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| Copyright (c) Queen's Printer, Victoria, British Columbia, Canada |
IMPORTANT INFORMATION |
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COMPANY ACT — Continued
[RSBC 1996] CHAPTER 62
Division 1 — Shares and Liabilities of Members
41 (1) The directors of every company that is not a reporting company, before allotting shares, must offer those shares proportionately to the members, but if there are classes of shares, the directors must first offer the shares to be allotted proportionately to the members holding shares of the class proposed to be allotted and, if any shares remain, the directors must then offer the remaining shares proportionately to the other members.
(2) Subsection (1) does not apply to an allotment of shares pursuant to
(a) rights of exchange or conversion attached to shares or securities of the company,
(b) an amalgamation agreement under section 248,
(c) a compromise or arrangement under section 252,
(d) a dividend payable in shares,
(e) an employee share ownership plan registered under Part 1 of the Employee Investment Act, or
(f) an employee venture capital plan registered under Part 2 of the Employee Investment Act.
(3) The offer referred to in subsection (1) must be made by notice specifying the number of shares offered and the time, which must be not less than 7 days, for acceptance.
(4) After the expiration of the time for acceptance of the offer referred to in subsection (1) or on receipt of written confirmation from the person to whom the offer is made that the person declines to accept the offer, and if there are no other members holding shares who should first receive an offer, the directors may offer shares for 3 months after that time, to the persons and in the manner the directors think most beneficial to the company, but the offer to those persons must not be at a price less than, or on terms more favourable than, the offer to the members.
(5) A member may not waive generally the member's right to be offered shares referred to in subsection (1), but a member may, in writing, waive the member's right to be offered a specified allotment of shares.
(6) Unless there is provision to the contrary in its memorandum or articles, a reporting company may allot and issue its shares at the times, in the manner and to the persons, or class of persons, the directors determine.
42 (1) Subject to section 47, no shares with par value may be allotted or issued except at a price or for a consideration at least equal to the product of the number of shares allotted or issued multiplied by their par value.
(2) No shares without par value may be allotted or issued at a price or for a consideration less than,
(a) if the memorandum or articles authorize the directors to determine the price or consideration, the price or consideration determined by them, or
(b) if there is no provision in the memorandum or articles as mentioned in paragraph (a), the price or consideration determined by special resolution,
and the capital of the company is, with respect to those shares, an amount equal to at least the aggregate amount of the price or consideration paid to the company on or for those shares that are issued, together with amounts that may be added to that capital by ordinary resolution.
(3) Even if the price or consideration for a share may be other than cash, the price or consideration for a share may, at the time when the share is allotted, be expressed in terms of money and so recorded in the proceedings of the directors of the company.
43 (1) No share may be issued until it is fully paid.
(2) A share is not fully paid until the company has received the full consideration for it in cash, property or services.
(3) For the purposes of subsection (2),
(a) a document evidencing indebtedness of the allottee does not constitute property,
(b) services are past services actually performed for the company,
(c) the value of property or services is an amount set by resolution of the directors that is, in all circumstances of the transaction, no greater than fair market value, and
(d) the full consideration received for a share issued by way of dividend is the amount declared by the directors to be the amount of the dividend.
44 (1) If shares or securities are issued with rights of exchange or conversion attached to them, the company may, in accordance with those rights,
(a) convert or exchange any of those shares or securities that are fully paid into or for unissued shares, and
(b) reissue shares converted or exchanged under this section as if they had never been issued.
(2) Sections 42 and 43 (2) and (3) do not apply to a conversion or exchange of shares under
(a) subsection (1),
(b) an amalgamation agreement under section 248, or
(c) a compromise or arrangement under section 252,
and if the shares converted or exchanged are fully paid, the shares issued under the conversion or exchange are deemed to be fully paid.
45 Every director is jointly and severally liable to compensate the company and any member for any loss, damage and costs sustained by the company or the member by reason of the allotment or issue of a share in contravention of section 42 or 43.
