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Co-operative Corporations Act

R.S.O. 1990, CHAPTER C.35

Consolidation Period: From August 31, 2007 to the e-Laws currency date.

Last amendment: 2006, c. 21, Sched. C, s. 103.

SKIP TABLE OF CONTENTS

CONTENTS

Interpretation

1.  (1)  In this Act,

“articles of incorporation” or “articles” means the original or restated articles of incorporation, articles of amalgamation, letters patent, supplementary letters patent, a special Act and any other instrument by which a co-operative is incorporated, and includes any amendments thereto; (“statuts constitutifs”, “statuts”)

“authorized capital” means the authorized capital as determined under section 25; (“capital social autorisé”)

“certificate of incorporation” includes letters patent, a special Act or any other instrument by which a co-operative is incorporated; (“certificat de constitution”)

“certified copy” means,

(a) in relation to a document of a co-operative, a copy of the document certified to be a true copy signed by an officer,

(b) in relation to a document issued by a court, a copy of the document certified to be a true copy under the seal of the court and signed by the registrar or clerk thereof,

(c) in relation to a document in the custody of the Minister, a copy of the document certified to be a true copy by the Minister or by such person as is designated by the regulations; (“copie certifiée conforme”)

“co-operative” means a corporation carrying on an enterprise on a co-operative basis and to which this Act applies; (“coopérative”)

“co-operative basis” means organized, operated and administered upon the following principles and methods,

(a) each member or delegate has only one vote,

(b) no member or delegate may vote by proxy,

(c) interest on loan capital and dividends on share capital are limited to a percentage fixed by this Act or the articles of incorporation, and

(d) the enterprise of the corporation is operated as nearly as possible at cost after providing for reasonable reserves and the payment or crediting of interest on loan capital or dividends on share capital; and any surplus funds arising from the business of the organization, after providing for such reasonable reserves and interest or dividends, unless used to maintain or improve services of the organization for its members or donated for community welfare or the propagation of co-operative principles, are distributed in whole or in part among the members in proportion to the volume of business they have done with or through the organization; (“mode coopératif”)

“corporation” means a corporation with or without share capital whether or not it is a co-operative to which this Act applies; (“personne morale”)

“court” means the Superior Court of Justice; (“tribunal”)

“debt obligation” means a bond, debenture, note or other similar obligation of a corporation, whether secured or unsecured; (“titre de créance”)

“direct charge co-operative” means a co-operative that deals with its members and prospective members only in products or services on a cost basis and that directly charges its members a fee to cover the operating expenses of the co-operative; (“coopérative de contribution directe”)

“financial statement” means a financial statement referred to in section 128; (“état financier”)

“housing charges” means the charges a non-profit housing co-operative charges its members and includes charges unrelated to housing; (“frais de logement”)

“issued capital” means the issued capital as determined under section 29; (“capital social émis”)

“member” means a person who is a member of a co-operative pursuant to the provisions of this Act or the articles and by-laws of the co-operative governing membership; (“membre”)

“member unit” means a housing unit of a non-profit housing co-operative other than a non-member unit; (“logement réservé aux membres”)

“Minister” means the Minister of Finance or such other member of the Executive Council to whom the administration of this Act may be assigned; (“ministre”)

“Ministry” means the Ministry of the Minister; (“ministère”)

“multi-stakeholder co-operative” means a co-operative,

(a) the articles of which provide that it is a multi-stakeholder co-operative for the purposes of this Act,

(b) the articles of which provide for the division of its members into two or more stakeholder groups,

(c) the articles of which set out the method of determining the number of directors each stakeholder group may elect, and

(d) for which the requirements set out in subsection 1 (1.3) are satisfied; (“coopérative composée de partenaires multiples”)

“non-member unit” means a housing unit of a non-profit housing co-operative designated under section 171.5 as a non-member unit; (“logement réservé aux personnes qui ne sont pas membres”)

“non-profit housing co-operative” means a co-operative, without share capital, the articles of which provide that the co-operative is a non-profit housing co-operative for the purposes of this Act; (“coopérative de logement sans but lucratif”)

“officer” means the chair or any vice-chair of the board of directors, the president, any vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the general manager, or any other person designated an officer by by-law or by resolution of the directors or any other individual who performs functions for the co-operative similar to those normally performed by an individual occupying any such office; (“dirigeant”)

“personal representative”, where used with reference to the holding of shares or loans or the exercise of a member’s rights in that capacity, means in the capacity of an executor, administrator, guardian, tutor, trustee, receiver or liquidator of the member, shareholder or lender or the committee of or curator to the member, shareholder or lender who is a mentally incompetent person; (“ayant droit”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“regulations” means the regulations made under this Act; (“règlements”)

