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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 Memorandum and Articles
216 In this Part "alter" includes create, add to, vary and delete.
217 (1) If there is an express provision in this Act permitting a company to alter its memorandum, it may be altered in the cases and to the extent permitted by that provision, so long as the altered memorandum complies with this Act.
(2) A company that wishes to alter its memorandum as permitted by subsection (1) must file a certified copy of the resolution altering it, together with a copy of the memorandum as amended by the alteration.
(3) A resolution to alter the memorandum of a company takes effect
(a) if every other requirement of this Act relating to the proposed alteration is complied with, on the date that a certified copy has been accepted for filing by the registrar, or
(b) on the date specified in the resolution,
whichever is later.
218 (1) If the memorandum of a company is altered, every copy of the memorandum issued on or after the date the alteration takes effect must contain the alteration.
(2) Every company that contravenes this section commits an offence.
219 (1) Subject to this Act and its memorandum, a company may, if the articles as altered would, at the time of the filing, comply with this Act, alter its articles by filing with the registrar a certified copy of a special resolution or a resolution passed under section 229 altering the articles.
(2) A resolution to alter the articles of a company takes effect
(a) if every other requirement of this Act relating to the proposed alteration is complied with, on the date that a certified copy has been accepted for filing by the registrar, or
(b) on the date specified in the resolution,
whichever is later.
(3) Every alteration made in compliance with subsections (1) and (2) is as valid as if originally contained in the articles.
220 (1) If the articles of a company are altered, every copy of the articles issued on or after the date the alteration takes effect must contain the alteration.
(2) Every company that contravenes this section commits an offence.
221 Every company, other than a specially limited company, may, by special resolution, alter its memorandum by altering any restriction on the business carried on or to be carried on by it, or on its powers.
222 Any member of a company, not later than 7 days after the special resolution was passed under section 221, may give a notice of dissent to the company in respect of the member's shares and, in that event, section 207 applies.
223 (1) Every company, by special resolution, may alter its memorandum by changing its name to a name approved by the registrar.
(2) On the registrar accepting for filing a certified copy of the resolution referred to in subsection (1), he or she must issue a certificate showing the change of name and the date it is effective and must publish in the Gazette a notice of change of name.
(3) No change of the name of a company affects any of its rights or obligations, or renders defective any legal proceedings by or against it, and any legal proceedings that may have been continued or commenced against it under its former name may be continued or commenced against it by its new name.
224 Subject to sections 226 and 227, a company may, by special resolution, alter its memorandum or articles by creating, defining and attaching special rights or restrictions to any shares, whether issued or unissued.
225 Subject to sections 226 and 227, a company may, by special resolution, and by otherwise complying with its memorandum and articles, alter its memorandum or articles by varying or abrogating any special rights or restrictions attached to any shares, whether issued or unissued.
226 (1) A right or special right attached to issued shares must not be prejudiced or interfered with under this Act or the memorandum or articles unless
(a) if the right or special right prejudiced or interfered with is attached to a class of shares, members holding shares of that class, and
(b) if the right or special right prejudiced or interfered with is attached to a series of shares and the rights or special rights attached to that series are affected differently from those attached to another series of the same class, members holding shares of that series,
consent by a separate resolution of the members of that class or series, as the case may be, requiring a majority of 3/4 of the votes cast.
(2) A resolution to create, vary or abrogate any special right of conversion or exchange attaching to shares of a reporting company must not be submitted to a general meeting, or a class meeting, or a series meeting, unless the executive director has first consented to the resolution.
227 (1) The holders of
(a) not less than 10% of the shares of a company who
(i) are entitled to vote, and
(ii) who did vote, in person or by proxy,
against the special resolution referred to in section 224 or 225,
(b) not less than 10% of the shares of a class of shares of a company, whose special rights or restrictions are affected by a special resolution abrogating or altering special rights or restrictions attaching to that class of shares and who voted, in person or by proxy, against the resolution referred to in section 226 (1), or
(c) not less than 10% of the shares of a series of shares of a company, whose special rights or restrictions are affected differently from those attached to another series of the same class of shares by a special resolution abrogating or altering special rights or restrictions attaching to that series of shares and who voted, in person or by proxy, against the resolution referred to in section 226 (1),
may, not more than 14 days after the passing of
(d) the special resolution referred to in section 224 or 225, or
(e) the resolution referred to in section 226,
apply to the court to set aside the special resolution referred to in section 224 or 225, or the resolution referred to in section 226.
