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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 — Court Proceedings
200 (1) A member of a company may apply to the court for an order on the ground
(a) that the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner oppressive to one or more of the members, including the applicant, or
(b) that some act of the company has been done, or is threatened, or that some resolution of the members or any class of members has been passed or is proposed, that is unfairly prejudicial to one or more of the members, including the applicant.
(2) On an application under subsection (1), the court may, with a view to bringing to an end or to remedying the matters complained of, make an interim or final order it considers appropriate, and, without limiting the generality of the foregoing, the court may
(a) direct or prohibit any act or cancel or vary any transaction or resolution,
(b) regulate the conduct of the company's affairs in future,
(c) provide for the purchase of the shares of any member of the company by another member of the company, or by the company,
(d) in the case of a purchase by the company, reduce the company's capital or otherwise,
(e) appoint a receiver or receiver manager,
(f) order that the company be wound up under Part 9,
(g) authorize or direct that proceedings be commenced in the name of the company against any party on the terms the court directs,
(h) require the company to produce financial statements,
(i) order the company to compensate an aggrieved person, and
(j) direct rectification of any record of the company.
(3) Every company referred to in subsection (1) must file a certified copy of an order made by the court under this section, or on appeal from it, with the registrar within 14 days from its entry in the court registry.
(4) The rights granted by this section are in addition to those granted under section 227.
(5) Every company that contravenes subsection (3) commits an offence.
(6) For purposes of this section a member includes
(a) a beneficial owner of a share in the company, and
(b) any other person who, in the discretion of the court, is a proper person to make an application under this section.
201 (1) A member or director of a company may, with leave of the court, bring an action in the name and on behalf of the company
(a) to enforce a right, duty or obligation owed to the company that could be enforced by the company itself, or
(b) to obtain damages for any breach of a right, duty or obligation referred to in paragraph (a),
whether the right, duty or obligation arises under this Act or otherwise.
(2) A member or director of a company, with leave of the court, in the name and on behalf of the company, may defend an action brought against the company.
(3) A member or director, on notice to the company, may apply to the court for the leave referred to in subsection (1) or (2) and, if
(a) the member or director has made reasonable efforts to cause the directors of the company to commence or diligently prosecute or defend the action,
(b) the member or director is acting in good faith,
(c) it is prima facie in the interests of the company that the action be brought or defended, and
(d) in the case of an application by a member, the member was a member of the company at the time of the transaction or other event giving rise to the cause of action,
the court may require that notice of the application be served on those persons, and may grant the leave on terms it considers appropriate.
(4) While an action brought or defended under this section is pending, the court may,
(a) on the application of a member or director, authorize any person to control the conduct of the action or give any other directions for the conduct of the action, and
(b) on the application of the person controlling the conduct of the action, order, on terms and conditions it sees fit, that the company pay the person interim costs, including legal fees and disbursements, for which the person may be made accountable to the company by the court on the final disposition of the action.
(5) On the final disposition of the action, the court may order that the costs taxed as between a solicitor and the solicitor's own client incurred by
(a) the member or director bringing or defending the action or other person controlling the conduct of the action be paid to the member, director or person by the company or other parties to the action, or
(b) the company and any director or officer of the company be paid to them by the member or director bringing the action or other person controlling the conduct of the action.
(6) An action brought or defended under this section must not be discontinued, settled or dismissed without the approval of the court.
(7) An application made or an action brought or defended under this section must not be stayed or dismissed merely because it is shown that an alleged breach of a right, duty or obligation, owed to the company, has been or might be approved by the members of that company, but evidence of that approval or possible approval may be taken into account by the court in making an order under this section.
(8) For purposes of this section, a member includes
(a) a beneficial owner of a share in the company, and
(b) any other person who, in the discretion of the court, is a proper person to make an application under this section.
202 In any proceeding against a person who is a director, officer, receiver, receiver manager or liquidator of a company, if it appears to the court that the person is or may be liable in respect of negligence, default, breach of duty or breach of trust, but has acted honestly and reasonably and ought fairly to be excused, the court must take into consideration all the circumstances of the case, including those connected with the person's appointment, and may relieve the person, either wholly or partly, from liability, on the terms the court considers necessary.
203 Every application to the court under this Act must be made by motion and, unless notice is specifically required by this Act, may be brought without notice to any other person, but the court may direct that notice of the application be served on those persons the court requires.
204 (1) A document may be served on a company
(a) by leaving it at, or mailing it by registered post addressed to, the registered office of the company, or
(b) by personally serving any director, officer or liquidator of the company,
and, if a receiver manager has been appointed, by personally serving the receiver manager.
(2) A document may be served on an extraprovincial company registered under this Act
(a) by leaving it at, or mailing it by registered post addressed to, the head office of the company in British Columbia as last designated in the records of the registrar, or
(b) by personally serving any attorney of the company appointed under section 304.
