P-16 - Act respecting the special powers of legal persons

Updated to 27 November 2003

This document has official status.

chapter P-16

Act respecting the special powers of legal persons

1999, c. 40, s. 214.

DIVISION I POWERS AND RIGHTS OF COMPANIES AND LEGAL PERSONS OF QUÉBEC OUTSIDE QUÉBEC

1999, c. 40, s. 214.

1. Every company or legal person,

(1)  constituted by or under a general or special Act of the Parliament of the former Province of Lower Canada or of the former Province of Canada, for one or more of the objects within the jurisdiction of the legislative authority of Québec; or

(2)  constituted by or under a general or special Act of Québec;

has, has always had and shall have, subject to any restrictions in that regard contained in its charter, the capacity to acquire, possess and exercise, outside Québec, the rights and powers which may be recognized or be conferred upon it by the laws in force in any other Province or in any foreign country.

R. S. 1964, c. 275, s. 1; 1999, c. 40, s. 214.

DIVISION II POWERS OF COMPANIES AND LEGAL PERSONS TO CHANGE THEIR NAME AND HEAD OFFICE

1979, c. 31, s. 40; 1999, c. 40, s. 214.

2. Every company or legal person contemplated in section 1, except a company to which Part I or Part IA of the Companies Act (chapter C-38) applies or a legal person to which Part III of the said Act applies, may, by by-law, change its name or transfer its head office to another place pursuant to this division.

R. S. 1964, c. 275, s. 2; 1979, c. 31, s. 41; 1999, c. 40, s. 214.

3. The new name must be in conformity with sections 9.1 and 34.1 of the Companies Act (chapter C-38).

The head office shall be located in Québec.

R. S. 1964, c. 275, s. 3; 1979, c. 31, s. 41; 1993, c. 48, s. 431; 1999, c. 40, s. 214.

4. Such by-law must be approved by the vote of at least two-thirds in value of the shares represented by the shareholders present at a meeting called for that purpose.

In the case of a legal person without share capital, such by-law must be approved by the vote of at least two-thirds of the members present at such meeting.

R. S. 1964, c. 275, s. 4; 1968, c. 73, s. 1; 1999, c. 40, s. 214.

5. The by-law is forwarded to the Inspector General of Financial Institutions for approval. If the Inspector General approves the by-law, he shall deposit a notice to that effect in the register instituted under the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P-45).

R. S. 1964, c. 275, s. 5; 1968, c. 73, s. 2; 1968, c. 74, s. 1; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 211; 1993, c. 48, s. 432.

6. (Repealed).

R. S. 1964, c. 275, s. 6; 1968, c. 73, s. 2; 1969, c. 26, s. 67; 1982, c. 52, s. 217; 1993, c. 48, s. 433.

7. For the approval of such by-law by the Inspector General, there shall be paid the fee exigible for the approval provided for in section 21 of the Companies Act (chapter C-38).

R. S. 1964, c. 275, s. 7; 1968, c. 73, s. 2; 1968, c. 74, s. 2; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 217.

8. The by-law so approved shall come into force on the date of deposit of the notice in the register.

R. S. 1964, c. 275, s. 8; 1968, c. 73, s. 3; 1993, c. 48, s. 434.

9. The change of the name of a company or legal person does not affect its rights or obligations, and all proceedings to which it is party may be continued under its new name without continuance of suit.

R. S. 1964, c. 275, s. 9; 1979, c. 31, s. 42; 1999, c. 40, s. 214.

10. (Repealed).

1968, c. 73, s. 4; 1979, c. 31, s. 43.

DIVISION III SUBDIVISION OF SHARES OF CERTAIN COMPANIES

11. The directors of any company, other than companies constituted under the Companies Act (chapter C-38), of which the capital stock is divided into shares being a multiple of 100, may pass a by-law declaring that the capital stock of such company shall be divided into shares of $100 each, and, from and after the passing of such by-law, such capital stock shall be divided into shares of $100 each.

R. S. 1964, c. 275, s. 10; 1999, c. 40, s. 214.

DIVISION IV INCREASE OR REDUCTION OF CAPITAL STOCK BY CERTAIN COMPANIES

12. The directors of a company constituted by special statute may make a by-law for increasing the capital stock to an amount which they may consider requisite for the attainment of its objects.