(2) The court must not hear the application referred to in subsection (1) unless notice has been served on the company and an affidavit of that service exhibiting the notice has been served on the registrar not later than 14 days after the passing of the last resolution.
(3) The court may direct that notice of the application be served on any other person.
(4) On an application under subsection (1), the court may
(a) set aside the special resolution and require a copy of the order to be filed with the registrar,
(b) affirm the special resolution subject to terms the court considers appropriate, or
(c) affirm the special resolution and require the company, subject to section 236 (1), or any other person, to purchase the shares of any member at a price and on the terms to be determined by the court,
and, in any case, the court may make consequential orders, including any order as to costs, and give directions it considers appropriate.
(5) The registrar must not accept for filing a special resolution referred to in subsection (1), unless
(a) the registrar receives evidence satisfactory to the registrar that every person entitled to apply to the court under subsection (1) has waived that right,
(b) the time for bringing an application under subsection (1) has expired, and the registrar has not been served as required by subsection (2), or
(c) a copy of the order of the court affirming the special resolution, together with evidence satisfactory to the registrar that any consequential orders and directions of the court have been complied with, has been filed with the registrar,
and the registrar receives a certificate of an officer or director of the company that this Act has been complied with in relation to the special resolution.
(6) The rights granted by this section are in addition to those granted under section 200.
228 Sections 224 to 227 do not apply to a compromise or arrangement under section 252.
229 (1) The special rights and restrictions attached to shares of a class may authorize
(a) the issue of shares of that class in one or more series, and
(b) the directors, by resolution,
(i) to alter the memorandum to set the number of shares in, and to determine the designation of the shares of, each series, and
(ii) to alter the memorandum or the articles to create, define and attach special rights and restrictions to the shares of each series, subject to the special rights and restrictions attached to the shares of the class.
(2) If cumulative dividends in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends in accordance with the amounts that would be payable on those shares if all the accumulated dividends were paid in full.
(3) If amounts payable on a winding up, or on the occurrence of any other event as a result of which the holders of the shares of all series of the same class are then entitled to a return of capital, are not paid in full, the shares of all series of the same class must participate rateably in a return of capital in respect of that class in accordance with the amounts that would be payable on the return of capital if all amounts so payable were paid in full.
(4) Special rights or restrictions attached to a series of shares do not confer on the series priority over another series of the same class then outstanding respecting
(a) dividends, or
(b) a return of capital
(i) on winding up, or
(ii) on the occurrence of another event that would result in the holders of all series of the same class being entitled to a return of capital.
(5) A resolution under subsection (1) may only be passed before the issue of shares of the series to which the resolution relates, and after the issue of shares of that series the number of shares in, the designation of, and the special rights and restrictions attached to, that series may be added to, altered, varied or abrogated only under sections 224, 225, 230 or 231, as the case may be.
(6) Sections 73, 148 to 161, 163 (1) (k), 200 (1) (b), 207 (8), 208 and 290 (a) apply to a series of shares, a separate resolution of a series and a series meeting, as the case may be.
230 (1) Every company, by a resolution of the members as the articles provide or, in the absence of provision in the articles, by special resolution, may alter its memorandum to increase its authorized capital by
(a) creating shares with par value, or shares without par value, or both,
(b) increasing the number of shares with par value, or shares without par value, or both, or
(c) increasing the par value of a class of shares with par value, if no shares of that class are issued.
(2) A company creating new shares under this section must comply with section 19 (3).
231 (1) Every company may, by special resolution, alter its memorandum to
(a) subdivide all or any of its unissued, or fully paid issued, shares with par value into shares of smaller par value,
(b) subdivide all or any of its unissued, or fully paid issued, shares without par value so that the number of those shares is increased,
(c) consolidate all or any of its shares with par value into shares of larger par value,
(d) consolidate all or any of its shares without par value so that the number of those shares authorized is reduced,
(e) change all or any of its unissued, or fully paid issued, shares with par value into shares without par value,
(f) change all or any of its unissued shares without par value into shares with par value,
(g) alter the name or designation of all or any of its shares, whether issued or unissued, or
(h) alter the provisions as to the maximum price or consideration at or for which shares without par value may be issued.
