Acts and Regulations

B-9.1 - Business Corporations Act

Section 27
Disposition versions

Full text
Preemptive right and exceptions
27(1)In this section
“equity shares” means shares of any class, whether or not preferred as to dividends or assets, which have unlimited dividend rights;(actions d’équité)
“financial institution” means any body corporate or other institution which in its ordinary course of business lends money;(institution financière)
“preemptive right” means the right to purchase shares or other securities to be issued or subjected to rights or options to purchase, as such right is defined in this section;(droit de préemption)
“unlimited dividend right” means the right without limitation as to the amount either to all or to a share of the balance of any dividends after the payment of dividends on any shares entitled to a preference, and includes the right to all or to a share of the balance of any surplus upon winding up after the repayment of capital;(droit illimité aux dividendes)
“voting right” means the right to vote for the election of one or more directors excluding a right to vote which is dependent on the happening of an event specified in the articles or this Act;(droit de vote)
“voting shares” means the shares of any class which have voting rights as defined in this section.(actions avec droit de vote)
27(2)Except as otherwise provided in the articles and except as provided in this section, the holders of equity shares of any class, in the case of the proposed issuance by the corporation of, or the proposed granting by the corporation of rights or options to purchase, its equity shares of any class or any shares or other securities convertible into or carrying rights or options to purchase its equity shares of any class shall, if the issuance of the equity shares proposed to be issued or issuable upon exercise of such rights or options or upon conversion of such other securities would adversely affect the unlimited dividend rights of such holders, have the right during a reasonable time and on reasonable conditions, both to be fixed by the board, to purchase such shares or other securities in such proportions as shall be determined as provided in this section.
27(3)Except as otherwise provided in the articles and except as provided in this section, the holders of voting shares of any class, in case of the proposed issuance by the corporation of, or the proposed granting by the corporation of rights or options to purchase, its voting shares of any class or any shares or other securities convertible into or carrying rights or options to purchase its voting shares of any class shall, if the issuance of the voting shares proposed to be issued or issuable upon exercise of such rights or options or upon conversion of such other securities would adversely affect the voting rights of such holders, have the right during a reasonable time and on reasonable conditions, both to be fixed by the board, to purchase such shares or other securities in such proportions as shall be determined as provided in this section.
27(4)The preemptive right provided for in subsections (2) and (3) shall entitle shareholders having such rights to purchase the shares or other securities to be offered or optioned for sale as nearly as practicable in such proportions as would, if such preemptive right were exercised, preserve the relative unlimited dividend rights and voting rights of such holders and at a price or prices not less favourable at which such shares or other securities are proposed to be offered for sale to others, without deduction of such reasonable expenses of and compensation for the sale, underwriting or purchase of such shares or other securities by underwriters or dealers as may lawfully be paid by the corporation.
27(5)In case each of the shares entitling the holders thereof to preemptive rights does not confer the same unlimited dividend right or voting right, the board shall apportion the shares or other securities to be offered or optioned for sale among the shareholders having the preemptive rights to purchase them in such proportions as in the opinion of the board shall preserve as far as practicable the relative unlimited dividend rights and voting rights of the holders at the time of such offering.
27(6)The apportionment made by the board shall, in the absence of fraud or bad faith, be binding upon all shareholders.
27(7)Unless the articles expressly so provide, shareholders have no preemptive right in respect of shares to be issued
(a) as a share dividend,
(b) pursuant to the exercise of conversion privileges, options or rights previously granted by the corporation,
(c) pursuant to a corporate reorganization,
(d) as a result of an amalgamation,
(e) to a financial institution as consideration or partial consideration of a loan or the renewal of a loan from the financial institution to the corporation or as a result of an option granted to the financial institution for such consideration,
(f) under an option granted to an employee under a stock option plan or stock purchase plan which has the approval of the shareholders, or
(g) with the unanimous agreement of all shareholders.
27(8)On or after the coming into force of this section, this section does not apply to corporations whose securities are listed on an exchange recognized by a Canadian securities regulatory authority as defined under securities legislation.
27(9)On or after the date this subsection comes into force, this section does not apply to
(a) a corporation incorporated under this Act after that date, unless the articles otherwise provide,
(b) a body corporate continued under section 126 after that date, unless the articles of continuance otherwise provide, and
(c) a body corporate incorporated or created under another Act of the Legislature after that date, unless that Act otherwise provides.
