Table of Contents Master

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1 Table of Contents Master VOLUME 1 Supplementary Table of Cases... STC-1 Table of Cases... TC-1 CHAPTER 1 NON-CORPORATE ORGANIZATIONS 1.1 Unincorporated Business Organizations Introduction Sole Proprietorship and Division Sole Proprietorship (a) Commercial Law Characteristics (b) Tax Factors Corporate Division (a) Commercial Law Characteristics (b) Tax Factors Joint Venture and Co-ownership Commercial Law Characteristics (a) Joint Venture (b) Co-ownership Tax Factors Business Trust (Including Real Estate Investment Trust) Commercial Law Characteristics Tax Factors Limited Liability Company Unincorporated Non-Profit Organizations Unincorporated Non-Profit Associations Charitable Trusts Charitable Trusts Distinguished from Other Trusts Types of Charitable Trusts Taxation of Non-Profit Organizations Regulation of Charities General Partnerships and LLPs Nature of Partnership (a) Meaning of Partnership (b) Indicia of Partnership (c) Subordination of Certain Loan Agreements and Sales of Goodwill Providing for Share of Profits External Relations and the Liability of Partners to Third Parties (a) Agency of Partners CON-1 (OCLP) (2014 Rel. 2)

2 1.3.2(b) Partner Liability Regime Relations Among Partners Inter Se (a) Default Rules (b) Partnership Property (c) Fidelity (d) Limited Rights of Assignees Ownership of Land Dissolution (a) Dissolution Triggering Events (b) Procedure (c) Distribution of Partnership Property and Liability for Deficiency Registration Requirements Limited Liability Partnership Function LLP Liability Shield Formation Restrictions of Business Activities LLP Firm Name Extra-Provincial LLP BNA Registration Formation and Registration Requirements General Name Registration by a General Partnership or LLP Partnership Record Business Name Other than Firm Name Registration Fees Cancellation of a Business Name Registration Renewals Civil Remedy Effect of Noncompliance Offences Prohibited and Restricted Business Names Transaction Opinions Involving General Partnerships or LLPs General Scope of Examination Formation and Existence of Partnership Partnership Authorization Execution and Delivery Enforceability Taxation of Partnerships and Partners Fiscal Period CON-2

3 Nature of Partnership Taxation Special Rules Applicable to Calculating Partnership Income Flow-Through of Partnership Losses Disposition of Partnership Interest Limited Partnerships Overview LP Structure Basic Requirements LP Declarations (and Declarations of Change) Consequences of Non-compliance LP Name Requirements LP Documents (a) Record of Limited Partners (b) Other LP Documents and Rights of Inspection Rights, Liabilities and Immunities of Partners General Partners Limited Partners (a) Limitation of Liability (b) Return of Contribution (c) Assignment of Limited Partner s Interest (d) Other Rights of Limited Partners Dissolution of LP Triggering Dissolution Distributions on Dissolution Extra-Provincial LP Registration Requirements Consequences of Non-compliance Record of Limited Partners Manitoba LPs Transaction Opinions Involving LPs Overview Scope of Examination Formation and Existence of LP Corporate Status of GP GP s Corporate Power and Capacity LP Authorization GP s Corporate Authorization Execution and Delivery CHAPTER 2 CORPORATIONS 2.1 Business Corporations Characteristics of a Corporation Jurisdiction Shopping CON-3 (OCLP) (2014 Rel. 2)

4 OBCA v. CBCA (a) Technical Differences (b) Fees Incorporation in Other Canadian Jurisdictions Professional Corporations Mutual Fund Corporations Non-LSIF LSIF Financial Institutions and Cooperatives Corporate Taxation Unlimited Liability Companies Introductions Background to the Current Environment Significant Tax Changes Due to the New Protocol Current Determinants in the Choice of ULC Jurisdiction NSULC v. BCULC NSULC v. ABULC BCULV v. ABULC Concluding Observations Non-Share Capital Corporations Introduction Decision to Incorporate Whether to Incorporate With or Without Share Capital (a) Advantage of Non-Share Capital Corporations (b) Disadvantages of Non-Share Corporation (c) Tax Status Advantages of Incorporation Choice of Ontario Federal Incorporation Structure of the Corporations Act (Ontario) Incorporation Application for Incorporation Name Search Report Corporate Name Head Office Objects and Powers (a) Principal Objects and Powers (b) Secondary Objects (c) Restrictions in Other Legislation Directors By-Laws Members Non-Profit Characteristics Non-Profit to Members and Directors Distribution Constrains CON-4

