes any proposed action or resolution, as the case may be.

(3)  Where a director of a provincial corporation resigns because of a disagreement with an action or omission of the board of directors or of the management of the corporation and the director knows or believes that, as a result of the action or omission,

                                 (a)    the corporation or any shareholder, director, officer or employee of the corporation is or will be in contravention of this Act or the regulations, the Criminal Code (Canada), the Securities Act or legislation of another jurisdiction that is comparable to this Act or the Securities Act, or

                                 (b)    there has been or will be a change in the circumstances of the corporation that might materially and adversely affect the financial position of the corporation,

the director shall submit to the corporation a written statement giving the reasons for the resignation.

(4)  A provincial corporation shall forthwith send a copy of the statement referred to in subsection (2)

                                 (a)    to all other directors, and

                                 (b)    unless the directors of the provincial corporation consider on reasonable grounds that sending the statement would materially and adversely affect the financial viability of the provincial corporation, to every shareholder entitled to receive notice of a meeting referred to in subsection (1).

(5)  Where the directors decide, under subsection (4)(b), not to send a copy of the statement to the shareholders, they shall forthwith notify the Minister in writing to that effect, and the Minister may, notwithstanding that decision, order the provincial corporation to send the statement to the shareholders.

(6)  No provincial corporation or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (4).

(7)  A person who in good faith submits a statement under subsection (3) shall not be liable in any civil action arising out of the statement.

(8)  A director who resigns as director of a provincial corporation shall forthwith give notice to the Minister of the resignation together with a copy of any written statement given under this section.

(9)  Forthwith on receipt of the written request of the Minister, a director who gives a notice under subsection (8) shall provide the Minister with any information related to the resignation that is asked for in the request.

1991 cL‑26.5 s112

Notice of change of directors

113(1)  A provincial corporation shall send to the Minister notice in the prescribed form of any change in the membership of its board of directors within 15 days after the effective date of the change.

(2)  Where a provincial corporation contravenes subsection (1), the Minister or any interested  person may apply to the Court for an order requiring the corporation to send the notice to the Minister, and the Court may so order and may make any other order it considers appropriate.

1991 cL‑26.5 s113

Filling vacancies

114(1)  Subject to subsections (3) and (4), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from

                                 (a)    an increase in the number or minimum number of directors, or

                                 (b)    a failure to elect the number or minimum number of directors required to be elected by section 101(2) or the bylaws.

(2)  If there is not a quorum of directors, or if there has been a failure to elect the number or minimum number of directors required by section 101(2) or the bylaws, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy, and if they fail to call a meeting or if there are no directors then in office, any shareholder may call the meeting.

(3)  Where the holders of any class or series of shares of a provincial corporation have an exclusive right to elect one or more directors and a vacancy occurs among those directors,

                                 (a)    subject to subsection (4), the remaining directors elected by that class or series may fill the vacancy, except a vacancy resulting from an increase in the number or minimum number of directors for that class or series or from a failure to elect the number or minimum number of directors for that class or series, or

                                 (b)    if there are no such remaining directors, any holder of shares of that class or series may call a meeting of the holders of those shares for the purpose of filling the vacancy.

(4)  The bylaws may provide that a vacancy among the directors shall be filled only by

                                 (a)    a vote of the shareholders, or

                                 (b)    a vote of the holders of any class or series of shares having an exclusive right to elect one or more directors, if the vacancy occurs among the directors elected by that class or series.

(5)  A director appointed or elected to fill a vacancy holds office for the unexpired term of the director’s predecessor.

1991 cL‑26.5 s114

Meetings of directors

115   Unless the bylaws of a provincial corporation otherwise provide, the directors may meet at any place and on any notice they determine.

1991 cL‑26.5 s115

Meeting called by Minister

116(1)  Where in the Minister’s opinion it is necessary, the Minister may, by notice in writing, require a provincial corporation to hold a meeting of directors to consider the matters set out in the notice.

(2)  The Minister may attend and be heard at a meeting referred to in subsection (1).

1991 cL‑26.5 s116

Meetings called by board

117   In addition to any provision in the bylaws for calling meetings of directors, a quorum of the directors may, at any time, call a meeting of the directors for the transaction of any business the general nature of which is specified in the notice calling the meeting.

1991 cL‑26.5 s117

Notice of meeting

118(1)  Subject to the bylaws, notice of the time and place for the holding of the meeting called under section 117 shall be given to each director by sending the notice at least 10 days before  the date of the meeting to the last address of the director as shown on the records of the provincial corporation.

(2)  A director may in any manner waive a notice of a meeting of directors, and attendance of a director at a meeting of directors is a waiver of notice of the meeting except where the director attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called.

1991 cL‑26.5 s118

Adjourned meetings

119   Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.

1991 cL‑26.5 s119

Meeting by electronic means

120   A director may participate in a meeting of directors by means of telephone or other communication devices that permit all persons participating in the meeting to hear each other if

                                 (a)    the bylaws so provide, or

                                 (b)    subject to the bylaws, all the directors participating in the meeting consent,

and a director participating in a meeting by those means is deemed for the purposes of this Act to be present at that meeting.

1991 cL‑26.5 s120

Quorum

121(1)  Subject to the bylaws and this section, a majority of the number of directors appointed or elected constitutes a quorum at any meeting of directors.

(2)  At least one of the directors present at a meeting of directors must be an unaffiliated director.

(3)  Subject to the instrument of incorporation and the bylaws, where there is a vacancy on the board of directors, the remaining directors may exercise all the powers of the board so long as a quorum of the board remains in office.

1991 cL‑26.5 s121

Resident Canadian requirement

122(1)  Directors shall not transact business at a meeting of directors unless a majority of the directors present are ordinarily resident in Canada.

(2)  Notwithstanding subsection (1), directors may transact business at a meeting of directors when fewer than a majority of the directors present are ordinarily resident in Canada if

                                 (a)    a director who is ordinarily resident in Canada and who is unable to be present approves in writing or by telephone or other communication device the business transacted at the meeting, and

                                 (b)    the number of directors who are ordinarily resident in Canada and are present at the meeting, together with any director who gives the director’s approval under clause (a), totals a majority of the directors present at the meeting.

1991 cL‑26.5 s122

Majority vote

123   The concurrence of a majority of the directors present at a meeting of the directors is necessary to pass any resolution.

1991 cL‑26.5 s123

Executive committee

124(1)  The shareholders of a provincial corporation may, by special resolution and subject to subsection (2), authorize the directors to delegate any of their powers to an executive committee consisting of not fewer than 3 persons to be appointed by the directors from their number.

(2)  No executive committee has authority to

                                 (a)    submit to the shareholders any question or matter requiring the approval of the shareholders,

                                 (b)    fill a vacancy among the directors or in the office of auditor,

                                 (c)    issue securities except in the manner and on the terms authorized by the directors,

                                 (d)    declare dividends,

                                 (e)    purchase, redeem or otherwise acquire shares issued by the provincial corporation, except in the manner and on the terms authorized by the directors,

                                  (f)    authorize the payment of a commission under section 71,

                                 (g)    approve a management proxy circular,

                                 (h)    approve any financial statements under section 158,

                                  (i)    adopt, amend or repeal bylaws, or

                                  (j)    approve the written procedures described in section 175 or 197.

1991 cL‑26.5 s124

Officers

125(1)  The directors of a provincial corporation shall elect from among themselves a chair of the board.