46 A company must not allot or issue fractional shares except as permitted by section 241.
47 (1) A company, if authorized by its memorandum or articles, may pay a commission or allow a discount to a person in consideration of the person subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for its shares, but, in the case of a company other than a specially limited company, the commission and discount in the aggregate must not exceed 25% of the subscription price.
(2) Subject to subsection (1), a company must not apply any of its shares or capital money, either directly or indirectly, in payment of a commission, discount or allowance to a person in consideration of the person subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for shares in the company.
48 (1) A member of a company is entitled, without charge, to a share certificate evidencing the shares held by the member.
(2) A company must not issue a share certificate to a member until the company has entered in the registers of allotments, transfers and members the information required to be entered in them under sections 65, 66 and 67 in respect of the shares evidenced by the share certificate.
(3) A company that contravenes subsection (2) commits an offence.
49 (1) Every company must, within one month after the allotment of and payment for any of its shares, have ready for delivery the share certificate for those shares.
(2) Unless the conditions of the share provide otherwise, every company must, within one month after the delivery to the company of an instrument of transfer of shares, have available for delivery the share certificate for the share transferred, but if the company refuses to register a transfer of shares it must, within one month after the date on which the instrument of transfer was delivered to the company, send to the transferee a notice of the refusal to register.
(3) If the memorandum or articles of a company provide for shares with a special right to convert or exchange attached to them, the company must, within one month after receipt by the company of the share certificate for the share to be converted or exchanged properly tendered to it for conversion or exchange, have available for delivery the share certificate resulting from the conversion or exchange.
(4) If a company fails to comply with a requirement of this section, the court, on the application of the person entitled to have the share certificate delivered to the person, may make an order directing the company and any director or officer of the company to comply within the time specified in the order and may direct that all costs of and incidental to the application be borne by the company, or by a director or officer of the company responsible for the default.
50 (1) A member of a company may require the company to issue to the member 2 or more share certificates for any shares registered in the member's name so that each new share certificate specifies the number of shares that the member requires, and in that case the member must surrender to the company the certificate in place of which the new certificates are to be issued.
(2) The company may impose a charge for each new certificate as prescribed by the articles, or, in the absence of a provision in the articles, as the company or the directors decide, not to exceed, in either case, a prescribed amount for each new certificate.
(3) When shares are held jointly, the company is not bound to issue more than one share certificate, but the joint holders are entitled to exercise jointly the right conferred by subsection (1).
(4) If a new share certificate is required under subsection (1), section 49 applies as if the new certificate were the certificate to be delivered after the allotment of the shares.
51 (1) Every share certificate of a company, issued on or after October 1, 1973, must state on its face
(a) the name of the company and the words
(i) "Incorporated in British Columbia",
(ii) "Amalgamated in British Columbia", or
(iii) "Continued in British Columbia",
as applicable,
(b) the name of the person to whom the certificate is issued,
(c) the number and class and, if applicable, series of shares represented by it and whether the shares are with or without par value and, if with par value, that value,
(d) the date of issue of the share certificate,
(e) if the shares evidenced by it are subject to a restriction on transfer, a conspicuous statement that the restriction exists, and
(f) the number or other designation by which the certificate is identified.
(2) Every share certificate issued on or after October 1, 1973 for partly paid shares issued before October 1, 1973 must state on its face,
(a) if the company is a specially limited company, the word "Assessable", and
(b) if the company is not a specially limited company, the amount paid up on each of the shares represented by it.
(3) Subject to subsection (4), every share certificate issued on or after October 1, 1973 for shares with special rights or restrictions attached must contain or have attached to it a full text of the special rights or restrictions.
(4) A company may, instead of complying with subsection (3), keep a copy of the full text of the special rights or restrictions attached to a share referred to in subsection (3) at either its records office or registered office, and if so kept, it must
(a) provide a free copy of that full text to any person who demands one, and
(b) endorse every share certificate representing a share with those special rights or restrictions attached with a statement that
(i) there are special rights and restrictions attached to the share, and
(ii) that a free copy of the full text of them may be obtained at the registered office or records office, wherever they are kept.