5 2.3.9 Records and Financial Statements Supplementary Letters Patent Continuations and Amalgamation Continuation Amalgamation Cancellation and Winding-up Cancellation for Cause Winding-up Special Non-Share Corporations Clubs Charitable Corporations Taxation of Non-Share Capital Organizations Corporate Personality and Liability Juridical Nature of the Corporation The Ends of the Corporation Corporate Personality Insurable Interest Equitable Subordination Veil Piercing (a) Statutory Framework (b) Jurisprudence Corporate Liability Civil Liability (a) Contract (b) Corporate Vicarious Liability in Tort Corporate Criminal Liability Constitutional Jurisdiction Provincial Authority Federal Authority Canada Not-for-Profit Corporations Law Introduction Types of Federal NFP Corporations Non-Soliciting Corporations Soliciting Corporations Religious Corporations Regulation of Soliciting and Non-Soliciting Corporations Public Accountants and Audits Modernized Corporate Law Framework Incorporation Abolition of Ultra Vires Doctrine Directors and Officers Members and Membership Rights/Remedies By-laws CON-5 (OCLP) (2014 Rel. 7)

6 Borrowing Fundamental Changes Problems and Solutions Whether the Ultra Vires Doctrine is Preserved in Part Vacillation between Soliciting and Non-Soliciting Status Lack of Knowledge Qualifier in Soliciting Corporation Status Accidental or Unintentional Members Minority Veto Power (a) Possible Issues (b) Possible Solutions Does Membership Have Any Privileges? (a) Irreducible Class Membership Rights (b) Statutory Membership Remedies Hybrid By-Laws and By-Law Amendments Self-Perpetuating Boards Ex Officio Directors Liability of Directors and Officers Corporate Governance Implicit CBCA Model (a) CBCA Governance Pillars (b) Summary Implicit CNCA Governance Model (a) CNCA Governance Pillars (b) Implications Transitioning to the New Act Conclusion Summary of Procedure Canada Not-For-Profit Corporations Act Continuance Under the Canada Not-for-profit Corporations Act Outline of the Steps in a Continuance to the CNCA Continue or Involuntarily Dissolve Administrative Dissolution Revival Steps in the Continuance Process Conclusion CHAPTER 3 FORMATION 3.1 Incorporation Pre-Incorporation Decisions Methods of Incorporation Four Methods of Incorporation CON-6

7 (a) Filing Articles of Incorporation (b) Registration of Memorandum of Association (c) Letters Patent (d) Special Act Differences in Methods of Incorporation Incorporation under the OBCA Application of the Act Incorporation Procedure (a) Documentary Requirements (b) Incorporation Date (c) Corporation Number (d) Fees Articles of Incorporation (a) Corporate Name (b) Registered Office (c) Share Capital (d) Incorporators and First Directors (e) Optional Provisions Pre-Incorporation Contracts Problem at Common Law OBCA Solution Case Law on Reformed Pre-Incorporation Contract Regime (a) Promoter s Personal Liability (b) Corporation s Adoption of Contract (c) Promoter s Express Disclaimer (d) Judicial Apportionment of Liability Corporate Capacity and Powers Ultra Vires Doctrine Capacity of an OBCA Corporation Restricted Businesses or Powers Abolition of Constructive Notice Doctrine Indoor Management Rule Summary of Major Corporate Events Incorporation Under the Ontario Business Corporations Act Organization General Information Required Duties and Powers of First Directors Procedure Meeting of First Directors Organizational Meeting of Shareholders Appointment of Officers Transfer of Shares to Permanent Shareholders CON-7 (OCLP) (2014 Rel. 7)

