Guide on amalgamating cooperatives

Two or more cooperatives under the Canadian Cooperatives Act (Coop Act) can amalgamate by filing an application with Corporations Canada. The information below will assist you in preparing your application.

Note

The information provided here is to assist you in completing your application for amalgamation quickly and accurately. It is not intended to replace legal advice. Consider consulting a lawyer or another professional advisor to ensure that the specific needs of your cooperative are met.

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Cooperative principle

A cooperative is a body corporate that adheres to the cooperative principles. For more information, see What is a Co-operative?

Amalgamation

An amalgamation is a process by which two or more cooperatives governed by the Coop Act (“amalgamating cooperatives”) merge and carry on as one cooperative (“amalgamated cooperative”).

There are two ways to amalgamate under the Coop Act:

  1. A long-form amalgamation requires each amalgamating cooperative to sign an amalgamation agreement and submit it for approval at a meeting of members and to a meeting of the shareholders.

The amalgamation agreement sets out the terms and means of carrying out the amalgamation and must include:

  • the provisions required in the articles of amalgamation
  • the name and address of each proposed director of the amalgamated cooperative
  • an explanation of how the membership and investment shares of each amalgamating cooperative will be converted into shares of the amalgamated cooperative and, if applicable, investment shares or other securities of the amalgamated cooperative
  • if any shares of an amalgamating cooperative are not to be converted into shares or securities of the amalgamated cooperative, a statement of the amount of money or securities of any other cooperative that holders of such shares are to receive in addition to or instead of shares or securities of the amalgamated cooperative
  • a description of the manner of payment of money instead of the issue of fractional shares of the amalgamated cooperative or of any other body corporate the securities of which are to be received in the amalgamation
  • the proposed by-laws, whether they are new or consist of the by-laws of one of the amalgamating cooperatives
  • details of any arrangements necessary to complete the amalgamation and to provide for the subsequent management and operation of the amalgamated cooperative.

The articles of amalgamation that you submit to Corporations Canada must include the provisions agreed upon in the amalgamation agreement. However, the amalgamation agreement is not be filed with Corporations Canada.

  1. A short-form amalgamation is often faster since the amalgamation is approved by a resolution of the directors and does not require approval of the members or the shareholders. There are two types of short-form amalgamation:
    • A vertical short-form amalgamation involves a holding cooperative and one or more wholly-owned subsidiaries. In this case, the articles of amalgamation must be the same as the articles of the amalgamating holding cooperative, except for the cooperative name, which may be different.
    • A horizontal short-form amalgamation involves two or more wholly-owned subsidiaries of the same holding cooperative. The membership and investment shares of all but one of the subsidiaries will be cancelled as part of the amalgamation with no repayment of capital in respect of those shares. The articles of amalgamation must be the same as the articles of the amalgamating subsidiary whose membership is not cancelled, except for the name, which may be different.

Can a provincial cooperative amalgamate with a federal cooperative?

In order for an application for amalgamation to proceed, all of the amalgamating cooperatives must be governed by the Coop Act. This means that if a body corporate is governed by another statute, it must first continue to the Coop Act before it can amalgamate with other cooperatives.  For more information, see Policy on continuance (import) of a body corporate into the Canada Cooperatives Act.

The Coop Act does not apply to the body corporate until after a certificate of continuance has been issued. Consequently, the meeting convened to pass the resolution to amalgamate must be held according to the Coop Act requirements for a meeting of members while the meeting to approve the resolution to continue must meet the requirements of the legislation that governed the body corporate prior to the continuance. To simplify and speed up this process, articles of continuance can be filed at the same time as articles of amalgamation.

Documents that must be filed to amalgamate two or more cooperatives

To amalgamate two or more cooperatives, you must file an application that includes: 

  1. a cover letter including contact information for the person filing the application. In this letter, clearly indicate whether or not if the amalgamated cooperative is a non‑profit housing cooperative or a worker cooperative
  2. a completed and signed copy of Form 3009 – Articles of Amalgamation (PDF Version, 120 KB) (see instructions to complete the form)
  3. a completed and signed copy of Form 3002 – Initial Registered Office Address and First Board of Directors (PDF Version, 120 KB) (see instructions to complete the form)
  4. a statutory declaration about solvency for each amalgamating cooperative (see What should be included in the statutory declaration)
  5. a Nuans name search report, unless the amalgamated cooperative will use the corporate name of one of the amalgamating cooperatives. If your name has been pre-approved by Corporations Canada, attach a copy of the Corporations Canada letter approving your name along with the copy of the Nuans name search report.
  6. the filing fee (see Services, fees and turnaround times – Cooperatives).

Corporations Canada offers several methods of filing (see How do I file my application under the Canada Cooperatives Act (Coop Act)?).

Language of the articles

The articles can be in the official language of your choice. This means they may be:

  • in a format that uses either official language (in French or in English), or
  • in a format that employs both English and French.

What should be included in the statutory declaration?

The statutory declarations (see Model Statutory Declaration) must state that, on the effective date of the amalgamation:

  1. each amalgamating cooperative is, and the amalgamated cooperative will be able to pay its liabilities as they become due
  2. the realizable value of the amalgamated cooperative’s assets will not be less than the total of its liabilities and its stated capital of all classes
  3. one of the following statements:
    1. there are reasonable grounds to believe that no creditor will be prejudiced by the amalgamation
    2. adequate notice has been given to all known creditors of the amalgamating cooperatives and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

The statutory declarations must be signed by a director or an authorized officer of each amalgamating cooperatives.

Effective date of the certificate

The certificate’s effective date is the date on which Corporations Canada receives your complete application or any later date you requested.

Problem with your application

If there is a problem with your application, Corporations Canada returns it with a letter that explains the steps you need to take to fix the problem.

Model Statutory Declaration

In the matter of an application for amalgamation under section 297 or subsection 298(1) or subsection 298(2) of the Canada Cooperatives Act
(Name of Applicant Cooperative)
Statutory Declaration
I, the undersigned, DO SOLEMNLY DECLARE that:

  1. I am the director or an authorized officer of the __________________ (name of one of the amalgamating cooperative) and I declare having personal knowledge of the matters herein deposed to.
  2. I am satisfied that there are reasonable grounds for believing that on the effective date of the amalgamation:
    1. each amalgamating cooperative is and the amalgamated cooperative will be able to pay its liabilities as they become due
    2. the realizable value of the amalgamated cooperative’s assets will not be less than the total of its liabilities and its stated capital of all classes
    3. one of the following statements (a or b):
      1. there are reasonable grounds to believe that no creditor will be prejudiced by the amalgamation
      2. adequate notice has been given to all known creditors of the amalgamating cooperatives and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

AND make this solemn declaration conscientiously believing it to be true, and knowing that it is of the same force and effect as if made under oath.
The declaration must be signed by a director of one of the amalgamating cooperatives.

DECLARED before me
in the City of __________________
in the province of _____________________
on this _____ day of the ____ of the year 20___
____________________________
(signature)
________________________(print first and last name)
Commissioner of oaths
___________________________
(signature)
_________________________________print first and last name)
Director of the amalgamated corporation

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