“related person”, where used to indicate a relationship with any person, means,

(a) any spouse, son or daughter of that person, or

(b) any relative of such person or of such person’s spouse, other than an individual referred to in clause (a), who has the same home as such person; (“personne liée”)

“resident Canadian” means a Canadian citizen or person lawfully admitted to Canada for permanent residence, who is ordinarily resident in Canada; (“résident canadien”)

“security” means any share of any class or series of shares or any debt obligation of a corporation; (“valeur mobilière”)

“senior officer” means,

(a) the chair or any vice-chair of the board of directors, the president, any vice-president, the secretary, the treasurer or the general manager of a co-operative or any other individual who performs functions for the co-operative similar to those normally performed by an individual occupying any such office, and

(b) each of the five highest paid employees of a co-operative, including any individual referred to in clause (a); (“cadre dirigeant”)

“series”, in relation to shares, means a division of a class of shares; (“série”)

“special resolution” means a resolution that is not effective until it is,

(a) passed by the directors of a co-operative, and

(b) confirmed, with or without variation, by at least two-thirds of the votes cast at a general meeting of the members of the co-operative duly called for that purpose, or such greater proportion of the votes cast as the articles provide; (“résolution spéciale”)

“spouse” means a person to whom the person is married or with whom the person is living in a conjugal relationship outside marriage; (“conjoint”)

“stakeholder group” means a group of members of a multi-stakeholder co-operative,

(a) with a common interest, or

(b) residing within a defined geographical area; (“groupement de partenaires”)

“Superintendent” means the Superintendent of Financial Services appointed under the Financial Services Commission of Ontario Act, 1997; (“surintendant”)

“term loan” means a loan having a fixed date of maturity and includes member and patronage loans having a fixed date of maturity; (“prêt à terme”)

“worker co-operative” means a co-operative,

(a) the articles of which provide that the co-operative’s primary object is to provide employment to its members,

(b) the articles of which provide that it is a condition of membership that, except in circumstances prescribed by the regulations, a member must be employed by the co-operative, and

(c) for which subsection (1.1) is satisfied. (“coopérative de travail”) R.S.O. 1990, c. C.35, s. 1 (1); 1992, c. 19, s. 1 (1); 1994, c. 17, s. 1 (1); 1997, c. 28, s. 34; 1999, c. 6, s. 14 (1, 2); 2001, c. 8, s. 6; 2004, c. 31, Sched. 8, s. 1; 2005, c. 5, s. 14 (1-3); 2006, c. 19, Sched. C, s. 1 (1).

Employment requirements

(1.1)  For the purposes of the definition of “worker co-operative” in subsection (1), this subsection is satisfied if,

(a) at least 75 per cent of the permanent full-time employees are members of the co-operative;

(b) at least 75 per cent of all employees are members of the co-operative; or

(c) the alternative requirements prescribed by the regulations for the purposes of this clause, relating to the proportion of employees that must be members of the co-operative are satisfied. 1992, c. 19, s. 1 (2).

Permanent full-time employees

(1.2)  For the purposes of clause (1.1) (a), an employee is not a permanent full-time employee if,

(a) the employee is employed for a probationary period of one year or less;

(b) the employee is employed under a contract for a term of two years or less; or

(c) the employee’s regular hours of work are less than fifteen hours per week. 1992, c. 19, s. 1 (2).

Multi-stakeholder co-operative

(1.3)  For the purposes of the definition of “multi-stakeholder co-operative”, the requirements of this subsection are satisfied if,

(a) each member of the co-operative belongs to a stakeholder group; and

(b) no member of a co-operative belongs to more than one stakeholder group at the same time. 1994, c. 17, s. 1 (2).

Special resolution of multi-stakeholder co-operative

(1.4)  For a multi-stakeholder co-operative, any reference in this Act to a special resolution means a resolution that is not effective until it is,

(a) passed by the directors of a multi-stakeholder co-operative; and

(b) confirmed, with or without variation, by at least two-thirds, or such greater proportion as the articles provide, of the votes cast by the members of each stakeholder group at,

(i) a general meeting of the members of the co-operative duly called for that purpose, or

(ii) separate meetings of each of the stakeholder groups duly called for that purpose. 1994, c. 17, s. 1 (2).

Determining directors

(1.5)  For a multi-stakeholder co-operative, the value invested in the co-operative by the members of any stakeholder group shall not be used as the sole basis for determining the number of directors that may be elected by that stakeholder group. 1994, c. 17, s. 1 (2).