8 Forms of Share Certificates Corporate Seal Minute Book and Corporate Registers By-Laws Purpose of By-Laws Making, Amending or Repealing By-Laws Optional By-Law Provision in the OBCA Banking and Signing Officers Corporate Seal Officers Names Introduction Selecting a Corporate Name Elements of a Corporate Name Unauthorized Use of Legal Elements Format of Name French Form of Name Foreign Language Name Name Restrictions Absolute Prohibitions (a) Words (b) Identical names (c) Punctuation Marks (d) Obscene Names (e) Misdescriptive Names Conditional Prohibitions (a) Affiliated Body Corporate (b) Foreign Parent (c) Long Usage (d) Names Restricted by Statute (e) Amalgamated Corporation (f) Words (g) Numerals Political Party Prohibitions without Consent or Undertaking (a) Successor Corporation (b) Successor Business (c) Differentiated Corporate Names (d) Family Names (e) Engineer (f) Architect (g) Names Implying Government, University, Professional or Financial Intermediary Status CON-8

9 Proposed Names Deceptive and Distinctive Names General, Descriptive, Individual and Geographic Names Searching a Proposed Corporate Name Number Names Business Names Protecting a Corporate Name Change of Corporate Name Voluntary Name Change Compulsory Name Change Judicial Review of Director s Name Decision Trade-Marks Domain Names Registration of Domain Names Cyber-Squatting Corporate Name Disputes Introduction Rationale for Minimizing the Incidence of Corporate Name Confusion Acquiring a Corporate Name under the OBCA Self-Selected Corporate Names Elements of a Corporate Name Corporate Name Regulation Director s Regulatory Roles Compulsory Name Change Judicial Review of Director s Name Decision Substantive Analysis of Likelihood of Deception Statutory Framework Table Legislative Framework on Deceptive Corporate Names Parallel to Trade-mark Confusion Analysis Likelihood of Deception Case Law Summaries Table (a) Cases Ordering a Corporation to Change its Name Table (b) Cases Refusing to Order a Change of Corporate Name Synthesis of Principles and Factors (a) Public v. Private Interests (b) Actual Use (c) Meaning of Deception (d) Degree of Similarity and Inherent Distinctiveness (e) Degree of Similarity CON-9 (OCLP) (2015 Rel. 1)

10 (f) Identical Names (g) Similar Names (h) Identical Coined Element, with Similar or No Descriptive Elements (i) Family Names (j) Identical Suggestive Names (k) Identical Arbitrary Words (l) Identical Geographical Elements (m) Distinctiveness (including Non-identical Coined Names and Names Without Inherent Distinctiveness) (n) Length of Time that the Objector s Name or Trade-Mark Has Been in Use (o) Class of Persons Dealing With Corporation and Objector (p) Other Factors (q) Exercise of Discretion CHAPTER 4 SHAREHOLDER RIGHTS AND REMEDIES 4.1 Shareholders and Their Rights Nature of a Shareholder Shareholders, Beneficial Holders and Entitlement Holders Ways to Become a Shareholder Joint Shareholders Shareholder Lists Shareholder Rights Overview Liability Shield Dividends Return of Capital Information Rights Voting Rights Decision-Making Rights Minority Rights Shareholder Agreements and Voting Agreements Shareholder Agreements Types of Shareholder Agreements Common Provisions (a) Parties (b) Liquidity (c) Financing (d) Dividends and Bonuses (e) Management CON-10

11 (f) Employment (g) Dispute Resolution (h) Other USA (a) Definition and Nature (b) Section 108 of the OBCA (c) OBCA Provisions Subject to USA Voting Agreements Pooling Agreement Voting Trust Dissent and Appraisal Rights Introduction Standing to Dissent Triggering Events Articles of Amendment Amalgamation and Export Continuances Sale of Substantially All of the Corporation s Property Statutory Arrangements Voluntary Extensions Remedy for Undisclosed USA Compulsory Acquisitions, Compelled Acquisitions and GPTs (a) Compulsory Acquisitions (b) Compelled Acquisitions of Minority Interests (c) GPTs Procedure Section Section Section Fair Value Determination Procedural Aspects Partial Summary Judgment Overview Judicial Approach to Share Valuation (a) Market Value Approach (b) Asset-Value Approach (c) Earnings Approach (d) Combination of Approaches Interest and Costs Summary of Procedure Appraisal Rights of Dissenting Shareholders Oppression Remedy Introduction CON-11 (OCLP) (2015 Rel. 1)

