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Business Corporations Act

[SBC 2002] CHAPTER 57

Part 2.1 — Unlimited Liability Companies

Definition

51.1  For the purposes of this Part, "foreign unlimited liability corporation" means

(a) an unlimited liability corporation under the Business Corporations Act (Alberta),

(b) an unlimited company under the Companies Act (Nova Scotia),

(c) any other foreign corporation of which the shareholders, in their capacity as shareholders of the corporation, are liable for the debts and liabilities of the corporation, or

(d) a foreign corporation within a prescribed class of foreign corporations.

Notice of articles of unlimited liability company must include statement

51.11  A company formed under section 10 is an unlimited liability company if its notice of articles contains the following statement:

The shareholders of this company are jointly and severally liable to satisfy the debts and liabilities of this company to the extent provided in section 51.3 of the Business Corporations Act.

Statement on certificate

51.2  (1) Without limiting section 57, an unlimited liability company must set out on the face of each share certificate issued by it the following statement:

The shareholders of this company are jointly and severally liable to satisfy the debts and liabilities of this company to the extent provided in section 51.3 of the Business Corporations Act.

(2) The failure of an unlimited liability company to comply with subsection (1) does not affect the liability of its shareholders under section 51.3.

Corporate name

51.21  (1) An unlimited liability company

(a) must have the words "Unlimited Liability Company" or the abbreviation "ULC" as part of and at the end of its name, and

(b) must not have any of the words or abbreviations referred to in section 23 (1) as part of its name.

(2) For all purposes, the words "Unlimited Liability Company" are interchangeable with the abbreviation "ULC".

(3) A person must not use in British Columbia any name of which "Unlimited Liability Company", "Unlimited Liability Corporation" or "ULC" is a part unless the person is

(a) an unlimited liability company,

(a.1) a federal corporation entitled or required to use those words or that abbreviation,

(b) a foreign unlimited liability corporation, or

(c) a prescribed person.

(4) An unlimited liability company recognized under this Act has as its name, on its recognition,

(a) the name shown for the company on the application filed to effect the recognition of the company if

(i)   that name has been reserved for the company, and

(ii)   that reservation remains in effect at the date of the recognition of the company, or

(b) in any other case, the name created by adding "B.C. Unlimited Liability Company" after the incorporation number of the company.

Liability of shareholders of unlimited liability companies

51.3  (1) Subject to subsection (2), shareholders and former shareholders of an unlimited liability company are jointly and severally liable as follows:

(a) if the company liquidates, the shareholders and former shareholders are jointly and severally liable, from the commencement of the company's liquidation to its dissolution, to contribute to the assets of the company for the payment of the unlimited liability company's debts and liabilities;

(b) whether or not the company liquidates, the shareholders and former shareholders are jointly and severally liable, after the company's dissolution, for payment to the company's creditors of the unlimited liability company's debts and liabilities.

(2) A former shareholder of an unlimited liability company is not liable under subsection (1) unless it appears to the court that the shareholders of the unlimited liability company are unable to satisfy the debts and liabilities referred to in subsection (1), and, even in that case, is not liable under subsection (1)

(a) in respect of any debt or liability of the unlimited liability company that arose after the former shareholder ceased to be a shareholder of the unlimited liability company,

(b) in a liquidation of the company, if the former shareholder ceased to be a shareholder of the unlimited liability company one year or more before the commencement of liquidation, or

(c) on or after a dissolution of the company effected without liquidation, if the former shareholder ceased to be a shareholder of the unlimited liability company one year or more before the date of dissolution.

(3) The liability under subsections (1) and (2) of a shareholder or former shareholder of an unlimited liability company continues even though the unlimited liability company transforms, and, in that event,

(a) a reference in subsections (1) and (2) to

(i)   "shareholder" is deemed to be a reference to a person who was a shareholder of the unlimited liability company at the time it transformed, and

(ii)   "former shareholder" is deemed to be a reference to a person who ceased to be a shareholder of the unlimited liability company before it transformed, and

(b) a reference in subsection (1) (a) or (b) or (2) (b) or (c) to "the company" is deemed to be a reference to the successor corporation.

(4) In subsection (3) and this subsection:

"successor corporation", in relation to an unlimited liability company, means any corporation that results from the company, or any of its successor corporations, transforming;

"transform", in relation to an unlimited liability company or any of its successor corporations, means to

(a) alter its notice of articles to become a limited company,

(b) continue into another jurisdiction, or

(c) amalgamate with another corporation.

