Canada Cooperatives Regulations

46 (1) For the purpose of subsection 131(1) of the Act, before a constrained share cooperative concludes that investment shares of the cooperative are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 or the directors of the cooperative determine that investment shares of the cooperative may be owned contrary to the constraint, the cooperative shall send by registered mail a written notice in accordance with subsection (5) to the person shown in the securities register of the cooperative as the holder of the investment shares.

(2) For the purpose of subsection 131(1) of the Act, investment shares of a constrained share cooperative that are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 may only be sold after the directors of the cooperative have

• (a) ascertained whether or not the cooperative has received a reply to a request for information referred to in subsection (7) respecting the shares and considered the reply, if any; and

• (b) examined and considered any other records of the cooperative that contain information that would indicate whether the shares are owned contrary to the constraint.

(3) For the purpose of subsection 131(1) of the Act, if a constrained share cooperative has sent a notice referred to in subsection (1) to a person shown in the securities register of the cooperative as the holder of investment shares, the cooperative shall, not less than 90 days but not more than 150 days after sending the notice, send to the person by registered mail a further written notice in accordance with subsection (6) respecting the investment shares that the cooperative intends to sell if

• (a) the cooperative has concluded that investment shares in respect of which the notice was sent are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39; or

• (b) the directors of the cooperative have determined that investment shares in respect of which the notice was sent may be owned contrary to the constraint and the cooperative intends to sell all or some of the investment shares under subsection 131(1) of the Act.

(4) Where a cooperative sends a notice under subsection (1) or (3), the cooperative shall, at the time the notice is sent, enter or cause to be entered in the securities register of the cooperative the particulars of the notice including the date on which it was sent.

(5) The notice referred to in subsection (1) shall contain

• (a) the name and address of the holder of the investment shares as shown in the securities register of the cooperative;

• (b) a statement that identifies the certificate representing the investment shares by certificate number or otherwise;

• (c) a statement indicating that all or some of the investment shares may be sold by the cooperative under subsection 131(1) of the Act if the shares are owned, or the directors of the cooperative determine that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39;

• (d) a statement indicating that the cooperative may conclude that all or some of the investment shares are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39;

• (e) a statement indicating that the directors of the cooperative may determine that all or some of the investment shares may be owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 and that, for the purpose of making the determination, the directors of the cooperative will

  • (i) consider the reply, if any, to a request for information referred to in subsection (7) respecting the shares, and

  • (ii) examine and consider any other records of the cooperative that contain information that would indicate whether the shares are owned contrary to the constraint;

• (f) a statement indicating that no investment share in respect of which the notice is sent may be sold under subsection 131(1) of the Act if a transfer of the share is registered in the securities register of the cooperative after the notice was sent, unless the cooperative again complies with the requirements set out in this Part respecting the sale of the share;

• (g) a statement indicating that no investment share in respect of which the notice is sent may be sold under subsection 131(1) of the Act unless not less than 60 days but not more than 150 days have elapsed from the day on which a notice referred to in subsection (3) is sent to the holder of the share;

• (h) a statement indicating the earliest date and the latest date on which the cooperative may sell the investment shares, having regard to the requirements set out in section 48;

• (i) a statement indicating that the investment shares may only be sold on an exchange on which investment shares of the cooperative are listed and posted for trading or, if investment shares of the cooperative are not listed and posted for trading on an exchange, in such a way as to obtain the best sale price available in the circumstances at the time of sale;

• (j) a statement indicating that, if not all the investment shares of the holder evidenced by a certificate are sold under subsection 131(1) of the Act, a certificate evidencing the investment shares that are not sold will be issued on surrender for cancellation of the certificate evidencing the investment shares sold; and

• (k) a statement indicating that, immediately on the sale of the investment shares under subsection 131(1) of the Act, the cooperative will

  • (i) register the transfer or a notice of the sale of the investment shares or cause the transfer or a notice of the sale of the shares to be registered in the securities register of the cooperative, and

  • (ii) send a notice of the sale to the person shown in the securities register of the cooperative as the holder of the shares at the time of sale.

(6) The notice referred to in subsection (3) shall contain

• (a) the name and address of the holder of the investment shares as shown in the securities register of the cooperative;

• (b) a statement that identifies the certificate evidencing the investment shares by certificate number or otherwise;

• (c) a statement indicating that all or some of the investment shares may be sold by the cooperative under subsection 131(1) of the Act if the shares are owned, or the directors of the cooperative determine that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39;

• (d) a statement indicating that the cooperative has concluded that the investment shares are owned, or that the directors of the cooperative have determined that the investment shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 and indicating the reason for the conclusion or determination, as the case may be;

• (e) a statement indicating that the cooperative intends to sell all or a specified number of the investment shares under subsection 131(1) of the Act;

• (f) a statement indicating that if, before the sale, the cooperative changes its conclusion that the investment shares are owned, or the directors of the cooperative change their determination that the investment shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 or there is a change in the reason for the conclusion or determination, the cooperative will send a notice in accordance with subsection 47(1) to the person shown in the securities register of the cooperative as the holder of the investment shares;

• (g) a statement advising that, unless the person shown in the securities register of the cooperative as the holder of the investment shares receives a notice referred to in paragraph (f), that person and all other interested persons should not assume

  • (i) that the cooperative has changed its conclusion that the investment shares are owned, or the directors of the cooperative have changed their determination that the investment shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39,

  • (ii) that there has been a change in the reason for the conclusion or determination, or

  • (iii) that the cooperative no longer intends to sell the investment shares under subsection 131(1) of the Act;

• (h) a statement indicating that no investment share in respect of which the notice is sent may be sold under subsection 131(1) of the Act if a transfer of the share is registered in the securities register of the cooperative after the notice referred to in subsection (1) was sent unless the cooperative again complies with the requirements set out in this Part respecting the sale of the share;

• (i) a statement indicating that no investment share in respect of which the notice is sent may be sold under subsection 131(1) of the Act unless not less than 60 days but not more than 150 days have elapsed from the day on which the notice was sent to the holder of the share; and

• (j) a statement indicating each of the matters referred to in paragraphs (5)(h) to (k).

(7) The notice referred to in subsection (1) shall be accompanied by a request for information, including a request for the completion of the forms, that would indicate whether the investment shares are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39.

(8) The notice referred to in subsection (3) shall be accompanied by a request for information referred to in subsection (7), unless the cooperative has received the requested information before the notice is sent.

(9) A request for information referred to in subsection (7) shall be accompanied by instructions for the furnishing of the information and the completion of the forms referred to in that subsection and by a sufficient number of copies of the forms.