12 Background Overview (a) Applicants (b) Grounds (c) Court-Ordered Relief Applicants OSC Per Se Complainants Proper Persons Direct and Indirect Routes to the Oppression Remedy Test for Oppression under Subsection 248(2) (a) Determining the Complainant s Reasonable Expectations (b) Oppressive or Unfairly Prejudicial Conduct Alternative to Court-Ordered Liquidation Indicia of Oppression Oppression Found Oppression Not Found Remedies Buyout (a) Circumstances Justifying Buyout Remedy (b) Elements of Buyout Remedy Other Interim and Final Costs (a) Injunctive Relief (b) Appointment of Receiver-Manager (c) Amending Articles, By-Laws or USA (d) Issuing Securities (e) Appointing or Replacing Directors (f) Purchasing Securities (g) Repayment (h) Rescission (i) Production of Financial Statements (j) Compensating an Aggrieved Person (k) Rectification (l) Liquidation (m) Investigation (n) Requiring a Trial (o) Other Relief Contracting Out Trust Indentures Arbitration Derivative Actions, Investigations and Other Shareholder Remedies Derivative Action CON-12

13 Nature of Statutory Remedy Complainants Leave Requirements Specific Powers of the Court Investigation Overview Background Statutory Provisions Usage Compliance and Restraining Orders Complainant or Creditor Initiated OSC Initiated Other Juridical Remedies under the OBCA Security Holder Remedies under the OSA CHAPTER 5 CORPORATE GOVERNANCE 5.1 Board Functions, Composition and Process Background Governance Models Implicit OBCA Governance Model (a) OBCA Governance Pillars (b) Summary Non-offering Corporations Offering Corporations General Board Functions Board Composition Number Qualification and Disqualification Election Termination Removal Quorum Board Meetings Remuneration Committees Officers General Specific Officers (a) Chair (b) Managing Director (c) President (d) Vice-President (e) Manager (f) Secretary, Treasurer and Controller CON-13 (OCLP) (2015 Rel. 1)

14 Summary of Major Corporate Events Meetings of Directors Under the Ontario Business Corporations Act Duties of Directors and Officers Duties Generally Contracts in Which Directors or Officers are Interested Business Judgment Rule BJR in the Supreme Court of Canada (a) People s Departments Stores (1992) Inc., Re (b) Kerr v. Danier Leather (c) BCE (d) Lessons from the S.C.C. Trilogy BJR in Lower Courts Corporate Opportunity Doctrine Insider Reporting Insider Reports Issuer Filings Mutual Funds Exemptions Penalties Liabilities of Directors and Officers Introduction Significance of the Incorporation Jurisdiction Place of Business Definitions of Director and Officer (a) Definition of Director (b) Officers Board Committees Overview of the Civil and Criminal Liabilities of Directors and Officers Functions and Duties of Directors Duty to Manage or Supervise Management Acting in the Best Interests of the Corporation Civil Liability of Directors and Officers Who Can Sue? Liability to the Corporation (a) Duty of Loyalty (b) Duty of Care (c) Insider Trading and Tipping (d) Non-compliance with OBCA or Constating Documents (e) Issuing Shares for Inadequate Non-Cash Consideration (f) Reacquisition of Shares by an Insolvent Corporation (g) Unreasonable Commissions CON-14

15 (h) Payment of Dividends by an Insolvent Corporation (i) Financial Assistance (j) Improper Indemnification (k) Payments to Dissenting or Oppressed Shareholders by an Insolvent Corporation (l) Oppression Liability to Shareholders (a) Oppression (b) Insider Trading (c) Non-Compliance with Incorporation Statute or Constating Documents (d) Issuing a Misleading Prospectus (e) Issuing a Misleading Take-Over Bid Circular (f) Assumption of a Special Duty (g) Duty of Care Liability to the Holders of Debt Obligations (a) Oppression (b) Insider Trading (c) Misleading Prospectus or Take-Over Bid Circular (d) Duty of Care Liability to Employees (a) OBCA/CBCA (b) Employment Standards Legislation (c) Pension Benefits Legislation (d) Employee Use of Corporate Law Remedies Liability to Tax and Other Governmental Authorities (a) Liability for Direct Corporate Obligations (b) Liability for Third-Party Obligations Liability to Suppliers of Goods and Services (a) Contractual Trust Funds (b) Construction Trust Claims (c) Other Statutory Trust Claims (d) Oppression Liability to Customers Liability to Franchisees Liability to Involuntary Creditors of the Corporation Liability to Trustee in Bankruptcy (a) BIA (b) Oppression Remedy and Derivative Action Criminal Liability of Directors and Officers Types of Offences Ontario Statutes (a) OBCA (b) Securities Law Offences CON-15 (OCLP) (2015 Rel. 1)