205 If a corporation is plaintiff in an action or other legal proceeding and it appears that the corporation will be unable to pay the costs of the defendant if the defendant is successful in the defence, the court may require security to be given by the corporation for those costs, and may stay all proceedings until the security is given.
206 (1) If any omission, defect, error or irregularity has occurred in the conduct of the business or affairs of a company by which
(a) a breach of a provision of this Act has occurred,
(b) there has been default in compliance with the memorandum or articles of the company, or
(c) proceedings at or in connection with any general meeting, class meeting, series meeting, or meeting of the directors of the company, or any assembly purporting to be such a meeting have been rendered ineffective,
despite any other provisions of this Act, the court
(d) either of its own motion, or on the application of any interested person, may make an order to rectify or cause to be rectified or to negative or modify or cause to be modified the consequences in law of the omission, defect, error or irregularity, or to validate any act, matter or thing rendered or alleged to have been rendered invalid by or as a result of the omission, defect, error or irregularity, and may give ancillary or consequential directions it considers necessary, but
(e) before making an order, must consider the effect of the order on the company and its directors, officers, members and creditors.
(2) An order made under subsection (1) does not prejudice the rights of any third party who has acquired those rights for valuable consideration without notice of the omission, defect, error or irregularity cured by the order.
Division 2 — Dissent Proceedings
207 (1) If,
(a) being entitled to give notice of dissent to a resolution as provided in section 37, 103, 126, 222, 244, 249 or 289, a member of a company (in this Act called a "dissenting member") gives notice of dissent,
(b) the resolution referred to in paragraph (a) is passed, and
(c) the company or its liquidator proposes to act on the authority of the resolution referred to in paragraph (a),
the company or the liquidator must first give to the dissenting member notice of the intention to act and advise the dissenting member of the rights of dissenting members under this section.
(2) On receiving a notice of intention to act in accordance with subsection (1), a dissenting member is entitled to require the company to purchase all of the dissenting member's shares in respect of which the notice of dissent was given.
(3) The dissenting member must exercise the right given by subsection (2) by delivering to the registered office of the company, within 14 days after the company, or the liquidator, gives the notice of intention to act,
(a) a notice that the dissenting member requires the company to purchase all of the dissenting member's shares referred to in subsection (2), and
(b) the share certificates representing all of those shares,
and, on delivery of that notice and those share certificates, the dissenting member is bound to sell those shares to the company and the company is bound to purchase them.
(4) A dissenting member who has complied with subsection (3), the company, or, if there has been an amalgamation, the amalgamated company, may apply to the court, and the court may
(a) require the dissenting member to sell, and the company or the amalgamated company to purchase, the shares in respect of which the notice of dissent has been given,
(b) set the price and terms of the purchase and sale, or order that the price and terms be established by arbitration, in either case having due regard for the rights of creditors,
(c) join in the application any other dissenting member who has complied with subsection (3), and
(d) make consequential orders and give directions it considers appropriate.
(5) The price that must be paid to a dissenting member for the shares referred to in subsection (2) is their fair value as of the day before the date on which the resolution referred to in subsection (1) was passed, including any appreciation or depreciation in anticipation of the vote on the resolution, and every dissenting member who has complied with subsection (3) must be paid the same price.
(6) The amalgamation or winding up of the company, or any change in its capital, assets or liabilities resulting from the company acting on the authority of the resolution referred to in subsection (1), does not affect the right of the dissenting member and the company under this section or the price to be paid for the shares.
(7) Every dissenting member who has complied with subsection (3)
(a) may not vote, or exercise or assert any rights of a member, in respect of the shares for which notice of dissent has been given, other than under this section,
(b) may not withdraw the requirement to purchase the shares, unless the company consents, and
(c) until the dissenting member is paid in full, may exercise and assert all the rights of a creditor of the company.
(8) If the court determines that a person is not a dissenting member, or is not otherwise entitled to the right provided by subsection (2), the court, without prejudice to any acts or proceedings that the company, its members, or any class of members may have taken during the intervening period, may make the order it considers appropriate to remove the limitations imposed on the person by subsection (7).
(9) The relief provided by this section is not available if, subsequent to giving notice of dissent, the dissenting member acts inconsistently with the dissent, but a request to withdraw the requirement to purchase the dissenting member's shares is not an act inconsistent with the dissent.
(10) A notice of dissent ceases to be effective if the dissenting member consents to or votes in favour of the resolution of the company to which the dissent relates, unless the consent or vote is given solely as a proxy holder for a person whose proxy required an affirmative vote.
208 A notice of a general meeting, or class meeting, of a company to consider a resolution as a result of which a notice of dissent may be filed must contain a statement in terms that the Lieutenant Governor in Council, by regulation, may prescribe, advising a member of the member's right to give a notice of dissent and the consequences of giving the notice.
209 (1) On the application of one or more members holding in the aggregate not less than 1/5 of the issued shares of any class of the company, the court may appoint an inspector to investigate the affairs and management of the company and any of its affiliates, and may determine the manner and extent of the investigation.
