Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Marginal note:Right to distribution in money

• 224 (1) If in the course of liquidation of a corporation the shareholders resolve or the liquidator proposes to

  • (a) exchange all or substantially all the property of the corporation for securities of another body corporate that are to be distributed to the shareholders, or

  • (b) distribute all or part of the property of the corporation to the shareholders in kind,

  a shareholder may apply to the court for an order requiring the distribution of the property of the corporation to be in money.

• Marginal note:Powers of court

  (2) On an application under subsection (1), the court may order

  • (a) all the property of the corporation to be converted into and distributed in money; or

  • (b) the claims of any shareholder applying under this section to be satisfied by a distribution in money, in which case subsections 190(20) to (22) apply.

Marginal note:Custody of documents

• 225 (1) A person who has been granted custody of the documents and records of a dissolved corporation remains liable to produce those documents and records until the end of the prescribed period or of any shorter period fixed by an order made under subsection 223(5).

• Marginal note:Offence

  (2) A person who, without reasonable cause, contravenes subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

Marginal note:Definition of shareholder

• 226 (1) In this section, shareholder includes the heirs and personal representatives of a shareholder.

• Marginal note:Continuation of actions

  (2) Notwithstanding the dissolution of a body corporate under this Act,

  • (a) a civil, criminal or administrative action or proceeding commenced by or against the body corporate before its dissolution may be continued as if the body corporate had not been dissolved;

  • (b) a civil, criminal or administrative action or proceeding may be brought against the body corporate within two years after its dissolution as if the body corporate had not been dissolved; and

  • (c) any property that would have been available to satisfy any judgment or order if the body corporate had not been dissolved remains available for such purpose.

• Marginal note:Service

  (3) Service of a document on a corporation after its dissolution may be effected by serving the document on a person shown in the last notice filed under section 106 or 113.

• Marginal note:Idem

  (3.1) Service of a document on a company to which the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, applied that has been dissolved by subsection 261(8) of the Canada Business Corporations Act, chapter 33 of the Statutes of Canada, 1974-75-76 and chapter 9 of the Statutes of Canada, 1978-79, may be effected by serving the document on a person shown as a director in the last annual summary filed by the company pursuant to the Canada Corporations Act.

• Marginal note:Reimbursement

  (4) Notwithstanding the dissolution of a body corporate under this Act, a shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount received by that shareholder on such distribution, and an action to enforce such liability may be brought within two years after the date of the dissolution of the body corporate.

• Marginal note:Representative action

  (5) A court may order an action referred to in subsection (4) to be brought against the persons who were shareholders as a class, subject to such conditions as the court thinks fit and, if the plaintiff establishes a claim, the court may refer the proceedings to a referee or other officer of the court who may

  • (a) add as a party to the proceedings each person who was a shareholder found by the plaintiff;

  • (b) determine, subject to subsection (4), the amount that each person who was a shareholder shall contribute towards satisfaction of the plaintiff’s claim; and

  • (c) direct payment of the amounts so determined.

Marginal note:Unknown claimants

• 227 (1) On the dissolution of a body corporate under this Act, the portion of the property distributable to a creditor or shareholder who cannot be found shall be converted into money and paid to the Receiver General.

• Marginal note:Constructive satisfaction

  (2) A payment under subsection (1) is deemed to be in satisfaction of a debt or claim of such creditor or shareholder.

• Marginal note:Recovery

  (3) A person who establishes an entitlement to any moneys paid to the Receiver General under this Act shall be paid by the Receiver General an equivalent amount out of the Consolidated Revenue Fund.

Marginal note:Vesting in Crown

• 228 (1) Subject to subsection 226(2) and section 227, property of a body corporate that has not been disposed of at the date of its dissolution under this Act vests in Her Majesty in right of Canada.

• Marginal note:Return of property on revival

  (2) If a body corporate is revived as a corporation under section 209, any property, other than money, that vested in Her Majesty pursuant to subsection (1), that has not been disposed of shall be returned to the corporation and there shall be paid to the corporation out of the Consolidated Revenue Fund

  • (a) an amount equal to any money received by Her Majesty pursuant to subsection (1); and

  • (b) where property other than money vested in Her Majesty pursuant to subsection (1) and that property has been disposed of, an amount equal to the lesser of

    • (i) the value of any such property at the date it vested in Her Majesty, and

    • (ii) the amount realized by Her Majesty from the disposition of that property.

PART XIXInvestigation

Marginal note:Investigation

• 229 (1) A security holder or the Director may apply, ex parte or on such notice as the court may require, to a court having jurisdiction in the place where the corporation has its registered office for an order directing an investigation to be made of the corporation and any of its affiliated corporations.

• Marginal note:Grounds

  (2) If, on an application under subsection (1), it appears to the court that

  • (a) the business of the corporation or any of its affiliates is or has been carried on with intent to defraud any person,

  • (b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of a security holder,

  • (c) the corporation or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose, or

  • (d) persons concerned with the formation, business or affairs of the corporation or any of its affiliates have in connection therewith acted fraudulently or dishonestly,

  the court may order an investigation to be made of the corporation and any of its affiliated corporations.