Interpretation: subsidiary

(2)  For the purposes of this Act, a corporation shall be deemed to be a subsidiary of a co-operative if, but only if, it is controlled by that co-operative. R.S.O. 1990, c. C.35, s. 1 (2).

Holding co-operative

(3)  For the purposes of this Act, a co-operative shall be deemed to be a corporation’s holding co-operative if, but only if, that corporation is its subsidiary. R.S.O. 1990, c. C.35, s. 1 (3).

Control

(4)  For the purposes of this Act, a subsidiary shall be deemed to be controlled by one or more other corporations if, but only if,

(a) shares of the subsidiary carrying more than 50 per cent of the votes for the election of directors are held, other than by way of security only, by or for the benefit of such one or more other corporations; and

(b) the votes carried by such shares are sufficient, if exercised, to elect a majority of the board of directors of the subsidiary. R.S.O. 1990, c. C.35, s. 1 (4).

Insolvency

(5)  For the purposes of this Act, a co-operative is insolvent if its liabilities exceed the realizable value of its assets or if the co-operative is unable to pay its debts as they become due. R.S.O. 1990, c. C.35, s. 1 (5).

Number of members

(6)  In determining the number of members of a co-operative, for the purposes of this Act, two or more persons holding the same share or shares jointly shall be counted as one member. R.S.O. 1990, c. C.35, s. 1 (6).

2.Repealed: 1999, c. 12, Sched. I, s. 1 (1).

Application

3.This Act, except where it is otherwise expressly provided, applies,

(a) to every corporation incorporated as a co-operative by or under a general or special Act of the Parliament of the former Province of Upper Canada;

(b) to every corporation incorporated as a co-operative by or under a general or special Act of the Parliament of the former Province of Canada that has its head office and carries on business in Ontario and that was incorporated with objects to which the authority of the Legislature extends; and

(c) to every corporation incorporated as a co-operative by or under a general or special Act of the Legislature,

but this Act does not apply to a corporation to which the Credit Unions and Caisses Populaires Act applies. R.S.O. 1990, c. C.35, s. 3.

Incorporation

Incorporation

4.(1) A co-operative may be incorporated under this Act for any lawful objects to which the authority of the Legislature extends, except those of a corporation the incorporation of which is provided for in any other Act.

Professions

(2) Where the practice of a profession is governed by an Act, a co-operative may be incorporated to practise the profession only if such Act expressly permits the practice of the profession by a corporation and subject to the provisions of such Act. R.S.O. 1990, c. C.35, s. 4.

Articles of incorporation

5.  (1)  Five or more persons, being,

(a) corporations; or

(b) natural persons who are of the age of eighteen years or more,

and who intend to be members of the co-operative, may incorporate a co-operative with or without share capital by signing and delivering to the Minister in duplicate articles of incorporation and such other information as may be prescribed. R.S.O. 1990, c. C.35, s. 5 (1); 1994, c. 17, s. 3 (1).

Articles for worker co-operatives

(1.1)  Three or more natural persons who are of the age of eighteen years or more and who intend to be members of a worker co-operative may incorporate such a co-operative with or without share capital by signing and delivering articles of incorporation to the Minister in duplicate. 1992, c. 19, s. 2 (1).

Contents of articles

(2)  Subject to subsection (3), articles of incorporation shall set out the following particulars:

1. The name of the co-operative to be incorporated.

2. All restrictions on the business that the co-operative may carry on or on the powers that the co-operative may exercise.

3. The place in Ontario where the head office of the co-operative is to be located, giving the municipality and the upper-tier municipality or, where the head office is to be located in territory without municipal organization, the geographic township and district, and the address giving the street and number, if any.

4. The number of directors or the minimum and maximum numbers of directors of the co-operative and the names in full and the residence addresses, giving the street and number, if any, of each person who is to be a first director of the co-operative.

5. The name in full, and the residence address, giving the street and number, if any, of each of the incorporators. R.S.O. 1990, c. C.35, s. 5 (2); 1992, c. 19, s. 2 (2); 1994, c. 17, s. 3 (2); 2002, c. 17, Sched. F, Table.

