What are the effects of National Instrument 45-106 on the CBCA?
National Instrument 45-106, like all other Canadian Securities Administrators’ national instruments, does not change the Canada Business Corporations Act (CBCA). Corporations Canada recommends putting restrictions on share transfers in Item 4 and restrictions on transfers of other securities in Item 7 of the articles. This approach is outlined in the incorporation kit. However the articles of incorporation, amalgamation, continuance, revival, and restated articles of incorporation will not be rejected if the restrictions on all securities transfers, including shares, are in Item 4. Corporations Canada will accept the forms whether the transfer restrictions are set out in two places or in one.
