- (a) extinguishing or reducing a liability in respect of an amount unpaid on any share;
- (b) distributing to the holder of an issued share of any class or series of shares an amount not exceeding the stated capital of the class or series; and
- (c) declaring its stated capital to be reduced by an amount that is not represented by realizable assets.
- (a) the corporation is, or would after the reduction 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.
- (a) to pay to the corporation an amount equal to any liability of the shareholder that was extinguished or reduced contrary to this section; or
- (b) to pay or deliver to the corporation any money or property that was paid or distributed to the shareholder or other recipient as a consequence of a reduction of capital made contrary to this section.
- R.S., 1985, c. C-44, s. 38
- 2001, c. 14, s. 23
Marginal note: Adjustment of stated capital account
- 39 (1) On a purchase, redemption or other acquisition by a corporation under section 34, 35, 36, 45 or 190 or paragraph 241(3)(f), of shares or fractions thereof issued by it, the corporation shall deduct from the stated capital account maintained for the class or series of shares of which the shares purchased, redeemed or otherwise acquired form a part an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series or fractions thereof purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.
- Marginal note: Idem (2) A corporation shall deduct the amount of a payment made by the corporation to a shareholder under paragraph 241(3)(g) from the stated capital account maintained for the class or series of shares in respect of which the payment was made.
- Marginal note: Idem (3) A corporation shall adjust its stated capital account or accounts in accordance with any special resolution referred to in subsection 38(2).
- Marginal note: Idem (4) On a conversion of issued shares of a corporation into shares of another class or series or a change under section 173, 191 or 241 of issued shares of a corporation into shares of another class or series, the corporation shall
- (a) deduct from the stated capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, divided by the number of issued shares of that class or series immediately before the conversion or change; and
- (b) add the result obtained under paragraph (a) and any additional consideration received pursuant to the conversion or change to the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed.
- (a) any of those shares that are held by the corporation at the expiration of two years, and
- (b) any shares into which any of those shares were converted by the corporation and held under paragraph 32(1)(b) that are held by the corporation at the expiration of two years after the shares from which they were converted were acquired
are deemed to have been acquired at the expiration of the two years.
- R.S., 1985, c. C-44, s. 39
- 1994, c. 24, s. 9(F)
- 2001, c. 14, s. 24(F)
- 2011, c. 21, s. 25(F)
Marginal note: Enforcement of contract to buy shares
- 40 (1) A corporation shall fulfil its obligations under a contract to buy shares of the corporation, except if the corporation can prove that enforcement of the contract would put it in breach of any of sections 34 to 36.
- Marginal note: Status of contracting party (2) Until the corporation has fulfilled all its obligations under a contract referred to in subsection (1), the other party retains the status of claimant entitled 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 and to the rights of holders of any class of shares whose rights were in priority to the rights given to the holders of the class of shares being purchased, but in priority to the rights of other shareholders.
- R.S., 1985, c. C-44, s. 40
- 2001, c. 14, s. 25
Marginal note: Commission for sale of shares
41 The directors may authorize the corporation to pay a reasonable commission to any person in consideration of the person’s purchasing or agreeing to purchase shares of the corporation from the corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares.
- R.S., 1985, c. C-44, s. 41
- 2001, c. 14, s. 135(E)
Marginal note: Dividends
42 A corporation shall not declare or pay a dividend 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 and stated capital of all classes.
- 1974-75-76, c. 33, s. 40
- 1978-79, c. 9, s. 1(F)
Marginal note: Form of dividend
- 43 (1) A corporation may pay a dividend by issuing fully paid shares of the corporation and, subject to section 42, a corporation may pay a dividend in money or property.
- Marginal note: Adjustment of stated capital account (2) If shares of a corporation are issued in payment of a dividend, the declared amount of the dividend stated as an amount of money shall be added to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend.
- 1974-75-76, c. 33, s. 41
- 1978-79, c. 9, ss. 1(F), 16
44 [Repealed, 2001, c. 14, s. 26]
Marginal note: Shareholder immunity
- 45 (1) The shareholders of a corporation are not, as shareholders, liable for any liability, act or default of the corporation except under subsection 38(4), 118(4) or (5), 146(5) or 226(4) or (5).
- Marginal note: Lien or hypothec on shares (2) Subject to subsection 49(8), the articles may provide that the corporation has a lien or hypothec on a share registered in the name of a shareholder or the shareholder’s personal representative for a debt of that shareholder to the corporation, including an amount unpaid in respect of a share issued by a body corporate on the date it was continued under this Act.
- Marginal note: Enforcement of lien or hypothec (3) A corporation may enforce a lien or hypothec referred to in subsection (2) in accordance with its by-laws.
- R.S., 1985, c. C-44, s. 45
- 2001, c. 14, s. 27
- 2011, c. 21, s. 26