Idem

(3)  In addition to the particulars required to be set out in subsection (2), articles of incorporation shall state,

(a) where there is to be share capital,

(i) the authorized capital, the classes of shares, if any, into which it is to be divided, the number of shares of each class and the par value of each share,

(ii) where there are to be preference shares, the designations, preferences, rights, conditions, restrictions, limitations or prohibitions attaching to them or each class of them,

(iii) the restrictions to be placed on the transfer of its shares or any class thereof,

(iv) the class and number of shares to be taken by each incorporator and the amount to be paid therefore,

(v) the classes of membership, if any, setting forth the designation of and the terms and conditions attaching to each class of membership, and

(vi) the authority of the directors to fix the number of shares in, and to determine the designations, preferences, rights, conditions, restrictions, limitations or prohibitions attaching to, a class of shares that may be issued in series;

(b) where there is to be no share capital,

(i) the amount of the membership fee,

(ii) the restrictions to be placed on the transfer of member loans,

(iii) the classes of membership, if any, setting forth the designation of and the terms and conditions attaching to each class of membership, and

(iv) the amount of a minimum member loan, if any,

and any other matter required by this Act or the regulations to be set out in the articles. R.S.O. 1990, c. C.35, s. 5 (3); 2001, c. 8, s. 7; 2004, c. 31, Sched. 8, s. 2.

Non-profit housing co-operatives

(3.1)  In addition to the particulars required to be set out in subsections (2) and (3), the articles of a non-profit housing co-operative shall be deemed to provide that,

(a) the primary object of the co-operative is to provide housing to its members;

(b) the co-operative’s activities shall be carried on without the purpose of gain for its members; and

(c) on the dissolution of the co-operative and after the payment of its debts and liabilities, the remaining property of the co-operative be transferred to or distributed among one or more non-profit housing co-operatives or charitable organizations. 1992, c. 19, s. 2 (3).

Articles: general

(4)  The articles may set out any provision that is authorized by this Act to be set out in the articles or that could be the subject of a by-law of the co-operative. R.S.O. 1990, c. C.35, s. 5 (4).

Consent of first director

(5)  Where the articles name as a first director a person who is not an incorporator, the articles shall have attached thereto his or her written and signed consent to act as a first director. R.S.O. 1990, c. C.35, s. 5 (5).

(6)  Repealed: 1997, c. 19, s. 3 (1).

Certificate of incorporation

6.(1) If the articles conform to law, the approvals to incorporate that are required by statute have been given, all prescribed information has been delivered to the Minister and all fees established by the Minister have been paid, the Minister shall,

(a) endorse on each duplicate of the articles the words “Filed/déposé” and the day, month and year of the filing thereof;

(b) file one of the duplicates in the Minister’s office; and

(c) issue to the incorporators or their agent a certificate of incorporation to which the Minister shall affix the other duplicate. R.S.O. 1990, c. C.35, s. 6 (1); 1994, c. 17, s. 4; 1997, c. 19, s. 3 (2).

Idem

(2) A co-operative comes into existence upon the date set forth in its certificate of incorporation.

Idem

(3) A certificate of incorporation is conclusive proof that all conditions precedent required to be performed by the incorporators have been complied with and that the co-operative has been incorporated under this Act, except in a proceeding under section 166 to cancel the certificate for cause. R.S.O. 1990, c. C.35, s. 6 (2, 3).

Name

Use of “co-operative” or “coopérative”, etc.

7.(1) The corporate name of a co-operative shall include the word “co-operative” in English or “coopérative” in French as part thereof.

Idem

(2) Where a co-operative or any director, officer, employee or member uses the name of the co-operative, the word “co-operative” or «coopérative» may be abbreviated to “co-op” in English or “coop” in French.

Idem

(3) No corporation, association, partnership or individual not being a co-operative to which this Act applies shall use in Ontario a name that includes the word “co-operative” or “coopérative” or any abbreviation or derivation thereof whether or not the word, abbreviation or derivation is used in or in connection with the name.

Idem

(4) Subsection (3) does not apply to a corporation incorporated by or under the authority of the Parliament of Canada, to a corporation granted an extra-provincial licence, to a corporation incorporated under the laws of Ontario before the 12th day of April, 1917 or to a corporation to which the Credit Unions and Caisses Populaires Act applies.

Use of “Incorporated”, “Incorporée”, etc.

(5) Subject to subsection (6), the name of a co-operative incorporated after the 31st day of March, 1974 shall have the word “Incorporated”, “Incorporée” or “Corporation” or its corresponding abbreviation “Inc.” or “Corp.” as the last word thereof.

Use of “Limited” or “Limitée”

(6) Where a co-operative has share capital, the name of the co-operative may have the word “Limited” or “Limitée” or its corresponding abbreviation “Ltd.” or “Ltée” as the last word thereof. R.S.O. 1990, c. C.35, s. 7.