(2) No alteration of the memorandum as to any part of the issued shares of any class or, in the case of a class with more than one series, any series, is valid unless
(a) the consent required by section 226 is given, and
(b) the consent of members holding, in the aggregate, not less than 3/4 of the shares not to be changed of that class or series is given by separate resolution.
(3) The provisions of the articles of a company relating to a class or series meeting of the company or, to the extent the articles do not make provision for a class or series meeting, the provisions of the articles relating to the call and conduct of general meetings apply to a meeting to pass a separate resolution under subsection (2).
232 (1) Every company may alter its memorandum by resolution of its directors or by ordinary resolution
(a) cancelling shares that are not allotted or issued,
(b) cancelling fully paid shares that are surrendered to the company by way of gift, or
(c) cancelling shares of a reporting company that have been held in escrow under an escrow agreement required by the executive director, and that are surrendered for cancellation under that agreement
and diminishing the authorized capital accordingly.
(2) A company must not return any cash, property or other consideration paid to it for any shares referred to in subsection (1) (c), unless
(a) the return is first authorized by special resolution, or
(b) the terms of the escrow agreement
(i) were approved by special resolution before the allotment of the shares, and
(ii) require the return.
(3) Sections 233 and 234 do not apply to a cancellation of shares under this section.
233 (1) Every company may reduce its capital, whether issued or unissued, in any way by special resolution confirmed by the court and, without restricting the generality of the foregoing, may
(a) extinguish or reduce the liability on any of its partly paid shares in respect of capital not paid up,
(b) either with or without extinguishing or reducing the liability on any of its partly paid shares, cancel any paid up capital that is lost or unrepresented by available assets, or
(c) either with or without extinguishing or reducing liability on any of its partly paid shares, pay off any paid up capital that is in excess of the needs of the company.
(2) The court, if satisfied that every creditor of the company who is entitled under section 234 to object to the reduction has consented to it, or that the debt or claim has been discharged, or has determined, or has been secured, may, either in whole or in part and on terms and conditions the court considers appropriate, confirm the resolution referred to in subsection (1).
(3) A resolution under subsection (1) does not take effect until the registrar has accepted for filing a certified copy of the resolution and the court order, together with a statement approved by the court stating that the authorized capital of the company has been altered by the resolution and order, in compliance with section 19.
(4) If a resolution under subsection (1) has the effect of diminishing the authorized capital of a company, the resolution must alter the memorandum accordingly, and the company must file a copy of its memorandum, as altered, with the material required to be filed with the registrar by subsection (3).
(5) If the company making application for confirmation of a resolution referred to in subsection (1) is a company registered under the Small Business Venture Capital Act, the court must not confirm the resolution until the company has presented satisfactory proof that any amount payable to the Minister of Finance and Corporate Relations under section 22 of that Act has been paid.
(6) If the company making application for confirmation of a resolution referred to in subsection (1) is a company registered under Part 2 of the Employee Investment Act, the court must not confirm the resolution until the company has presented satisfactory proof that any amount payable to the Minister of Finance and Corporate Relations under section 31 or 32 of that Act has been paid.
234 (1) If the proposed reduction of capital involves either diminution of liability in respect of unpaid capital or the payment to any member of any paid up capital, or in any other case in which the court so directs, every creditor of the company who at the date set by the court is entitled to any debt or claim that, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, is entitled to object to the reduction, but the court, having regard to any special circumstances of the case, may direct that any class or classes of creditors is or are not entitled to object to the reduction, and may dispense with the consent of that class or those classes.
(2) The court must settle a list of creditors entitled to object to the reduction, and for that purpose must ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may require notice to be published setting a time within which creditors not entered on the list are to claim to be so entered or otherwise are to be excluded from the right to object to the reduction.
(3) If a creditor entered on the list whose debt or claim is not discharged or determined does not consent to the reduction, the court may dispense with the consent of that creditor if the company appropriates, as the court may direct,
(a) the full amount of the debt or claim, or
(b) an amount set by the court after an inquiry and adjudication the court considers appropriate.
(4) Every company that willfully conceals the name of a creditor entitled to object to the reduction, or willfully misrepresents the nature or amount of the creditor's debt or claim, commits an offence.
235 Subject to sections 236 and 237, every company, by resolution of its directors,
(a) may redeem, on the terms and in the manner provided in the memorandum or articles, any of its issued shares that have a right of redemption attached to them, and
(b) if it is so authorized by, and subject to any restriction in, its memorandum or articles, may purchase any of its shares.
236 (1) A company must not redeem, purchase or otherwise acquire any of its shares, if, at the time of the proposed redemption, purchase or acquisition, the company is insolvent, or if the redemption, purchase or acquisition would render the company insolvent.
(2) The court, on the application of a director of a company, may declare that, in view of all the circumstances, the company is insolvent, or that the proposed redemption or purchase would render the company insolvent.
237 (1) If a proposed purchase by a company of its shares
(a) is not to be made through a stock exchange, or
(b) is not to be made from a bona fide employee or bona fide former employee
(i) of the company, or
(ii) of an affiliate of the company,
or from the employee's or former employee's personal representative, in respect of shares beneficially owned by the employee or former employee,
the company must make its offer to purchase proportionately to every member who holds shares of the class or series to be purchased.
(2) Unless the memorandum or articles otherwise provide, if a company proposes to redeem some, but not all, of its shares of a particular class or series, the redemption must be made proportionately among every member who holds shares of the class or series to be redeemed.
(3) This section does not apply to a purchase of shares under section 200, 207 or 227.
238 (1) A company may, unless the memorandum or articles otherwise provide,
(a) reissue a cancelled share that it has redeemed or purchased, and
(b) sell a share that it has redeemed or purchased but not cancelled.
(2) No company may vote or pay or make any dividend or other distribution in respect of a share held by it that it has redeemed or purchased but not cancelled.
(3) A share purchased or redeemed by a company must, if so required by
(a) the memorandum or articles, or
(b) a resolution of the directors,
be cancelled and the number of issued shares reduced accordingly.
239 No redemption or purchase of shares under section 200, 207, 227 or 235 is deemed to reduce capital within the meaning of section 233 or to change the authorized capital of the company.
240 If a company proposes alterations to its capital or shares,
(a) the alterations may be made by one special resolution, and
(b) the consents of a class or part of a class may be made by one separate resolution of the class or part of it,
and it is unnecessary to pass and file individual resolutions.
241 (1) Every company may issue fractional shares for the purposes of sections 231, 248, 252 to 254 and 289 or for the purpose of making a fresh issue of shares that is offered to and taken by existing members of the company in proportion to the number of shares already held by them respectively.
(2) Subject to section 236, every company may purchase its fractional shares, but must consolidate them into whole shares and must deal with those whole shares in accordance with section 238.
242 If a company has purported to issue or allot shares and the creation, issue or allotment of those shares is invalid by reason of a provision of this or any other Act, or of the memorandum or articles of the company, or otherwise, or if the terms of issue or allotment are inconsistent with or unauthorized by such a provision, the court, on application by the company, a holder of any of those shares or a creditor of the company, and on being satisfied that in all the circumstances it is just and equitable to do so, may make an order validating the creation, issue or allotment of those shares, or confirming the terms of issue or allotment of them, or both, and, on the order being made, those shares are deemed to have been validly created, issued or allotted on the terms of the issue or allotment of them.
243 (1) Subject to any provision to the contrary in its memorandum, a specially limited company may, by special resolution, convert itself into a company having a memorandum in Form 1 of the Second Schedule, and, for that purpose, must alter its memorandum and articles to comply with the requirements of this Act for such a company.
(2) The registrar, on receipt of a copy of the special resolution referred to in subsection (1) and a copy of the company's memorandum and articles as altered, and the prescribed fees, must issue a certificate of the conversion of the company, and the conversion takes effect on issuance of the certificate.
(3) The registrar must publish in the Gazette a statement of the conversion of the company.
244 Every member of a specially limited company, not more than 7 days after the special resolution was passed pursuant to section 243, may give a notice of dissent to the company in respect of the member's shares and, in that event, section 207 applies.
245 (1) Every corporation incorporated by an Act of the Legislature, unless that Act contains a provision inconsistent with or repugnant to this section, may convert itself into a company under this Act by a special resolution that
(a) alters the form of the constitution of the corporation by substituting for its charter a memorandum and articles that comply with this Act,
(b) if it is necessary to comply with this Act, alters the name of the corporation, and
(c) authorizes 2 or more directors to execute the memorandum and articles on behalf of the corporation and to deliver them to the registrar with a copy of the resolution and any other documents relating to the corporation that the registrar requires.
