Cooperative Credit Associations Act (S.C. 1991, c. 48)

Marginal note:Vertical short-form amalgamation

• 230 (1) An association may, without complying with sections 227 to 229, amalgamate with one or more bodies corporate that are incorporated by or under an Act of Parliament if the body or bodies corporate, as the case may be, are wholly-owned subsidiaries of the association and

  • (a) the amalgamation is approved by a resolution of the directors of the association and of each amalgamating subsidiary; and

  • (b) the resolutions provide that

    • (i) the shares of each amalgamating subsidiary will be cancelled without any repayment of capital in respect thereof,

    • (ii) the letters patent of amalgamation and the by-laws of the amalgamated association will be the same as the incorporating instrument and the by-laws of the amalgamating association that is the holding body corporate, and

    • (iii) no securities will be issued by the amalgamated association in connection with the amalgamation.

• Marginal note:Horizontal short-form amalgamation

  (2) Two or more bodies corporate incorporated by or under an Act of Parliament may amalgamate and continue as an association without complying with sections 227 to 229 if

  • (a) at least one of the applicants is an association;

  • (b) the applicants are all wholly-owned subsidiaries of the same holding body corporate;

  • (c) the amalgamation is approved by a resolution of the directors of each of the applicants; and

  • (d) the resolutions provide that

    • (i) the shares of all applicants, except those of one of the applicants that is an association, will be cancelled without any repayment of capital in respect of those shares,

    • (ii) the letters patent of amalgamation and the by-laws of the amalgamated association will be the same as the incorporating instrument and the by-laws of the amalgamating association whose shares are not cancelled, and

    • (iii) the stated capital of the amalgamating association and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating association whose shares are not cancelled.

Marginal note:Joint application to Minister

• 231 (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 229(5), the applicants shall, within three months after the approval of the agreement in accordance with subsection 229(4) or the approval of the directors in accordance with section 230, jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one association.

• Marginal note:Conditions precedent to application

  (2) No application for the issue of letters patent under subsection (1) may be made unless

  • (a) notice of intention to make such an application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of each applicant is situated; and

  • (b) the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Part relating to amalgamations.

• Marginal note:Application of sections 24 to 26

  (3) If two or more bodies corporate, none of which is an association, apply for letters patent under subsection (1), sections 24 to 26 apply in respect of the application with any modifications that the circumstances require.

• Marginal note:Matters for consideration

  (4) Before issuing letters patent of amalgamation continuing the applicants as one association, the Minister shall take into account all matters that the Minister considers relevant to the application, including

  • (a) the sources of continuing financial support for the amalgamated association;

  • (b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of the amalgamated association;

  • (c) the business record and experience of the applicants;

  • (d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity;

  • (e) whether the amalgamated association will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

  • (f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses;

  • (g) whether the association is to be operated in accordance with cooperative principles; and

  • (h) the best interests of the financial system in Canada and, in particular, the cooperative financial system in Canada.

Marginal note:Issue of letters patent

• 232 (1) Where an application has been made to the Minister in accordance with section 231, the Minister may issue letters patent of amalgamation continuing the applicants as one association.

• Marginal note:Letters patent

  (2) Where letters patent are issued pursuant to this section, section 28 applies with such modifications as the circumstances require in respect of the issue of the letters patent.

• Marginal note:Publication of notice

  (3) The Superintendent shall cause to be published in the Canada Gazette notice of the issuance of letters patent pursuant to subsection (1).

Marginal note:Court enforcement

• 232.1 (1) If an association or any director, officer, employee or agent of an association is contravening or has failed to comply with any term or condition made in respect of the issuance of letters patent of amalgamation, the Minister may, in addition to any other action that may be taken under this Act, apply to a court for an order directing the association or the director, officer, employee or agent to comply with the term or condition, cease the contravention or do any thing that is required to be done, and on the application the court may so order and make any other order it thinks fit.

• Marginal note:Appeal

  (2) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court.