Use of name

8.Despite section 7, a co-operative may use its name in such form and in such language as the articles provide and as the Minister approves. R.S.O. 1990, c. C.35, s. 8.

Co-operative name

9.(1) The name of a co-operative shall not,

(a) be the same as or similar to the name of a known corporation, association, partnership or individual whether in existence or not if its use would be likely to deceive, except where the corporation, association, partnership or individual signifies its, his or her consent in writing to the use of the name in whole or in part, and, if required by the Minister,

(i) in the case of a corporation, undertakes to dissolve or change its name to a dissimilar name within six months after the filing of the articles or amendment by which the name is acquired, or

(ii) in the case of an association, partnership or individual, undertakes to cease to carry on its, his or her business or activities, or change its, his or her name to a dissimilar name, within six months after the filing of the articles or amendment by which the name is acquired;

(b) suggest or imply a connection with the Crown or the Government of Canada or the government of a municipality or any province or territory of Canada or any department, branch, bureau, service, agency or activity of any such government or municipality without the consent in writing of the appropriate authority;

(c) suggest or imply a connection with a political party or a leader of a political party;

(d) contain any word or phrase that indicates or implies that it is incorporated for any object other than one or more of the objects set out in its articles;

(e) contain any word or phrase or any abbreviation or derivation thereof, the use of which is prohibited or restricted under any other Act unless in the latter case the restrictions are complied with; or

(f) in the opinion of the Minister, be objectionable on any public grounds.

Change of name if objectionable

(2) If a co-operative through inadvertence or otherwise has acquired a name contrary to subsection (1), the Minister may, after giving the co-operative an opportunity to be heard, issue a certificate of amendment to the articles changing the name of the co-operative to the name specified in the certificate, and, upon the issuance of the certificate of amendment, the articles are amended accordingly.

Failure to perform undertaking

(3) Where an undertaking referred to in clause (1) (a) is given by a co-operative and the undertaking is not carried out within the time specified, the Minister may, after giving the co-operative an opportunity to be heard, issue a certificate of amendment to the articles changing the name of the co-operative to the name specified in the certificate, and, upon the issuance of the certificate of amendment, the articles are amended accordingly.

Idem

(4) Where an undertaking referred to in clause (1) (a) is given by a corporation to which this Act does not apply or by an association, partnership or individual and the undertaking is not carried out within the time specified, the Minister may, after giving the co-operative that acquired the name by virtue of such undertaking an opportunity to be heard, issue a certificate of amendment to the articles changing the name of the co-operative to the name specified in the certificate, and, upon the issuance of the certificate, the articles are amended accordingly. R.S.O. 1990, c. C.35, s. 9.

Change not to affect rights, etc.

10.A change in the name of a co-operative does not affect its rights or obligations. R.S.O. 1990, c. C.35, s. 10.

Unauthorized use of “Limited”, etc.

11.Where a co-operative carries on business or identifies itself to the public in a name or style other than as provided in the articles, such name or style shall not include the word “Limited”, “Limitée”, “Incorporated”, “Incorporée” or “Corporation” or any abbreviation thereof. R.S.O. 1990, c. C.35, s. 11.

Reservation of name

12.(1) Any person may, on application in writing and on the payment of the fee established by the Minister, reserve a corporate name for the use and benefit of the applicant or the applicant’s nominee for a period of ninety days or such lesser period as the applicant specifies, if the name is at the time not contrary to section 9. R.S.O. 1990, c. C.35, s. 12 (1); 1997, c. 19, s. 3 (3).

Idem

(2) During the period for which the name has been reserved, no corporation shall acquire the name or a similar name without the consent in writing of the person for whose use and benefit the name has been reserved. R.S.O. 1990, c. C.35, s. 12 (2).

Seal and Head Office

13.  Repealed: 2001, c. 8, s. 8.

Head office

14.(1) Subject to subsection (2), a co-operative shall at all times have its head office at the place in Ontario where the articles provide that the head office is to be located.

Change of head office

(2) A co-operative may by by-law change the municipality or geographic township in which its head office is located to another place in Ontario.

Where municipality annexed or amalgamated

(3) Where the location of the head office of a co-operative is changed by reason only of the annexation or amalgamation of the place in which the head office is located to or with another municipality, such change does not constitute and has never constituted a change within the meaning of subsection (2). R.S.O. 1990, c. C.35, s. 14 (1-3).

Filing of by-law

(4) The co-operative shall, within ten days after a by-law passed under subsection (2) has been confirmed by the members, file a certified copy of the by-law with the Superintendent. R.S.O. 1990, c. C.35, s. 14 (4); 1997, c. 28, s. 35.