(5) Every company that contravenes any requirement of this section commits an offence.
52 A share certificate issued by the company and signed as required by section 53 evidencing shares held by a member is proof in the absence of evidence to the contrary of the title of the member to the shares.
53 Every share certificate of a company must be signed manually by at least one officer or director of the company, or by or on behalf of a registrar, branch registrar, transfer agent or branch transfer agent of the company, and any additional signatures may be printed or otherwise mechanically reproduced and, in that event, a certificate so signed is as valid as if signed manually.
54 If a share certificate of a company is worn out, defaced, lost or destroyed, it may be renewed on payment of the charge, not exceeding a prescribed amount, and on the terms for evidence and indemnity as the articles require, or in the absence of a provision in the articles, as the directors determine.
55 (1) The liability of a member for a share held by the member is limited,
(a) in the case of a share with par value, to the amount unpaid on it, and
(b) in the case of a share without par value, to the amount unpaid on it of the price or consideration for which the share was issued by the company,
but a member is not personally liable for more than the amount actually agreed to be paid for a share held by the member.
(2) Money payable by a member to the company under the memorandum or articles is a debt due from the member to the company of the nature of a specialty debt.
(3) No member of a company is personally liable for the debts, obligations or acts of the company.
56 The provisions of the Companies Act, R.S.B.C. 1960, c. 67, and the provisions of the articles of an existing company, that relate to
(a) the payment of calls by, and dividends to, and the liability of, the holder of shares that are not fully paid, and
(b) the enforcement of the liability referred to in paragraph (a),
continue to apply for shares that were not fully paid on October 1, 1973.
57 For the purposes of the Bankruptcy and Insolvency Act (Canada) and the Winding-up Act (Canada), every present and past member is, subject to section 55, liable to contribute to the assets of the company to an amount sufficient for the payment of its debts and liabilities and the costs, charges and expenses of the bankruptcy or winding up, as the case may be, and for the adjustment of the rights of the members among themselves, but
(a) a past member is not liable to contribute
(i) if the past member has ceased to be a member for one year or more before the commencement of the bankruptcy or winding up,
(ii) in respect of a debt or liability of the company contracted after the past member ceased to be a member, or
(iii) unless it appears to the court that the existing members are unable to satisfy the contributions required to be made by them,
(b) a sum due to a member, because of being a member, by way of a dividend, profit or otherwise is deemed not to be a debt of the company payable to that member if there is a competition between the member and any other creditor not a member, but the sum may be taken into account for the purpose of the final adjustment of the rights of the members among themselves.
58 A share in a company is transferable as provided by the articles of the company.
59 Despite the memorandum or articles of a company, a company must not register a transfer of shares unless a proper instrument of transfer has been delivered to the company, but an instrument of transfer is not required for the company to register a transmission of shares under section 64.
60 (1) Despite the memorandum or articles of a company, the guardian, committee, trustee, curator, tutor, personal representative or trustee in bankruptcy of a member, although not entered as a member, has the rights, privileges and obligations that attach to the shares held by the member, if the documents required by section 63 are produced and deposited with the company.
(1.1) Subsection (1) applies to a representative who is authorized under the Representation Agreement Act to exercise the rights and privileges or perform the obligations of a member.
(2) Subsection (1) and (1.1) do not apply on the death of a member for shares registered in the member's name and the name of another person in joint tenancy.
61 A transfer of the share or other interest of a member made by a person who is the guardian, committee, trustee, curator, tutor or trustee in bankruptcy of a member or who is the member's personal representative or representative authorized under the Representation Agreement Act is, although that person is not himself or herself a member, as valid as if that person had been a member at the time of the execution of the instrument of transfer.
62 Subject to this Act and the memorandum and articles of a company, the company, on the application of the transferor or transferee of a share in the company, must enter the name of the transferee in its register of members.