(2)  The directors of a provincial corporation

                                 (a)    may designate the offices of the corporation and may appoint officers to those offices and specify their duties, and

                                 (b)    may delegate to the officers of the corporation the power to manage the business and affairs of the corporation.

(3)  The directors shall not delegate to the officers of the provincial corporation any power that, under section 124(2), cannot be exercised by an executive committee.

(4)  Where the regulations prescribe qualifications for appointment as an officer, the directors shall not appoint a person who does not have those qualifications.

1991 cL‑26.5 s125

Delegation of fiduciary powers

126(1)  Notwithstanding any law related to fiduciaries, the shareholders of a provincial trust corporation, by special resolution, may authorize the directors to delegate to the chief executive officer any powers of the corporation under a deed, will or other document creating a trust, and such a delegation may authorize the chief executive officer to further delegate any such powers to any other officer or officers of the corporation.

(2)  The exercise of a power by a person to whom it is delegated under subsection (1) constitutes an exercise of the power by the provincial trust corporation.

(3)  Before any powers are delegated pursuant to a special resolution described in subsection (1), the provincial trust corporation shall establish written procedures related to the exercise of the powers by a delegate.

(4)  The procedures referred to in subsection (3) shall be developed by the investment committee and shall be reviewed at least once each year by the investment committee.

(5)  The investment committee shall report on its review under subsection (4) and shall give its recommendations, if any, with respect to the procedures referred to in subsection (3) to the board of directors.

(6)  The procedures referred to in subsection (3) shall be subject to the approval of the board of directors and, on receipt of recommendations from the investment committee, the board shall review the procedures and make any changes it considers to be necessary.

(7)  This section applies to an extra‑provincial trust corporation with respect to the delegation of powers under any deed, will or other document creating a trust governed by the law of Alberta if the corporation is not prevented by the law of the jurisdiction in which it is incorporated from making that delegation.

1991 cL‑26.5 s126

Committees

127(1)  The directors of a provincial corporation shall appoint from their number an audit committee, a conduct review committee and an investment committee to carry out the duties and exercise the powers imposed or conferred on them by this Act and the regulations.

(2)  Each committee appointed under subsection (1) shall consist of at least 3 members, and at least 2/3 of the members on the audit committee and the conduct review committee shall be unaffiliated directors.

(3)  A committee appointed under subsection (1) shall not transact any business at a meeting unless a majority of the members present at the meeting are unaffiliated directors.

1991 cL‑26.5 s127

Irregularities

128   An act of the board of directors, a committee, a director or an officer of a provincial corporation is valid notwithstanding

                                 (a)    an irregularity in the election or appointment, or

                                 (b)    a defect in the qualifications

of a director or officer.

1991 cL‑26.5 s128

Resolution instead of meeting

129(1)  A resolution in writing signed by all the directors of a provincial corporation entitled to vote on that resolution at a meeting of directors or a committee of directors is as valid as if it had been passed at a meeting of directors or a committee of directors.

(2)  A resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of directors or a committee of directors of a provincial corporation and signed by all the directors entitled to vote at that meeting satisfies all the requirements of this Act relating to meetings of directors or committees of directors.

(3)  A provincial corporation shall keep a copy of every resolution referred to in subsections (1) and (2) with the minutes of the proceedings of the directors or committee of directors.

1991 cL‑26.5 s129

Disclosure of interest

130(1)  This section applies to a director or officer of a provincial corporation who

                                 (a)    is required by section 176 to make a disclosure, or

                                 (b)    is a director or officer of, or holds or beneficially owns 10% or more of the issued and outstanding shares of, a body corporate that is or is to be a party to a material contract or proposed material contract with the provincial corporation, whether or not other persons are or will also be parties to the contract.

(2)  A director or officer described in subsection (1) shall, forthwith after becoming aware of the facts that bring the director or officer within the application of subsection (1), disclose in writing to the provincial corporation in detail, and request to have entered in the minutes of a board meeting, the nature of the transaction, guarantee or material contract, the nature and extent of the director’s or officer’s relationship with it and with any person referred to in subsection (1)(b) and the interest of any such person in the material contract.

(3)  The director or officer shall not

                                 (a)    vote or attempt in any way to influence the voting on any resolution to approve the transaction, guarantee or material contract, or

                                 (b)    be present while the subject‑matter of the resolution is being discussed or the vote is being conducted.

(4)  Where the director or officer complies with subsection (2) and the transaction, guarantee or material contract is approved by resolution of the board, is reasonable and fair to the provincial corporation or the subsidiary at the time it is so approved and does not contravene Part 10,

                                 (a)    the transaction, guarantee or material contract is neither void nor voidable by reason only of the circumstances bringing the director or officer within the application of subsection (1), or by reason only that the director or officer was present at or was counted to determine the presence of a quorum at any meeting that authorized the transaction, guarantee or material contract, and

                                 (b)    if a profit accrues to the director or officer as a result of the making of the transaction, guarantee or material contract, the director or officer is not liable to account to the provincial corporation for that profit by reason only of the circumstances bringing the director or officer within the application of subsection (1).

(5)  If a person who is required to comply with this section fails to do so, the Court may, on the application of the provincial corporation or a shareholder of the corporation, set aside the transaction on any terms it thinks fit.

(6)  Nothing in this section entitles any person to enter into any transaction into which the person is not otherwise legally entitled to enter.

1991 cL‑26.5 s130

Liability of directors and others

131(1)  Directors of a provincial corporation who vote for or consent to a resolution authorizing the issue of a share for a consideration other than money are jointly and severally liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution.

(2)  Subsection (1) does not apply if the shares are, on allotment, held in escrow pursuant to an escrow agreement required by the Executive Director and are surrendered for cancellation pursuant to that agreement.

(3)  A director is not liable under subsection (1) if the director proves that the director did not know and could not reasonably have known that the share was issued for a consideration less than the fair equivalent of the money that the provincial corporation would have received if the share had been issued for money.

(4)  Directors of a provincial corporation who vote for or consent to a resolution authorizing

                                 (a)    an investment, transaction or guarantee that is contrary to Part 9, 10 or 11 and involves any payment or distribution of property by the provincial corporation,

                                 (b)    a purchase, redemption or other acquisition of shares contrary to section 63, 64 or 65,

                                 (c)    a reduction in the stated capital of the corporation contrary to section 67,

                                 (d)    the payment of a commission contrary to section 71,

                                 (e)    the payment of a dividend contrary to section 72,

                                  (f)    the payment of an indemnity contrary to section 135,

                                 (g)    a payment to a shareholder contrary to an order under section 293,

                                 (h)    a payment contrary to section 25, or

                                  (i)    any other payment to a shareholder, director or officer the effect of which is to reduce the capital base of the corporation to an amount that is less than that required under this Act,

are jointly and severally liable to restore to the corporation any amounts so paid and the value of any property so distributed and not otherwise recovered by it.

(5)  A director is not liable under subsection (4)(a) if the director proves that the director did not know and could not reasonably have known that the investment, transaction or guarantee was contrary to Part 9, 10 or 11.

(6)  A director who has satisfied a judgment rendered under this section is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded.

(7)  If money or property of a provincial corporation is paid or distributed to a shareholder or other recipient contrary to any of the provisions referred to in subsection (4), the corporation, any director or shareholder of the corporation, or any person who was a creditor of the corporation at the time of the payment or distribution, is entitled to apply to the Court for an order under subsection (8).