Such by-law shall declare the number of the shares of the new stock, and may prescribe the manner in which the same shall be allotted; and, in default of its so doing, the control of such allotment shall be deemed to vest in the directors.

R. S. 1964, c. 275, s. 11; 1965 (1st sess.), c. 73, s. 1; 1999, c. 40, s. 214.

13. Any company constituted by special statute may, by by-law, reduce its share capital in any way, and, in particular, without prejudice to the generality of the foregoing power, may:

(1)  extinguish or reduce the liability on any of its shares in respect of share capital not paid-up; or

(2)  either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost or unrepresented by available assets; or

(3)  either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the company;

and may reduce the amount of its share capital and of its shares accordingly.

R. S. 1964, c. 275, s. 12; 1999, c. 40, s. 214.

14. (1)  Where the proposed reduction of share capital involves either extinction or diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, and in any other case if the Inspector General so directs, every creditor of the company who at the date of the petition for confirmation is entitled to any debt or claim which if that date were the commencement of the winding-up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction.

(2)  The Inspector General shall settle a list of creditors so entitled to object, and for that purpose shall ascertain the names of such creditors and the nature and amount of their debts or claims. He may thereupon publish notices fixing a period within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction.

(3)  Where a creditor entered on the list does not consent to the reduction, the Inspector General may, if he thinks fit, dispense with the consent of that creditor, on the company paying to the creditor his debt or claim in one of the ways hereafter mentioned, as the Inspector General may direct, to wit:

(a)  If the company admits the full amount of this debt or claim, or, though not admitting it, is willing to pay it, then the full amount of the debt or claim;

(b)  If the company does not admit or is not willing to provide for the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the Inspector General after the like inquiry and adjudication as if the company were being wound up.

R. S. 1964, c. 275, s. 13; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 217; 1999, c. 40, s. 214.

15. (1)  A shareholder of the company, past or present, shall not be liable in respect of any share to any call or contribution exceeding in amount the difference, if any, between the amount paid, or, as the case may be, the reduced amount, if any, which is to be deemed to have been paid, on the share, and the amount of the share as fixed by the special Act creating the company or by by-law duly confirmed.

Provided that if any creditor entitled in respect of any debt or claim to object to the reduction of share capital is, by reason of his ignorance of the proceedings for reduction, or of their nature and effect with respect to his claim, not entered on the list of creditors, and, after the reduction, the company is unable, within the meaning of the provisions respecting the winding-up of companies, to pay the amount of his debt, or claim, then,—

(a)  every person who was a shareholder of the company at the date of the confirmation of the by-law shall be liable to contribute for the payment of such debt or claim an amount not exceeding the amount which he would have been liable to contribute if the company had commenced to be wound up on the day before the date of the said confirmation; and

(b)  if the company is wound up, the court, on the application of any such creditor and proof of his ignorance as aforesaid, may, if it thinks fit, settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list as if they were ordinary contributories in a winding-up.

(2)  Nothing in this section shall affect the rights of the contributories among themselves, nor the recourse of any creditor against the company or the shareholders.

R. S. 1964, c. 275, s. 14.

16. Any director, officer or manager of the company who

(a)  wilfully conceals the name of any creditor entitled to object to the reduction, or wilfully misrepresents the nature or amount of the debt or claim of any creditor; or who

(b)  aids or abets in any such concealment or misrepresentation,

shall be guilty of an offence and liable to a fine of not more than $200.

R. S. 1964, c. 275, s. 15; 1990, c. 4, s. 653; 1999, c. 40, s. 214.

17. The Inspector General may require the company to publish, as he directs, the reasons for the said reduction and such other information in regard thereto as he may think expedient with a view to giving proper information to the public.

R. S. 1964, c. 275, s. 16; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 217.

18. No by-law for increasing or reducing the capital stock of the company shall have any force or effect whatever until after it has been sanctioned by a vote of not less than two-thirds in value of the shareholders, at a general meeting of the company duly called for considering the same, and has been afterwards confirmed by the Government.