63 If a person applies to a company or its transfer agent to effect a transmission of shares or other securities, the person must produce
(a) a declaration of transmission made by a guardian, committee, trustee, curator, tutor, personal representative, representative authorized under the Representation Agreement Act or trustee in bankruptcy stating the particulars of the transmission,
(b) the share certificate or security registered in the name of the deceased or bankrupt,
(c) in the case of a death
(i) the original grant of probate or letters of administration or a court certified copy of them, or
(ii) the original or a court certified or authenticated copy of the grant of representation, will, order or other instrument or other evidence of the death under which title to the shares or securities is claimed to vest,
(d) in the case of bankruptcy, a copy of the court order or of the assignment in bankruptcy and a copy of the instrument appointing the trustee, and
(e) in any other case,
(i) if the person making the declaration of transmission referred to in paragraph (a) was appointed by a court, a court certified copy of the court order, and
(ii) if that person was not appointed by a court, a copy of the document evidencing that person's appointment or authority and other evidence of the appointment or authority required by the company.
64 The deposit of the documents required by section 63 is, despite the memorandum or articles, sufficient authority to enable a company or its transfer agent, on application by the guardian, committee, trustee, curator, tutor, personal representative, representative authorized under the Representation Agreement Act or trustee in bankruptcy, to register that person as the registered holder of the shares or other securities in that person's representative capacity.
65 (1) Every company must keep a register of allotments and must promptly enter on it the names and addresses of every allottee, together with the shares allotted, showing
(a) the date of the allotment,
(b) whether the allotment was for cash or for other consideration,
(c) the kind and class and, if applicable, series of the shares,
(d) the par value, if any,
(e) the amount paid on each share,
(f) the number of shares allotted for cash,
(g) the number of shares allotted for considerations other than cash and particulars of the contract under which the shares have been allotted, and
(h) the amount or rate, if any, of commission paid, or agreed to be paid, or discount allowed, or agreed to be allowed.
(2) Every company that contravenes this section commits an offence.
66 (1) Every company must keep with its register of members a register of transfers in which every transfer of shares of the company, whether transferred on the register of members or on any branch register of members, and the date and other particulars of each transfer, must be set out.
(2) Every company that contravenes this section commits an offence.
67 (1) Every company must keep a register of its members and must promptly enter in it the names of the subscribers to the memorandum and the name of every other person who agrees to become a member of the company, together with
(a) the full name and address of every subscriber or other person, noting, if applicable, the subscriber's or other person's representative capacity,
(b) the date on which each person was entered in the register as a member and whether the person acquired the person's share by allotment, transfer, conversion, exchange or otherwise, and, if by transfer, from whom,
(c) the date on which a person ceased to be a member,
(d) the kind and class and, if applicable, series of shares held by each member, their par value, if any, and, in the case of partly paid shares, the amount paid or agreed to be considered as paid on each share, and
(e) identifying particulars of the share certificates issued for the shares held by the members.
(2) The register of members is proof in the absence of evidence to the contrary of any matters directed or authorized by this Act to be inserted in it.
(3) Every company that contravenes subsection (1) commits an offence.
68 (1) If
(a) the name of a person is, without sufficient cause, entered in, or omitted from, the register of members of a company, or
(b) default is made or unnecessary delay takes place in entering in the register of members the fact that a person ceased to be a member,
the person aggrieved, a member of the company, the personal representative or trustee in bankruptcy of the person aggrieved or of the member of the company, or the company, may apply to the court for rectification of the register.
(2) The court may order rectification of the register of members and payment by the company of damages sustained by a party aggrieved and may, despite the summary nature of the process, decide a question relating to the title of a person who is a party to the application, and generally may decide a question necessary or expedient to be decided for rectification of the register.
69 (1) A company may keep its register of members at any office in British Columbia of
(a) a trust company, or
(b) an extraprovincial trust corporation
that is authorized to carry on trust business under the Financial Institutions Act.
(2) If a company, in accordance with subsection (1), keeps its register of members at an office of a trust company or extraprovincial trust corporation, it may also keep its register of allotments and its register of transfers at that office.
(3) If a company, in accordance with this section, keeps its register of members and either or both of its register of allotments and its register of transfers at an office of a trust company or extraprovincial trust corporation, the trust company or extraprovincial trust corporation, as the case may be, must promptly give the registrar notice
(i) of the address of its office in British Columbia at which those registers of that company are kept,
(ii) of any change of the address of its office at which those registers of that company are kept, and
(iii) on ceasing to keep them, of the date it ceases to keep those registers of that company.
70 (1) A company must not keep, or cause to be kept, a branch register of members, except as permitted by this section.
(2) A company may, if authorized by its articles, keep, or cause to be kept in British Columbia by a trust company that is authorized to carry on trust business under the Financial Institutions Act, or an extraprovincial trust corporation that is so authorized, one or more branch registers of members.
(3) A company may, if authorized by its articles, cause to be kept outside British Columbia one or more branch registers of members.
(4) The company or a trust company or an extraprovincial trust corporation keeping a branch register of members must immediately give the registrar notice of
(a) the address at which the branch register is kept,
(b) any change of the address referred to in paragraph (a), and
(c) the date it ceases to keep the branch register.
(5) Each branch register of members must
(a) be kept in the same manner in which the register of members is required to be kept,
(b) be open for inspection and make available extracts and copies furnished in the same manner and on the same conditions as apply to the register of members under sections 164 and 165, and
(c) be proof in the absence of evidence to the contrary of any matters directed or authorized by this Act to be inserted in it.
(6) A copy of every entry in a branch register of members must, promptly after the entry is made, be
(a) transmitted to the place where the register of members is kept,
(b) entered in the register of members, and
(c) retained by the person responsible for keeping the register of members.
(7) Every branch register of members is deemed to be part of a company's register of members, and entry in a branch register of members of the matters required to be entered in the register of members constitutes compliance with sections 62 and 67.
(8) Every company that contravenes this section commits an offence.
71 If, by virtue of the law in force in any other province, state, territory or country, a corporation incorporated under the law keeps in British Columbia a branch register of its members, the Lieutenant Governor in Council may, by order published in the Gazette, declare that the provisions of this Act for inspection, copies, place of keeping and rectification of registers of members, subject to any modifications specified in the order, apply to the branch register kept in British Columbia.
72 (1) Every company having more than 100 members must,
(a) unless the register of members is in a form constituting in itself an index, keep an index of the names of the members of the company as a part of its register of members, and
(b) within 14 days after the date on which an alteration is made in the register of members, make any necessary alteration in the index.
(2) The index of members must be so kept as to enable particulars with respect to every member to be readily ascertained.
(3) Every company that contravenes this section commits an offence.
73 (1) For the purpose of determining members, or members of a class of members, entitled to notice of, or to vote at, a general meeting or class meeting or entitled to receive payment of a dividend or for any other proper purpose, the directors may set in advance a date as the record date.
(2) If a record date is set, it must be not more than 49 days before the date on which the particular action requiring the determination of the members is to be taken.
(3) If no record date is set for the determination of members entitled to notice, or to vote, or of members entitled to receive payment of a dividend or for any other proper purpose, the date on which notice of the meeting is mailed or on which the resolution of the directors declaring the dividend is adopted respectively is the record date for the determination.
(4) A determination of members entitled to vote at a meeting made as provided in this section applies to an adjournment of the meeting.
(5) A company must not at any time close its register of members.
74 The negotiation of a cheque by, or the acknowledgment of receipt by, a person whose name is entered in the register of members, whether or not registered in a representative capacity, is a valid discharge to a company for a dividend or sum paid or property transferred by it for a share registered in the name of the person, and the company is not bound to see to the execution of a trust, express, implied or constructive, concerning shares of the company.
75 (1) Every reporting company must keep a register of its indebtedness in excess of $5 000 to each director or officer of the company, or an associate of any of them, which register must contain
(a) the name of the creditor,
(b) the date the indebtedness was incurred,
(c) the amount,
(d) the interest rate payable, and
(e) the due date.