(8)  On an application under subsection (7), the Court may, if it is satisfied that it is equitable to do so, do any or all of the following:

                                 (a)    order a shareholder or other recipient to restore to the provincial corporation any money or property that was paid or distributed to the shareholder or other recipient contrary to any of the provisions referred to in subsection (4);

                                 (b)    order the provincial corporation to return or issue shares to a person from whom the corporation has purchased, redeemed or otherwise acquired shares;

                                 (c)    make any further order it considers appropriate.

(9)  A director who relies in good faith on

                                 (a)    financial statements of the provincial corporation represented to the director by an officer of the corporation or in a written report of the auditor of the corporation as fairly reflecting the financial condition of the corporation, or

                                 (b)    an opinion or report of a professional advisor

is not liable under this section or section 132.

(10)  No action under subsection (1) or (4) shall be commenced more than 2 years after the facts on which the action is based first came to the attention of the plaintiff.

1991 cL‑26.5 s131;1995 c28 s70

Duty of care of directors and officers

132(1)  Every director and officer of a provincial corporation, in exercising powers and in discharging duties,

                                 (a)    shall act honestly and in good faith with a view to the best interests of the corporation, and

                                 (b)    shall exercise the care, diligence and skill that a reasonably prudent person would exercise under comparable circumstances.

(2)  In considering whether a particular transaction or course of action is in the best interests of the provincial corporation,

                                 (a)    a director or officer shall have due regard to the interests of the depositors, the shareholders and the persons for whom the corporation acts in a fiduciary capacity, and

                                 (b)    a director who is elected or appointed by the holders of a class or series of shares may give special, but not exclusive, consideration to the interests of those holders.

(3)  Every director and officer of a provincial corporation shall comply with this Act and the regulations and the corporation’s instrument of incorporation and bylaws.

1991 cL‑26.5 s132

Relief from duty ineffective

133   No provision in a contract, the instrument of incorporation, the bylaws or a resolution relieves a director or officer of a provincial corporation from the duty to act in accordance with this Act and the regulations or relieves the director or officer from liability for a breach of either of them.

1991 cL‑26.5 s133

Dissent by director

134(1)  A director of a provincial corporation who is present at a meeting of directors or a committee of directors is deemed to have consented to any resolution passed or action taken at the meeting unless the director

                                 (a)    requests that the director’s abstention or dissent be, or the director’s abstention or dissent is, entered in the minutes of the meeting,

                                 (b)    sends the director’s written dissent to the secretary of the meeting before the meeting is adjourned,

                                 (c)    sends the director’s dissent by registered mail or delivers it to the principal place of business of the corporation immediately after the meeting is adjourned, or

                                 (d)    otherwise proves that the director did not consent to the resolution or action.

(2)  A director who votes for or consents to a resolution or action is not entitled to dissent under subsection (1).

1991 cL‑26.5 s134

Indemnification

135(1)  Except in respect of an action by or on behalf of the provincial corporation or body corporate to procure a judgment in its favour, a provincial corporation may, by resolution of the board, indemnify a present or former director or officer of the corporation or a person who acts or acted at the corporation’s request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and that person’s heirs and legal representatives, against costs, charges and expenses, including any amount paid to settle an action or satisfy a judgment, reasonably incurred by that person with respect to a civil, criminal or administrative action or proceeding to which that person is made a party by reason of holding that person’s position if

                                 (a)    that person acted honestly, in good faith and with a view to the best interests of the corporation, and

                                 (b)    in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, that person had reasonable grounds for believing that the conduct was lawful.

(2)  A provincial corporation may, with the approval of the Court, indemnify a person referred to in subsection (1) in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favour to which that person is made a party by reason of holding that person’s position, against all costs, charges and expenses reasonably incurred by that person in connection with the action if that person fulfils the conditions set out in subsection (1)(a) and (b).

(3)  Notwithstanding anything in this section, a person referred to in subsection (1) is entitled to indemnity from the provincial corporation in respect of all costs, charges and expenses reasonably incurred by the person with respect to the defence of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of holding the person’s position if the person

                                 (a)    was substantially successful on the merits in the person’s defence of the action or proceeding,

                                 (b)    fulfils the conditions set out in subsection (1)(a) and (b), and

                                 (c)    is fairly and reasonably entitled to indemnity.

(4)  A provincial corporation may purchase and maintain insurance for the benefit of any person referred to in subsection (1) against any liability incurred by the person

                                 (a)    in the person’s capacity as a director or officer of the corporation, except when the liability relates to the person’s failure to act honestly and in good faith with a view to the best interests of the corporation, or

                                 (b)    in the person’s capacity as a director or officer of another body corporate if the person acts or acted in that capacity at the corporation’s request, except when the liability relates to the person’s failure to act honestly and in good faith with a view to the best interests of the body corporate.

(5)  A provincial corporation or a person referred to in subsection (1) may apply to the Court for an order approving an indemnity under this section, and the Court may so order and make any further order it considers appropriate.

(6)  An applicant under subsection (5) shall give the Minister notice of the application, and the Minister is entitled to appear and be heard.

(7)  On an application under subsection (5), the Court may order notice to be given to any interested person, and that person is entitled to appear and be heard in person or by counsel.

1991 cL‑26.5 s135

Remuneration of directors

136(1)  A provincial corporation shall make bylaws respecting the remuneration of directors.

(2)  Subject to the bylaws, a provincial corporation may provide remuneration to its directors.

1991 cL‑26.5 s136

Records of meetings

137(1)  A provincial corporation shall keep a record of the total number of meetings of the directors and of the audit, conduct review and investment committees and the number of meetings attended by each director.

(2)  A provincial corporation shall send a summary of the record kept under subsection (1) to the Minister and to each shareholder with the notice of the annual meeting.

1991 cL‑26.5 s137

Part 7
Insider Trading

Definitions

138   In this Part,

                                 (a)    “insider� means, with respect to a provincial corporation,

                                           (i)    the corporation, in respect of the purchase or other acquisition by it of shares issued by it or any of its affiliates,

                                          (ii)    a director or officer of the corporation,

                                         (iii)    a person who, with respect to at least 10% of the voting rights attached to the voting shares of the corporation,

                                                 (A)    beneficially owns voting shares carrying those voting rights,

                                                  (B)    exercises control or direction over those voting rights, or

                                                  (C)    beneficially owns voting shares carrying some of those voting rights and exercises control or direction over the remainder of those voting rights,

                                         (iv)    a person employed by the corporation or retained by it on a professional or consulting basis,

                                          (v)    an affiliate of the corporation,

                                         (vi)    a person who receives specific confidential information from a person described in this clause or in section 140 and who has knowledge that the person giving the information is a person described in this clause or in section 140, and

                                        (vii)    a person who receives specific confidential information from the first‑mentioned person in subclause (vi) and who has knowledge that that person received that knowledge in the manner described in that subclause;

                                 (b)    “provincial corporation� does not include a provincial corporation that is a reporting issuer.

1991 cL‑26.5 s138

Deemed insiders

139   For the purposes of this Part,

                                 (a)    a director or an officer of a body corporate that is an insider of a provincial corporation is deemed to be an insider of the corporation,

                                 (b)    a director or an officer of a subsidiary of a provincial corporation is deemed to be an insider of the corporation,

                                 (c)    a person is deemed to own beneficially shares beneficially owned by a body corporate controlled by the person directly or indirectly, and

                                 (d)    a body corporate is deemed to own beneficially shares beneficially owned by its affiliates.