27(10)A corporation may remove preemptive rights provided for in subsections (2) and (3) by special resolution.
27(11)The holders of a class or a series of shares are entitled to vote separately as a class or series on the special resolution under subsection (10) if the removal of the preemptive rights would affect the holders of shares of that class or series of shares in a manner different from the holders of shares of another class or series.
27(12)Subsection (10) applies whether or not shares of a class or series otherwise carry the right to vote.
27(13)A special resolution under this section is adopted when the holders of the shares of each class or series entitled to vote separately on the special resolution as a class or series have approved the special resolution.
27(14)The removal of the preemptive rights of a shareholder to all shares or other securities of the corporation shall be effective on the date the special resolution is adopted or on a later date specified in the resolution.
27(15)A shareholder who has voted against the special resolution may, within 20 days after the resolution has been adopted, demand payment of the fair value of their shares, and the provisions of section 131 apply with the necessary modifications.
27(16)When the articles so provide, the provisions of this section apply, except to the extent the provisions are inconsistent with the articles.
2023, c.2, s.22; 2023, c.2, s.155
Preemptive right and exceptions
27(1)In this section
“equity shares” means shares of any class, whether or not preferred as to dividends or assets, which have unlimited dividend rights;(actions d’équité)
“financial institution” means any body corporate or other institution which in its ordinary course of business lends money;(institution financière)
“preemptive right” means the right to purchase shares or other securities to be issued or subjected to rights or options to purchase, as such right is defined in this section;(droit de préemption)
“unlimited dividend right” means the right without limitation as to the amount either to all or to a share of the balance of any dividends after the payment of dividends on any shares entitled to a preference, and includes the right to all or to a share of the balance of any surplus upon winding up after the repayment of capital;(droit illimité aux dividendes)
“voting right” means the right to vote for the election of one or more directors excluding a right to vote which is dependent on the happening of an event specified in the articles or this Act;(droit de vote)
“voting shares” means the shares of any class which have voting rights as defined in this section.(actions avec droit de vote)
27(2)Except as otherwise provided in the articles and except as provided in this section, the holders of equity shares of any class, in the case of the proposed issuance by the corporation of, or the proposed granting by the corporation of rights or options to purchase, its equity shares of any class of any shares or other securities convertible into or carrying rights or options to purchase its equity shares of any class shall, if the issuance of the equity shares proposed to be issued or issuable upon exercise of such rights or options or upon conversion of such other securities would adversely affect the unlimited dividend rights of such holders, have the right during a reasonable time and on reasonable conditions, both to be fixed by the board, to purchase such shares or other securities in such proportions as shall be determined as provided in this section.
27(3)Except as otherwise provided in the articles and except as provided in this section, the holders of voting shares of any class, in case of the proposed issuance by the corporation of, or the proposed granting by the corporation of rights or options to purchase, its voting shares of any class or any shares or options to purchase its voting shares of any class shall, if the issuance of the voting shares proposed to be issued or issuable upon exercise of such rights or options or upon conversion of such other securities would adversely affect the voting rights of such holders, have the right during a reasonable time and on reasonable conditions, both to be fixed by the board, to purchase such shares or other securities in such proportions as shall be determined as provided in this section.
27(4)The preemptive right provided for in subsections (2) and (3) shall entitle shareholders having such rights to purchase the shares or other securities to be offered or optioned for sale as nearly as practicable in such proportions as would, if such preemptive right were exercised, preserve the relative unlimited dividend rights and voting rights of such holders and at a price or prices not less favourable at which such shares or other securities are proposed to be offered for sale to others, without deduction of such reasonable expenses of and compensation for the sale, underwriting or purchase of such shares or other securities by underwriters or dealers as may lawfully be paid by the corporation.
27(5)In case each of the shares entitling the holders thereof to preemptive rights does not confer the same unlimited dividend right or voting right, the board shall apportion the shares or other securities to be offered or optioned for sale among the shareholders having the preemptive rights to purchase them in such proportions as in the opinion of the board shall preserve as far as practicable the relative unlimited dividend rights and voting rights of the holders at the time of such offering.
27(6)The apportionment made by the board shall, in the absence of fraud or bad faith, be binding upon all shareholders.