(2) Every company that contravenes this section commits an offence.
76 (1) Every company must keep a register of its debentures containing particulars of every debenture issued by it and outstanding, showing its date and amount, the amount or rate of any consideration, commission or discount paid or made directly or indirectly by the company to a person in consideration of the person subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for any of the debentures, and identifying the person.
(2) The deposit of a debenture as security for a debt of a company must not, for the purpose of this section, be treated as the issue of the debenture at a discount.
(3) Every company that contravenes subsection (1) commits an offence.
77 (1) Every company must keep in one or more books a register of debentureholders and must immediately enter in it, by series of debentures, the name of every person who becomes a registered holder of any of its debentures, together with
(a) the full name and address of every debentureholder, noting, if applicable, the debentureholder's representative capacity,
(b) the date that each debentureholder is entered in the register, and whether the debentureholder acquired the debenture by issue or transfer or otherwise and, if by transfer, from whom,
(c) the date that a person ceased to be a debentureholder for a registered debenture,
(d) the kind and amount of each registered debenture held by the debentureholder, and
(e) particulars of the registered debentures held by the debentureholder.
(2) The register of debentureholders is proof in the absence of evidence to the contrary of matters directed or authorized by this Act to be inserted in it.
(3) Every company that contravenes subsection (1) commits an offence.
78 A company may, if authorized by its articles and the debenture, or any trust indenture under which a registered debenture has been issued, cause to be kept one or more branch registers of its debentureholders.
79 (1) Sections 69 and 72 apply to the register of debentureholders.
(2) Sections 70 and 72 apply to a branch register of debentureholders.
80 (1) Unless the conditions of issue of a debenture otherwise provide, every company, within one month after the allotment of and payment for a debenture, must have the debenture available for delivery.
(2) Every company, within one month after the delivery to it of an instrument of transfer of a debenture, must have available for delivery the debenture transferred, but if the company refuses to register a transfer of a debenture the company must send a notice of refusal to register to the transferee within one month after the date on which the instrument of transfer was delivered to the company.
(3) If a company fails to comply with a requirement of this section, the court, on the application of the person entitled to have the debenture delivered or transferred to the person, may make an order directing the company and a director or officer of the company to comply within the time specified in the order, and may direct that all costs of and incidental to the application be borne by the company, or by a director or officer of the company responsible for the default.
81 (1) Every debenture must be signed manually by at least one officer or director of the company, or by or on behalf of a registrar, branch registrar, transfer agent or branch transfer agent for the debenture appointed by the company, or by or on behalf of a trustee who certifies it in accordance with a trust indenture.
(2) Any additional signatures may be printed or otherwise mechanically reproduced and, in that event, a debenture so signed is as valid as if signed manually.
82 Every contract with the company to take up and pay for a debenture of the company may be enforced by an order for specific performance.
83 Despite any rule of equity to the contrary, no condition contained in a debenture, or in a deed for securing a debenture, is invalid merely because the debenture is made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long.
84 (1) If a company redeems a debenture that was previously issued as one of a series,
(a) unless an express or implied provision to the contrary is contained in the debenture, the articles or a contract entered into by the company, or
(b) unless the company has, by a resolution of the members, manifested its intention that the debenture be cancelled,
the company has, and is deemed always to have had, power to reissue the debenture, either by reissuing the same debenture or by issuing another debenture in its place, and
(c) if the debenture so states, or
(d) if the debenture was first issued before January 1, 1977,
on the reissue the person entitled to the debenture has, and is deemed always to have had, the same priority as if the debenture had never been redeemed.
(2) If a company redeems a debenture and has the power to reissue that debenture, particulars of that debenture must be included in the balance sheet of the company.
(3) If a company has issued or deposited a debenture created by it to secure advances on current account or otherwise, the debenture is not deemed to have been redeemed merely because any of the advances are repaid, or that the account of the company ceases to be in debit, while the debenture remains issued or deposited.