16 (c) Environmental Offences (d) Provincial Tax Offences (e) Other Corporate and Business Statutes (f) Other Ontario Statutes Federal Statutes (a) Offences under the Criminal Code (b) Offences under Fiscal Legislation (c) Offences under Insolvency Legislation (d) Offences under Federal Environmental Laws (e) Offences under Other Federal Statutes Enforcement of Civil Liabilities of Directors and Officers Derivative Action Oppression Remedy Compliance and Restraining Orders Initiatives Class Actions Employment Standards Branch Orders CRA Assessments Protecting Directors and Officers from Liability Shareholder Ratification Disclosing Conflicting Interests and Obtaining Disinterested Approval Dissenting from Certain Board Resolutions Unanimous Shareholder Agreement Corporate Indemnification (a) Mandatory Indemnification (b) Prohibited Indemnification (c) Permissive Indemnification (d) Advance of Defence Costs (e) Practical Limitation Shareholder Indemnification Protective Orders in Insolvency Proceedings (a) CCAA Orders (b) BIA Orders Resignation Directors and Officers Liability Insurance Statutory Authorization Coverage of Limitations and Exclusions Procedural Requirements Disclosure Income Tax Implications (a) Deductibility of Insurance Premium by Corporation (b) Deductibility of Insurance Premium by Director CON-16

17 (c) Inclusion of Insurance Premiums in Income of Director/Officer (d) Inclusion of Insurance Proceeds in Income of Director/Officer Conclusion The New NFP Corporate Governance Framework Introduction Overview of the New NFP Legal Governance Framework Duties of Directors and Officers Duty of Care Fiduciary Duty (a) Appropriating Corporate Property, Information or Opportunities (b) Duty to Avoid Unfair Competition With the Corporation (c) Duty to Not Fetter Discretion Conflicts of Interest Corporate Law Rules Charity Law Rules Lines of Authority Constating Documents Corporate Policies and Protocols Committees Audit Committee Compensation Committee Other Committees Protection of Directors and Officers Indemnification (a) Mandatory Indemnification (b) Prohibited Indemnification (c) Permissive Indemnification (d) Advance of Defence Costs (e) Practical Limitation D & O Insurance (a) Statutory Authorization (b) Coverage Limitations and Exclusions (c) Procedural Requirements Other Protections Ethical and Standards Issues for Directors and Counsel Governance Action Plans Increasing Governance Quality Avoiding Governance Litigation CON-17 (OCLP) (2015 Rel. 1)

18 VOLUME 2 CHAPTER 6 CORPORATE FINANCE 6.1 Debt Obligations and Trust Indentures Borrowing Powers Borrowing Giving Security Giving a Guarantee Exercise of Borrowing Powers Banking Resolutions Types of Debt Obligations Borrowing from Financial Institutions Bonds, Debentures and Notes (a) A Lexicon (b) Debt Obligation in Registered or Bearer Form Taking Purchase-Money Security on the Sale of Goods (a) Equipment (b) Inventory Perfection Trust Indentures Introduction History of Trust Indenture Regulation in Ontario Application Indenture Trustee List of Bondholders Regulation of Trustees and Trust Indentures Compliance with Trust Indenture Summary of Procedure Borrowing Powers Securities Transfers, Pledges and Transmissions Overview Predecessor Regime What Was Wrong with the Former Legal Regime? Background to the STA What Implementation of the STA Means Direct Holding System Issue of Securities (a) Applicable Conflict of Law Rules (b) Issue of Certificated or Uncertificated Securities (c) Enforcement of Securities and Defences of the Issuer (d) Share Certificates Transfer of Securities (a) Applicable Conflict of Law Rules (b) Protected Purchaser CON-18

19 (c) Notice of an Adverse Claim (d) Endorsement of a Security Certificate (e) Delivery (f) Warranties on Transfer (g) Signature Guarantees (h) Purchaser s Right to Other Requisites of Transfer (i) Registration of Transfer (j) Lost or Stolen Security Certificates Pledge of Securities (a) Pledgee as Purchaser and Protected Purchaser (b) Scope of Security (c) Attachment (d) Perfection (e) Priority (f) Cut-Off Rule for Buyers of Securities Indirect Holding System Application of Indirect Holding System Nature of Security Entitlement Applicable Conflict of Law Rules Rights of Entitlement Holders (a) In Rem Rights (b) In Personam Rights (c) Cut-Off Rules Disposition of Security Entitlements Pledge of Security Entitlements (a) Overview (b) Attachment (c) Perfection (d) Priority Transmission of Securities Transmissions Rights of Successors Execution against Securities Share Capital and Dividends Introduction Authorized Capital Capital Clause in Articles Designation of Classes and Series Single Share Class Common Shares (a) Public Offering (b) Exempt Offering Multiple Share Classes Preferred Shares CON-19 (OCLP) (2015 Rel. 1)

20 Series Warrants Share Provisions Dividend Rights (a) Preferential Dividends (b) Cumulative and Non-Cumulative Dividends (c) Partially Cumulative (d) Participating Dividends (e) Dividend Sprinkling Return of Capital on Liquidation, Dissolution or Winding-Up Redemption, Retraction and Purchase of Shares by Corporation (a) Redemption (a)(i) Background Law (a)(ii) Redemption Triggers (a)(iii) Redemption Mechanics (a)(iv) Sinking Fund (a)(v) Retraction (a)(vi) Purchase by Corporation Conversion Rights and Anti-Dilution Protection (a) Conversion Rights (b) Anti-dilution Protection Tracking Shares Voting (a) Mandatory Governance Right (b) Application of Equality Principle (c) Multiple and Subordinate Voting Rights (d) Class Election of Directors (e) isement and Separate Class Votes Other Preferential Features Especially Governance Typical Sets Of Share Provisons Private Equity Investment Preferred Shares Used on a Section 85 Rollover or Estate Freeze Reorganization of an Insolvent Corporation Stated Capital Concept of Stated Capital Functions of Stated Capital Account Increase in Stated Capital Reduction in Stated Capital Share Purchase or Redemption (a) Incidental Reduction of Stated Capital Account (b) Generally Applicable Solvency Tests CON-20

21 (c) Exceptions to the Generally Applicable Solvency Tests (d) Director Liability if Solvency Tests Not Met (e) Calculation of Stated Capital Reduction Dividends General Application of the Double Solvency Tests Types of Dividends: Cash, In Specie and Stock Dividends (a) Stock Dividends (b) In Specie Dividends Reserves Declaration of Dividends Record Date Payment Right to Compel Dividend Director Liability for Improper Dividends Issue and Ownership of Shares Issue and Allotment of Shares Overview Contract Law Elements Corporate Law Elements (a) Consideration for Shares (b) Pre-emptive Rights (c) Application of Business Judgement Rule to the Issue of Shares (d) Issue of Stock Dividend (e) Commission on Issuance of Shares Share Certificates General Requirements Notation of Transfer Restrictions Share Conditions Fees Loss, Theft or Destruction Fractional and Scrip Certificates Warrants Share Transfer Restrictions Private Issuer Freedom of Contract Exercise of Board Discretion to Approve a Transfer of Shares Effect of Transfer on a USA Transfer Fees Restricted or Constrained Share Corporations CON-21 (OCLP) (2015 Rel. 1)

22 6.4.6 Lien on Shares Intercorporate Shareholdings Scope of the Prohibition Statutory Exceptions Options to Avoid the Prohibition Against Intercorporate Shareholdings Secured Transactions Overview Credit Facilities Operating Loan (a) Overview (b) Currency (c) Interest (d) Financial Covenants (e) Negative Pledge Term Loan (a) Overview (b) Collateral (c) Financial, Positive and Negative Covenants Capex Facilities Equipment Leasing Other Credit Facilities (a) Letters of Credit and Bank Guarantees (b) Bankers Acceptances and Other Commercial Paper (c) Foreign Exchange (d) Swaps (e) Consignments (f) Tax-Assisted Debt Obligations and Governmental Financial Assistance Programs Collateral Accounts Chattel Paper Inventory Equipment Mobile Goods (a) Motor Vehicles (b) Vessels and Rolling Stock Investment Property (a) Securities (b) Security Entitlements (c) Futures Contracts Real Property (a) Owned CON-22