27(7)Unless the articles expressly so provide, shareholders have no preemptive right in respect of shares to be issued
(a) as a share dividend,
(b) pursuant to the exercise of conversion privileges, options or rights previously granted by the corporation,
(c) pursuant to a corporate reorganization,
(d) as a result of an amalgamation,
(e) to a financial institution as consideration or partial consideration of a loan or the renewal of a loan from the financial institution to the corporation or as a result of an option granted to the financial institution for such consideration,
(f) under an option granted to an employee under a stock option plan or stock purchase plan which has the approval of the shareholders, or
(g) with the unanimous agreement of all shareholders.
27(8)This section does not apply to a corporation which has its shares listed on a prescribed stock exchange.
Definitions
27(1)In this section
“equity shares” means shares of any class, whether or not preferred as to dividends or assets, which have unlimited dividend rights;(actions d’équité)
“financial institution” means any body corporate or other institution which in its ordinary course of business lends money;(institution financière)
“preemptive right” means the right to purchase shares or other securities to be issued or subjected to rights or options to purchase, as such right is defined in this section;(droit de préemption)
“unlimited dividend right” means the right without limitation as to the amount either to all or to a share of the balance of any dividends after the payment of dividends on any shares entitled to a preference, and includes the right to all or to a share of the balance of any surplus upon winding up after the repayment of capital;(droit illimité aux dividendes)
“voting right” means the right to vote for the election of one or more directors excluding a right to vote which is dependent on the happening of an event specified in the articles or this Act;(droit de vote)
“voting shares” means the shares of any class which have voting rights as defined in this section.(actions avec droit de vote)
Preemptive right and exceptions
27(2)Except as otherwise provided in the articles and except as provided in this section, the holders of equity shares of any class, in the case of the proposed issuance by the corporation of, or the proposed granting by the corporation of rights or options to purchase, its equity shares of any class of any shares or other securities convertible into or carrying rights or options to purchase its equity shares of any class shall, if the issuance of the equity shares proposed to be issued or issuable upon exercise of such rights or options or upon conversion of such other securities would adversely affect the unlimited dividend rights of such holders, have the right during a reasonable time and on reasonable conditions, both to be fixed by the board, to purchase such shares or other securities in such proportions as shall be determined as provided in this section.
Preemptive right and exceptions
27(3)Except as otherwise provided in the articles and except as provided in this section, the holders of voting shares of any class, in case of the proposed issuance by the corporation of, or the proposed granting by the corporation of rights or options to purchase, its voting shares of any class or any shares or options to purchase its voting shares of any class shall, if the issuance of the voting shares proposed to be issued or issuable upon exercise of such rights or options or upon conversion of such other securities would adversely affect the voting rights of such holders, have the right during a reasonable time and on reasonable conditions, both to be fixed by the board, to purchase such shares or other securities in such proportions as shall be determined as provided in this section.
Preemptive right and exceptions
27(4)The preemptive right provided for in subsections (2) and (3) shall entitle shareholders having such rights to purchase the shares or other securities to be offered or optioned for sale as nearly as practicable in such proportions as would, if such preemptive right were exercised, preserve the relative unlimited dividend rights and voting rights of such holders and at a price or prices not less favourable at which such shares or other securities are proposed to be offered for sale to others, without deduction of such reasonable expenses of and compensation for the sale, underwriting or purchase of such shares or other securities by underwriters or dealers as may lawfully be paid by the corporation.
Preemptive right and exceptions
27(5)In case each of the shares entitling the holders thereof to preemptive rights does not confer the same unlimited dividend right or voting right, the board shall apportion the shares or other securities to be offered or optioned for sale among the shareholders having the preemptive rights to purchase them in such proportions as in the opinion of the board shall preserve as far as practicable the relative unlimited dividend rights and voting rights of the holders at the time of such offering.
Preemptive right and exceptions
27(6)The apportionment made by the board shall, in the absence of fraud or bad faith, be binding upon all shareholders.
Preemptive right and exceptions
27(7)Unless the articles expressly so provide, shareholders have no preemptive right in respect of shares to be issued
(a) as a share dividend,
(b) pursuant to the exercise of conversion privileges, options or rights previously granted by the corporation,
(c) pursuant to a corporate reorganization,
(d) as a result of an amalgamation,
(e) to a financial institution as consideration or partial consideration of a loan or the renewal of a loan from the financial institution to the corporation or as a result of an option granted to the financial institution for such consideration,
(f) under an option granted to an employee under a stock option plan or stock purchase plan which has the approval of the shareholders, or
(g) with the unanimous agreement of all shareholders.
Preemptive right and exceptions
27(8)This section does not apply to a corporation which has its shares listed on a prescribed stock exchange.