1991 cL‑26.5 s139

Deemed insiders

140(1)  In this section, “business combinationâ€? means an acquisition of all or substantially all the assets of one body corporate by another or an amalgamation of 2 or more bodies corporate.

(2)  For the purposes of this Part,

                                 (a)    if a body corporate becomes an insider of a provincial corporation or enters into a business combination with the corporation, a director or officer of the body corporate is deemed to have been an insider of the corporation for the preceding 6 months or for any shorter period during which that person was a director or officer of the body corporate, and

                                 (b)    if a provincial corporation becomes an insider of a body corporate or enters into a business combination with a body corporate, a director or an officer of the body corporate is deemed to have been an insider of the corporation for the preceding 6 months or for any shorter period during which that person was a director or officer of the body corporate.

1991 cL‑26.5 s140

Civil liability of insiders

141(1)  An insider who sells to or purchases from a shareholder of a provincial corporation or of any of its affiliates a security of the corporation or of any of its affiliates and in connection with that sale or purchase makes use of any specific confidential information for the insider’s own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security

                                 (a)    is liable to compensate any person for any direct loss suffered by that person as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to that person at the time of the transaction, and

                                 (b)    is accountable to the corporation for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

(2)  An action to enforce a right created by this section may be commenced only within 2 years after the date of completion of the transaction that gave rise to the cause of action.

1991 cL‑26.5 s141

Part 8
Auditors and Financial Statements

Qualifications of auditor

142(1)  A person is disqualified from being an auditor of a provincial corporation unless the person

                                 (a)    is

                                           (i)    an individual permitted by law to engage in an audit, otherwise than under the direct supervision of another person, that is intended to be relied on by third parties, or

                                          (ii)    a firm on whose behalf individuals referred to in subclause (i) engage in such audits,

                                     and

                                 (b)    is independent of

                                           (i)    the corporation and its affiliates, and

                                          (ii)    the directors and officers of the corporation and its affiliates.

(2)  For the purposes of this section,

                                 (a)    independence is a question of fact, and

                                 (b)    a person is deemed not to be independent if

                                           (i)    the person, the person’s partner, the spouse or adult interdependent partner of the person or partner, or a relative of, or a relative of the spouse or adult interdependent partner of, the person or partner who has the same home as the person or partner,

                                                 (A)    is a partner, director or officer of the provincial corporation or any of its affiliates,

                                                  (B)    beneficially owns or exercises control or direction over any of the voting shares of the provincial corporation or any of its affiliates, or

                                                  (C)    has been a receiver, a receiver and manager, a liquidator or a trustee in bankruptcy of the provincial corporation or any of its affiliates within 2 years of that person’s proposed appointment as auditor of the corporation,

                                             or

                                          (ii)    the person or the person’s partner is an employee of the provincial corporation or any of its affiliates.

(3)  No person shall be disqualified from acting as the auditor of a provincial corporation solely on the ground that the person is a depositor in the corporation.

(4)  An auditor who becomes disqualified under this section shall resign forthwith on becoming aware of the disqualification.

(5)  An interested person may apply to the Court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

RSA 2000 cL‑20 s142;2002 cA‑4.5 s51

Appointment of auditor

143(1)  The shareholders of a provincial corporation at their first annual meeting shall appoint an auditor to hold office until the close of the next annual meeting and, if the shareholders fail to do so, the directors shall forthwith make the appointment.

(2)  The shareholders of a provincial corporation shall at each annual meeting appoint an auditor to hold office until the close of the next annual meeting and, if an appointment is not so made, the auditor in office continues in office until a successor is appointed.

(3)  The remuneration of the auditor may be fixed by resolution of the shareholders or, if not so fixed, may be fixed by the directors.

1991 cL‑26.5 s143

Auditor ceasing to hold office

144(1)  An auditor ceases to hold office when the auditor

                                 (a)    dies or resigns, or

                                 (b)    is removed pursuant to section 145.

(2)  A resignation of an auditor becomes effective at the time a written resignation is received by the provincial corporation or at the time specified in the resignation, whichever is later.

1991 cL‑26.5 s144

Removal of auditor

145(1)  The shareholders of a provincial corporation may by ordinary resolution at a special meeting remove the auditor from office, other than an auditor appointed by the Court under section 148.

(2)  A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 146.

1991 cL‑26.5 s145

Filling vacancies

146(1)  Subject to subsection (3), the directors shall forthwith fill a vacancy in the office of auditor.

(2)  If there is not a quorum of directors, the directors then in office shall, within 21 days after a vacancy in the office of auditor occurs, call a special meeting of shareholders to fill the vacancy, and if they fail to call a meeting or if there are no directors, the meeting may be called by any shareholder.

(3)  The bylaws of a provincial corporation may provide that a vacancy in the office of auditor may be filled only by vote of the shareholders.

1991 cL‑26.5 s146

Term of office

147   An auditor appointed to fill a vacancy holds office for the unexpired term of the auditor’s predecessor.

1991 cL‑26.5 s147

Court-appointed auditor

148   If a provincial corporation does not have an auditor, the Court may, on the application of a shareholder or, if the corporation is a reporting issuer, the Executive Director, appoint an auditor to hold office until an auditor is appointed by the shareholders, and fix the remuneration of that auditor.

1991 cL‑26.5 s148;1995 c28 s70

Notice to Minister

149   A provincial corporation shall give notice to the Minister forthwith on the appointment of a person as auditor or the occurrence of a vacancy in the office of auditor.

1991 cL‑26.5 s149

Rights and liabilities of auditor and former auditor

150(1)  The auditor of a provincial corporation is entitled to receive notice of every meeting of shareholders and, at the expense of the corporation, may attend and be heard at any such meeting on matters relating to the auditor’s duties as auditor.

(2)  If any director or shareholder of a provincial corporation, whether or not the shareholder is entitled to vote at the meeting, gives written notice at least 10 days before a meeting of shareholders to the auditor or a former auditor of the corporation, the auditor or former auditor shall attend the meeting at the expense of the corporation and answer questions relating to the auditor’s duties as auditor or the former auditor’s former duties as auditor, as the case may be.

(3)  A director or shareholder who sends a notice referred to in subsection (2) shall concurrently send a copy of the notice to the provincial corporation.

(4)  An auditor is not required to comply with subsection (2) where the audit committee is satisfied that the request under subsection (2) is made primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the provincial corporation or any of its directors, officers or security holders, or for a purpose that is not related in any significant way to the duties of the auditor.

(5)  The auditor is entitled to attend and be heard at meetings of the board of directors on matters relating to the auditor’s duties as auditor.

(6)  The board of directors, the conduct review committee and the audit committee of a provincial corporation shall give reasonable notice of their meetings to the auditor.

(7)  No person shall accept an appointment or consent to be appointed as auditor of a provincial corporation if the person is replacing an auditor who has resigned or been removed, or whose term of office has expired or is about to expire, until the person has requested and received from that auditor a written statement of the circumstances surrounding and the reasons, in that auditor’s opinion, for the replacement.

(8)  Notwithstanding subsection (7), a person who is otherwise qualified may accept appointment or consent to be appointed as auditor of a provincial corporation if, within 15 days after making the request referred to in that subsection, the person does not receive the statement.

(9)  A person receiving a statement under subsection (7) shall forthwith deliver a copy of the statement to the Minister and, if no statement is received from the auditor from whom a statement is requested within 15 days after making the request, the person requesting the statement shall promptly give notice to the Minister of that fact.