(2) The registrar, on receipt of the resolution and documents referred to in subsection (1) and the proper fees, must issue a certificate that the corporation is converted into a company under this Act, and, on issuance of the certificate, the substituted memorandum and articles apply to the company in the same manner as if it were a company incorporated under this Act with that memorandum and those articles, and the former charter of the corporation ceases to apply.
(3) The registrar must publish in the Gazette a statement of the conversion of the corporation.
(4) A corporation must not pass a special resolution referred to in subsection (1) without the consent of the minister.
246 Conversion of a corporation under this Act does not affect any debt, liability, obligation or contract incurred or entered into by, to, with or on behalf of the corporation before the conversion, and legal proceedings in respect of them may be continued or commenced against it in the same manner as if the conversion had not taken place.
247 Any 2 or more companies may amalgamate and continue as one company, called the "amalgamated company", under the name of one of the amalgamating companies, or under a name approved by the registrar.
248 (1) The companies proposing to amalgamate must enter into an amalgamation agreement prescribing the terms and conditions of the amalgamation, the manner of carrying the amalgamation into effect and containing the memorandum and articles, which must first be approved by the registrar, proposed for the amalgamated company.
(2) The amalgamation agreement must also specify
(a) the full names, addresses and occupations of the directors of the amal-gam-ated company,
(b) the month and year in which the first annual general meeting of the amalgamated company will be held,
(c) the manner in which the issued and unissued shares of each amalgamating company will be exchanged for those of the amalgamated company,
(d) that each amalgamating company must adopt the agreement, and
(e) other details necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated company.
(3) If shares of one of the amalgamating companies are held by, or on behalf of, another of the amalgamating companies, the amalgamation agreement must provide for the cancellation of those shares without any repayment of capital in respect of them, and no provision may be made in the amalgamation agreement for the exchange of those shares.
(4) The amalgamation agreement is deemed to be adopted by each amalgamating company,
(a) if the amalgamating company has only one class of shares, when it is approved by a special resolution,
(b) if the amalgamating company has more than one class of shares, when it is approved by a separate resolution of each class requiring a majority of 3/4 of the votes cast,
(c) if one person beneficially owns all the shares of an amalgamating company, when it is approved by that person certifying the person's ownership and approval on the amalgamation agreement,
(d) if the amalgamating company has more than one series of shares, and the amalgamation agreement contains a provision that, if contained in a proposed alteration of the memorandum or articles of the company, would entitle the members who hold shares of that series to vote as a series under section 226, when it is approved by a separate resolution of that series requiring a majority of 3/4 of the votes cast, or
(e) if one of the amalgamating companies beneficially owns all the shares of another amalgamating company and has approved the agreement in accordance with paragraph (a), (b), (c) or (d), when it is approved on behalf of the second mentioned amalgamating company as evidenced by the secretary of the first mentioned amalgamating company certifying the ownership and approval on the amalgamation agreement.
249 (1) Subject to subsection (2) and (3), if an amalgamation agreement is adopted by all the amalgamating companies, they must, not less than 6 days nor more than 2 months after the adoption, apply to the court for an order approving the amalgamation.
(2) If a creditor or member of an amalgamating company, by notice in writing delivered to the registered office of that amalgamating company
(a) not later than 5 weeks after the adoption of the amalgamation agreement by all the amalgamating companies, and
(b) before the hearing of the application for the approving order,
requires the company to give the creditor or member 14 days' notice of the time and place of the hearing of the application, the company must give that notice to the creditor or member.
(3) A member of an amalgamating company, not more than 7 days after the amalgamation agreement is adopted by every amalgamating company, may give a notice of dissent to the amalgamating company of which he, she or it is a member in respect of all the member's shares of the class or kind described in the notice of dissent, in which event section 207 applies.
(4) The court may direct that notice be given of the time and place of the hearing of the application for the approving order, to those creditors and members of each amalgamating company, and in the manner, the court directs.
(5) On the application referred to in subsection (1),
(a) a creditor or any member is entitled to be heard, and
(b) the court, having regard to the rights and interests of every person affected, may approve the amalgamation agreement either as presented or subject to terms and conditions the court considers appropriate, or may dismiss the application.