(2) Notice of an application under this section must be given to the registrar, and, if the court makes an order appointing an inspector, the inspector within 7 days after the date of the order must file a certified copy of the order with the registrar.
(3) The court, before appointing an inspector, may require the applicant to give security for payment of the costs and expenses of the investigation, and, at any time, may set the amount of the costs and expenses, and order by whom and in what proportion they must be paid.
(4) Every person that is a receiver of property of a company or is a director, receiver manager, officer, employee, banker, auditor or agent of the company or any of the company's affiliates must produce for the examination of the inspector every accounting record and every other record, document and instrument relating to the company and any of its affiliates in the person's custody or control, and must give to the inspector every assistance in connection with the investigation that the person is reasonably able to give.
(5) The inspector may examine on oath any person who is or was a receiver of property of a company, or a director, receiver manager, officer, employee, banker, auditor or agent of the company or of any of its affiliates in relation to their affairs, management, accounts and records and the inspector may administer the oath, and the person examined must answer any question within the scope of the investigation put to that person by the inspector.
(6) The inspector, on conclusion of the investigation, must report to the court and send a copy of the report to the registrar, the company, if the company is a reporting company, the executive director and any other persons the court or the registrar orders.
210 (1) A company, by special resolution, may appoint an inspector to investigate the affairs and management of the company and any of its affiliates and to report in the manner and to the persons the resolution directs.
(2) Every inspector appointed under subsection (1) has the same powers as an inspector appointed by the court under section 209.
(3) Every person who is or was a receiver of property of the company, or every director, receiver manager, officer, employee, banker, auditor and agent of the company or any of its affiliates must comply with section 209 (4) and (5), as if the inspector had been appointed by the court.
211 Every person who, contrary to section 209 or 210,
(a) refuses to produce any accounting record or other record, document or instrument,
(b) refuses to answer any question, or
(c) destroys or alters any accounting record or record, document or instrument,
or otherwise fails to comply with section 209 or 210, commits an offence.
212 (1) If it appears to the minister that it is necessary in the public interest to investigate the beneficial ownership of, or interest in, the shares or debentures of, or membership in, a corporation, he or she may appoint one or more inspectors who may require any person to give any information and produce any records, documents and instruments that the person has, or can reasonably be expected to obtain, as to the names and addresses of the persons interested and the extent of their present and past interests in those shares, debentures or memberships, and the names and addresses of persons who act or have acted on their behalf in relation to those shares, debentures or memberships.
(2) For the purposes of this section, a person is deemed to have an interest in a share, debenture or membership if the person has any right to acquire or dispose of the share, debenture or membership or any interest in them, or to vote in respect of them, or if the person's consent is necessary for the exercise of any of the rights of other persons interested in them, or if other persons interested in them can be required or are accustomed to exercise their rights in accordance with the person's instructions.
(3) If, on receipt of a report from an inspector appointed under subsection (1), it appears to the minister that there is difficulty in determining the information required by this section and that the difficulty is due wholly or mainly to the unwillingness of any person concerned to give the information required by this section, the minister, by order published in the Gazette, may direct that the shares, debentures or memberships are restricted until further order of the minister or the court, so that
(a) a transfer of the shares, debentures or memberships, or in the case of unissued shares or debentures, a transfer of the right to be issued with them and any issue of them, is void,
(b) no voting rights are exercisable in respect of the shares, debentures or memberships,
(c) no further shares, debentures or memberships may be issued in right of the shares, debentures or memberships, or in pursuance of any offer made to the holder of them, and
(d) no payment may be made of any sums due from the corporation on those shares, debentures or memberships, whether in respect of capital or otherwise.
(4) If the minister makes an order directing that shares, debentures or memberships are subject to the restrictions referred to in subsection (3), any person aggrieved may apply to the court, and the court, if it considers it appropriate, may direct that the shares, debentures or memberships cease to be subject to all or any of those restrictions.
(5) If any share, debenture or membership is subject to a restriction referred to in subsection (3), every person who, being the registered owner of that share, debenture or membership and having knowledge of the restriction,
(a) acts with respect to the share, debenture or membership contrary to the restriction, or
(b) fails to notify any person who, but for the restriction imposed under subsection (3), would be entitled to exercise the rights and receive the benefits restricted by the order,
commits an offence.
(6) If a share, debenture or membership is issued in contravention of a restriction imposed by subsection (3), the corporation and every director and officer of the corporation who knowingly and willingly authorizes or permits that issue commits an offence.
213 An inspector appointed under this Part must not require a barrister or solicitor to disclose any privileged communication made to him or her in that capacity, except as to the name and address of his or her clients.
214 A copy of the report of an inspector appointed under section 209, 210 or 212, signed by the inspector, is admissible in any legal proceeding as evidence of the opinion of the inspector.
215 A person who fails to give information required of the person under section 209, 210 or 212 or who, in giving the information, makes a statement that the person knows or ought reasonably to know to be false in a material particular, or who recklessly makes a statement that is false in a material particular, commits an offence.
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