Alteration of notice of articles to become unlimited liability company

51.31  (1) A limited company may become an unlimited liability company by altering its notice of articles to

(a) include the statement referred to in section 51.11, and

(b) change the company's name in accordance with section 263 (3) to a name that complies with section 51.21 and Division 2 of Part 2.

(2) A company may alter its notice of articles under subsection (1) if all of the shareholders, whether or not their shares otherwise carry the right to vote,

(a) authorize the alteration by a unanimous resolution, and

(b) return to the company all of their share certificates, if any, representing shares in the company for endorsement in accordance with section 51.2 (1).

(3) If a limited company becomes an unlimited liability company by altering its notice of articles, the shareholders of the unlimited liability company are liable, in accordance with section 51.3, for the debts and liabilities of the company whether those debts and liabilities arose before or arise after the alteration.

Alteration of notice of articles to become limited company

51.4  (1) An unlimited liability company may become a limited company by altering its notice of articles to

(a) remove the statement referred to in section 51.11, and

(b) change the company's name in accordance with section 263 (3) to a name that complies with Division 2 of Part 2.

(2) If an unlimited liability company becomes a limited company by altering its notice of articles, section 51.3 applies to the liability of the shareholders and former shareholders of the unlimited liability company.

Amalgamations restricted

51.5  Despite section 269,

(a) a foreign corporation must not amalgamate with an unlimited liability company and continue as a company, whether as a limited company or as an unlimited liability company,

(b) a foreign unlimited liability corporation must not amalgamate with any company and continue as a company, whether as a limited company or as an unlimited liability company, and

(c) a foreign corporation must not amalgamate with a limited company and continue as an unlimited liability company.

Amalgamation resulting in unlimited liability company

51.6  (1) If an amalgamation involving one or more limited companies is proposed to result in an amalgamated unlimited liability company and that amalgamation is not to be effected under section 273 or 274,

(a) sections 270 (1) (b) and 271 do not apply to the amalgamating limited companies, and

(b) the amalgamation agreement must be adopted by a unanimous resolution of all of the shareholders of each amalgamating limited company, whether or not their shares otherwise carry the right to vote.

(2) Without limiting section 282, if an amalgamation results in an amalgamated unlimited liability company,

(a) the amalgamated unlimited liability company's notice of articles must include the statement referred to in section 51.11,

(b) the amalgamated unlimited liability company's name must comply with section 51.21 and Division 2 of Part 2, and

(c) the shareholders of the amalgamated unlimited liability company are liable, in accordance with section 51.3, for the debts and liabilities of the amalgamated unlimited liability company whether those debts and liabilities were the debts and liabilities of an amalgamating company immediately before, or are the debts and liabilities of the amalgamated unlimited liability company after, the amalgamation.

Amalgamation resulting in limited company

51.7  If an amalgamation of an unlimited liability company with another corporation results in an amalgamated limited company,

(a) the amalgamated limited company's notice of articles must not include the statement referred to in section 51.11,

(b) the amalgamated limited company's name must comply with Division 2 of Part 2, and

(c) section 51.3 applies to the liability of the shareholders and former shareholders of the unlimited liability company.

Continuation into British Columbia as unlimited liability company

51.8  (1) A foreign corporation must not be continued into British Columbia as an unlimited liability company unless

(a) the foreign corporation is

(i)   an unlimited liability corporation under the Business Corporations Act (Alberta),

(ii)   an unlimited company under the Companies Act (Nova Scotia), or

(iii)   a foreign corporation within a prescribed class of foreign corporations, and

(b) the continuation accords with any prescribed requirements that must be met in order for a foreign corporation to be continued into British Columbia as an unlimited liability company.

(2) Without limiting sections 302 and 305 (1), if a foreign corporation referred to in subsection (1) of this section continues into British Columbia as an unlimited liability company,

(a) the continued unlimited liability company's notice of articles must include the statement referred to in section 51.11,

(b) the continued unlimited liability company's name must comply with section 51.21 and Division 2 of Part 2, and

(c) the shareholders of the unlimited liability company are liable, in accordance with section 51.3, for the debts and liabilities of the continued unlimited liability company whether those debts and liabilities were the debts and liabilities of the continuing foreign corporation immediately before, or are the debts and liabilities of the continued unlimited liability company after, the continuation.

Continuation of foreign unlimited liability corporation into British Columbia as limited company prohibited

51.9  A foreign unlimited liability corporation must not continue into British Columbia as a limited company.

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