I would direct the attention of the committee to paragraph (d) which reads as follows:
(d) change all or any of its previously authorized shares with par value, issued or unissued, into the same or a different number of shares of any class or classes without par value and' not having priority as to capital or being subject to redemption;
This paragraph should be read with the first part of subsection 1, which reads:
(1) Subject to confirmation by supplementary letters patent, a company may from time to time by by-law ...
(d) change all or any of its previously authorized shares with par value, issued or unissued, into the same or a different number of shares of any class or classes without par value and not having priority as to capital or being subject to redemption;
It should also be read in conjunction with subsection 2:
No such by-law shall take effect until it is sanctioned by at least two-thirds of the votes of the holders of each class of shares thereby dealt with, cast at a special general meeting of shareholders called for the purpose and confirmed by supplementary letters patent.
This I notice is an innovation; the same provision apparently is not found in the sections which this section replaces, that is to say, sections 58, 59 and 60 of the present act. I am afraid it is fraught with danger. There are features that I personally do not like and I am going to move later on that subsection (d) be struck out. My reason for asking that it be deleted may be found in the case I referred to when speaking early in February, or perhaps later, on the subject
Dominion Companies Act
of company promotions in general. I will not refer by name to the company in regard to which I am about to speak; I will simply say that a certain company in western Canada during the past few months has made a change in its capital organization. This is the story. In the early history of the company certain shareholders bought 4,500 preferred shares at $100 par value. At the same time 3,000 shares of common stock were sold at $100 a share. The preferred stock became entitled to voting power after one year's default in the payment of dividends. In 1933, dividends were not paid and very naturally the holders of the preferred shares concluded that they had a right to step in, use their voting power and take possession of the company. What really happened was this. In the meantime the holders of the 3,000 common shares had passed a by-law to the effect that these 3,000 common shares of $100 par should be changed to 15,000 no par shares. When the petition was presented to the appropriate authority-
Topic: DOMINION COMPANIES ACT