250 If the registrar receives proof to the registrar's satisfaction that the terms and conditions of the approving order, if any, have been complied with, and on delivery to the registrar of
(a) a certified copy of the approving order,
(b) a certified copy of the amalgamation agreement, and
(c) a notice in Form 3 in the Second Schedule of the registered and records offices of the amalgamated company,
the registrar must
(d) register the documents and issue a certificate of amalgamation showing that the amalgamating companies are amalgamated and the date, which must not be earlier than the date the documents are delivered to the registrar, of the amalgamation, and
(e) publish in the Gazette a notice of the amalgamation showing the names of the amalgamating companies, the name of the amalgamated company, the address of its registered office and the date of the amalgamation.
251 From the date of the amalgamation, the amalgamating companies are amalgamated and are continued as one company under the name and with the memorandum and articles provided in the amalgamation agreement, and the amalgamated company is seized of and holds and possesses all the property, rights and interests and is subject to all the debts, liabilities and obligations of each amalgamating company, including any obligations to dissenting members under section 207, and every member of each amalgamating company is bound by the amalgamation agreement.
252 (1) Subject to subsections (6) and (7), if a compromise or arrangement is proposed between a company and its creditors or any class of them, or between a company and its members or any class of them, then, despite any other provision of this Act, if a majority in number representing 3/4 in value of those creditors or that class of creditors, or 3/4 of the votes of those members or that class of members, who are present and vote either in person or by proxy at a meeting convened in accordance with an order of the court under subsection (2), agree to a compromise or arrangement, the compromise or arrangement, if approved by the court and accepted for filing by the registrar, is binding on every creditor or member, as the case may be, and on the company.
(2) If a compromise or arrangement referred to in subsection (1) is proposed, the court may, on the application of the company, or of any creditor or member of the company, or on its own motion on the application for approval, order that a meeting of the creditors or any class of creditors, or of the members or any class of members, or the holders of a series of shares under subsection (6) to approve the compromise or arrangement be convened in the manner the court directs.
(3) No compromise or arrangement under this section takes effect until every requirement of this Act relating to the proposed compromise or arrangement has been complied with and a certified copy of the court order has been accepted for filing by the registrar.
(4) If a court order made under this section effects a change in the memorandum or articles of the company, the registrar must not accept it for filing, unless it is accompanied by a copy of the altered memorandum or articles certified by an officer or director.
(5) Every alteration in the memorandum or articles of a company as a result of this section is an alteration within the meaning of section 218 (1) and section 220 (1).
(6) If the terms of a compromise or arrangement between a company and its members or a class of them contain a provision that, if contained in a proposed alteration of the memorandum or articles of the company, would entitle the members who hold shares of a series of shares of any class of shares of the company to vote as a series under section 226 (1), no compromise or arrangement takes effect unless it is approved by a majority of 3/4 of the votes cast by those members voting separately at a meeting convened in accordance with an order of the court under subsection (2).
(7) Nothing in this section or in any order approving a compromise or arrangement made under this section binds a member to exchange shares of a reporting company held by the member for property, money or other securities of the reporting company or for property, money or securities of another corporation unless the compromise or arrangement has been approved in the manner described in subsection (8).
(8) A compromise or arrangement is approved for the purposes of subsection (7) when it is approved by a majority of the votes of members of the reporting company cast at a meeting referred to in subsection (2) other than the votes cast by
(a) affiliates of the reporting company,
(b) a member who will, as a consequence of the compromise or arrangement, be entitled to consideration for each share greater than that available to other holders of affected shares of the same class, and
(c) a member who alone or in combination with others effectively controls the reporting company and who, prior to receiving a notice of the meeting referred to in subsection (2), entered into or has agreed to enter into an understanding to support the compromise or arrangement.
253 (1) If a meeting is convened under section 252, the company must include in any notice of the meeting
(a) that is sent to a creditor or member of a company, a statement, which may be included in the information circular of a reporting company, explaining the effect of the compromise or arrangement and in particular stating
(i) any material interest of every director and officer, whether as director, officer, member or creditor of the company, or otherwise, and
(ii) the effect of the compromise or arrangement on those persons in so far as it is different from the effect on the similar interests of other persons, and
(b) that is given by advertisement, either the statement required by paragraph (a), or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of the statement.
(2) If the compromise or arrangement affects the rights of debentureholders, the statement must include the same explanation with respect to the trustee for the debentureholders as, under subsection (1) of this section, is required to be given with respect to the directors and officers.