Change of street address

(5) A co-operative may by resolution of the directors change the location of its head office within a municipality or geographic township and shall, within ten days after the passing of the resolution, file with the Superintendent notice of the change giving the address including the street and number, if any, of the new location. R.S.O. 1990, c. C.35, s. 14 (5); 1997, c. 28, s. 35.

Validity

(6) Failure to comply with subsection (4) or (5) does not affect the validity of the by-law or resolution. R.S.O. 1990, c. C.35, s. 14 (6).

Powers

Corporate powers

15.(1) A co-operative has the capacity and the rights, powers and privileges of a natural person.

Limitation in articles

(2) The capacity or powers of a co-operative may be limited by the articles. 1992, c. 19, s. 3.

(3) Repealed: 1992, c. 19, s. 3.

Powers to act outside of Ontario

(4) Every co-operative may exercise its powers beyond the boundaries of Ontario to the extent to which the laws in force where the powers are sought to be exercised permit, and may accept extra-provincial powers and rights. R.S.O. 1990, c. C.35, s. 15 (4).

Acting outside powers

16.(1) No act of a co-operative and no transfer of real or personal property to or by a co-operative, otherwise lawful, that is heretofore or hereafter done or made, is invalid by reason of the fact that the co-operative was without capacity or power to do such act or make or receive such transfer, but such lack of capacity or power may be asserted,

(a) in a proceeding against the co-operative by a member under subsection (2);

(b) in a proceeding by the co-operative, whether acting directly or through a receiver, liquidator, trustee or other legal representative or through members in a representative capacity, against a director or officer or former director or officer of the co-operative; or

(c) as cause for the cancellation of the certificate of incorporation of the co-operative under section 166.

Restraining order

(2) A member of a co-operative may apply to a court of competent jurisdiction for an order to restrain the co-operative from doing any act or transferring or receiving the transfer of real or personal property on the ground that the co-operative lacks capacity or power for the purpose, and the court may, if it considers it to be just and equitable, grant an order prohibiting the co-operative from doing the act or transferring or receiving the transfer of the real or personal property, but, where the act or transfer sought to be restrained or prohibited is being or to be done or made under a contract to which the co-operative is a party,

(a) all the parties to the contract shall be parties to the proceeding;

(b) the court in granting the order may set aside the contract and allow the co-operative or other parties to the contract, as the case may be, such compensation as may be equitable for the loss or damage sustained by any of them from the granting of the order and setting aside of the contract, other than anticipated profits from the contract. R.S.O. 1990, c. C.35, s. 16.

Loans to members, directors, etc.

17.(1) A co-operative shall not make loans to any of its members, directors or employees or give directly or indirectly, by means of a loan, guarantee, the provision of security or otherwise, any financial assistance to any member, director or employee, except in the course of transactions of a type available to all members of the co-operative.

Liability of directors and officers

(2) Those directors and officers of a co-operative who authorize or consent to making a loan or giving financial assistance in contravention of subsection (1) are jointly and severally liable to the co-operative and to its creditors for any actual loss to the co-operative together with interest at the rate of 6 per cent a year. R.S.O. 1990, c. C.35, s. 17.

Contracts

18.  (1)  Repealed: 2001, c. 8, s. 9.

Contracts

(2)  A contract that if entered into by an individual person would by law be required to be in writing signed by the parties to be charged therewith may be entered into on behalf of a co-operative in writing signed by any person acting under its authority, express or implied. R.S.O. 1990, c. C.35, s. 18 (2).

Parol contracts

(3)  A contract that if entered into by an individual person would by law be valid although made by parol only and not reduced into writing may be entered into by parol on behalf of a co-operative by any person acting under its authority, express or implied. R.S.O. 1990, c. C.35, s. 18 (3).

Power of attorney

19.A co-operative may, by writing under seal, empower any person, either generally or in respect of any specified matters, to execute, as its attorney and on its behalf in any place within or outside Ontario, documents to which it is a party in any capacity and that are required by law to be under seal, and every document signed by such attorney on behalf of the co-operative acting within the scope of the attorney’s authority, express or implied, and under the seal of the attorney binds the co-operative and has the same effect as if it were under the seal of the co-operative. R.S.O. 1990, c. C.35, s. 19.