(10)  Any interested person may apply to the Court for an order declaring the office of auditor of a provincial corporation to be vacant if the auditor fails to comply with subsection (7), unless subsection (8) applies.

1991 cL‑26.5 s150

Auditor’s statement privileged

151(1)  An auditor or former auditor who in good faith makes an oral or written statement or report under this Act shall not be liable in any civil action arising from the statement or report.

(2)  Subsection (1) does not relieve an auditor or former auditor from liability in connection with the auditor’s or former auditor’s report on the financial statements referred to in section 156.

1991 cL‑26.5 s151

Auditor’s duty to examine

152(1)  The auditor of a provincial corporation shall conduct an audit of the financial statements of the corporation and its subsidiaries for the preceding fiscal year and shall make the examination that in the auditor’s opinion is necessary to enable the auditor to make the report on them.

(2)  On the demand of the auditor of a provincial corporation, the present and former directors, officers, employees and agents of the corporation and any of its subsidiaries and holding bodies corporate, and the former auditors of the corporation, its subsidiaries and holding bodies corporate, shall furnish any

                                 (a)    information and explanations, and

                                 (b)    access to records, documents, books, accounts and vouchers of the corporation or any of its subsidiaries or holding bodies corporate

that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report referred to in subsection (1) and that the directors, officers, employees, agents and former auditors are reasonably able to furnish.

(3)  On the demand of the auditor of a provincial corporation, the directors of the corporation shall

                                 (a)    to the extent that they are reasonably able to do so, obtain from the present and former directors, officers, employees, agents and auditors of any subsidiary or holding body corporate of the corporation the information and explanations that the present or former directors, officers, employees, agents or auditors are reasonably able to furnish and that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report referred to in subsection (1), and

                                 (b)    furnish the information and explanations so obtained to the auditor.

1991 cL‑26.5 s152

Protection from liability

153   A person who in good faith makes an oral or written communication under section 152(2) or (3) shall not be liable in any civil action arising from it.

1991 cL‑26.5 s153

Errors and misstatements

154(1)  A director or an officer of a provincial corporation shall forthwith notify the audit committee and the auditor, or the former auditor if applicable, of any error or misstatement of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on, if the error or misstatement appears to the director or officer to be material.

(2)  If the auditor or a former auditor of a provincial corporation is notified or becomes aware of an error or misstatement in a financial statement on which the auditor or former auditor has reported, and if in the auditor’s or former auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director and the Minister.

(3)  When under subsection (2) the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall prepare and issue revised financial statements or otherwise inform the shareholders.

1991 cL‑26.5 s154

Auditor to report changes

155(1)  Where the auditor of a provincial corporation considers that there has been a change in the circumstances of the corporation or of any of its subsidiaries that might reasonably be expected to affect the financial position of the corporation materially and adversely, the auditor shall, in accordance with the regulations, forthwith report in writing to the corporation’s audit committee and to the Minister what the auditor considers to be the circumstances that constitute that change and why the auditor considers that those circumstances constitute such a change.

(2)  An auditor is not required to make a report under this section unless the auditor becomes aware of the change or contravention described in subsection (1) in the ordinary course of the auditor’s duties as auditor.

1991 cL‑26.5 s155

Annual financial statements

156(1)  The directors of a provincial corporation shall place before each annual meeting of shareholders

                                 (a)    annual financial statements of the provincial corporation for the fiscal year preceding the annual meeting and the auditor’s report on them, and

                                 (b)    any other documents or information required by the corporation’s instrument of incorporation or bylaws or by this Act or the regulations.

(2)  Where, as a result of the application of section 157, the financial statements required by subsection (1) are required to be on a consolidated basis, subsection (1) shall be interpreted as also requiring, where the provincial corporation is a holding body corporate or a subsidiary, separate financial statements and auditor’s report in respect of them.

1991 cL‑26.5 s156

Generally accepted accounting principles and auditing standards

157(1)  Subject to this Act, the regulations and any order of the Minister under subsection (3),

                                 (a)    with respect to the preparation of the financial statements of a provincial corporation, the provincial corporation and any other person responsible for their preparation shall apply generally accepted accounting principles, including the accounting recommendations of the Canadian Institute of Chartered Accountants set out in the Handbook published by that Institute as amended from time to time, and

                                 (b)    with respect to the auditor’s examination of the financial statements of a provincial corporation for the purposes of the auditor’s report, and with respect to the report itself, the auditor shall apply generally accepted auditing standards, including the auditing recommendations contained in that Handbook, as so amended.

(2)  Notwithstanding subsection (1)(a), the Minister may prescribe policies or rules that are to apply with respect to the preparation of the financial statements of a provincial corporation, and a person referred to in subsection (1) shall apply those policies or rules accordingly.

(3)  The Minister may order a provincial corporation to apply or ensure that there are applied any accounting principles, policies or rules that are specified or referred to in the order instead of generally accepted accounting principles or instead of policies or rules contained in regulations made with reference to subsection (2).

(4)  The Minister may order a provincial corporation to ensure that its auditor

                                 (a)    applies any auditing procedures additional to those contained in generally accepted auditing standards, or

                                 (b)    prepares any audit reports additional to the reports required by subsection (1)(b)

that are specified or referred to in the order.

(5)  The Regulations Act does not apply to generally accepted accounting principles or auditing standards, or to policies, rules or procedures specified or referred to in an order under subsection (3) or (4).

1991 cL‑26.5 s157

Approval of annual financial statements

158(1)  The directors of a provincial corporation shall approve the annual financial statements of the corporation, and the approval shall be evidenced by the signature of 2 or more directors.

(2)  One of the directors signing the annual financial statements under subsection (1) must be a member of the audit committee.

(3)  A provincial corporation shall not issue, publish or circulate copies of its annual financial statements unless the financial statements are

                                 (a)    approved and signed in accordance with subsections (1) and (2), and

                                 (b)    accompanied with the report of the auditor of the corporation.

1991 cL‑26.5 s158

Copies of financial statements ‑ provincial corporation

159(1)  A provincial corporation shall, not less than 21 days before each annual meeting of shareholders or before the signing of a resolution under section 95 instead of the annual meeting, send a copy of the material referred to in section 156 to each shareholder, except to a shareholder who has informed the corporation in writing that the shareholder does not wish to receive a copy of it.

(2)  Subject to subsection (3), a provincial corporation shall, without charge, send or deliver a copy of the material referred to in section 156 to every depositor of the corporation who in writing requests a copy.

(3)  Where as a result of the application of section 157 the annual financial statements referred to in section 156 are on a consolidated basis, subsection (2), insofar as it applies to financial statements, applies only to the consolidated financial statements.

1991 cL‑26.5 s159

Copies of financial statements ‑ registered
extra-provincial corporation

160(1)  Subject to subsection (2), a registered extra‑provincial corporation shall, on the written request of a depositor of the corporation who has a deposit in a branch of the corporation in Alberta, send or deliver a copy of its most recent annual financial statements and auditor’s report to the depositor without charge.

(2)  Where the annual financial statements referred to in subsection (1) are prepared on a consolidated basis, subsection (1) applies only to the consolidated financial statements.