R. S. 1964, c. 275, s. 17.

19. (1)  At any time, not more than six months after the sanction of such by-law, the directors may apply to the Lieutenant-Governor to confirm the same.

(2)  With such application, they must produce such by-law, and establish to the satisfaction of the Inspector General, so that he may report thereon, the due passage and sanction of such by-law, and the bona fide character of the increase or reduction of capital thereby provided for.

(3)  For that purpose, the Inspector General may take and keep record of any requisite evidence in writing, given under oath, and may administer every requisite oath.

R. S. 1964, c. 275, s. 18; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 212, s. 217.

20. Upon due proof so made the Government may, after having obtained the opinion of the Inspector General, confirm the by-law, and a notice to that effect shall be forthwith deposited by the Inspector General in the register; and, from the date of deposit, the capital stock of the company shall be increased or reduced to the amount, in the manner and subject to the conditions set forth in such by-law; and the whole of the stock, as so increased or reduced, shall become subject to the provisions of the Act constituting the company as a legal person, in like manner, so far as may be, as though every fraction thereof had formed part of the stock originally subscribed.

R. S. 1964, c. 275, s. 19; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 213; 1993, c. 48, s. 435; 1999, c. 40, s. 214.

21. There shall be paid, for the confirmation of such by-law, the same fee as is payable on supplementary letters patent granted and issued under the Companies Act (chapter C-38).

R. S. 1964, c. 275, s. 20.

DIVISION V POWER OF LEGAL PERSONS WITHOUT SHARE CAPITAL TO CHANGE THE MAXIMUM VALUE OF THE IMMOVABLES WHICH THEY MAY HOLD

1999, c. 40, s. 214.

22. Any legal person without share capital contemplated in section 1 may, by by-law, change the amount to which the value of the immovable property which it may acquire and hold or the revenue derived therefrom, is limited.

1968, c. 73, s. 5; 1999, c. 40, s. 214.

23. Such by-law must be approved by the vote of at least two-thirds of the members present at a meeting called for that purpose.

1968, c. 73, s. 5.

24. The by-law is forwarded to the Inspector General with a petition praying that it be approved by the Government, accompanied with all the documents required to prove the adoption of the by-law by the legal person; if, after having obtained the opinion of the Inspector General, the Government approves it, the Inspector General shall thereupon deposit a notice to that effect in the register.

The by-law so approved shall come into force on the date of deposit of such notice.

1968, c. 73, s. 5; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 214; 1993, c. 48, s. 436; 1999, c. 40, s. 214.

25. For the approval of such by-law, there shall be paid the fee exigible on supplementary letters patent issued under Part III of the Companies Act (chapter C-38).

1968, c. 73, s. 5.

DIVISION VI POWERS OF CERTAIN LEGAL PERSONS TO MORE PROFITABLY EMPLOY THE IMMOVABLE PROPERTY IN THEIR POSSESSION

1999, c. 40, s. 214.

26. Any legal person in Québec which cannot acquire immovable property, except to a limited amount, under the provisions of its charter or of the law, may, whenever it disposes of or alienates any immovable property belonging to it, apply the price thereof to the acquisition of other immovable property, and also receive the revenues thereof and employ the same for the objects for which it was constituted.

R. S. 1964, c. 275, s. 21; 1999, c. 40, s. 214.

DIVISION VII POWERS OF CERTAIN COMPANIES TO HYPOTHECATE THEIR PROPERTY AND TO ISSUE AND REISSUE BONDS OR OTHER TITLES OF INDEBTEDNESS

1992, c. 57, s. 642.

27. Any joint stock legal person which does not carry on an enterprise, constituted as a legal person under an Act or by letters patent and empowered to borrow and to hypothecate or any legal person thus constituted outside Québec, if so empowered by its charter or by the law governing it, may avail itself of the provisions of the Civil Code and grant a hypothec, even a floating hypothec, on a universality of property, movable or immovable, present or future, corporeal or incorporeal.

R. S. 1964, c. 275, s. 22; 1968, c. 9, s. 90; 1992, c. 57, s. 643.

28. (Repealed).

R. S. 1964, c. 275, s. 23; 1992, c. 57, s. 644.

29. (Repealed).

