ARCHIVED — Effect of National Instrument 45-106 on Canada Business Corporation Act Corporations
Archived Content
Information identified as archived on the Web is for reference, research or recordkeeping purposes. It has not been altered or updated after the date of archiving. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats on the "Contact Us" page.
May 25, 2006
On September 14, 2005, the Canadian Securities Administrator's (CSA) National Instrument 45-106 (NI 45-106) titled Prospectus and Registration Exemptions became effective in all jurisdictions. Amongst other things, NI 45-106 replaced the "private company" exemption with a "closely held issuer" exemption that refers to "securities" not just "shares".
It should be noted that NI 45-106, like all other (CSA) national instruments, does not change the Canada Business Corporations Act (CBCA). Paragraph 6(1)(d) of the (CBCA) still refers to restrictions on shares and Item 4 of the Articles of Incorporation only concerns restrictions on shares, not other securities. If incorporators want to put restrictions on securities other than shares, they must use Item 7 – Other Provisions. Changes have been made to the Incorporation Kit to incorporate the new "closely held issuer" exemption.
Richard G. Shaw
Director General