Acts and Regulations

B-9.1 - Business Corporations Act

Full text
Financial assistance and restrictions
43(1)In this section, “financial assistance” means financial assistance by means of a loan, a guarantee or the provision of security or otherwise.
43(2)Subject to any other provisions of this Act or the regulations, a corporation may give financial assistance to any person for any purpose.
2023, c.2, s.31
Financial assistance and restrictions
43(1)Except as permitted under subsection (3) or except where the articles provide, a corporation or any corporation with which it is affiliated shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise
(a) to any shareholder, director, officer or employee of the corporation or of an affiliated corporation, or
(b) to any associate of a shareholder, director, officer or employee of the corporation or of an affiliated corporation,
if there are reasonable grounds for believing that
(c) the corporation is, or after giving the financial assistance would be, unable to pay its liabilities as they become due, or
(d) the realizable value of the corporation’s assets, excluding the amount of any financial assistance in the form of a loan or in the form of assets pledged or encumbered to secure a guarantee, after giving the financial assistance, would be less than the aggregate of the corporation’s liabilities and stated capital of all classes.
43(2)Except as permitted under subsection (3), a corporation or any of its affiliates shall not, directly or indirectly,
(a) make a loan to any person that is secured by a share of the corporation, or
(b) give financial assistance to any person, by means of a loan, guarantee or otherwise, for the purpose of or in connection with a purchase of a share issued or to be issued by the corporation.
43(3)A corporation may give financial assistance by means of a loan, guarantee or otherwise
(a) to any person in the ordinary course of business if the lending of money is incidental to the ordinary business of the corporation,
(b) to any person on account of expenditures incurred on behalf of the corporation,
(c) to a holding body corporate if the corporation is a wholly-owned subsidiary of the holding body corporate,
(d) to a subsidiary body corporate of the corporation, or
(e) to or for the benefit of employees of the corporation or any of its affiliates
(i) to enable or assist them to purchase or erect living accommodation for their own occupation, or
(ii) in accordance with a plan for the purchase of shares of the corporation or any of its affiliates by a trustee.
43(4)A contract made by a corporation in contravention of this section may be enforced by the corporation or by a lender for value in good faith without notice of the contravention.
Financial assistance and restrictions
43(1)Except as permitted under subsection (3) or except where the articles provide, a corporation or any corporation with which it is affiliated shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise
(a) to any shareholder, director, officer or employee of the corporation or of an affiliated corporation, or
(b) to any associate of a shareholder, director, officer or employee of the corporation or of an affiliated corporation,
if there are reasonable grounds for believing that
(c) the corporation is, or after giving the financial assistance would be, unable to pay its liabilities as they become due, or
(d) the realizable value of the corporation’s assets, excluding the amount of any financial assistance in the form of a loan or in the form of assets pledged or encumbered to secure a guarantee, after giving the financial assistance, would be less than the aggregate of the corporation’s liabilities and stated capital of all classes.
43(2)Except as permitted under subsection (3), a corporation or any of its affiliates shall not, directly or indirectly,
(a) make a loan to any person that is secured by a share of the corporation, or
(b) give financial assistance to any person, by means of a loan, guarantee or otherwise, for the purpose of or in connection with a purchase of a share issued or to be issued by the corporation.
43(3)A corporation may give financial assistance by means of a loan, guarantee or otherwise
(a) to any person in the ordinary course of business if the lending of money is incidental to the ordinary business of the corporation,
(b) to any person on account of expenditures incurred on behalf of the corporation,
(c) to a holding body corporate if the corporation is a wholly-owned subsidiary of the holding body corporate,
(d) to a subsidiary body corporate of the corporation, or
(e) to or for the benefit of employees of the corporation or any of its affiliates
(i) to enable or assist them to purchase or erect living accommodation for their own occupation, or
(ii) in accordance with a plan for the purchase of shares of the corporation or any of its affiliates by a trustee.
43(4)A contract made by a corporation in contravention of this section may be enforced by the corporation or by a lender for value in good faith without notice of the contravention.