COMPANY ACT

[RSBC 1996] CHAPTER 62

[Updated to November 2, 1999]

Contents

Section 1 – Definitions and interpretation

1 (1) In this Act:

"affiliate" means a corporation that is affiliated with another corporation within the meaning of subsection (2);

"articles" means the document described in section 6, and includes

(a) the articles of association of an existing company,

(b) the bylaws of a company incorporated

(i) under a former Companies Act that did not provide for articles of association, or

(ii) by a special or private Act, and

(c) articles that may be required under section 36 or the regulations;

"associate", if used to indicate a relationship with a person, means

(a) a corporation of which that person beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all shares of the corporation for the time being outstanding carrying voting rights that are at that time capable of being exercised,

(b) a partner of that person,

(c) a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity,

(d) a spouse, son or daughter of that person, or

(e) a relative of that person or of that person’s spouse, other than a relative referred to in paragraph (d), who has the same home as that person;

"auditor" includes a partnership of auditors;

"charter" includes an Act, statute, ordinance, letters patent, certificate, declaration or other instrument or provision of law by or under which a corporation has been incorporated, amalgamated or continued, and every amendment of them applying to the corporation, and also its memorandum, articles, regulations or bylaws, agreement or deed of settlement and every amendment of them;

"class meeting" means a meeting of members who hold shares of a particular class;

"commission" means the commission established under the Commercial Appeals Commission Act;

"Companies Act, 1862" means the Companies Act of the Imperial Parliament, 25 and 26 Victoria, chapter 89, brought into force in British Columbia by the British Columbia Companies Ordinance, 1866 and the British Columbia Companies Ordinance, 1869;

"Companies Act, 1910" means the Companies Act, S.B.C. 1910, c. 7, and includes the Companies Act, R.S.B.C. 1911, c. 39, as amended;

"Companies Act, 1921" means the Companies Act, S.B.C. 1921, c. 10, and includes the Companies Act, R.S.B.C. 1924, c. 38, as amended;

"company" means a company incorporated or continued under this Act, and includes an existing company and an amalgamated company;

"copy" includes a true copy or a reproduction of the original but, with reference to a resolution of any kind, means a certified copy;

"corporate purposes" means any effort to influence the voting of members or debenture holders of a corporation at any meeting, to acquire or sell shares or debentures of the corporation, or to effect an amalgamation or reorganization of the corporation;

"corporation" means a company, body corporate, association or society, or body politic and corporate, however and wherever incorporated, but does not include a municipality, or a corporation sole;

"court", except in sections 63, 169, 205, 312 and 325, means the Supreme Court;

"debenture" includes an instrument, secured or unsecured, issued by a corporation if that instrument is

(a) in bearer or registered form,

(b) of a kind commonly dealt in on securities exchanges or markets, or commonly recognized in any area in which it is issued or dealt in as a medium for investment, and

(c) evidence of an obligation of indebtedness of the corporation,

but does not include negotiable unsecured promissory notes maturing not more than one year after the date of issue;

"debt obligation" means a bond, debenture, note or other similar obligation, whether secured or unsecured, of a corporation;

"director" includes every person, by whatever name designated, who performs functions of a director;

"document" means a written instrument, including a notice, order, certificate, register, letter, report, return, account, summons or legal process;

"executive director" means the executive director appointed under section 8 of the Securities Act;

"existing company" means a company incorporated under a former Companies Act or a former Companies Ordinance of British Columbia or of the colonies of British Columbia and Vancouver Island;

"extraordinary resolution", when referred to in the memorandum or articles of a company, means a special resolution;

"extraprovincial company" means a corporation continued under section 37, or duly incorporated otherwise than by or under an Act of the Legislature, that carries on business in British Columbia;

"federal company" means a corporation incorporated or continued by or under an Act of Canada and not discontinued by or under an Act of Canada and includes the Governor and Company of Adventurers of England trading into Hudson’s Bay;

"financial statement" includes any notes to it;

"form of proxy" means a written or printed form that, on completion and execution by, or on behalf of, a member, becomes a proxy;

"general meeting" means a general meeting of members;

"insider of a corporation" means

(a) any director or senior officer of the corporation or his or her associate,

(b) any person who beneficially owns, directly or indirectly, shares of the corporation carrying more than 10% of the voting rights attached to all shares of the corporation entitled to vote for the time being outstanding, or that person’s associate, but not including, in the case of a registrant, shares that have been acquired by the registrant as underwriter in the course of a current distribution to the public of those shares, or

(c) the corporation itself,

and every director or senior officer of a corporation that is itself an insider of a corporation is an insider of the corporation;

"insolvent" includes the inability of a company to pay its debts as they become due in the usual course of its business;

"limited liability company" means an organization that

(a) is formed in a jurisdiction other than British Columbia,

(b) is recognized as a legal entity in the jurisdiction in which it was formed,

(c) does not qualify to be registered under this Act as an extraprovincial company, and

(d) is not a partnership or a limited partnership;

"member" means a subscriber of the memorandum of a company, and includes every other person who agrees to become a member of a company and whose name is entered in its register of members or a branch register of members;

"memorandum" means the document described in section 5, and includes the memorandum of association of an existing company as originally executed, or as altered under this or any former Companies Act; and also includes the certificate of incorporation of a company incorporated under the Companies Act, 1878, and a memorandum that may be required under section 36 or the regulations;

"minister" includes any person designated in writing by the minister;

"mortgage" includes a secured debt obligation;

"ordinary resolution" means

(a) a resolution passed by the members of a company in general meeting by a simple majority of the votes cast in person or by proxy, or