1991 cL‑26.5 s160

Duties of audit committee

161(1)  The audit committee of a provincial corporation shall meet at least twice each year to review

                                 (a)    any annual financial statements distributed to the shareholders,

                                 (b)    the annual return of the corporation sent to the Minister under section 46,

                                 (c)    matters under section 150(4),

                                 (d)    all reports of the auditor under section 155, and

                                 (e)    any reports or transactions required by the regulations to be reviewed by the audit committee.

(2)  In the case of statements and returns that under this Act must be approved by the board of directors of a provincial corporation, the audit committee shall report to the board on those statements and returns before the approval is given.

(3)  The auditor of a provincial corporation is entitled to attend and be heard at all meetings of the audit committee and shall attend at least one of its meetings each year.

(4)  The auditor, a member of the audit committee or a director may call a meeting of the audit committee at any time.

1991 cL‑26.5 s161

Part 9
Restricted Party Transactions

Interpretation

162(1)  This Part does not apply to a provincial trust corporation whose registration is subject to a term, condition or restriction prohibiting it from carrying on the deposit‑taking business, except to the extent that this Part is made applicable by the regulations.

(2)  In this Part, “guaranteeâ€? includes an acceptance, indemnity, letter of credit, endorsement or standby letter of credit, repurchase agreement or similar arrangement issued or made by a provincial corporation or its subsidiary on behalf of a restricted party of the provincial corporation.

(3)  For the purposes of this Part, a transaction, guarantee or investment is made or entered into if an existing transaction, guarantee or investment, including one made or entered into before January 16, 1992, is modified, added to, extended or renewed.

(4)  Where a transaction is required by or under this Part to be at fair market rate, that requirement is satisfied, subject to subsection (5), if the transaction is not at fair market rate but is at a rate and terms that are more financially advantageous to the provincial corporation or subsidiary than actual fair market rate.

(5)  Subsection (4) does not apply where the transaction is between a provincial corporation or its subsidiary and an affiliate of the corporation.

1991 cL‑26.5 s162

Designation of restricted party

163(1)  For the purposes of this Part, the Minister may

                                 (a)    designate any person as a restricted party of a provincial corporation if the Minister is of the opinion that

                                           (i)    the person is acting or has acted jointly or in concert with a restricted party of the corporation with respect to the entering into of a transaction, guarantee or investment that would be prohibited or restricted under this Part if entered into by or with respect to the restricted party, or

                                          (ii)    there exists or has existed between the person and the corporation an interest or relationship that might reasonably be expected to affect or that has affected the exercise by the corporation of its best judgment with respect to a transaction, guarantee or investment,

                                     and

                                 (b)    designate as restricted parties of a provincial corporation 2 or more persons who have agreed, pursuant to any agreement, commitment or understanding, whether formal or informal, oral or written, to act jointly or in concert in respect of

                                           (i)    shares of the corporation that they beneficially own,

                                          (ii)    shares or ownership interests that they beneficially own of any entity that beneficially owns shares of the corporation, or

                                         (iii)    shares or ownership interests that they beneficially own of any entity that controls any entity that beneficially owns shares of the corporation.

(2)  Without limiting the generality of subsection (1)(b), any agreement, commitment or understanding by or between 2 or more persons referred to in subsection (1)(b)

                                 (a)    whereby any of them or their nominees may veto any proposal put before the board of directors of the corporation, or

                                 (b)    pursuant to which no proposal put before the board of directors of the corporation may be approved except with the consent of any of them or their nominees,

is deemed to be an agreement, commitment or understanding referred to in subsection (1)(b).

(3)  For the purposes of subsection (1)(b), persons shall not be presumed to have agreed to act jointly or in concert solely by reason of the fact that

                                 (a)    one is the proxyholder of one or more of the others in respect of shares or ownership interests referred to in subsection (1)(b), or

                                 (b)    they vote the voting rights attached to shares or ownership interests referred to in subsection (1)(b) in the same manner.

(4)  On application by the restricted party or the provincial corporation affected by a designation made under subsection (1), the Minister may revoke the designation.

1991 cL‑26.5 s163

Prohibited transactions, guarantees and investments

164(1)  Except as provided in this Act,

                                 (a)    no provincial corporation or its subsidiary shall, directly or indirectly, enter into any transaction with a restricted party of the corporation,

                                 (b)    no restricted party of a provincial corporation shall, directly or indirectly, enter into any transaction with the corporation or its subsidiary,

                                 (c)    no provincial corporation or its subsidiary shall, directly or indirectly, enter into any guarantee on behalf of a restricted party of the corporation, and

                                 (d)    no provincial corporation or its subsidiary shall, directly or indirectly, make an investment in any securities of a restricted party of the corporation.

(2)  This Part does not apply to

                                 (a)    the payment of remuneration

                                           (i)    to the auditor of a provincial corporation, or

                                          (ii)    to the directors of a provincial corporation or its subsidiary if the remuneration has been approved by the shareholders of the corporation or subsidiary,

                                     or

                                 (b)    the granting of indemnification in accordance with section 135.

1991 cL‑26.5 s164

Person previously a restricted party

165(1)  No provincial corporation or its subsidiary shall, directly or indirectly, during the 12‑month period after a person ceases to be a restricted party of the corporation,

                                 (a)    enter into any transaction with,

                                 (b)    enter into any guarantee on behalf of, or

                                 (c)    make an investment in any securities of

that person that would have been prohibited or that would have required the prior approval of the board of directors of the corporation had that person been a restricted party of the corporation at the time of the transaction, guarantee or investment, unless the proposed transaction, guarantee or investment has been authorized by the board of directors of the corporation and is at fair market rate.

(2)  A person referred to in subsection (1) shall disclose in writing to the provincial corporation the nature of the person’s interest in that transaction, guarantee or investment forthwith after becoming aware of the facts that bring the person within the application of that subsection.

(3)  The board of directors of the provincial corporation shall ensure that a disclosure under subsection (2) is entered in the minutes of the first board meeting held after the making of the disclosure.

1991 cL‑26.5 s165

Type of approval required

166   Where this Part requires that a transaction, guarantee or investment have the prior approval of the board of directors of a provincial corporation, the approval must be given in writing and in accordance with procedures established under section 175, and the approval may be given with respect to a specific transaction, guarantee or investment or with respect to a class of transactions, guarantees or investments.

1991 cL‑26.5 s166

Board approval required ‑ general

167   Subject to the prior approval of the board of directors of a provincial corporation, the corporation or its subsidiary may

                                 (a)    enter into a written contract with a restricted party for the provision of management services to or by the corporation or subsidiary if it is reasonable that the corporation or the subsidiary obtain or supply the services, and so long as the consideration is reasonable for the services provided and is at fair market rate,

                                 (b)    enter into a written lease of real estate or personal property with a restricted party so long as

                                           (i)    the rent is at fair market rate,

                                          (ii)    the term of the lease and all renewals does not exceed

                                                 (A)    5 years in the case of a lease of personal property, or

                                                  (B)    20 years in the case of a lease of real estate,

                                             and

                                         (iii)    the terms of the lease are otherwise competitive and reasonable,

                                 (c)    enter into a written contract with a restricted party at fair market rate for pension and benefit plans, stock options, incentive benefits and other reasonable commitments incidental to employment,

                                 (d)    enter into a written contract with a restricted party respecting the provision of goods or services, or providing for a networking arrangement for the provision of goods and services, other than management services, so long as the price paid for those goods or services is at fair market rate and the term of the contract and all renewals does not exceed 5 years in total,

                                 (e)    acquire from or sell to a restricted party prescribed securities, other than securities issued by the restricted party, so long as the transaction is at fair market rate,

                                  (f)    acquire beneficial ownership of shares of a body corporate as permitted by section 207(4),

                                 (g)    make a loan to or guarantee the obligations of an entity, other than a financial institution, in which the corporation beneficially owns shares as permitted by section 207(4), if the loan or guarantee is at fair market rate and meets prescribed conditions, and

                                 (h)    enter into any other transaction that the regulations permit it to enter into with the prior approval of the board of directors of the corporation.

