Corporate Changes and Reorganizations

Introduction
 After a corporation is incorporated, it may be necessary to change its characteristics for a variety
of reasons. Ie. new class of shares, increased number of directors.
 Changing theses characteristics involve amending the articles of corporation
 Some corporate changes under the CBCA include adjustments to a corporations shared capital,
continuing the corporation in the laws of another jurisdiction, amalgamating the corporation
with other corporations, selling substantially all of the corporation's assets, and terminating the
corporation's existence.
 Since these changes fundamentally alter the nature of the shareholders' investment, they are
subject to special procedures that are designed to protect the interest of the SH as well as
others with a stake in the corporation.
 In most cases, adequate disclosure regarding the nature of the change to SHs and SH approval
are required. This approval is required by a special resolution of SHs
 Where a SH has multiple classes of shares, sometimes the holder of each class of shares may be
given a right to vote, even if their shares do not otherwise carry a voting right.
 If a class is prejudicially affected by the change, holders of shares of that class may even be
entitled to vote separately as a class giving them a veto right over the change.
 SHs who disagree with a decision have a right to have their shares bought by the corporation 
"dissent and appraisal right"

Amendment of Articles
  Amendment of the articles requires approval by special resolution  resolution that is passed at
a meeting of SHs by a majority of not less than two-thirds of the votes case or is consented to in
writing by all shareholders entitled to vote.
 A level of approval higher than two-thirds may be specified in a SHs agreement or in a corps
articles
 As with all SHs meetings, notice of a meeting to consider a resolution to amend the articles must
be sent to SHs
 Notice must state the nature of the proposed amendment insufficient detail to permit SHs to
form a reasoned decision about whether to vote for or against the amendment and must
include the text of the special resolution on which the SHs will be asked to vote  s. 135(6).
 If the corp has more than 50 SHs, the management must send SHs a form of proxy and a
management proxy circular that provide further information  s. 149(1)
 SHs may initiate amendments to articles themselves by making a SH proposal  s. 175(1)

Changes to Stated Capital

By-laws

Continuance Under the Law of Another Jurisdiction

Introduction

Import

Export

Amalgamation (Corporate Combination)

Introduction
 As the authors state, the legal idea of amalgamation is much narrower than the corresponding business
idea. Imagine that corporation A Ltd. has it eye on the business being carried on by corporation B Ltd.
The two can be combined in various ways. The difference may have little practical effect if everything
goes as everyone planned. Legally however the differences can be quite significant and can become an
issue if things go wrong. Consider the differences between the following possibilities:

a) A Ltd. buys all of the assets of B Ltd. - A and B still remain distinct
b) A buys all the shares of B Ltd. - Share purchase – if one company buys the shares of another
corporation – does that mean they are one in the same? No
c) C buys all of the shares of A Ltd. and of B Ltd. - Same case as B, C becomes a dominant holder of
two different corporations. They don’t necessarily combine but there just happens to be one owner
of two different corporation
d) C Ltd. buys all of the business assets of A Ltd. and B Ltd. - A and B lose their assets and A and B go
their separate ways (similar to a)
None of these is an amalgamation in the legal sense. Under the CBCA ss. 181 to 186 and corresponding
provisions in other reformed statutes, two or more corporations may “amalgamate and continue as
one corporation.” The effect is that the old corporations cease to exist as separate entities; only one
corporation remains. It is governed by its own set of articles that must be sent to the Director as part of
the process. The Director issues a certificate of amalgamation to complete the process.

Long Form

Short Form

a) Vertical

b) Horizontal

Procedure After Approval of Long and Short Form Amalgamation

Arrangements
Sale of Assets or Shares

Going-Private Transactions

Approval Process

Termination of the Corporation’s Existence

a) Voluntary Dissolution

b) Involuntary Dissolution