R. S. 1964, c. 275, s. 24; 1992, c. 57, s. 644.

30. (Repealed).

R. S. 1964, c. 275, s. 25; 1992, c. 57, s. 644.

31. (Repealed).

R. S. 1964, c. 275, s. 26; 1992, c. 57, s. 644.

32. The person holding the power of attorney of the creditors in whose favour a hypothec is granted to secure payment of bonds or other titles of indebtedness cannot purchase from the company the first issue, by underwriting, purchase, subscription or otherwise, of the bonds or other titles of indebtedness secured by hypothec, and likewise no partnership or legal person whereof the said person is a member or officer, as the case may be, may become purchaser of the above-mentioned bonds or other titles of indebtedness.

R. S. 1964, c. 275, s. 27; 1992, c. 57, s. 645.

33. (1)  Where a company has redeemed any bonds or other titles of indebtedness previously issued, such company shall have power to keep such bonds or other titles of indebtedness alive for the purpose of reissue; provided that the conditions of issue do not expressly indicate the contrary, and that the bonds or other titles of indebtedness have not been redeemed in pursuance of an obligation upon the company so to do. The latter proviso, however, shall not apply if such obligation be one enforceable only by the person to whom such bonds or other titles of indebtedness were issued, or his assigns.

(2)  Where a company has exercised the power mentioned in the foregoing subsection, such company shall have power to reissue the bonds or other titles of indebtedness, either by reissuing the same bonds or other titles of indebtedness or by issuing others in their place; and upon such a reissue the person entitled to the bonds or other titles of indebtedness shall have the same rights and privileges as if the bonds or other titles of indebtedness had not been previously issued.

(3)  Where, with the object of keeping bonds or other titles of indebtedness alive for the purpose of reissue, they have been transferred to a nominee of the company, a transfer from such nominee shall be deemed to be a reissue for the purposes of this Division.

(4)  Where a company has deposited any of its bonds or other titles of indebtedness to secure advances on current account or otherwise, the bonds or other titles of indebtedness shall not be held to have been redeemed by reason only of the fact that the company may have ceased to be indebted whilst such bonds or other titles of indebtedness remained so deposited.

(5)  The reissue of a bond or other title of indebtedness, or the issue of another bond or of another title of indebtedness in its place, shall not be considered to be the issue of a new bond or new title of indebtedness for the purposes of a provision limiting the amount or number of bonds or of other titles of indebtedness to be issued.

R. S. 1964, c. 275, s. 28; 1992, c. 57, s. 646.

DIVISION VIII BORROWING POWERS OF CERTAIN LEGAL PERSONS WITHOUT CAPITAL STOCK

1992, c. 57, s. 647.

34. Any legal person without capital stock which does not carry on an enterprise, constituted as a legal person under an Act or by letters patent and empowered to borrow and to hypothecate or any legal person thus constituted outside Québec, if so empowered by its charter or by the law governing it, may, notwithstanding the provisions of the Civil Code, grant a hypothec, even a floating hypothec, on a universality of property, movable or immovable, present or future, corporeal or incorporeal.

In the case of religious communities, seminaries and colleges, such powers may be exercised only with the authorization of the bishop or administrator of the diocese where their head office is located.

R. S. 1964, c. 275, s. 29; 1992, c. 57, s. 648; 1999, c. 40, s. 214.

DIVISION IX

Repealed, 1993, c. 75, s. 48.

1993, c. 75, s. 48.

35. (Repealed).

R. S. 1964, c. 275, s. 30; 1993, c. 75, s. 48.

36. (Repealed).

R. S. 1964, c. 275, s. 31; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 215; 1993, c. 75, s. 48.

37. (Repealed).

R. S. 1964, c. 275, s. 32; 1993, c. 75, s. 48.

38. (Repealed).

R. S. 1964, c. 275, s. 33; 1993, c. 75, s. 48.

39. (Repealed).

R. S. 1964, c. 275, s. 34; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 216; 1991, c. 20, s. 8; 1993, c. 75, s. 48.

40. (Repealed).

R. S. 1964, c. 275, s. 35; 1993, c. 75, s. 48.

41. (Repealed).

