Continuance (export) of a federal corporation

Learn how to prepare a request to continue (export) a corporation from the Canada Business Corporations Act (CBCA) to another corporate statute.

Table of Contents

• What is a continuance (export) and when does it come into effect?
• What does Corporations Canada review in an application for continuance?
• What is the process to continue (export) a corporation into a non-federal jurisdiction (province, territory or another country)?
• Related Information
• Continuance (export) of a corporation to a federal jurisdiction

What is a continuance (export) and when does it come into effect?

An export transaction allows a CBCA corporation to be governed by another legislation other than the CBCA. It continues into, and is governed by, another legislation (referred to as the importing legislation). The CBCA would be the exporting legislation. As a result, the corporation ceases to be governed by the CBCA.

An export transaction may also be carried out as part of an amalgamation that results in a non-CBCA corporation or an arrangement.

A continuance (export) comes into effect on the date shown on the Certificate of Discontinuance issued by Corporations Canada. As of that date, the corporation will no longer be governed by the CBCA. Instead, it will be governed by the importing legislation, as if it had been incorporated in that jurisdiction.

What does Corporations Canada review in an application for continuance?

Corporations Canada reviews the application to ensure that:

• the continuance will not adversely affect any of the corporation's shareholders or creditors
• shareholders have been given adequate disclosure and have approved the export by a special resolution^{Footnote 1}
• the importing legislation permits the continuance of a CBCA corporation
• the corporation wishing to continue is in good standing under the CBCA (e.g., the corporation is up to date with filings of annual returns and financial statements, if applicable, and is not the subject of a current investigation for non-compliance).

What is the process to continue (export) a corporation into a non-federal jurisdiction (province, territory or another country)?

This involves four steps:

Step 1 - Authorisation of the continuance by a special resolution of shareholders

Each share in the corporation – whether or not it otherwise has such rights – has the right to vote in respect of a continuance. A special resolution is a resolution that is passed by at least two-thirds of the votes cast at a meeting.

The meeting notice and disclosure materials sent to shareholders must contain the following information:

• a description of any major differences between the protections available to shareholders under both the CBCA (e.g., the availability of the oppression remedy), and the importing legislation
• a description of any possible transaction – planned or unplanned – that may follow the export if such a transaction could have major consequences for the shareholders. For example, once the export is completed, the corporation intends to complete another corporate transaction that would not be permissible under the CBCA. This disclosure should indicate whether or not the proposed subsequent transaction is a major motivating influence for the export transaction, and whether or not a legal commitment has been made to conduct the proposed subsequent transaction after completion of the export transaction
• the reasons for the export transaction
• the availability of dissent rights
• that the continuance must be approved by a special resolution of shareholders
• any other material considerations.

Step 2 - Application for a Letter of Satisfaction from Corporations Canada

The Letter of Satisfaction states that Corporations Canada is satisfied that the continuance will not be prejudicial to creditors or shareholders of the corporation. The Letter of Satisfaction is valid for 90 days.

To obtain a Letter of Satisfaction, the corporation must send a written request to Corporations Canada, specifying:

• the corporate name and corporation number
• the name and telephone number of the applicant and details of where the Letter of Satisfaction should be sent
• a statement of a director or an authorised officer of the corporation stating that:
  • shareholders have been given full disclosure of the effect of export on their rights and interests;
  • the continuance has been approved by a special resolution of the corporation's shareholders
  • the continuance will not adversely affect shareholders or creditors of the corporation.
• If any shareholders dissented to the continuance, a statement of a director or officer that the corporation
  • will undertake to honour the dissent right granted by section 190 of the CBCA, and, if necessary, consult the Canadian courts for that purpose; and
  • has sufficient funds to pay dissenting shareholders and that arrangements have been made to ensure that those funds will be available to satisfy that claim.
• the filing fee.

If the corporation is continuing under a legislation that has not been pre-approved by Corporations Canada, the following documents must also be filed:

• a copy of the relevant provisions of the importing legislation under which the corporation will continue
• a signed legal opinion by counsel qualified to practice in the jurisdiction under which the corporation will continue. The notice must state that the importing legislation:
  • allows the continuance of a CBCA corporation
  • provides for the rights listed in subsection 188(10) of the CBCA.

Step 3 - Sending the Letter of Satisfaction to an importing legislative authority

The corporation must send the Letter of Satisfaction to the legislative authority which administers the importing legislation.

If the legislative authority approves the application for continuance, it will issue a document (e.g., a Certificate of Continuance) stating that the corporation is duly continued under the importing legislation, as if it had been incorporated under it.

Step 4 - Sending the document issued by the legislative authority to Corporations Canada

The corporation must send the document issued by the legislative authority to Corporations Canada.

Upon receipt of this document, Corporations Canada will issue a Certificate of Discontinuance. The date indicated on the Certificate of Discontinuance will be the same as the date on the document issued by the legislative authority.

It is necessary for the corporation to obtain the Certificate of Discontinuance. Until Corporations Canada issues a Certificate of Discontinuance, the corporation will continue to be governed by the CBCA, even though it is also governed by the importing legislation.

A notice of issuance of a Certificate of Discontinuance will be published in the Corporations Canada Monthly Transactions.

Related Information

• How do I file my application?
• What happens after I submit my application?
• Complaints and Appeals

Continuance (export) of a corporation to a federal jurisdiction

• Canada Not-for-profit Corporations Act (NFP Act) or the Canada Cooperatives Act (Coop Act)
• Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act

Footnotes

Footnote 1

Notice of the meeting does not legally have to be given to other persons affected by the continuance (e.g., creditors). However, it is good corporate practice to advice persons other than shareholders who would be affected by an export operation. If such a notice is appropriate, a news release may be adequate.

Return to footnote 1 referrer