(3) If a notice referred to in subsection (1) (b) includes a notification that copies of the statement can be obtained, every creditor or member entitled to attend the meeting must, on making application at the place and in the manner indicated by the notice, be furnished without charge by the company with a copy of the statement.
254 (1) In this section
"liabilities" includes duties, and
"property" includes rights, powers and property of every description.
(2) If
(a) an application is made to the court under section 252 for the approval of a compromise or arrangement,
(b) the compromise or arrangement has been proposed for the purpose of, or in connection with, a scheme for the reconstruction of a company or companies, or the amalgamation of 2 or more companies, and
(c) under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as the "transferor company") is to be transferred to another company (in this section referred to as the "transferee company"),
the court may, either by the order approving the compromise or arrangement, or by any subsequent order, provide for
(d) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of the transferor company,
(e) the allotment or appropriation by the transferee company of any shares, debentures or other similar interests in that company that, under the compromise or arrangement, are to be allotted or appropriated by that company to or for any person,
(f) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor company,
(g) the dissolution without winding up of the transferor company,
(h) provision to be made for any person who, within the time and in the manner the court directs, objects to the compromise or arrangement, including a direction that any member is entitled to give a notice of dissent, or
(i) the incidental, consequential and supplemental matters necessary to ensure that the reconstruction or amalgamation is fully and effectively carried out.
(3) If an order of the court made under this section provides for the transfer of property or liabilities, then, on filing with the registrar a certified copy of the order, that property is deemed to be transferred to and vested in, and those liabilities are deemed to be transferred to and become the liabilities of, the transferee company and, in the case of any particular property, if the order so directs, freed from any charge that is by the compromise or arrangement to cease to have effect.
(4) An order of the court under this section does not take effect until a certified copy of it has been accepted for filing by the registrar.
255 (1) For the purposes of this section, an "acquiring company" is a company that, under a scheme or contract, makes an offer to acquire shares or any class of shares in another company, called the "subject company", which offer has, within 4 months after the making of the offer, been accepted as to the shares, or as to each class of shares involved, by members holding not less than 9/10 of those shares or of the shares of that class other than shares already held at the date of the offer by, or by a nominee for, the acquiring company or its affiliate.
(2) Every acquiring company, within 5 months after the making of an offer referred to in subsection (1), may give written notice to any member of the subject company who holds shares or shares of the class involved in the offer, and who did not accept the offer, that the acquiring company desires to acquire that member's shares.
(3) If a notice is given under subsection (2), the acquiring company is entitled and bound to acquire every share of the member to whom notice was given for the price and on the terms in the offer referred to in subsection (1) unless the court, on application by the member to whom notice was given, made within 2 months from the date of the notice, orders otherwise.
(4) On an application by a member to whom notice was given under subsection (2), the court may
(a) set the price and terms of payment, and
(b) make consequential orders and give directions the court considers appropriate.
(5) For the purpose of this section, every offer referred to in subsection (1) for shares of more than one class is deemed to be a separate offer for shares of each class.
(6) If a notice has been given by an acquiring company under subsection (2) and the court has not ordered otherwise on an application made by a member to whom the notice was given, the acquiring company, on the expiration of 2 months after the date on which the notice has been given, or, if an application to the court by the member to whom the notice was given is then pending, after that application has been disposed of, must send a copy of the notice to the subject company and pay or transfer to the subject company the amount or other consideration representing the price payable by the acquiring company for the shares that by this section that company is entitled to acquire, and, on receiving the copy of the notice and that amount or other consideration, the subject company must register the acquiring company as a member with respect to those shares.
(7) Any sum received by the subject company under this section must be paid into a separate bank account and, together with any other consideration so received, must be held by that company, or a trustee approved by the court, on trust for the several persons entitled to that sum.
(8) Every person, except a company, who delivers a notice or form that contains a statement or makes a representation to any member of a company to the effect that the person proposes to take advantage of any enactment to acquire the shares of the member in the company, or that the person can compel the member to transfer the member's shares in the company to the person, commits an offence.
(9) Every acquiring company, within one month after becoming entitled to give the notice referred to in subsection (2), if the acquiring company has not given that notice, must give a written notice to each member referred to in subsection (2) that the member, within 3 months after receipt of the notice, may require the acquiring company to acquire the shares.
(10) If a member of a subject company requires the acquiring company to acquire the member's shares in accordance with subsection (9), the acquiring company must acquire the shares for the price and on the terms in the offer described in subsection (1).
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