Part 3 Capacity and Powers (clauses 8)

One minor amendment to this part is proposed (s. 18) to reflect the repeal of the financial assistance provisions (see Part 5). In addition, a number of technical changes are proposed to update and clarify the wording of the section.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No.: 8
CBCA Section No.: 18
Topic :Capacity and Powers (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law  
Reword s. 18 and remove the reference to s. 44.

Purpose of Change  
This change amends s. 18 to reflect changes made to other sections of the Act.

Similar Provincial Laws
N/A

Current Wording  
18. A corporation or a guarantor of an obligation of the corporation may not assert against a person dealing with the corporation or with any person who has acquired rights from the corporation that

(a) the articles, by-laws and any unanimous shareholder agreement have not been complied with,

(b) the persons named in the most recent notice sent to the Director under section 106 or 113 are not the directors of the corporation,

(c) the place named in the most recent notice sent to the Director under section 19 is not the registered office of the corporation,

(d) a person held out by a corporation as a director, an officer or an agent of the corporation has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the corporation or usual for such director, officer or agent,

(e) a document issued by any director, officer or agent of a corporation with actual or usual authority to issue the document is not valid or not genuine, or

(f) financial assistance referred to in section 44 or a sale, lease or exchange of property referred to in subsection 189(3) was not authorized,

except where the person has or ought to have by virtue of his position with or relationship to the corporation knowledge to the contrary.

Proposed Wording  
18. (1) No corporation and no guarantor of an obligation of a corporation may assert against a person dealing with the corporation or against a person who acquired rights from the corporation that

(a) the articles, by-laws and any unanimous shareholder agreement have not been complied with;

(b) the persons named in the most recent notice sent to the Director under section 106 or 113 are not the directors of the corporation;

(c) the place named in the most recent notice sent to the Director under section 19 is not the registered office of the corporation;

(d) a person held out by a corporation as a director, an officer or an agent of the corporation has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the corporation or usual for a director, officer or agent;

(e) a document issued by any director, officer or agent of a corporation with actual or usual authority to issue the document is not valid or not genuine; or

(f) a sale, lease or exchange of property referred to in subsection 189(3) was not authorized.

(2) Subsection (1) does not apply in respect of a person who has, or ought to have, knowledge of a situation described in that subsection by virtue of their relationship to the corporation.