(4) The reissue of a debenture or the issue of another debenture in its place under this section is deemed not to be the issue of a new debenture for the purpose of a provision limiting the amount or number of debentures to be issued.
85 (1) If a receiver or receiver manager is appointed on behalf of debentureholders of a company whose debentures are secured by a charge on all or substantially all the assets of the company, or any other person takes possession by or for those debentureholders of the property comprised in or subject to the charge, there must be paid out of assets coming into the hands of the receiver or receiver manager, or other person taking possession in priority to any claim for principal or interest in respect of the debentures, the wages or salary of any employee, except an employee who is a director, paid on a basis of time or piece work, for services rendered to the company during 3 months before the date of the appointment of the receiver or receiver manager, or other person taking possession, but not exceeding $2 000 for each employee.
(2) Payments made under this section must be recovered out of the assets of the company available for payment of general creditors, to the extent of those assets.
86 In sections 87 to 97:
"event of default" means an event specified in a trust indenture on the occurrence of which
(a) the security, if any, constituted by the trust indenture becomes enforceable, or
(b) the principal, interest or other money payable under it becomes, or may be declared to be, payable before maturity,
but the event is not an event of default unless and until every condition prescribed by the trust indenture for the occurrence of the event, the giving of notice, the lapse of time, or any other matter have been satisfied;
"trustee" means a person appointed as trustee by or under the terms of a trust indenture;
"trust indenture" means a deed, indenture or document however designated, including every supplement or amendment to it, under which a corporation issues or guarantees a debenture and by or under which a person is appointed as trustee for the holder of a debenture issued or guaranteed under it.
87 (1) Subject to subsection (2), sections 86 to 97 apply to a trust indenture, whether entered into before or after October 1, 1973, for any of the debentures outstanding or guaranteed under it, unless the sale by the issuer of the debentures secured by the trust indenture is exempt from registration under the Securities Act.
(2) On application by an interested person or on the executive director's own motion, the executive director may make an order, subject to the terms and conditions the executive director considers appropriate, exempting a trust indenture or a class of trust indentures from one or more of the provisions of sections 86 to 97 if the executive director considers that to do so would not be prejudicial to the public interest.
88 (1) A person must not be appointed a trustee unless the person, or if there is more than one person to be appointed as trustee, unless at least one of them, is resident in, or authorized to do business in, British Columbia, or authorized to carry on trust business under the Financial Institutions Act.
(2) A person must not be appointed or act as a trustee if a material conflict of interest exists in the person's fiduciary role as a trustee.
(3) Every trustee, within 90 days after the trustee becomes aware that a material conflict of interest exists, must either
(a) eliminate that conflict of interest, or
(b) resign from office.
(4) Every trust indenture, charge created by it and debenture issued under it is, despite a material conflict of interest of the trustee, valid.
(5) If a trustee has a material conflict of interest, an interested party may apply to the court, whether or not the period referred to in subsection (3) has expired, for an order that the trustee be removed and replaced on the conditions the court considers necessary.
89 (1) Every holder of a debenture issued under a trust indenture may, on payment to the trustee of a reasonable fee, require the trustee to furnish, within 25 days after receiving the affidavit referred to in subsection (3), a list setting out
(a) the name and address of every registered holder of outstanding debentures issued under the trust indenture,
(b) the aggregate principal amount of outstanding debentures owned by each holder, and
(c) the aggregate principal amount of debentures outstanding,
as shown on the records of the trustee on the day that the affidavit is delivered.
(2) If the applicant is a corporation, the affidavit required under subsection (1) must be made by a director or officer of the corporation.
(3) Every affidavit required under subsection (1) must contain
(a) the name, address and occupation of the applicant,
(b) if the applicant is a corporation, its name and address for service, and
(c) a statement that the list will not be used except for corporate purposes.
(4) If, without reasonable excuse, the trustee receiving the affidavit fails to furnish the list under subsection (1), the holder of the debenture may apply to the court for an order requiring the trustee to furnish the list and the court may make the order.