(b) a resolution that has been submitted to the members of a company who would have been entitled to vote on it in person or by proxy at a general meeting of the company and that has been consented to in writing by such members of the company holding shares carrying not less than 3/4 of the votes entitled to be cast on it; and a resolution so consented to is deemed to be an ordinary resolution passed at a general meeting of the company;

"printed" includes lithographed or reproduced by any mechanical, electrostatic or photostatic means;

"proxy" means a completed and executed form of proxy by which a member has appointed a person as the member’s nominee to attend and act for the member and on the member’s behalf;

"registrant" means a person registered or required to be registered in any jurisdiction to trade in securities;

"registrar" means the Registrar of Companies or other duly authorized person performing duties as registrar under this Act;

"reporting company" means a corporation incorporated by or under an Act of the Legislature, other than a corporation continued under section 37,

(a) that has any of its securities listed for trading on any stock exchange wherever located,

(b) that is ordered by the registrar to be a reporting company, or

(c) that

(i) was or was deemed to be a public company immediately before October 1, 1973,

(ii) had obtained an exemption order, under section 38A of the Companies Act, R.S.B.C. 1960, c. 67, if the exemption order was in effect immediately before October 1, 1973,

(iii) with respect to any of its securities, files a prospectus with the executive director and obtains a receipt for it, or

(iv) became an amalgamated company after October 1, 1973 if one of the amalgamating companies was, at the time of the amalgamation, a reporting company,

unless the registrar orders that it is not a reporting company;

"senior officer" means the chair or any vice chair of the board of directors, the president, any vice president, the secretary, the treasurer or the general manager of the corporation or any other individual who performs functions of the corporation similar to those normally performed by an individual occupying any of those offices, and the 5 highest paid employees of a corporation, including any individual referred to in this definition;

"separate resolution" means a resolution that has been submitted to all the members who hold shares of a particular class or series and that is consented to in writing by all those members or passed by the required majority at a class meeting or series meeting;

"series meeting" means a meeting of members who hold shares of a particular series;

"solicit" and "solicitation" include

(a) every request for a proxy, whether or not accompanied by or included in a form of proxy,

(b) every request to execute or not to execute a form of proxy or to revoke a proxy,

(c) the sending or delivery of a form of proxy or other communication to a member under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

(d) the sending or delivery of a form of proxy to a member under section 153 (1),

but do not include

(e) the sending or delivery of a form of proxy to a member in response to an unsolicited request made by the member or on the member’s behalf, or

(f) the performance by any person of professional services on behalf of a person soliciting a proxy;

"special resolution" means

(a) a resolution passed by a majority of not less than 3/4 of the votes cast by those members of a company who, being entitled to do so, vote in person or by proxy at a general meeting of the company

(i) of which notice as the articles provide and not being less than 21 days notice specifying the intention to propose the resolution as a special resolution, has been duly given, or

(ii) if every member entitled to attend and vote at the meeting agrees, at a meeting of which less than 21 days notice has been given, or

(b) a resolution consented to in writing by every member of a company who would have been entitled to vote in person or by proxy at a general meeting of the company, and a resolution so consented to is deemed to be a special resolution passed at a general meeting of the company;

"special rights or restrictions" includes special rights and restrictions, whether preferred, deferred or otherwise, and whether in regard to redemption or return of capital, conversion into or exchange for the same or any other number of any other kind, class, or series of shares, dividend, voting, nomination or appointment of directors or other control, or otherwise, and for the purposes of this definition the words "special rights" and the word "restrictions", when used in this Act, whether together or separately, have a corresponding meaning;

"wages or salary" means wages as defined in the Employment Standards Act.

(2) For the purposes of this Act, one corporation is affiliated with another corporation if one of them is the subsidiary of the other, or both are subsidiaries of the same corporation, or each of them is controlled by the same person.

(3) For the purposes of this Act, a corporation is a subsidiary of another corporation if

(a) it is controlled by

(i) that other corporation,

(ii) that other corporation and one or more corporations, each of which is controlled by that other corporation, or

(iii) 2 or more corporations, each of which is controlled by that other corporation, or

(b) it is a subsidiary of a subsidiary of that other corporation.

(4) For the purpose of subsections (2), (3) and (6), a corporation is controlled by a person if

(a) shares of the corporation carrying more than 50% of the votes for the election of directors are held, other than by way of security only, by or for the benefit of that person, and

(b) the votes carried by the shares mentioned in paragraph (a) are sufficient, if exercised, to elect a majority of the directors of the corporation.

(5) For the purposes of this Act, a corporation is the holding company of a corporation if the last mentioned corporation is its subsidiary.

(6) For the purposes of this Act, shares are held for the benefit of a person if they are beneficially owned by a corporation controlled by the person or by an affiliate of that corporation.

(7) For the purposes of this Act, a corporation is deemed to own beneficially securities that are beneficially owned by its affiliates.

(8) For the purposes of this Act, a corporation is deemed to carry on business in British Columbia if

(a) its name, or any name under which it carries on business, is listed in a telephone directory for any part of British Columbia,

(b) its name, or any name under which it carries on business, appears or is announced in any advertisement in which an address in British Columbia is given,

(c) it has a resident agent, or representative or warehouse, office or place of business in British Columbia, or

(d) it otherwise carries on business within British Columbia,

but, for the purposes of this Act, it

(e) is deemed not to carry on business in British Columbia if its business in British Columbia is banking or is constructing and operating a railway, and

(f) is not to be deemed to carry on business in British Columbia merely because of an interest it has as a limited partner in a limited partnership carrying on business in British Columbia.