1991 cL‑26.5 s167

Board approval not required ‑ general

168(1)  A provincial corporation or a subsidiary of the corporation, without the prior approval of the board of directors of the corporation, may

                                 (a)    enter into a transaction with a restricted party that involves minor or general expenditures by the corporation or the subsidiary,

                                 (b)    enter into a transaction with a restricted party for

                                           (i)    the sale of goods, or

                                          (ii)    the provision of financial services

                                          that are normally sold or provided to the public by the corporation or the subsidiary in the ordinary course of business, so long as the prices and rates charged by the corporation or subsidiary are at fair market rate,

                                 (c)    enter into a transaction by which it takes a deposit from a restricted party, other than a financial institution, so long as the deposit is made at fair market rate, and

                                 (d)    enter into any other transaction that the regulations permit it to enter into without the prior approval of the board of directors of the corporation.

(2)  The conduct review committee of a provincial corporation shall, subject to any prescribed limits, develop criteria as to what constitutes minor or general expenditures for the purposes of subsection (1)(a).

1991 cL‑26.5 s168;1992 c21 s24

Directors, officers, employees, etc.

169(1)  Subject to the prior approval of the board of directors of a provincial corporation, the corporation or its subsidiary may

                                 (a)    make a loan to

                                           (i)    a director, officer or prescribed employee of the corporation,

                                          (ii)    the spouse or adult interdependent partner of a director or officer of the corporation, or

                                         (iii)    a relative of, or a relative of the spouse or adult interdependent partner of, a director or officer of the corporation who has the same home as the director or officer

                                          on the security of the residence of the person to whom the loan is made if the loan qualifies as an investment under section 201 and, except in the case of a loan to a prescribed employee, an officer or a director who is an officer or prescribed employee, the loan is at fair market rate,

                                 (b)    make a personal loan to

                                           (i)    an officer or a prescribed employee of the corporation,

                                          (ii)    the spouse or adult interdependent partner of an officer of the corporation, or

                                         (iii)    a relative of, or a relative of the spouse or adult interdependent partner of, an officer of the corporation who has the same home as the officer

                                          if the loan qualifies as an investment under section 199 and, except in the case of a loan to an officer or prescribed employee of the corporation, the loan is at fair market rate,

                                 (c)    enter into an employment contract with a director or officer of the corporation or subsidiary, and

                                 (d)    enter into any other transaction with a person referred to in this subsection that the regulations permit it to enter into with the prior approval of the board of directors of the corporation.

(2)  For the purposes of subsection (1)(b)(i), “officerâ€? and “prescribed employeeâ€? include a director who is also an officer or prescribed employee.

(3)  Notwithstanding subsection (1)(a) and (b), a provincial corporation or its subsidiary may make a loan to a prescribed employee of the corporation who is not a director or officer of it without obtaining the approval of the board of directors of the corporation if the loan qualifies as an investment under section 201 or 199, as the case may be, and does not exceed the prescribed amount.

RSA 2000 cL‑20 s169;2002 cA‑4.5 s51

Financial institutions

170(1)  A provincial corporation or a subsidiary of the corporation may, with the prior approval of the board of directors of the corporation,

                                 (a)    make a loan to a restricted party that is a financial institution in which the corporation beneficially owns shares as permitted under section 207(4), if the loan is at fair market rate, is fully secured by securities that meet prescribed qualifications and is for prescribed purposes,

                                 (b)    enter into a transaction with a restricted party that is a financial institution if the transaction consists of a disposition by the corporation or subsidiary of assets for which the consideration is fully paid in money and is at fair market rate,

                                 (c)    guarantee the obligations of a restricted party that is a financial institution, and

                                 (d)    enter into any other transaction with a restricted party that is a financial institution that the regulations permit it to enter into with the prior approval of the board of directors of the corporation.

(2)  A provincial corporation or a subsidiary of the corporation may, without the approval of the board of directors of the corporation, enter into a transaction with a restricted party that is a financial institution if

                                 (a)    the transaction consists of a deposit made at fair market rate and for a prescribed purpose, or

                                 (b)    the transaction consists of the acquisition at fair market rate of prescribed securities from a securities dealer who is not an underwriter within the meaning of the Securities Act in the distribution of those securities and is not selling them as their principal.

1991 cL‑26.5 s170

Prescribed limits

171   No provincial corporation or subsidiary shall enter into a transaction or guarantee or make an investment under this Part in excess of the prescribed limits.

1991 cL‑26.5 s171

Consent to prohibited or restricted transaction

172   The Minister may give prior consent to a provincial corporation or its subsidiary to

                                 (a)    enter into a transaction or class of transactions with,

                                 (b)    enter into a guarantee or class of guarantees on behalf of, or

                                 (c)    make an investment in securities or a class of securities of,

a restricted party of the corporation that would otherwise be prohibited or restricted by this Act or the regulations if the Minister is satisfied that the transaction, guarantee or investment is in the best interests of the corporation and is not prejudicial to the interests of its depositors or persons in respect of whom the corporation acts in a fiduciary capacity and would not contravene section 173.

1991 cL‑26.5 s172

Transaction involving trust and estate funds

173(1)  A provincial trust corporation shall not participate in or enter into a transaction with a restricted party or a guarantee on behalf of a restricted party using funds, other than deposits, held by the corporation as a fiduciary.

(2)  Except as provided in this section, a provincial trust corporation shall not invest funds, other than deposits, held by the corporation as a fiduciary in securities of the corporation or its restricted parties.

(3)  A provincial trust corporation may act as a fiduciary of a trust or estate that owns securities of the corporation or its restricted parties if the securities were acquired before the corporation assumed responsibility as a fiduciary.

(4)  Where a provincial trust corporation acts as a fiduciary of a trust or estate holding securities of the corporation,

                                 (a)    the securities shall not be sold or voted, and

                                 (b)    an offer for the securities shall not be refused

except with the approval of the board of directors, and the reasons for those actions shall be entered in the minutes of the next meeting of the board of directors.

(5)  Each year the board of directors shall approve a report on the securities of the provincial trust corporation and its restricted parties held by the corporation as fiduciary, and the reasons for their retention or sale.

(6)  Nothing in this section authorizes a provincial trust corporation to perform any act as a fiduciary that is otherwise prohibited.

(7)  Nothing in this section prevents a provincial trust corporation from

                                 (a)    fulfilling a specific direction or permission of a court or of an instrument creating a fiduciary duty ordering or empowering the corporation to purchase or sell securities of the corporation or its restricted parties or to enter into a transaction with a restricted party or a guarantee on behalf of a restricted party, but a general power to invest in the discretion of the fiduciary shall not be considered to be a specific direction or permission for the purposes of this clause,

                                 (b)    investing funds held by it as a fiduciary in the securities of its restricted parties for which there is a published market within the meaning of the regulations, or

                                 (c)    entering into an investment that a co‑fiduciary or the co‑fiduciaries of the corporation may direct to be made without the agreement of the corporation, where the co‑fiduciary or co‑fiduciaries have made such a direction.

