Government of Canada / Gouvernement du Canada
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Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

Act current to 2020-10-05 and last amended on 2018-05-01. Previous Versions

PART 5Corporate Finance (continued)

Marginal note:Repayment

  •  (1) Debt obligations issued, pledged, hypothecated or deposited by a corporation are not redeemed by reason only that the indebtedness evidenced by the debt obligations or in respect of which the debt obligations are issued, pledged, hypothecated or deposited is repaid.

  • Marginal note:Acquisition and reissue of debt obligations

    (2) Debt obligations issued by a corporation and purchased, redeemed or otherwise acquired by it may be cancelled or, subject to any applicable trust indenture or other agreement, may be reissued, pledged or hypothecated to secure any existing or future obligation of the corporation, and such an acquisition and reissue, pledge or hypothecation is not a cancellation of the debt obligations.

Marginal note:Annual contributions or dues

 Subject to the articles, the by-laws and any unanimous member agreement, the directors may require members to make an annual contribution or pay annual dues and may determine the manner in which the contribution is to be made or the dues are to be paid.

Marginal note:Ownership of property

 A corporation owns any property of any kind that is transferred to or otherwise vested in the corporation and does not hold any property in trust unless that property was transferred to the corporation expressly in trust for a specific purpose or purposes.

Marginal note:Directors not trustees

 Directors are not, in that capacity, trustees for any property of the corporation, including property held in trust by the corporation.

Marginal note:Investments by corporation

 Subject to the limitations accompanying any gift and the articles or by-laws, a corporation may invest its funds as its directors think fit.

Marginal note:Distribution of property, accretions or profits

  •  (1) Subject to subsection (2), no part of a corporation’s profits or of its property or accretions to the value of the property may be distributed, directly or indirectly, to a member, a director or an officer of the corporation except in furtherance of its activities or as otherwise permitted by this Act.

  • Marginal note:Distribution to member

    (2) If a member of a corporation is an entity that is authorized to carry on activities on behalf of the corporation, the corporation may distribute any of its money or other property to the member to carry on those activities.

Marginal note:Surrendered memberships

 A corporation may accept a membership in the corporation surrendered to it as a gift including, in Quebec, a legacy and may extinguish or reduce a liability respecting an amount unpaid on that membership.

Marginal note:Liability

  •  (1) The members of a corporation are not, in that capacity, liable for any liability of the corporation, including any arising under paragraph 253(3)(f) or (g), or any act or default of the corporation, except as otherwise provided by this Act.

  • Marginal note:Lien on membership

    (2) Subject to subsection 42(2), the articles may provide that the corporation has a lien on a membership registered in the name of a member or the member’s personal representative for a debt of that member to the corporation, including an amount unpaid in respect of a membership issued by a body corporate on the date it was continued as a corporation under this Act.

  • Marginal note:Enforcement of lien

    (3) A corporation may enforce a lien referred to in subsection (2) in accordance with its by-laws.

PART 6Debt Obligations, Certificates, Registers and Transfers


Marginal note:Definitions

  •  (1) The following definitions apply in this Part.

    adverse claim

    adverse claim, in respect of a debt obligation, includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest or right in the debt obligation. (opposition)


    bearer means the person who is in possession of a debt obligation that is payable to bearer or endorsed in blank. (porteur)


    broker means a person who is engaged in whole or in part in the business of buying and selling debt obligations and who, in the transaction concerned, acts for, buys a debt obligation from or sells a debt obligation to a customer. (courtier)


    delivery means voluntary transfer of possession. (livraison ou remise)


    fiduciary means any person who acts in a fiduciary capacity or as the administrator of the property of others and includes a personal representative of a deceased person. (représentant)

    good faith

    good faith means honesty in fact in the conduct of the transaction concerned. (bonne foi)

    good faith purchaser

    good faith purchaser means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a debt obligation. (acquéreur de bonne foi)


    holder means a person who is in possession of a debt obligation that is issued or endorsed to the person, to bearer or in blank. (détenteur)


    overissue means the issue of debt obligations in excess of any maximum number of debt obligations that the issuer is authorized by a trust indenture to issue. (émission excédentaire)


    purchaser means a person who takes an interest or right in a debt obligation by sale, mortgage, hypothec, pledge, issue, reissue, gift or any other voluntary transaction. (acquéreur)


    transfer includes transmission by operation of law. (transfert)

    trust indenture

    trust indenture means a trust indenture as defined in subsection 104(1). (acte de fiducie)


    valid means issued in accordance with the applicable law and the by-laws of the issuer, or validated under section 54. (valide)

  • Marginal note:Negotiable instruments

    (2) Except when a transfer is restricted and noted on a debt obligation in accordance with subsection 42(2), a debt obligation is a negotiable instrument.

  • Marginal note:Registered form

    (3) A debt obligation is in registered form if

    • (a) it specifies a person who is entitled to the debt obligation or to the rights it evidences, and its transfer is capable of being recorded in a debt obligations register; or

    • (b) it bears a statement that it is in registered form.

  • Marginal note:Order form

    (4) A debt obligation is in order form if, by its terms, it is payable to the order of a person specified with reasonable certainty in it or to a person to whom it is assigned.

  • Marginal note:Bearer form

    (5) A debt obligation is in bearer form if it is payable to bearer according to its terms and not by reason of an endorsement.

  • Marginal note:Guarantor or surety for issuer

    (6) A guarantor or, in Quebec, a surety for an issuer is deemed to be an issuer to the extent of the guarantee, whether or not the obligation is noted on the debt obligation.

Debt Obligation Certificates

Marginal note:Debt obligation certificate

 An issuer shall provide a debt obligation holder, on request, with

  • (a) a debt obligation certificate that complies with this Act; or

  • (b) a non-transferable written acknowledgement of their right to obtain a debt obligation certificate.

Marginal note:Fee

 An issuer may charge a reasonable fee for a debt obligation certificate issued in respect of a transfer.

Marginal note:Jointly held debt obligations

 If debt obligations are held by more than one person,

  • (a) an issuer is not required to issue more than one debt obligation certificate in respect of those debt obligations; and

  • (b) delivery of a debt obligation certificate to one of the holders is sufficient delivery to them all.

Marginal note:Signatures

  •  (1) A debt obligation certificate shall be signed by at least one of the following persons, or a facsimile of the signature shall be reproduced on the certificate:

    • (a) a director or officer of the issuer;

    • (b) a transfer agent or branch transfer agent of the issuer, or an individual acting on their behalf; or

    • (c) a trustee who certifies it in accordance with a trust indenture.

  • Marginal note:Former director or officer

    (2) An issuer may issue debt obligation certificates that contain the signature of a person who is no longer a director or officer and the validity of the certificate is not adversely affected.

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