R. S. 1964, c. 275, s. 36; 1993, c. 75, s. 48.

DIVISION X POWERS OF CERTAIN COMPANIES RESPECTING THE COMPOSITION OF THE BOARD OF DIRECTORS

42. Notwithstanding any provision to the contrary, any company constituted under the Companies Act (chapter C-38) and whose principal object is the protection of the forest, in Québec or in certain parts of Québec, against fire, may by by-law provide that the Minister of Natural Resources, Wildlife and Parks, or such person as he may designate, shall be ex officio a member of its board of directors, and that the other members, or some of the other members of its board of directors, instead of being elected at the general meeting of the shareholders, may be appointed, one by each other company constituted under the same Act for similar purposes and holding, in its own name or in the name of one or more trustees, one or more shares therein; and it shall not be necessary that such trustee have the qualifications required by section 86 of the Companies Act to be a member of the board of directors.

R. S. 1964, c. 275, s. 37; 1979, c. 81, s. 20; 1990, c. 64, s. 24; 1994, c. 13, s. 16; 1999, c. 40, s. 214; 2003, c. 8, s. 6.

DIVISION XI

Repealed, 1995, c. 33, s. 25.

1995, c. 33, s. 25.

43. (Repealed).

R. S. 1964, c. 275, s. 38; 1975, c. 75, s. 1; 1976, c. 41, s. 1; 1995, c. 33, s. 25.

DIVISION XII HOUSING LOANS TO EMPLOYEES

44. In this Division, “company” in addition to its ordinary meaning, shall designate any joint stock or registered capital company and any legally constituted legal person, whatever be the nature and place of their constitution and which are subject to the legislative authority of Québec.

R. S. 1964, c. 275, s. 39; 1999, c. 40, s. 214.

45. Any company may, by by-law of its directors or managers, adopt a system of loans to its employees in view of enabling them to erect or acquire dwelling-houses for themselves and their families, or to make improvement thereon or pay off mortgages burdening same.

R. S. 1964, c. 275, s. 40.

46. Such by-law shall determine the amount, methods and conditions of such loans, save the following provisions.

R. S. 1964, c. 275, s. 41.

47. The rate of interest must be reasonable and in no case shall exceed six per cent per annum.

R. S. 1964, c. 275, s. 42.

48. The borrower may at any time effect payments in advance or discharge the loan before maturity.

R. S. 1964, c. 275, s. 43.

49. Such loans shall be personal to the employees.

R. S. 1964, c. 275, s. 44.

50. In order to guarantee the conservation, the protection and the payment of its claim, the company may stipulate in the loan agreement any legal conditions and provisions not incompatible with this Division.

R. S. 1964, c. 275, s. 45.

51. Moreover, any company may enter into agreements with any government, government agency, legal person, company, partnership, employer, builder and interested person for the establishing and maintenance of a rent allowance fund or a rent reduction fund, or of any other fund of similar nature intended to provide small salary earners with suitable tenements, through rent allowances, part-payment of their rent or any other similar method.

Any company shall be authorized to pay into such fund the financial contributions provided for by such agreements.

R. S. 1964, c. 275, s. 46; 1999, c. 40, s. 214.

52. On the recommendation of the Société d’habitation du Québec, the Government may, on such conditions as it may determine, grant to the employees of a company which makes building loans to them under this Division, the benefit of the guarantee and payments of interest contemplated in section 2 of the Family Housing Act (chapter H-1).

R. S. 1964, c. 275, s. 47; 1966-67, c. 55, s. 75; 1977, c. 5, s. 14.

53. The Inspector General of Financial Institutions is responsible for carrying out the administration of this Act.

1982, c. 52, s. 218.

54. The Minister of Finance is responsible for the administration of this Act.

1982, c. 52, s. 218.

DIVISION XIII

This Division ceased to have effect on 17 April 1987.

55. (This section ceased to have effect on 17 April 1987).

1982, c. 21, s. 1; U. K., 1982, c. 11, Sch. B, Part I, s. 33.

REPEAL SCHEDULE

In accordance with section 17 of the Act respecting the consolidation of the statutes (chapter R-3), chapter 275 of the Revised Statutes, 1964, in force on 31 December 1977, is repealed effective from the coming into force of chapter P-16 of the Revised Statutes.