Section 102 of the Canada Business Corporations Act (CBCA) 1985: This section outlines the requirements for a corporation to obtain shareholder approval for a proposed amalgamation or merger. It specifies that the corporation must provide notice of the meeting at which the proposal will be considered, along with a copy of the proposed articles of amalgamation or merger. The section also requires that the corporation provide a summary of any dissenting shareholder rights and remedies.
Section 102 of the Canada Business Corporations Act (CBCA) 1985 outlines the requirements for a corporation to obtain shareholder approval for a proposed amalgamation or merger. This section is important as it ensures that shareholders are given adequate notice and information before making a decision that could impact their investment in the corporation.
Facts:
When a corporation proposes an amalgamation or merger, it must obtain shareholder approval before proceeding. Section 102 of the CBCA sets out the requirements for obtaining this approval, including providing notice of the meeting at which the proposal will be considered, along with a copy of the proposed articles of amalgamation or merger. The section also requires that the corporation provide a summary of any dissenting shareholder rights and remedies.
Relevant laws:
The CBCA is the relevant statute governing corporations in Canada. Other relevant statutes may include provincial or territorial business corporations acts. Case law may also be relevant in interpreting the requirements of Section 102.
Application of laws to facts:
The requirements set out in Section 102 are mandatory and must be followed by corporations seeking shareholder approval for an amalgamation or merger. Failure to comply with these requirements could result in legal challenges by shareholders.
Key legal issues or questions:
The key legal issues or questions that may arise in relation to Section 102 include whether the corporation has provided adequate notice and information to shareholders, whether dissenting shareholders have been given adequate rights and remedies, and whether the proposed amalgamation or merger is in the best interests of the corporation and its shareholders.
Likely outcome:
If a corporation fails to comply with the requirements of Section 102, shareholders may challenge the proposed amalgamation or merger in court. The outcome of such a challenge will depend on the specific facts of the case and how the court interprets the requirements of Section 102.
Alternatives or different interpretations:
There may be alternative interpretations of the requirements set out in Section 102, depending on the specific facts of the case. For example, there may be questions about what constitutes adequate notice or information for shareholders.
Risks and uncertainties:
The risks and uncertainties associated with failing to comply with the requirements of Section 102 include legal challenges by shareholders, potential delays in completing the proposed amalgamation or merger, and reputational damage to the corporation.
Advice to the client:
Corporations seeking shareholder approval for a proposed amalgamation or merger should ensure that they comply with the requirements of Section 102, including providing adequate notice and information to shareholders and summarizing any dissenting shareholder rights and remedies. Failure to comply with these requirements could result in legal challenges and delays in completing the proposed transaction.
Related case law and judgments:
1. BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 – This case dealt with the duty of directors to consider the interests of all stakeholders, including shareholders, when making decisions about a proposed transaction.
2. Re InterOil Corporation, 2017 BCSC 1322 – This case dealt with the adequacy of notice provided to shareholders in relation to a proposed transaction.
3. Re Intact Financial Corporation, 2017 ONSC 5664 – This case dealt with the adequacy of information provided to shareholders in relation to a proposed transaction.
4. Re Dolly Varden Silver Corporation, 2016 BCSECCOM 255 – This case dealt with the rights of dissenting shareholders in relation to a proposed transaction.
5. Re Red Eagle Resources Corp., 2018 BCSECCOM 198 – This case dealt with the adequacy of disclosure provided to shareholders in relation to a proposed transaction.