Preincorporation contracts

Definitions

20.(1) In this section,

“contractor” means a person who enters into a preincorporation contract in the name of or on behalf of a co-operative before its incorporation; (“contractant”)

“other party” means a person with whom a contractor enters into a preincorporation contract; (“autre partie”)

“preincorporation contract” means a contract entered into by a contractor in the name of or on behalf of a co-operative before its incorporation. (“contrat préconstitutif”)

Adoption of preincorporation contracts

(2) A co-operative may adopt a preincorporation contract entered into in its name or on its behalf, and thereupon the co-operative is entitled to the benefits and is subject to the liabilities that were contracted in its name or on its behalf and the contractor ceases to be entitled to such benefits or to be subject to such liabilities.

Non-adoption of preincorporation contracts

(3) Where a preincorporation contract is not adopted by a co-operative, the contractor is entitled to the benefits and subject to the liabilities under the contract and is entitled to recover from the co-operative the value of any benefit received by the co-operative under the contract.

Application to court for relief

(4) Whether or not a preincorporation contract is adopted by the co-operative, the other party may apply to the court which may, despite subsections (2) and (3), make an order fixing or apportioning liability as between the contractor and the co-operative in any manner the court considers just and equitable under the circumstances. R.S.O. 1990, c. C.35, s. 20.

By-laws

21.Subject to this Act and the articles, the directors may pass by-laws that regulate the business and affairs of the co-operative. 1992, c. 19, s. 4.

Remuneration of directors

22.A by-law relating to the remuneration of a director as director shall fix the remuneration and the period for which it is to be paid. R.S.O. 1990, c. C.35, s. 22.

Passing of by-laws

23.No by-law is effective until it is,

(a) passed by the directors of a co-operative; and

(b) confirmed, with or without variation, by at least two-thirds of the votes cast at a general meeting of the members of the co-operative duly called for that purpose, or such greater proportion of the votes cast as the articles provide. R.S.O. 1990, c. C.35, s. 23.

By-laws re delegates

24.(1) The directors may pass by-laws providing for,

(a) the division of its members into groups, either territorially or on the basis of common interest;

(b) the election of some or all of its directors,

(i) by such groups on the basis of the number of members in each group or the volume of business done by each group with the co-operative, or both, or

(ii) for the groups in a defined geographical area, by the delegates of such groups meeting together;

(c) the election of delegates and alternate delegates to represent each group on the basis of the number of members in each group or the volume of business done by each group with the co-operative, or both;

(d) where a member is a co-operative, the election or appointment of delegates and alternate delegates to represent the member co-operative on the basis of the number of members in the member co-operative or the volume of business done with the co-operative, or both;

(e) the method of electing or appointing delegates and the number of delegates;

(f) the holding of meetings of delegates;

(g) the authority of delegates at meetings or providing that a meeting of delegates shall for all purposes be deemed to be and to have all the powers of a meeting of the members;

(h) the holding of meetings of members or delegates territorially or on the basis of common interest;

(i) the payment of remuneration and expenses of delegates attending meetings.

Voting

(2) A delegate has only one vote and shall not vote by proxy.

Qualification of delegates

(3) No person shall be elected or appointed a delegate who is not a member, officer or director of the co-operative or of a member co-operative.

Saving

(4) No by-law under subsection (1) shall prohibit members from attending meetings of delegates and participating in the discussions at such meetings. R.S.O. 1990, c. C.35, s. 24.

Capital

Shares

25.  (1)  The authorized capital of a co-operative shall be divided into shares with par value and may consist of shares of more than one class or series. R.S.O. 1990, c. C.35, s. 25 (1); 2004, c. 31, Sched. 8, s. 3 (1).

Par value

(2)  Each class or series of shares shall have a minimum par value of $1 or any multiple of $1 that results in a par value expressed in dollars without cents. 2001, c. 8, s. 10; 2004, c. 31, Sched. 8, s. 3 (2).

Authorized capital

(3)  The authorized capital of the co-operative shall be expressed in Canadian currency in its articles and is an amount equal to the total of the products of the number of shares of each class or series multiplied by the par value thereof. R.S.O. 1990, c. C.35, s. 25 (3); 2004, c. 31, Sched. 8, s. 3 (3).

Membership shares

26.(1) The membership shares of a co-operative shall be shares to which there is attached no preference, right, condition, restriction, limitation or prohibition set out in the articles of the co-operative other than the restriction on the allotment, issue or transfer. R.S.O. 1990, c. C.35, s. 26 (1); 1994, c. 17, s. 2.

Classes of shares

(2) Where a co-operative has only one class of shares, that class shall be membership shares and designated as co-operative or co-op membership shares. R.S.O. 1990, c. C.35, s. 26 (2); 1994, c. 17, s. 2.

