The Sales of Shares Act

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1 SALE OF SHARES c The Sales of Shares Act being Chapter 199 of The Revised Statutes of Saskatchewan, 1920 (assented to November 10, 1920). NOTE: This consolidation is not official. Amendments have been incorporated for convenience of reference and the original statutes and regulations should be consulted for all purposes of interpretation and application of the law. In order to preserve the integrity of the original statutes and regulations, errors that may have appeared are reproduced in this consolidation.

2 2 c. 199 SALE OF SHARES Table of Contents 1 Short title 2 Interpretation 3 Securities excepted 4 Sale of shares of unlicenced company forbidden 5 Advertising shares prohibited 6 Documents to be filed 7 Verification of documents 8 Examination of documents 9 Issue of certificate 10 Refusal of certificate 11 Certificate of one or more classes of stocks 12 Stocks not sold before documents filed 13 Alteration of charter revokes certificate 14 Doing business on a different plan 15 Application for new certificate 16 Agents 17 Annual statement 18 Failure to report 19 Examination by board 20 Cost and expenses of examination 21 Revocation of certificate and liscence 22 Intermittent sale of shares 23 Mining companies special certificate 24 Prosecution and penalties 25 Publication in gazette

3 SALE OF SHARES c CHAPTER 199 An Act to regulate the Sale of Shares, Bonds or Other Securities of Companies Short title 1 This Act may be cited as The Sale of Shares Act , c.63, s.1; R.S.S. 1920, c.199, s.1. Interpretation 2 In this Act, unless the context otherwise requires, the expression: Board 1. Board means the Local Government Board; Company 2. Company means a company, syndicate or association of persons, incorporated or unincorporated , c.63, s.2; R.S.S. 1920, c.199, s.2. Securities excepted 3 This Act shall not apply to the sale of any stocks, bonds, debentures or other securities: (a) of Canada or of any province thereof, or guaranteed thereby by respectively; (b) of the United Kingdom or of the United States of America or guaranteed thereby respectively; (c) of any other foreign country; (d) of any municipal corporation, school district, local improvement district or drainage district in any province or territory of Canada; (e) issued under The Rural Telephone Act; (f) authorised by the board to be sold or listed on any stock exchange which has been approved for the purpose of this section by the board; or (g) not included among those above enumerated, but in which trustees are authorised to invest trust funds under the provisions of The Trustee Act; nor shall it apply to the sale of shares in any company incorporated in Saskatchewan for the promotion of art, science, charity, religion, or other useful object, or for purposes of recreation and with the intention that all its profits (if any) or income shall be devoted to the object of incorporation; or to the sale of shares of a fraternal or benefit society where the sale is restricted to members of the society , c.63, s.3 (redrawn); R.S.S. 1920, c.199, s.3.

4 4 c. 199 SALE OF SHARES Sale of shares of unlicenced company forbidden 4 No person shall sell or offer or attempt to sell in Saskatchewan any shares, stocks, bonds or other securities of a company, other than the securities hereinbefore excepted, without first obtaining from the board a certificate, and in the case of an agent a license, as hereinafter provided , c.63, s.4; R.S.S. 1920, c.199, s.4. Advertising shares prohibited 5 No person shall print, publish, issue or distribute any advertisement, prospectus, circular, letter or other document containing an offer to sell or request to purchase any of such shares, stocks, bonds or other securities unless the company whose shares, stocks, bonds or other securities are offered for sale shall first have obtained from the board the required certificate , c.63, s.5; R.S.S. 1920, c.199, s.5. Documents to be filed 6 Before any shares, stocks or bonds or other securities of a company are offered for sale there shall be filed with the board, together with a filing fee of ten dollars, the following documents: 1. A statement showing in full detail the plan upon which the company proposes to do business, and specifying the branches of business included in the objects of incorporation, where it is an incorporated company, or in the purposes of the copartnership or unincorporated association, as the case may be, which it intends to carry on; 2. A copy of all contracts, bonds or other instruments which it proposes to make with or sell to its contributors; 3. A statement showing the location of the head office of the company, an itemised account of its actual financial condition and the amount of its property and liabilities, and such other information touching its affairs as the board requires; 4. In case of a copartnership or unincorporated association, a copy of its articles of copartnership or association, and all other papers pertaining to its organisation. 5. Where the company has not been organised under the laws of Canada or of any province thereof: (a) a copy of the laws of the state, country, territory or Government under which it exists or is incorporated; (b) a copy of its charter, memorandum of agreement or association or constitution and bylaws and all amendments thereto , c.63, s.6 (redrawn); R.S.S. 1920, c.199, s.6.

5 SALE OF SHARES c Verification of documents 7 All the documents described in section 6 shall be verified by the oath of a duly authorised officer of an incorporated company or of a member of a copartnership or unincorporated association. Any documents of record in a public office shall in addition he certified as true copies by the officer of whose records they form part , c.63, s.7 (redrawn); R.S.S. 1920, c.199, s.7. Examination of documents 8 The board shall examine the statements and documents filed, and if deemed advisable, make a detailed examination of the company s affairs, at the expense of the applicant for the certificate , c.63, s.8 (redrawn); R.S.S. 1920, c.199, s.8. Issue of certificate 9(1) If the hoard finds that the company is solvent, that its memorandum of agreement or association, articles of incorporation or association, or constitution and bylaws, its proposed plan of business and proposed contracts provide a fair, just and equitable plan for the transaction of business, and appear to indicate the probability of a fair return on the shares, stocks, bonds or other securities proposed to be offered for sale, the board shall issue a certificate reciting that the company has complied with the provisions of this Act, that detailed information in regard to the company and its securities is on file in the board s office for public inspection and information, and that the company is permitted to sell its shares, stocks, bonds or other securities, or a limited and defined amount thereof in the province; and such certificate shall also recite in bold type that the board in no wise recommends the securities to be offered for sale by such company. (2) The fee to be paid the board upon the issue of such certificate, or for its renewal in case the certificate for any reason lapses, shall be five dollars , c.63, s.9; R.S.S. 1920, c.199, s.9. Refusal of certificate 10 If the board finds otherwise than as mentioned in section 9, it shall refuse the certificate and so notify the applicant. Such refusal shall not prevent another application at any subsequent period , c.63, s.10; R.S.S. 1920, c.199, s.10. Certificate of one or more classes of stocks 11 The board may grant a certificate under this Act in respect of any class or classes of stocks, bonds, shares or securities of a company, and exclude others therefrom , c.63, s.11; R.S.S. 1920, c.199, s.11. Stocks not sold before documents filed 12 A company shall not, nor shall any person, either as principal or agent, transact business in form or character similar to that set forth in section 4, until such company or person has obtained a certificate as provided by section , c.63, s.12; R.S.S. 1920, c.199, s.12.

6 6 c. 199 SALE OF SHARES Alteration of charter revokes certificate 13 If any alteration or amendment is made in the charter, memorandum of agreement or association, articles of incorporation or association, constitution or bylaws of the company after a certificate has been granted under section 9, such alteration or amendment shall in every case operate as an immediate revocation of the certificate and of all licenses issued to agents , c.63, s.13; R.S.S. 1920, c.199, s.13. Doing business on a different plan 14 Should the company transact business on any other plan than that set forth in the statement required to be filed by section 6, or make contracts other than those shown in the copy of the proposed contracts required to be filed by section 6, the certificate granted upon the faith of such statement or proposed contracts so shown shall become ipso facto null and void, and no business thereby authorised shall be transacted until a new certificate has been obtained , c.63, s.14; R.S.S. 1920, c.199, s.14. Application for new certificate 15 Upon the revocation of a certificate under sections 13 or 14 a new certificate may be applied for and the applicant shall file with the board a copy of the charter, memorandum of agreement or association, articles of incorporation or association, constitution and bylaws, with all amendments thereto up to the date of the application, and the procedure otherwise as well as the rights and duties of all parties in relation thereto shall be the same as in the case of an original application , c.63, s.15 (redrawn); R.S.S. 1920, c.199, s.15. Agents 16(1) Any company or person desiring to sell its shares, stocks, bonds or other securities, may appoint one or more agents, but no such agent shall do any business of the nature aforesaid for said company or person in this province until he has first registered with the board as agent for such company or person (for which registration he shall pay to the board the sum of one dollar) and has received a license to do such business. (2) Such agent shall produce the said license to every person with whom he proposes to do business. (3) The fee to be paid the board on the issue of an agent s license shall be one dollar. (4) Such registration and license shall entitle the agent to represent the company or person as agent until the first day of January following, unless the license is sooner revoked by the board; and such license may be revoked at any time by the board for any cause it deems sufficient , c.63, s.16; R.S.S. 1920, c.199, s.16.

7 SALE OF SHARES c Annual statement 17(1) Every such company shall file with the board at least once in every period of twelve months, but not later than thirty days after the date of its annual meeting and at such other times as may be required by the board, a statement verified by the oath of a duly authorised officer, if it be an incorporated company or association, otherwise by the oath of a member of the copartnership or unincorporated association, setting forth, in such form as is prescribed by the board, its financial condition and the amount of its assets and liabilities, and furnishing such other information concerning its affairs as the board requires. (2) Each regular statement shall be accompanied by a filing fee of five dollars , c.63, s.17; R.S.S. 1920, c.199, s.17. Failure to report 18(1) Any such company which fails to file its report annually as above required, or which fails to file any special report herein required within thirty days after receipt of a request therefor from the board, shall forfeit its right to continue the business of selling its shares, stocks, bonds or other securities in Saskatchewan, and no person shall thereafter sell or offer for sale any of the shares, stocks, bonds or other securities of such company, unless and until the company has been reinstated under the provisions of subsection (2). (2) The board may reinstate the company in its right to sell its shares and securities on the company filing at any subsequent period and paying a penalty to be fixed by the board of not less than $1 nor more than $5 for each day during which there has been a noncompliance with the requirements of this section , c.63, s.18; R.S.S. 1920, c.199, s.18. Examination by board 19(1) Every such company shall, as respects matters within the jurisdiction of the province of Saskatchewan be subject to examination by the board or a member thereof or an auditor appointed by it for the purpose, or its duly authorised officers at any time the board deems advisable. (2) For the purpose of such examination the board or such member or auditor or officer may: (a) require the attendance of all such persons as it or he thinks fit to summon and examine, and require answers or returns to such inquiries as it or he thinks fit to make; (b) require the production of all material, books, papers, plans, specifications, drawings and documents; (c) administer oaths, affirmations or declarations: and shall have the like power of compelling the attendance and examination of witnesses and the production and inspection of documents, and enforcement of orders, and other matters necessary or proper for the due exercise of the jurisdiction hereby conferred as is vested in the Court of King s Bench in respect of any cause or matter properly before it. 19l9-20, c.63, s.19; R.S.S. 1920, c.199, s.19.

8 8 c. 199 SALE OF SHARES Cost and expenses of examination 20(1) For every such examination a fee shall be paid not to exceed twenty-five dollars for each day or fraction thereof, plus the actual travelling and hotel expenses of a member or auditor or officer of the board, while he is absent from his office for the purpose of making the examination, and the failure or refusal of the company or other person to pay such fees and expenses upon demand of the board or official while making such examination shall work an immediate revocation of any certificate granted. (2) A similar fee and expenses shall be paid for an examination of the property or plant of the company, where the board considers such examination necessary, and failure to pay such fine and expenses upon demand of the board or its official shall work an immediate revocation of any certificate granted. (3) The board may, before undertaking the examination require the deposit of the estimated amount of the fees and expenses. Any balance of the deposit remaining after deduction of the proper charges shall be repaid to the depositor , c.63, s.20 (redrawn); R.S.S. 1920, c.199, s.20. Revocation of certificate and liscence 21 When it appeals to the board that the assets of a company doing such business in the province are impaired to such an extent that they do not equal its liabilities, or that it is conducting its business in an unsafe, inequitable or unauthorised manner, or is jeopardising the interest of its stockholders or investors in shares, stocks, bonds or other securities by it offered for sale, or when any such company fails or refuses to file any papers, statements or documents required by this Act, without giving satisfactory reasons therefor, the board may revoke the certificate granted to such company, and any licenses granted to agents thereof under this Act , c.63, s.21; R.S.S. 1920, c.199, s.21. Intermittent sale of shares 22(1) A company incorporated by or under the authority of the Parliament of Canada or of the Legislature of this province, or licensed under The Saskatchewan Insurance Act, or The Companies Act, or subject to taxation under The Corporations Taxation Act, The Railway Taxation Act, or any of the former Acts or ordinances dealing with the same subject matter as these Acts and for which these Acts are substituted, the officers or agents of such company, or any person who owns shares, stocks, bonds or securities thereof, may sell or offer for sale any such shares, stocks, bonds or securities, when such sale or attempted sale is not made in the course of continued and successive acts. (2) The printing, publication or advertisement in any newspaper, magazine or other periodical, or by any other means of display, or the issue, putting forth or distribution of any advertisement, circular letter or other paper containing, an offer to sell, solicitation to purchase, or intimation of the fact of the issue of any such shares, bonds, stocks or other securities, or solicitation by agents or employees, shall be evidence of an attempt to sell in the course of continued and successive acts and in violation of this Act , c.63, s.22; R.S.S. 1920, c.199, s.22.

9 SALE OF SHARES c Mining companies special certificate 23(1) Any company whose object is the development of mines and other natural resources in Saskatchewan, and whose undertaking has not been developed so that it is not known that a fair return is promised upon its shares, stocks, bonds or securities, so as to justify a certificate under section 9, such company may apply for a special certificate in respect of shares, stocks, bonds or securities, and permitting the offer by the company to the public for purchase of shares, stocks, bonds or securities of the company. (2) The board shall grant such special certificate upon the company establishing to its satisfaction that the proceeds of all sales of the unissued stock of said company will be paid to a trust company licensed to do business in Saskatchewan, or other trustee approved of by the board, less a deduction in its discretion for commission for the sale of such stock and reasonable expenses incident to the office management of the company advertising, and in trust to apply such net proceeds to the development or operation of the undertaking of the company only. (3) Any shareholder may sell from time to time any of the shares held by him in a company which has obtained a special certificate as aforesaid, personally or through his agents, or upon any stock exchange, and no sale or attempt to sell by any such individual shareholder, his agent or brokers, shall be an infraction of this Act. (4) Certificates for shares offered for sale pursuant to the provisions of this section shall have conspicuously written or printed on the face of them the words development stock , c.63, s.23; R.S.S. 1920, c.199, s.23. Prosecution and penalties 24(1) Any person contravening any of the provisions of this Act or who being the holder of a special certificate under section 23 fails to observe the conditions or restrictions imposed upon persons acting under such certificate, shall be guilty of an offence punishable, on summary conviction before a police magistrate or two justices of the peace, by a fine of not less than fifty nor more than five hundred dollars, and, in default of payment, imprisonment for a term not exceeding six months. (2) Where the accused was the holder of an agent s license, and such license has been revoked or annulled under the provisions of section 13, 20 or 21, or the company s right to sell its securities has been forfeited under section 18, the accused shall not be convicted of the offence of selling securities contrary to the provisions of this Act if it appears that he was not aware of the revocation or annulment of his license or the forfeiture of the company s right, as the case may be, or of the act or event which effected such revocation annulment or forfeiture , c.63, s.24; R.S.S. 1920, c.199, s.24. Publication in gazette 25 In every case where the certificate of a company has been revoked or annulled or its right to sell its shares forfeited, the board may publish notice thereof in The Saskatchewan Gazette and in such other manner as it thinks fit , c.63, s.25; R.S.S. 1920, c.199, s.25.

10 Regina, Saskatchewan Printed by the authority of THE QUEEN S PRINTER Copyright 2008

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