23 (b) Leasehold Insurance (a) Property Damage and Business Risks (b) Refunds of Unearned Premiums Intellectual Property PPSA System Overview Scope (a) Application (b) Exclusions Attachment (a) Value (b) Debtor s Rights in Collateral (c) Written Security Agreement or Secured Party in Possession (d) No Postponement of Attachment Perfection (a) Registration (b) Maintaining Perfection Priorities (a) General Priority Rules (b) Specific Internal Priority Rules Intercreditor Arrangements (a) Subordinations and Postponements (b) Estoppel Certificates Security Agreements Debenture (a) Nature (b) Perfection GSA Assignment of Accounts (a) GABD (b) Specific Assignment Equipment Leases and Consignment Agreements (a) Equipment Leases (b) Consignments Pledge of Securities or Other Investment Property Bank Act Security (a) Scope (b) Attachment and Perfection (c) Priorities Guarantee Real Property Security (a) Charge/Mortgage of Land CON-23 (OCLP) (2015 Rel. 1)

24 (b) Assignment of Rents (c) Leasehold Mortgage CHAPTER 7 FUNDAMENTAL CHANGES 7.1 Amendments, Continuances and Amalgamations Amendments Articles of Amendment Generally Procedure Date of Certificate of Amendment Separate Class or Series Vote Change of Corporate Name Changing Restrictions on Business Amendments Restricting Issue, Transfer or Ownership of Shares Other Amendments to the Articles Restated Articles Continuances Import Continuance Export Continuance Continuances as Co-operative Corporation Amalgamations Amalgamations Generally Amalgamation Procedure (a) Long-Form Amalgamation (b) Short-Form Amalgamation (c) Post-Amalgamation Organizations Legal Effect of Amalgamation Appraisal Right Summary of Procedure Amending Articles and Restating Articles Summary of Procedure Amalgamation Summary of Procedure Import Continuance Summary of Procedure Export Continuance Arrangements, Reorganizations and Going-Private Transactions Arrangements Introduction Meaning of Arrangement Whose Rights Can Be Arranged? Prerequisites (a) Inapplicable CBCA Requirements (b)OBCA Corporate Applicant (c) Complying with Statutory Procedures Rights That May Be Subject to Arrangement (a) Shareholder Rights CON-24

25 (b) Warrants (c) Debt Obligations Interim Orders Voting Class Identification Approval Orders (a) SCC Framework for Approval of Plans of Arrangement (b) Lower Court Rulings on Approvals Obtaining a Certificate of Arrangement Reorganizations Introduction Scope No Dissent or Appraisal Rights Gap-Filling Nature Stakeholder Approval Obtaining a Certificate of Reorganization Going-Private Transactions Background Regulation of GPTs (a) Judicial (b) Section 190, OBCA Summary of Procedure Arrangements Summary of Procedure Reorganization Liquidation, Dissolution and Revival Liquidation Overview Voluntary Liquidation (a) Resolution (b) Notice (c) Inspectors (d) Arrangement with Creditors re Power of Liquidators (e) Assets (f) Bank Account (g) Contributories (h) Distribution of Assets (i) Filling Vacancies in Office of Liquidator (j) Arrangements with Creditors (k) Compromises with Debtors and Contributors (l) Sale of Property for Shares, etc (m) Obtaining Directions and Examinations (n) Meetings (o) Final Meeting (p) Dissolution (q) Unclaimed Assets CON-25 (OCLP) (2015 Rel. 3)