Idem

(3) Where a co-operative has more than one class of shares, one class shall be membership shares, designated as provided in subsection (2), and the other shares shall consist of one or more classes of preference shares and shall have attached thereto the designation co-operative or co-op preference shares and such other designation as set out in the articles. R.S.O. 1990, c. C.35, s. 26 (3); 1994, c. 17, ss. 2, 5 (1).

Preference shares

(4) No class of preference shares shall be designated as preference shares or by words of like import, unless the class has attached thereto a preference or right over the membership shares. R.S.O. 1990, c. C.35, s. 26 (4); 1994, c. 17, s. 2.

Transition, common shares

(5) Common shares of a co-operative that are authorized or issued at the time that this subsection comes into force shall be deemed to be membership shares. 1994, c. 17, s. 5 (2).

Preference shares

27.(1) Articles that provide for preference shares must set out,

(a) the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to any class of preference shares; and

(b) the maximum number of shares of any class of preference shares that the co-operative is authorized to issue.

Same

(2) Preference shares do not confer on their holder the right to vote except as permitted under this Act or the right to receive any of the remaining property of the co-operative on dissolution. 1994, c. 17, s. 6.

Preference shares in series

27.1  (1)  The articles, subject to such conditions and restrictions as may be prescribed and subject to the limitations set out in the articles,

(a) may authorize the issue of any class of preference shares in one or more series and may fix the number of shares in, and determine the designations, preferences, rights, conditions, restrictions, limitations and prohibitions attaching to the shares of, each series; and

(b) may, where the articles authorize the issue of any class of preference shares in one or more series, authorize the directors to fix the number of shares in, and to determine the designations, preferences, rights, conditions, restrictions, limitations and prohibitions attaching to the shares of each series. 2004, c. 31, Sched. 8, s. 4.

Proportionate abatement

(2)  If any amount,

(a) of cumulative dividends, whether or not declared, or declared non-cumulative dividends; or

(b) payable on return of capital in the event of the liquidation, dissolution or winding-up of a co-operative,

in respect of shares of a series is not paid in full, the shares of the series shall participate rateably with the shares of all other series of the same class in respect of,

(c) all accumulated cumulative dividends, whether or not declared, and all declared non-cumulative dividends; or

(d) all amounts payable on return of capital in the event of the liquidation, dissolution or winding-up of the co-operative,

as the case may be. 2004, c. 31, Sched. 8, s. 4.

No priority of shares of same class

(3)  No preferences, rights, conditions, restrictions, limitations or prohibitions attached to a series of preference shares authorized under this section shall confer upon the shares of a series a priority in respect of,

(a) dividends; or

(b) return of capital in the event of the liquidation, dissolution or winding-up of the co-operative,

over the shares of any other series of the same class. 2004, c. 31, Sched. 8, s. 4.

Articles designating special shares

(4)  Where, in respect of a series of preference shares, the directors exercise the authority conferred on them, before the issue of shares of that series, the directors shall file with the Minister articles of amendment, in a form approved by the Superintendent, designating the series. 2004, c. 31, Sched. 8, s. 4.

Certificate of amendment

(5)  Section 154 applies with respect to the articles of amendment referred to in subsection (4). 2004, c. 31, Sched. 8, s. 4.

Equality of shares of a class

28.  Each share of a class shall be the same in all respects as every other share of that class, except as otherwise permitted by section 27.1. 2004, c. 31, Sched. 8, s. 5.

Issued Capital

Issued capital

29.  The issued capital of a co-operative shall be expressed in Canadian currency and is an amount equal to the total of the products of the number of issued shares of each class or series multiplied by the par value thereof less such decreases in the issued capital as from time to time have been effected by the co-operative in accordance with this Act. R.S.O. 1990, c. C.35, s. 29; 2004, c. 31, Sched. 8, s. 6.

Cancellation of par share

30.  (1)  If an issued share of a class or series is cancelled, the issued capital is decreased by an amount equal to the par value of the shares of that class or series. 2004, c. 31, Sched. 8, s. 7.

Cancellation of fractions of shares

(2)  If a fraction of an issued share of a class or series is cancelled, the issued capital is decreased by an amount that bears the same proportion to the amount determined under subsection (1) that the fraction bears to a whole share of that class or series. 2004, c. 31, Sched. 8, s. 7.

Redemption, Purchase and Surrender

Purchase and redemption of shares

30.1  (1)  A co-operative may purchase or redeem its shares only in accordance with this Act and the regulations and in accordance with its articles. 2004, c. 31, Sched. 8, s. 8 (1).

Price for purchase and redemption