• Marginal note:Notice to Director

  (3) A security holder who makes an application under subsection (1) shall give the Director reasonable notice thereof and the Director is entitled to appear and be heard in person or by counsel.

• Marginal note:No security for costs

  (4) An applicant under this section is not required to give security for costs.

• Marginal note:Hearings in camera

  (5) An ex parte application under this section shall be heard in camera.

• Marginal note:Consent to publish proceedings required

  (6) No person may publish anything relating to ex parte proceedings under this section except with the authorization of the court or the written consent of the corporation being investigated.

Marginal note:Powers of court

• 230 (1) In connection with an investigation under this Part, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

  • (a) an order to investigate;

  • (b) an order appointing an inspector, who may be the Director, fixing the remuneration of an inspector, and replacing an inspector;

  • (c) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

  • (d) an order authorizing an inspector to enter any premises in which the court is satisfied there might be relevant information, and to examine any thing and make copies of any document or record found on the premises;

  • (e) an order requiring any person to produce documents or records to the inspector;

  • (f) an order authorizing an inspector to conduct a hearing, administer oaths, and examine any person on oath, and prescribing rules for the conduct of the hearing;

  • (g) an order requiring any person to attend a hearing conducted by an inspector and to give evidence on oath;

  • (h) an order giving directions to an inspector or any interested person on any matter arising in the investigation;

  • (i) an order requiring an inspector to make an interim or final report to the court;

  • (j) an order determining whether a report of an inspector should be published and, if so, ordering the Director to publish the report in whole or in part or to send copies to any person the court designates;

  • (k) an order requiring an inspector to discontinue an investigation; and

  • (l) an order requiring the corporation to pay the costs of the investigation.

• Marginal note:Copy of report

  (2) An inspector shall send to the Director a copy of every report made by the inspector under this Part.

Marginal note:Power of inspector

• 231 (1) An inspector under this Part has the powers set out in the order appointing him.

• Marginal note:Exchange of information

  (2) In addition to the powers set out in the order appointing him, an inspector appointed to investigate a corporation may furnish to, or exchange information and otherwise cooperate with, any public official in Canada or elsewhere who is authorized to exercise investigatory powers and who is investigating, in respect of the corporation, any allegation of improper conduct that is the same as or similar to the conduct described in subsection 229(2).

• Marginal note:Court order

  (3) An inspector shall on request produce to an interested person a copy of any order made under subsection 230(1).

Marginal note:Hearing in camera

• 232 (1) Any interested person may apply to the court for an order that a hearing conducted by an inspector under this Part be heard in camera and for directions on any matter arising in the investigation.

• Marginal note:Right to counsel

  (2) A person whose conduct is being investigated or who is being examined at a hearing conducted by an inspector under this Part has a right to be represented by counsel.

Marginal note:Criminating statements

233 No person is excused from attending and giving evidence and producing documents and records to an inspector under this Part by reason only that the evidence tends to criminate that person or subject that person to any proceeding or penalty, but no such evidence shall be used or is receivable against that person in any proceeding thereafter instituted against that person under an Act of Parliament, other than a prosecution under section 132 of the Criminal Code for perjury in giving the evidence or a prosecution under section 136 of the Criminal Code in respect of the evidence.

Marginal note:Absolute privilege (defamation)

234 Any oral or written statement or report made by an inspector or any other person in an investigation under this Part has absolute privilege.

Marginal note:Information respecting ownership and control

• 235 (1) If the Director is satisfied that, for the purposes of Part XI, XIII or XVII, or for the purposes of enforcing any regulation made under section 174, there is reason to inquire into the ownership or control of a security of a corporation or any of its affiliates, the Director may require any person that the Director reasonably believes has or has had an interest or right in the security or acts or has acted on behalf of a person with such an interest or right to report to him or her or to any person the Director designates

  • (a) information that the person has or can reasonably be expected to obtain as to present and past interests or rights in the security; and

  • (b) the names and addresses of the persons with such an interest or right and of any person who acts or has acted in relation to the security on their behalf.

• Marginal note:Presumption

  (2) For the purposes of subsection (1), a person is deemed to have an interest or right in a security if

  • (a) the person has a right to vote or to acquire or dispose of the security or any interest or right in it;

  • (b) the person’s consent is necessary for the exercise of the rights or privileges of any other person with an interest or right in the security; or

  • (c) any other person with an interest or right in the security can be required or is accustomed to exercise rights or privileges attached to the security in accordance with the person’s instructions.

• Marginal note:Publication

  (3) The Director shall publish in a publication generally available to the public the particulars of information obtained by the Director under this section, if the particulars

  • (a) are required to be disclosed by this Act or the regulations; and

  • (b) have not previously been so disclosed.

• Marginal note:Offence

  (4) A person who fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

• Marginal note:Officers, etc., of bodies corporate

  (5) Where a body corporate commits an offence under subsection (4), any director or officer of the body corporate who knowingly authorized, permitted or acquiesced in the commission of the offence is a party to and guilty of the offence and is liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both, whether or not the body corporate has been prosecuted or convicted.