26 (r) Disposal of Records (s) Stay of Proceedings against the Corporation Involuntary Liquidation (a) Justifiable Lack of Confidence in Conduct of the Corporation s Affairs (b) Misapplication of the Corporation s Property by the Majority Shareholder (c) Fraudulent Scheme (d) Loss of Substratum (e) Partnership Analogy (f) Deadlock (g) Corporation Being Operated Solely for the Benefit of Debenture-holders (h) Management Being Involved in Suspicious Transactions Including Transfer of Assets to Another Corporation Without Retaining Voting Control (i) Outvoted in Domestic Policy Procedure for Involuntary Liquidation Cancellation of Certificate of Incorporation Dissolution Introduction Voluntary Dissolution Termination of Existence of Corporations Not Incorporated by Articles on Letters Patent Liability of Shareholders Property Undisposed of at Dissolution Preservation of Actions against a Corporation Revival Summary of Major Corporate Events Part XVI of the OBCA Voluntary Winding Up Summary of Major Corporate Events Part XVI of the OBCA Winding up by Court Summary of Major Corporate Events Part XVI of the OBCA Voluntary and Involuntary Dissolution and Revival Arrangements and Reorganizations of Insolvent Corporations Introduction Why Resort to Sections 186 or 182 of the OBCA in an Insolvency? Key Elements Restated Capital Structure Reorganizations Involving Section Scope Gap-Filling Nature CON-26

27 Case Law (a) Extinguishing Shares (b) Other Cases Is Section 186 Redundant? (a) Why s. 182 may be Preferred to s (b) Use of s. 186 in Involuntary Contexts Section 182 Arrangements Adjunct or Stand-Alone (a) Adjunct to CCAA or BIA Reorganization (b) Stand-Alone Compromise of Debt Obligations and Other Creditor Claims Meaning of Arrangement Prerequisites Rights Subject to Arrangement (a) Shareholder Rights (b) Warrant Holder Rights (c) Rights of Holders of Debt Obligations (d) Rights of Other Creditors Overview of the Process for Approving a Plan of Arrangement Interim Order (a) General (b) Notice to Stakeholders (c) Appraisal Rights (d) Appointment of Counsel for Shareholders (e) Stays (f) Releases Stakeholder Approval (a) Stakeholder Rights to Vote on the Plan (b) Voting Class Identification (c) Separate Vote Tabulations (d) Approval Thresholds (e) Notice of Meeting and the Information Circular (f) Fairness Opinion (g) Procedure at the Meeting, including Quorum Fairness Hearing (a) BCE Framework (b) Burden of Proof (c) Compliance with Statutory Procedures (d) Good Faith Requirement (e) Fair and Reasonable Requirement Valid Business Purpose Prong CON-27 (OCLP) (2015 Rel. 4)

28 (f) Fair and Reasonable Requirement Fair Balancing of Rights Prong (g) Intelligent Business Person Test Challenging the Plan s Fairness (a) Standing to Object to Plan (b) Lack of Favourable Vote (c) Challenging the Composition of the Majority (d) Plans Found to be Unfair (e) Appeal of Plan Approval Conclusion CHAPTER 8 CORPORATE SECRETARIAL 8.1 Registered Office and Corporate Records Registered Office General Change of Registered Office Functions of Registered Office Corporate Records General Securities Registers and Records Minute Books Rectifying Records Records as Evidence Lists of Shareholders Lists of Holders of Debt Obligations Inspection of Records Location of Records Business Records Protection Act Filings Returns Generally Corporations Information Act Business Names Tax (a) Federal (b) Ontario Corporations Returns Act Securities Act Other OBCA Exemptions Administrative Judicial Financial Statements and Auditors Financial Statements Audits CON-28

29 Exemption from Audit Requirement Auditor (a) Qualification (b) Duties and Liabilities (c) Appointment, Removal and Remuneration (d) Annual Audit Process (e) Audit Report Audit Enquiries and Responses Audit Committees Summary of Procedure Auditors and Financial Statments Shareholder Meetings and Proxy Solicitation Meetings of Shareholders General Annual Meetings Special Meetings Class or Series Meetings Shareholder Requisitioned Meetings Court-ordered Meetings Location Proxy Solicitation Record Dates Notice of Meeting Annual Information Form and Management Discussion and Analysis Shareholder Communications under NI (a) Record Date (b) Request for Beneficial Ownership Information (c) List of Participants (d) Response from Intermediaries (e) Delivery of Proxy-related Material (f) Annual and Financial Statements (g) Security Holder Instructions to Intermediaries (h) Interim Financial Statements Voting Shares Registered in Name of Registrant or Intermediary Proxies and Information Circulars General Form of Proxy Information Circulars Revocation of Proxies Procedures at Meeting of Shareholders Shareholder Proposals Summary of Major Corporate Events Meetings of Shareholders Under the Ontario Business Corporations Act CON-29 (OCLP) (2015 Rel. 4)