1991 cL‑26.5 s173

Delegation

174(1)  The board of directors may by resolution delegate to a committee of directors the power given to the board under this Part to approve transactions, guarantees or investments.

(2)  Section 127(2) applies to a committee established under subsection (1).

1991 cL‑26.5 s174

Review procedures

175(1)  A provincial corporation shall establish written review and approval procedures to be followed by the corporation to ensure compliance with this Part.

(2)  The procedures referred to in subsection (1) shall deal with at least the following matters:

                                 (a)    the formalities governing transactions, guarantees and investments in respect of a restricted party;

                                 (b)    the obligations of the provincial corporation or subsidiary and the restricted party to disclose information;

                                 (c)    the protection of confidential information held by the provincial corporation or subsidiary relating to its business associates, and the conduct of the corporation or subsidiary in cases where the interests of the corporation or subsidiary or of a person affiliated with either of them may be in conflict with the interests of its business associates.

(3)  The procedures referred to in subsection (1) shall be developed by the conduct review committee and shall be reviewed at least once each year by the conduct review committee.

(4)  The conduct review committee shall report on its review under subsection (3) and shall give its recommendations, if any, with respect to the procedures to the board of directors.

(5)  The procedures shall be subject to the approval of the board of directors and the board, on receipt of any recommendation from the conduct review committee, shall review the procedures and make any changes it considers necessary.

(6)  The auditor of a provincial corporation is entitled to attend and be heard at all meetings of the conduct review committee.

1991 cL‑26.5 s175

Disclosure by restricted party

176(1)  A restricted party of a provincial corporation who knows or has reason to believe that the party is a restricted party of the corporation and proposes to enter into a transaction or guarantee with the corporation or its subsidiary for which the approval of the board of directors of the corporation is required shall disclose in writing to the corporation the nature of the restricted party’s interest in the proposed transaction or guarantee forthwith after becoming aware of the facts that bring the restricted party within the application of this subsection.

(2)  Where the restricted party is a director or officer of the provincial corporation, the disclosure must be made in accordance with section 130.

(3)  Where, with respect to a proposed transaction or guarantee referred to in subsection (1), a provincial corporation knows or has reason to believe that a party is a restricted party of the corporation, the corporation shall take all reasonable steps to obtain from that other party full disclosure in writing of any interest or relationship, direct or indirect, that would make that other party a restricted party of the corporation.

(4)  The board of directors of the provincial corporation shall ensure that a disclosure under subsection (1) or (3) is entered in the minutes of the first board meeting held after the making of the disclosure.

(5)  Where a provincial corporation does not receive full disclosure as required by this section in respect of a proposed transaction or guarantee, the corporation or its subsidiary, as the case may be, shall not enter into the transaction or guarantee.

1991 cL‑26.5 s176

Duty to report contraventions

177(1)  The auditor of a provincial corporation shall promptly report to the board of directors and the Minister any material breach of this Part of which the auditor is aware or is made aware under subsection (2).

(2)  Any person undertaking professional services for a provincial corporation who, in providing the professional services, becomes aware of a breach of this Part shall promptly report the breach to the board of directors and the auditor of the corporation, unless the person has already reported the breach under subsection (1).

(3)  Nothing in this section abrogates any privilege that may exist between a solicitor and the solicitor’s client.

(4)  A person who in good faith makes a report under subsection (1) or (2) shall not be liable in any civil action arising from it.

(5)  Where a provincial corporation or its subsidiary has made an investment or entered into a transaction or guarantee

                                 (a)    that is prohibited under this Part, or

                                 (b)    without the approvals required under this Part,

the provincial corporation shall, on becoming aware of that fact, forthwith notify the auditor and the Minister of that fact.

1991 cL‑26.5 s177

Onus of proof

178   For the purposes of this Part, the onus is on the restricted party and the provincial corporation or its subsidiary to establish that a transaction or guarantee between the corporation or subsidiary and the restricted party or an investment by the corporation or subsidiary in the securities of the restricted party is permitted under this Part.

1991 cL‑26.5 s178

Personal information

178.1(1)  In this section, “personal informationâ€? means personal information as defined in the Personal Information Protection Act other than business contact information to which that Act does not apply by virtue of section 4(3)(d) of that Act.

(2)  For the purposes of complying with this Part and any regulations made under this Act respecting restricted parties, a provincial corporation may collect and use personal information about persons who are restricted parties without obtaining their consent.

(3)  Persons who are not restricted parties must provide personal information as is necessary for the provincial corporation to comply with section 164.

2003 cP‑6.5 s70

Applications to Court

179(1)  Where a transaction, guarantee or investment that is prohibited under this Part takes place, any interested person, including the Minister, may apply to the Court for an order

                                 (a)    setting aside the transaction, guarantee or investment and directing that the restricted party account to the provincial corporation for any profit or gain realized, and

                                 (b)    that each person who participated in or facilitated the transaction, guarantee or investment pay to the provincial corporation on a joint and several basis

                                           (i)    the damages suffered,

                                          (ii)    the face value of the transaction, guarantee or investment, or

                                         (iii)    the amount expended by the provincial corporation in the transaction, guarantee or investment

and on the application, the Court may so order or make any other order it thinks fit, including an order for compensation for the loss or damage suffered by the provincial corporation and punitive or exemplary damages from the restricted party.

(2)  A person who is not a director is not liable under subsection (1)(b) unless the person knew or ought reasonably to have known that the transaction, guarantee or investment took place in contravention of this Part.

1991 cL‑26.5 s179

Part 10
Capacity and Powers

Application

180   This Part does not apply to a provincial trust corporation whose registration is subject to a term, condition or restriction prohibiting it from carrying on the deposit‑taking business, except to the extent that this Part is made applicable by the regulations.

1991 cL‑26.5 s180

General powers

181(1)  Subject to this Act and the regulations, a registered corporation shall not engage in or carry on any business other than business generally appertaining to the business of providing financial services.

(2)  Notwithstanding subsection (1),

                                 (a)    a registered trust corporation may exercise the fiduciary powers referred to in section 1(1)(qq)(i), and

                                 (b)    a registered corporation may

                                           (i)    engage in the provision of real property brokerage services, and

                                          (ii)    acquire, hold, maintain, improve, develop, repair, serve, lease, dispose of or otherwise deal with real property.

1991 cL‑26.5 s181

Restriction on engaging in deposit-taking business

182(1)  No person other than a registered corporation shall engage in the deposit‑taking business.

(2)  Subsection (1) does not apply to a person who engages in the deposit‑taking business pursuant to any enactment that expressly requires or permits it to do so.

(3)  A provision in an enactment that gives a person the capacity, rights, powers or privileges of an individual or that otherwise operates as a general enabling provision is not to be considered to be an express requirement or permission for the purposes of subsection (2).

(4)  The fact that a deposit is taken in contravention of this section does not affect any civil liability arising in respect of the deposit or the money deposited.

1991 cL‑26.5 s182

Restriction on fiduciary activities

183(1)  No body corporate other than a registered trust corporation may carry on the business of offering its services to the public as or accepting or executing the office of

                                 (a)    executor or administrator or trustee, or

                                 (b)    guardian or trustee of a minor’s estate or of the estate of a mentally incompetent person.

(2)  Subsection (1) does not apply to

                                 (a)    a professional corporation within the meaning of the Legal Profession Act,

                       Â