Bill 95 - An Act to Amend the Business Corporations Act

BILL 95

An Act to Amend the Business Corporations Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Subsection 1(1) of the Business Corporations Act, chapter B-9.1 of the Acts of New Brunswick, 1981, is amended by adding the following definition in alphabetical order:

“registered form” means a registered form as defined in the Securities Transfer Act; (nominatif)

2 The Act is amended by adding after section 27 the following:

Restriction regarding issuance of shares in bearer form

27.1( 1) Despite sections 28 and 37 and paragraph 113(1)(g), a corporation shall not issue, in bearer form, a certificate, warrant or other evidence of a conversion privilege, option, or right to acquire a share or other security of the corporation.

27.1( 2) A corporation shall, on the request of a holder of a certificate, warrant or other evidence of a conversion privilege, option or right to acquire a share or other security of the corporation that is in bearer form and that was issued before the commencement of this section, issue in exchange to that holder, in registered form, a certificate, warrant or other evidence, as the case may be.

3 Subsection 28(1) of the Act is repealed and the following is substituted:

28( 1) Subject to section 27, a corporation may issue a certificate, warrant or other evidence of a conversion privilege, option, or right to acquire a share or other security of the corporation, and shall set out the conditions of the certificate, warrant or other evidence

(a) in the certificate, warrant or other evidence, or

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

4 Section 47 of the Act is amended

(a) by repealing subsection (12) and substituting the following:

47( 12) A corporation may issue for each fractional share, a certificate in registered form or scrip certificate in registered form that entitle the holder to receive a certificate for a full share in exchange for scrip certificates equalling a full share.

(b) by adding after subsection (12) the following:

47( 12.1) A corporation shall, on the request of the holder of a certificate for a fractional share or scrip certificate that was issued in bearer form before the commencement of this subsection, issue in exchange to that holder, in registered form, a certificate for a fractional share or a scrip certificate, as the case may be.

5 The heading “Share warrants” preceding section 51 is repealed and the following is substituted:

Certificates, warrants or other evidence of a conversion privilege, option, or right to acquire a share or other security

6 Section 51 of the Act is repealed and the following is substituted:

51( 1) A corporation that has issued a certificate, warrant or other evidence of a conversion privilege, option, or right to acquire a share or other security of the corporation may provide, by coupons or otherwise, for the payment of the future dividends on the shares or other security included in the certificate, warrant or other evidence of the privilege, option or right.

51( 2) A holder of a certificate, warrant or other evidence of a conversion privilege, option or right to acquire a share or other security of the corporation may, if the provisions and regulations respecting certificates, warrants or other evidence of a privilege, option or right to acquire a share or other security of the corporation contained in the articles provide, be deemed to be a shareholder of the corporation, either to the full extent or for any purposes defined by the regulations in the articles.

51( 3) On the issuance of a certificate, warrant or other evidence of a conversion privilege, option, or right to acquire a share or other security of the corporation, the corporation shall remove from its share register the name of the shareholder entered in the registry as holding the shares or other security as if the holder had ceased to be a shareholder, and shall enter in the share register the following particulars:

(a) the fact of the issue of the certificate, warrant or other evidence of the privilege, option or right;

(b) a statement of the shares or other securities included in the certificate, warrant or other evidence of the privilege, option or right; and

51( 4) Until a certificate, warrant or other evidence of a privilege, option or right to acquire a share or other security of the corporation is surrendered, the particulars referred to in subsection (3) shall be deemed to be the particulars required by this Act to be entered in the share register of the corporation in respect of the shares or other security, and, on the surrender, the date of the surrender shall be entered in the registry as if it were the date at which a person ceased to be a shareholder.

51( 5) Despite subsection 47(1), a holder of a certificate, warrant or other evidence of a privilege, option or right to acquire a share or other security of the corporation is not entitled to a share certificate in respect of the shares or other security, until the certificate, warrant or other evidence of the privilege, option or right is surrendered.

51( 6) Unless a holder of a certificate, warrant or other evidence of a privilege, option or right to acquire a share or other security of the corporation is entitled to attend and vote at general meetings, the shares or other security represented by the certificate, warrant or other evidence of the privilege, option or right shall not be counted as part of the capital of the corporation for the purpose of a general meeting of shareholder.

7 The Act is amended by adding after section 99 the following:

PART IX.1

Definitions

99.1 The following definitions apply in this Part.

“police force” means a police force established for a local government or for a region or the Royal Canadian Mounted Police. (corps de police)

“register” means a register of individuals with significant control over a corporation prepared and maintained by a corporation under section 99.3. (registre)

“regulatory body” means any of the following: (organisme de réglementation)

(a) the Financial and Consumer Services Commission continued under the Financial and Consumer Services Commission Act;

(b) the Financial Transactions and Reports Analysis Centre of Canada established under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); and

(c) a prescribed corporation, agency or other entity or any employee or officer of a prescribed corporation, agency or other entity whose authority to regulate is based on a law of the Province or Canada.

Significant control over corporation

99.11( 1) For the purposes of this Part and subject to any class of prescribed exclusions, each of the following individuals is an individual with significant control over a corporation:

(a) an individual who has any of the following interests or rights, or any combination of them, in a significant number of shares of the corporation:

( i) the individual is the registered holder of the shares,

( ii) the individual is the beneficial owner of the shares, or

( iii) the individual has direct or indirect control or direction over the shares; and

(b) an individual to whom prescribed circumstances apply.

99.11( 2) Two or more individuals are each an individual with significant control over a corporation if, in respect of a significant number of shares of the corporation,

(a) an interest, right or a combination of interests or rights referred to in paragraph (1)(a) is held jointly by those individuals, or

(b) a right or a combination of rights referred to paragraph (1)(a) is subject to any agreement or arrangement under which the right or rights are to be exercised jointly or in concert by those individuals.