90 Every issuer or guarantor of debentures issued under, or a registrar appointed under, a trust indenture, on demand by the trustee, must promptly furnish to the trustee the names and addresses of the registered holders of those debentures.
91 Every issuer or guarantor of debentures issued or to be issued under a trust indenture, on demand by the trustee, must immediately provide to the trustee evidence of compliance with every term of the trust indenture relating to the
(a) issue, certification and delivery of debentures issued under the trust indenture,
(b) release, or release and substitution, of property subject to a mortgage, charge, lien or other encumbrance created by the trust indenture,
(c) satisfaction and discharge of the trust indenture, and
(d) taking of any other action required or permitted to be taken by the trustee.
92 Evidence of compliance as required by section 91 consists of
(a) a certificate or affidavit made by a director or officer of the issuer or guarantor stating that every term referred to in that section has been complied with,
(b) if there are terms, compliance with which are by the trust indenture made subject to review by
(i) a solicitor, an opinion of a solicitor acceptable to the trustee that those terms have been complied with, or
(ii) an auditor or accountant, an opinion or report of the auditor or accountant of the issuer or guarantor or other accountant that the trustee may select, that those terms have been complied with, and
(c) a statement by the person giving the evidence of compliance under paragraphs (a) and (b)
(i) that the person has read and understands the terms of the trust indenture concerning which the evidence is given,
(ii) describing the nature and scope of the examination or investigation on which the person's statements or opinions are based,
(iii) that the person has made the examination or investigation that the person believes necessary to enable the person to make the statements or give the opinions contained or expressed in it, and
(iv) that, in the person's opinion, the terms of the trust indenture concerning which the evidence is given have been complied with or satisfied.
93 (1) Every issuer or guarantor under a trust indenture, on demand by the trustee, must furnish the trustee with evidence, in the form the trustee requires, of any action required or permitted to be taken by the issuer or guarantor under the trust indenture.
(2) Every issuer or guarantor under a trust indenture, on demand by the trustee, must provide the trustee with a certificate that the issuer or guarantor has complied with every requirement contained in the trust indenture that, if it had not been complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or if the issuer or guarantor has not complied, a statement to that effect and particulars of the failure to comply.
94 Every trustee, unless the trustee believes that it is in the best interests of the holders of the debentures to withhold notice and so informs the issuer or guarantor in writing, must give to the holders of debentures issued under a trust indenture, within a reasonable time but not exceeding 30 days after the trustee becomes aware of the occurrence of it, notice of every event of default arising under the trust indenture and continuing at the time the notice is given.
95 A trustee must exercise the powers and duties of the trustee
(a) in good faith and in a commercially reasonable manner,
(b) with the care, diligence and skill of a reasonably prudent trustee, and
(c) in the best interests of the holders of the debentures issued under the trust indenture.
96 Despite section 95, no trustee is liable if the trustee relies and acts in good faith on statements contained in a certificate, affidavit, opinion or report that complies with this Act and the terms of the trust indenture.
97 No term of a trust indenture or of an agreement between a trustee and the holders of debentures issued under it or between the trustee and the issuer or guarantor relieves a trustee from the duties imposed on the trustee by section 95.
98 If a receiver manager is appointed, the powers of the directors and officers of the corporation cease with respect to that part of the undertaking for which the receiver manager is appointed until the receiver manager is discharged.
99 Every receiver or receiver manager,
(a) within 7 days after being appointed as receiver or receiver manager, must file with the registrar a notice of the appointment in Form 5 in the Second Schedule,
(b) at least once in every 6 month period after the date of the appointment, must file with the registrar summaries of the accounts of the administration of the receiver or receiver manager,
(c) within 7 days after ceasing to act as receiver or receiver manager, must file with the registrar a notice in Form 6 in the Second Schedule, and
(d) within 7 days after completion of the duties as receiver or receiver manager, must prepare and render a final account of the receiver's or receiver manager's administration and file with the registrar a copy of the account and a return in Form 7 in the Second Schedule.
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