Marginal note:Effect of letters patent

• 233 (1) On the day provided for in the letters patent issued under section 232,

  • (a) the amalgamation of the applicants and their continuance as one association becomes effective;

  • (b) the property of each applicant continues to be the property of the amalgamated association;

  • (c) the amalgamated association continues to be liable for the obligations of each applicant;

  • (d) any existing cause of action, claim or liability to prosecution is unaffected;

  • (e) any civil, criminal or administrative action or proceeding pending by or against an applicant may be continued to be prosecuted by or against the amalgamated association;

  • (f) any conviction against, or ruling, order or judgment in favour of or against, an applicant may be enforced by or against the amalgamated association;

  • (g) if any director or officer of an applicant continues as a director or officer of the amalgamated association, any disclosure by that director or officer of a material interest in any contract made to the applicant shall be deemed to be disclosure to the amalgamated association; and

  • (h) the letters patent of amalgamation are the incorporating instrument of the amalgamated association.

• Marginal note:Minutes

  (2) Any deemed disclosure under paragraph (1)(g) shall be recorded in the minutes of the first meeting of directors of the amalgamated association.

• Marginal note:Transitional

  (3) Notwithstanding anything in this Act or the regulations, the Governor in Council may, by order, on the recommendation of the Minister, grant to an association in respect of which the letters patent were issued pursuant to subsection 232(1) permission to

  • (a) engage in a business activity specified in the order that an association is not otherwise permitted by this Act to engage in and that one or more of the amalgamating bodies corporate was engaging in at the time application for the letters patent was made;

  • (b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made;

  • (c) [Repealed, 1994, c. 47, s. 52]

  • (d) hold assets that an association is not otherwise permitted by this Act to hold if the assets were held by one or more of the amalgamating bodies corporate at the time the application for the letters patent was made;

  • (e) acquire and hold assets that an association is not otherwise permitted by this Act to acquire or hold if one or more of the amalgamating bodies corporate were obliged, at the time the application for the letters patent was made, to acquire those assets; and

  • (f) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

• Marginal note:Duration of exceptions

  (4) The permission granted under any of paragraphs (3)(a) to (f) shall be expressed to be granted for a period specified in the order not exceeding

  • (a) with respect to any matter described in paragraph (3)(a), thirty days after the date of issue of the letters patent or, where the activity is conducted pursuant to an agreement existing on the date of issue of the letters patent, the expiration of the agreement;

  • (b) with respect to any matter described in paragraph (3)(b), ten years; and

  • (c) with respect to any matter described in any of paragraphs (3)(d) to (f), two years.

• Marginal note:Renewal

  (5) Subject to subsection (6), the Governor in Council may, by order, renew a permission granted by order under subsection (3) with respect to any matter described in any of paragraphs (3)(b) to (e) for such further period or periods as the Governor in Council deems necessary.

• Marginal note:Limitation

  (6) The Governor in Council shall not grant to an association any permission

  • (a) with respect to matters described in paragraph (3)(b) that purports to be effective more than ten years after the date of the approval for the association to commence and carry on business unless the Governor in Council is satisfied on the basis of evidence on oath provided by an officer of the association that the association will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and

  • (b) with respect to matters described in paragraphs (3)(d) and (e) that purports to be effective more than ten years after the date of issue of the letters patent.

Transfer of Business

Marginal note:Sale by association

• 233.1 (1) An association may sell all or substantially all of its assets to a financial institution incorporated under an Act of Parliament, a bank holding company or an authorized foreign bank in respect of its business in Canada if the purchasing financial institution, bank holding company or authorized foreign bank assumes all or substantially all of the liabilities of the association.

• Marginal note:Sale agreement

  (2) An agreement of purchase and sale (in subsection (3), section 233.2, subsections 233.3(1) and (4) and section 233.5 referred to as a “sale agreement”) must set out the terms of, and means of effecting, the sale of assets referred to in subsection (1).

• Marginal note:Consideration

  (3) Despite anything in this Act, the consideration for a sale referred to in subsection (1) may be cash or fully paid securities of the purchasing financial institution, bank holding company or authorized foreign bank or in part cash and in part fully paid securities of the purchasing financial institution, bank holding company or authorized foreign bank or any other consideration that is provided for in the sale agreement.

• Meaning of authorized foreign bank and bank holding company

  (4) In this section, authorized foreign bank and bank holding company have the meaning assigned to those expressions by section 2 of the Bank Act.