Significant number of shares

99.2 For the purposes of this Part, a significant number of shares of a corporation is

(a) any number of shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares, or

(b) any number of shares that is equal to 25% or more of all of the corporation’s outstanding voting shares.

99.3( 1) A corporation shall prepare and maintain, at its registered office or at any other prescribed place, a register of individuals with significant control over the corporation that contains the following information:

(a) the name, date of birth and last known address of each individual with significant control over the corporation;

(b) the jurisdiction of residence for income tax purposes of each individual with significant control over the corporation;

(d) a description of how each individual is an individual with significant control over the corporation, including a description of their interests and rights in respect of shares of the corporation;

(e) a description of each step taken in accordance with subsection (2); and

(f) any other prescribed information.

99.3( 2) At least once during each financial year of a corporation, the corporation shall take reasonable steps, including any prescribed steps, to ensure that it has identified all individuals with significant control over the corporation and that the information in the register is accurate, complete and up-to-date.

99.3( 3) When a corporation becomes aware of any information referred to in paragraph (1)(a), (b), (c), (d), (e) or (f) as a result of steps taken in accordance with subsection (2) or through any other means, the corporation shall record that information in the register within 15 days of becoming aware of it.

99.3( 4) When a corporation requests information referred to in paragraph (1)(a), (b), (c), (d), (e) or (f) from one of its shareholders, the shareholder shall, to the best of the shareholder’s knowledge, reply accurately and completely as soon as possible.

99.3( 5) Within one year after the sixth anniversary of the day on which an individual ceases to be an individual with significant control over the corporation, the corporation, subject to any other laws of the Province or of Canada that provide for a longer retention period, shall dispose of any of that individual’s personal information, as defined in the Right to Information and Protection of Privacy Act, that is recorded in the register.

99.3( 6) A corporation that, without reasonable cause, violates or fails to comply with subsection (1) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

99.3( 7) A shareholder who, without reasonable cause, violates or fails to comply with subsection (4) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

Disclosure of information to Director or prescribed body

99.4( 1) A corporation shall disclose to the Director, on request, any information in its register.

99.4( 2) On request by a prescribed body that has investigative powers in relation to offences under this Act, a corporation shall, as soon as possible after the request is made to the corporation, and in the manner specified by the prescribed body,

(a) provide the prescribed body with a copy of the corporation’s register, or

(b) disclose to the prescribed body any information specified by that body that is in the corporation’s register.

99.4( 3) A corporation that violates or fails to comply with subsection (1) or (2) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

Disclosure of information to shareholders or directors

99.5( 1) Shareholders of a corporation or directors of a corporation may, on sending to the corporation an affidavit referred to in subsection (2), require the corporation or its agent to provide, within 10 days after the receipt of the affidavit, a list made up to a date not more than 10 days before the date of receipt of the affidavit setting out

(a) the name and last known address of each individual with significant control over the corporation, and

(b) a description of how each individual is an individual with significant control over the corporation, including a description of their interests and rights in respect of shares of the corporation.

99.5( 2) The affidavit under subsection (1) shall contain

(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

99.5( 3) A list obtained under this section shall not be used by any person except in connection with

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

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

99.5( 4) A person that violates or fails to comply with subsection (1) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

99.5( 5) A person that violates or fails to comply with subsection (3) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category G offence.

Disclosure for tax purposes

99.6( 1) On the request of an employee of the Civil Service as defined in the Civil Service Act or a federal public service employee who is responsible for administering or enforcing a law of the Province or Canada that provides for the imposition or collection of a tax, royalty or duty, a corporation shall disclose information in its register for the purpose of

(a) administering or enforcing a law of the Province or Canada that provides for the imposition or collection of a tax, royalty or duty, or

(b) providing information contained in the register to officials of a jurisdiction outside Canada to assist in the administration or enforcement of a law of that jurisdiction that provides for the imposition or collection of a tax, royalty or duty if the assistance is authorized under an arrangement, written agreement, treaty or law of the Province or Canada.

99.6( 2) A person that violates or fails to comply with subsection (1) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

Disclosure for regulatory purposes

99.7( 1) On the request of a regulatory body, a corporation shall disclose information in its register for the purpose of

(a) administering or enforcing a law for which the regulatory body is responsible,

(b) assisting another agency in Canada in the administration or enforcement of a law that is similar to a law for which the regulatory body is responsible, or

(c) providing information contained in the register to an agency outside Canada to assist the agency in the administration or enforcement of a law that is similar to a law for which the regulatory body is responsible if the assistance is authorized under an arrangement, written agreement, treaty or law of the Province or Canada.

99.7( 2) A person that violates or fails to comply with subsection (1) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

Disclosure for law enforcement purposes

99.8( 1) On the request of a member of a police force, a corporation shall disclose information in its register for the purpose of

(a) conducting an investigation into an offence under a law of the Province or Canada, or

(b) providing information contained in the register to a law enforcement agency in a jurisdiction other than the Province to assist that agency with a law enforcement proceeding if the assistance is authorized under an arrangement, written agreement, treaty or law of the Province or Canada.

99.8( 2) A person that violates or fails to comply with subsection (1) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

Non-application

99.9 Sections 99.1 to 99.8 do not apply to a corporation that is a reporting issuer as defined in the Securities Act.

8 Section 126 of the Act is amended

(a) in subsection (8) by striking out “A share of a body corporate” and substituting “Subject to subsection (8.1), a share of a body corporate”;

(b) by adding the following after subsection (8):

126( 8.1) If a corporation continued under this Act had, before it was continued, issued a share certificate in registered form that is convertible to bearer form, the corporation shall not, if a holder of the share certificate exercises the conversion privilege attached to the certificate, issue a share certificate in bearer form.