Section 31 — Canada Business Corporations Act: Exception

A corporation may in the capacity of a personal representative hold shares in itself or in its holding body corporate unless it or the holding body corporate or a subsidiary of either of them has a beneficial interest in the shares. A corporation may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money. A corporation may permit any of its subsidiary bodies corporate to acquire shares of the corporation in the subsidiary’s capacity as a personal representative, unless the subsidiary would have a beneficial interest in the shares; or by way of security for the purposes of a transaction entered into by the subsidiary in the ordinary course of a business that includes the lending of money. A corporation may permit any of its subsidiary bodies corporate to acquire shares of the corporation through the issuance of those shares by the corporation to the subsidiary body corporate if, before the acquisition takes place, the conditions prescribed for the purposes of this subsection are met. After an acquisition has taken place under the purported authority of subsection (4), the conditions prescribed for the purposes of this subsection must be met. If a corporation permits a subsidiary body corporate to acquire shares of the corporation under the purported authority of subsection (4), and either one or more of the conditions prescribed for the purposes of subsection (4) were not met, or one or more of the conditions prescribed for the purposes of subsection (5) are not met or cease to be met, then, notwithstanding subsections 16(3) and 26(2), the prescribed consequences apply in respect of the acquisition of the shares and their issuance.