Canada Cooperatives Act (S.C. 1998, c. 1)
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Act current to 2024-11-11 and last amended on 2022-08-31. Previous Versions
PART 13Financial Disclosure (continued)
Marginal note:Appointment of auditor
254 (1) Subject to section 255, the members must, by ordinary resolution, at the first annual meeting of members and at each subsequent annual meeting, appoint an auditor to hold office until the close of the next annual meeting.
Marginal note:Eligibility
(2) An auditor appointed under section 82 is eligible for appointment under subsection (1).
Marginal note:Incumbent auditor
(3) Despite subsection (1), if an auditor is not appointed at a meeting of members, the incumbent auditor continues in office until a successor is appointed.
Marginal note:Remuneration
(4) The remuneration of an auditor may be fixed by ordinary resolution of the members or, if not so fixed, may be fixed by the directors.
Marginal note:Dispensing with auditor
255 (1) A cooperative that is not a distributing cooperative may resolve not to appoint an auditor by
(a) special resolution of the members; and
(b) special resolution of all shareholders, including those who do not otherwise have the right to vote.
Marginal note:Limitation
(2) A resolution under subsection (1) is valid only until the next annual meeting of members.
- 1998, c. 1, s. 255
- 2001, c. 14, s. 202
Marginal note:Ceasing to hold office
256 (1) An auditor of a cooperative ceases to hold office when the auditor dies, resigns or is removed under section 257.
Marginal note:Effective date of resignation
(2) A resignation of an auditor becomes effective on the date on which a written resignation is sent to the cooperative, or on the date specified in the resignation, whichever is later.
Marginal note:Removal of auditor
257 (1) The members may by ordinary resolution at a special meeting remove the auditor from office, unless the auditor was appointed by a court under section 259.
Marginal note:Vacancy
(2) A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed or, if not so filled, may be filled under section 258.
Marginal note:Filling vacancy
258 (1) Subject to subsection (3), the directors must fill a vacancy in the office of auditor without delay after it occurs.
Marginal note:Calling meeting
(2) If there is not a quorum of directors, the directors then in office must, not later than twenty-one days after a vacancy in the office of auditor occurs, call a special meeting of members to fill the vacancy and, if they fail to call a meeting or if there are no directors, the meeting may be called by any member.
Marginal note:Members filling vacancy
(3) The by-laws of a cooperative may provide that a vacancy in the office of auditor may only be filled by vote of the members.
Marginal note:Unexpired term
(4) An auditor appointed to fill a vacancy holds office for the unexpired term of their predecessor.
Marginal note:Court appointed auditor
259 (1) If a cooperative does not have an auditor, the court may, on the application of a member or shareholder, appoint and fix the remuneration of an auditor who holds office until an auditor is appointed by the members.
Marginal note:Exception
(2) Subsection (1) does not apply if a resolution made under section 255 not to appoint an auditor is in effect.
Marginal note:Right to attend meeting
260 (1) The auditor of a cooperative is entitled to receive notice of every meeting of the cooperative and, at the expense of the cooperative, to attend and be heard at the meetings on matters relating to the auditor’s duties.
Marginal note:Duty to attend
(2) If a director or member of a cooperative, whether or not the member is entitled to vote at the meeting, or a shareholder that is entitled to vote at that meeting of shareholders, gives written notice not less than ten days before a meeting of the cooperative to the auditor or a former auditor of the cooperative, the auditor or former auditor shall attend the meeting at the expense of the cooperative and answer questions relating to the auditor’s duties.
Marginal note:Notice to cooperative
(3) A director, member or shareholder who sends a notice referred to in subsection (2) must send a copy of the notice to the cooperative at the same time.
Marginal note:Statement of auditor
(4) An auditor is entitled to submit to the cooperative a written statement giving the reasons for the auditor’s resignation or the reasons why the auditor opposes a proposed action or resolution set out in any of paragraphs (a) to (d), in any of the following situations:
(a) the auditor resigns;
(b) the auditor receives a notice or otherwise learns of a meeting of members called for the purpose of removing the auditor from office;
(c) the auditor receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because the term of office of the incumbent auditor has expired or is about to expire; or
(d) the auditor receives a notice or otherwise learns of a meeting at which a resolution referred to in section 255 is to be proposed.
Marginal note:Other statements
(5) In the case of a proposed replacement of an auditor, whether through removal or at the end of the auditor’s term, the following rules apply with respect to other statements:
(a) the cooperative must make a statement on the reasons for the proposed replacement; and
(b) the proposed replacement auditor may make a statement in which he or she comments on the reasons referred to in paragraph (a).
Marginal note:Circulating statement
(6) The cooperative must send a copy of the statements referred to in subsections (4) and (5) without delay to every person who is entitled to receive notice of a meeting referred to subsection (1) and to the Director.
Marginal note:Replacing auditor
(7) No person may accept appointment or consent to be appointed as auditor of a cooperative if the person is replacing an auditor who has resigned or been removed or whose term of office has expired or is about to expire until the person has requested and received from that auditor a written statement of the circumstances and the reasons why, in that auditor’s opinion, the auditor is to be replaced.
