Canada Business Corporations Act

Marginal note:Right to dissent

• 190 (1) Subject to sections 191 and 241, a holder of shares of any class of a corporation may dissent if the corporation is subject to an order under paragraph 192(4)(d) that affects the holder or if the corporation resolves to

  • (a) amend its articles under section 173 or 174 to add, change or remove any provisions restricting or constraining the issue, transfer or ownership of shares of that class;

  • (b) amend its articles under section 173 to add, change or remove any restriction on the business or businesses that the corporation may carry on;

  • (c) amalgamate otherwise than under section 184;

  • (d) be continued under section 188;

  • (e) sell, lease or exchange all or substantially all its property under subsection 189(3); or

  • (f) carry out a going-private transaction or a squeeze-out transaction.

• Marginal note:Further right

  (2) A holder of shares of any class or series of shares entitled to vote under section 176 may dissent if the corporation resolves to amend its articles in a manner described in that section.

• Marginal note:If one class of shares

  (2.1) The right to dissent described in subsection (2) applies even if there is only one class of shares.

• Marginal note:Payment for shares

  (3) In addition to any other right the shareholder may have, but subject to subsection (26), a shareholder who complies with this section is entitled, when the action approved by the resolution from which the shareholder dissents or an order made under subsection 192(4) becomes effective, to be paid by the corporation the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted or the order was made.

• Marginal note:No partial dissent

  (4) A dissenting shareholder may only claim under this section with respect to all the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

• Marginal note:Objection

  (5) A dissenting shareholder shall send to the corporation, at or before any meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the corporation did not give notice to the shareholder of the purpose of the meeting and of their right to dissent.

• Marginal note:Notice of resolution

  (6) The corporation shall, within ten days after the shareholders adopt the resolution, send to each shareholder who has filed the objection referred to in subsection (5) notice that the resolution has been adopted, but such notice is not required to be sent to any shareholder who voted for the resolution or who has withdrawn their objection.

• Marginal note:Demand for payment

  (7) A dissenting shareholder shall, within twenty days after receiving a notice under subsection (6) or, if the shareholder does not receive such notice, within twenty days after learning that the resolution has been adopted, send to the corporation a written notice containing

  • (a) the shareholder’s name and address;

  • (b) the number and class of shares in respect of which the shareholder dissents; and

  • (c) a demand for payment of the fair value of such shares.

• Marginal note:Share certificate

  (8) A dissenting shareholder shall, within thirty days after sending a notice under subsection (7), send the certificates representing the shares in respect of which the shareholder dissents to the corporation or its transfer agent.

• Marginal note:Forfeiture

  (9) A dissenting shareholder who fails to comply with subsection (8) has no right to make a claim under this section.

• Marginal note:Endorsing certificate

  (10) A corporation or its transfer agent shall endorse on any share certificate received under subsection (8) a notice that the holder is a dissenting shareholder under this section and shall forthwith return the share certificates to the dissenting shareholder.

• Marginal note:Suspension of rights

  (11) On sending a notice under subsection (7), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section except where

  • (a) the shareholder withdraws that notice before the corporation makes an offer under subsection (12),

  • (b) the corporation fails to make an offer in accordance with subsection (12) and the shareholder withdraws the notice, or

  • (c) the directors revoke a resolution to amend the articles under subsection 173(2) or 174(5), terminate an amalgamation agreement under subsection 183(6) or an application for continuance under subsection 188(6), or abandon a sale, lease or exchange under subsection 189(9),

  in which case the shareholder’s rights are reinstated as of the date the notice was sent.

• Marginal note:Offer to pay

  (12) A corporation shall, not later than seven days after the later of the day on which the action approved by the resolution is effective or the day the corporation received the notice referred to in subsection (7), send to each dissenting shareholder who has sent such notice

  • (a) a written offer to pay for their shares in an amount considered by the directors of the corporation to be the fair value, accompanied by a statement showing how the fair value was determined; or

  • (b) if subsection (26) applies, a notification that it is unable lawfully to pay dissenting shareholders for their shares.

• Marginal note:Same terms

  (13) Every offer made under subsection (12) for shares of the same class or series shall be on the same terms.

• Marginal note:Payment

  (14) Subject to subsection (26), a corporation shall pay for the shares of a dissenting shareholder within ten days after an offer made under subsection (12) has been accepted, but any such offer lapses if the corporation does not receive an acceptance thereof within thirty days after the offer has been made.

• Marginal note:Corporation may apply to court

  (15) Where a corporation fails to make an offer under subsection (12), or if a dissenting shareholder fails to accept an offer, the corporation may, within fifty days after the action approved by the resolution is effective or within such further period as a court may allow, apply to a court to fix a fair value for the shares of any dissenting shareholder.

• Marginal note:Shareholder application to court

  (16) If a corporation fails to apply to a court under subsection (15), a dissenting shareholder may apply to a court for the same purpose within a further period of twenty days or within such further period as a court may allow.

• Marginal note:Venue

  (17) An application under subsection (15) or (16) shall be made to a court having jurisdiction in the place where the corporation has its registered office or in the province where the dissenting shareholder resides if the corporation carries on business in that province.

• Marginal note:No security for costs

  (18) A dissenting shareholder is not required to give security for costs in an application made under subsection (15) or (16).

• Marginal note:Parties

  (19) On an application to a court under subsection (15) or (16),

  • (a) all dissenting shareholders whose shares have not been purchased by the corporation shall be joined as parties and are bound by the decision of the court; and

  • (b) the corporation shall notify each affected dissenting shareholder of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel.

• Marginal note:Powers of court

  (20) On an application to a court under subsection (15) or (16), the court may determine whether any other person is a dissenting shareholder who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting shareholders.

• Marginal note:Appraisers

  (21) A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.

• Marginal note:Final order

  (22) The final order of a court shall be rendered against the corporation in favour of each dissenting shareholder and for the amount of the shares as fixed by the court.

• Marginal note:Interest

  (23) A court may in its discretion allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective until the date of payment.

• Marginal note:Notice that subsection (26) applies

  (24) If subsection (26) applies, the corporation shall, within ten days after the pronouncement of an order under subsection (22), notify each dissenting shareholder that it is unable lawfully to pay dissenting shareholders for their shares.

• Marginal note:Effect where subsection (26) applies

  (25) If subsection (26) applies, a dissenting shareholder, by written notice delivered to the corporation within thirty days after receiving a notice under subsection (24), may

  • (a) withdraw their notice of dissent, in which case the corporation is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or

  • (b) retain a status as a claimant against the corporation, to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of the corporation but in priority to its shareholders.

• Marginal note:Limitation

  (26) A corporation shall not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that

  • (a) the corporation is or would after the payment be unable to pay its liabilities as they become due; or

  • (b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities.