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Legislative Assembly of New Brunswick
Status of Legislation - First Reading Bill
An Act to Amend the Companies Act
 
Legislature :
54
Session :
5
Bill No. :
47
Member :
Hon. Betts
First Reading :
2003-3-25
Second Reading :
2003-3-26
Committee of the Whole :
2003-3-28
Amended :
Third Reading :
2003-4-1
Royal Assent :
2003-4-11
Download PDF :
  Bill 47         
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Text of Bill :
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:



1                           Section 18.1 of the Companies Act, chapter C-13 of the Revised Statutes, 1973, is amended



(a)               in subsection (8) by striking out "subsection 35(4)" and substituting "subsection 35.2(1)";



(b)               in subsection (9) by striking out "35(4)(a)" and substituting "35.2(1)(b)".



2                           Section 35 of the Act is repealed and the following is substituted:



35(1)               Subject to subsections (2) and (3), the Director may forfeit the charter of the company by issuing a certificate of dissolution under this section if a company



(a)               has not commenced operation within three years after the date shown on its charter,



(b)               has not carried on its operations for three consecutive years, or



(c)                is in default in sending any fee, notice or document to the Director required by this Act.



35(2)               The Director shall not dissolve a company under this section unless the Director has



(a)               sent by ordinary mail notice of the decision to dissolve the company to the company at its head office or to its mailing address as indicated in the records of the Director, and



(b)               published notice of the decision to dissolve the company in The Royal Gazette.



35(3)               Publication in The Royal Gazette of the notice of the Director's decision to dissolve a company shall be deemed to be notice to the company.



35(4)               Sixty days after the notice of the Director's decision to dissolve a company is published in The Royal Gazette, the Director may dissolve the company.



35(5)               Unless cause to the contrary has been shown, the Director may, after the expiry of the period referred to in subsection (4), issue a certificate of dissolution and the company ceases to exist on the date shown in the certificate of dissolution.



3                           The Act is amended by adding after section 35 the following:



35.1(1)          The Director may, upon application of any interested party, and upon good cause being shown, revive any charter forfeited under section 35, upon compliance with such conditions as the Director may require.



35.1(2)          The Lieutenant-Governor in Council may, in writing, direct the Director to revive the company whose charter has been forfeited and upon receiving such direction, the Director shall revive the charter of the company.



35.1(3)          Where the Director acts under subsection (1) or receives a direction from the Lieutenant-Governor in Council under subsection (2), the Director shall issue a certificate of revival.



35.1(4)          A company is revived on the date shown on the certificate of revival and thereafter the company, subject to the rights acquired by any person after its dissolution, has all the rights and privileges and is liable for the obligations that it would have had if it had not been dissolved.



35.2(1)          The charter of a company incorporated by letters patent or by special Act of the Legislature may be surrendered if the company proves to the satisfaction of the Director



(a)               that a by-law has been enacted by the company's board of directors and approved by at least two-thirds of its shareholders to surrender the company's charter,



(b)               that it has parted with its property, divided its assets rateably among its shareholders, and



(c)                that it has no debts or liabilities, the debts or obligations of the company have been provided for or protected, or the creditors of the company or other persons holding the debts and liabilities of the company consent to the surrender of the charter.



35.2(2)          Subject to subsection (1), the Director may accept a surrender of the charter and issue a certificate of dissolution, which may be dated as of the date the application is received by the Director or any later date, and the company ceases to exist on the date shown in the certificate of dissolution.



35.3(1)          Notwithstanding the dissolution of a company under this Act,



(a)               a civil, criminal or administrative action or proceeding commenced by or against the company before its dissolution may be continued as if the company had not been dissolved,



(b)               a civil, criminal or administrative action or proceeding may be brought against the company within two years after its dissolution as if the company had not been dissolved, and



(c)                any property distributed to shareholders that would otherwise have been available to satisfy any judgment or order if the company had not been dissolved remains available for such purpose.



35.3(2)          Service of a document on a company after its dissolution may be effected by serving the document upon a person shown in the last notice filed under subsection 87(6), or if no notice has been filed under that subsection, upon a person shown as a director in the letters patent.



35.3(3)          Notwithstanding the dissolution of a company, a shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (1) to the extent of the amount received by that shareholder upon such distribution, and an action to enforce such liability may be brought within two years after the date of dissolution of the company.



35.4(1)          Upon the dissolution of a company, the portion of the property distributable to a creditor or shareholder who cannot be found shall be either converted into money and paid to the Minister of Finance or transferred, delivered or conveyed to Her Majesty in right of New Brunswick.



35.4(2)          A payment under subsection (1) shall be deemed to be in satisfaction of a debt or claim of such creditor or shareholder.



35.4(3)          If at any time a person establishes that the person is entitled to any money paid to the Minister of Finance under this section, the Minister of Finance shall pay an equivalent amount to the person out of the Consolidated Fund.



35.5(1)          Subject to section 35.3 and section 35.4, property of a company that has not been disposed of at the date of its dissolution vests in Her Majesty in right of New Brunswick.



35.5(2)          If a company is revived under section 35.1, any property other than money that vested in Her Majesty pursuant to subsection (1) and that has not been disposed of shall be returned to the company and there shall be paid to the company out of the Consolidated Fund



(a)               an amount equal to any money received by Her Majesty pursuant to subsection (1), and



(b)               where property other than money vested in Her Majesty pursuant to subsection (1) and that property has been disposed of, an amount equal to the lesser of



(i)         the value of any such property at the date it vested in Her Majesty, and



(ii)       the amount realized by Her Majesty from the disposition of that property.



35.5(3)          If a company is revived under section 35.1, any property other than money to be returned to the company in accordance with subsection (2) shall vest in the company without any deed, bill of sale or other document from the Crown or any action by the Crown.



EXPLANATORY NOTES



Section 1



(a) and (b)            These amendments are consequential on the amendments in section 3 of this amending Act.



Section 2



The existing provision is as follows:



35(1)               In case of non-use by the company of its charter for three consecutive years, or where the company does not go into actual operation within three years after the charter is granted, or the company for three consecutive years fails to comply with the provisions of section 126, the Director may publish a notice in The Royal Gazette declaring the charter of the company forfeited, and the charter is thereupon forfeited.



35(2)               The Director may, upon application of any person interested, and upon good cause shown, revive any charter so forfeited upon compliance with such conditions as he may prescribe, and notice of such revival shall be published in The Royal Gazette.



35(3)               Upon publication of the notice, the company is restored to its legal position as of the time of such forfeiture to the same extent and to the like effect as if there had been no forfeiture.



35(4)               The charter of a corporation incorporated by letters patent or by special Act of the Legislature may be surrendered if the corporation proves to the satisfaction of the Director:



(a)               that it has parted with its property, divided its assets ratably amongst its shareholders or members; and



(b)               that



(i)         it has no debts or liabilities,



(ii)       the debts and obligations of the corporation have been duly provided for or protected, or



(iii)    the creditors of the corporation or other persons holding them consent; and



(c)                that the corporation has given notice of the application for leave to surrender by publishing the same once in The Royal Gazette and once in a newspaper published at or near as may be to the place where the corporation has its head office.



35(5)               The Director, upon a due compliance with the provisions of subsection (4), may accept a surrender of the charter and direct its cancellation, and fix a date upon and from which the corporation shall be dissolved, and the corporation shall thereby and thereupon become dissolved accordingly.



35(6)               Every corporation whose charter, after it becomes operative, is so surrendered or expires by its own limitation or is annulled by forfeiture or otherwise, shall nevertheless be continued as a body corporate for the term of three years after the time when it would have been so dissolved, for the purpose of prosecuting or defending suits by or against it.



Section 3



New provisions.

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Legend
* Private Bill
** Bill referred to Standing Committee on Law Amendments
+ Private Member's Public Bill
++ Motion for second reading defeated
+++ Debate at second reading adjourned
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