Marginal note:Exception
(8) Despite subsection (7), a person otherwise qualified may accept appointment or consent to be appointed as auditor of a cooperative if, no later than fifteen days after making the request referred to in that subsection, the person does not receive a reply.
Marginal note:Effect of non-compliance
(9) Unless subsection (8) applies, an appointment as auditor of a cooperative of a person who has not complied with subsection (7) is null or void.
- 1998, c. 1, s. 260
- 2001, c. 14, s. 203(F)
Marginal note:Examination
261 (1) An auditor of a cooperative must make any examination that is in the auditor’s opinion necessary to enable the auditor to report in the manner that may be prescribed on the financial statements required by this Act to be placed before the members or shareholders, except any financial statements or parts of statements that relate to the period referred to in subparagraph 247(1)(a)(ii).
Marginal note:Reliance on other auditor
(2) Despite section 262, an auditor of a cooperative may reasonably rely on the report of an auditor of an entity the accounts of which are included in whole or in part in the financial statements of the cooperative.
Marginal note:Application
(3) Subsection (2) applies whether or not the financial statements of the cooperative reported on by the auditor are in consolidated form.
Marginal note:Right to information
262 (1) On the demand of an auditor of a cooperative, the present or former directors, officers, employees or agents or mandataries of the cooperative must provide any information and explanations, and access to any documents of the cooperative or any of its subsidiaries that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 261 and that they are reasonably able to provide.
Marginal note:Other information
(2) On the demand of the auditor of a cooperative, the directors must obtain from the present or former directors, officers, employees and agents or mandataries of any subsidiary of the cooperative the information and explanations that the present or former directors, officers, employees and agents or mandataries are reasonably able to provide and that are, in the auditor’s opinion, necessary to enable the auditor to make the examination and report required under section 261 and provide them to the auditor.
Marginal note:No civil liability
(3) A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil action arising from having made the communication.
Marginal note:Audit committee
263 (1) Subject to subsection (2), a distributing cooperative must, and any other cooperative may, have an audit committee composed of not fewer than three directors, a majority of whom are not full-time officers or employees of the cooperative or any of its affiliates.
Marginal note:Exemption
(2) The Director may, on application of a cooperative, authorize the cooperative to dispense with an audit committee and the Director may, if satisfied that the members and shareholders will not be prejudiced, permit the cooperative to dispense with an audit committee on any reasonable conditions that the Director thinks fit.
Marginal note:Duty of committee
(3) An audit committee must review the financial statements of the cooperative before they are approved under section 250.
Marginal note:Auditor’s attendance
(4) The auditor of a cooperative is entitled to receive notice of every meeting of the audit committee and, at the expense of the cooperative, to attend and be heard at the meeting. If requested to do so by a member of the audit committee, the auditor must attend every meeting of the committee held during the auditor’s term of office.
Marginal note:Calling meeting
(5) The auditor of a cooperative or a member of the audit committee may call a meeting of the committee.
Marginal note:Notice of error
264 (1) A director or officer of a cooperative shall, without delay, notify the auditor and the audit committee, if any, of any error or misstatement of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on.
Marginal note:Errors in financial statements
(2) If the auditor or former auditor of a cooperative is notified or becomes aware of an error or misstatement in a financial statement on which the auditor or former auditor has reported, and if in their opinion the error or misstatement is material, the auditor or former auditor must inform each director accordingly.
Marginal note:Duty of directors
(3) When under subsection (2) the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall
(a) prepare and issue revised financial statements; or
(b) otherwise inform the members and shareholders and, if the cooperative is one that is required to comply with section 252, inform the Director of the error or misstatement in the same manner as it informs the members.
Marginal note:Qualified privilege
265 Any oral or written statement or report made under this Act by the auditor or former auditor of a cooperative has qualified privilege.
PART 14Trust Indentures
Interpretation
Marginal note:Definitions
266 The definitions in this section apply in this Part.
- event of default
event of default means, in relation to a trust indenture, an event specified in the trust indenture on the occurrence of which the principal, interest and other money payable under the trust indenture become or may be declared to be payable before maturity, but the event is not an event of default until all the conditions set out in the trust indenture in connection with the giving of notice of the event have been satisfied or the period for giving the notice has elapsed. (cas de défaut)
- guarantor
guarantor means a person that has guaranteed an obligation of an issuer under a trust indenture. (caution)
- issuer
issuer means a cooperative that has issued, is about to issue or is in the process of issuing debt obligations. (émetteur)
- trustee
trustee means a person appointed as trustee, including the administrator of the property of others, under the terms of a trust indenture to which a cooperative is a party, and includes a successor trustee. (fiduciaire)
- trust indenture
trust indenture means a deed, indenture or other instrument or act, including a supplement or amendment, made by a cooperative under which the cooperative issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations issued under it. (acte de fiducie)
- 1998, c. 1, s. 266
- 2011, c. 21, s. 100
- Date modified: