Continuance under the CBCA moves a corporation formed under another jurisdiction's law into the federal regime without dissolving it — often a pre-closing step so a target can later amalgamate, CBCA to CBCA, with the buyer's own acquisition vehicle.
Continuance lets a corporation change which statute governs it without dissolving or losing anything. Coming into the federal regime: CBCA s. 187(1): "a body corporate incorporated otherwise than by or under an Act of Parliament may, if so authorized by the laws of the jurisdiction where it is incorporated, apply to the Director for a certificate of continuance". Once the certificate issues, the corporation becomes a CBCA corporation as if it had always been one, its articles of continuance become its articles of incorporation, and it keeps every piece of property and every liability it had before — pending legal proceedings carry on unaffected.
The mirror-image move, a CBCA corporation leaving for another jurisdiction's law, is a separate section with its own protections: s. 188(5) requires shareholder approval by special resolution, and s. 188(1)(b) requires the corporation to satisfy the Director that the move "will not adversely affect creditors or shareholders". It is this export move, not the import one, that carries a statutory appraisal right — s. 190(1)(d) gives dissenting shareholders the right to be bought out at fair value specifically where the corporation "is continued under section 188". A target continuing into the CBCA under s. 187 does not trigger that CBCA dissent right, since it is not yet a CBCA corporation when its own jurisdiction's shareholders approve the move; any dissent right on the way in comes from the exporting province's own corporate statute, not the CBCA.
A related, unstated reason a target continues into the CBCA before closing: CBCA amalgamation under ss. 181 to 186 is only available between corporations that are themselves under the CBCA. Bringing a provincially incorporated target into the federal regime first is a standard way to make a subsequent short-form amalgamation with the buyer's own CBCA acquisition vehicle possible — inference from the structure of ss. 181 and 187, not a stated purpose on either section's own text.
A Nova-Scotia-incorporated target agrees to be bought by a fund's newly formed CBCA acquisition vehicle. As a pre-closing condition, the target applies under s. 187 and obtains a certificate of continuance, becoming a CBCA corporation as of the stated effective date; its existing lease, customer contracts and one pending small-claims suit carry over unaffected. The day after closing, the buyer's acquisition vehicle and the now-CBCA target amalgamate under the s. 184 short-form vertical route with no separate shareholder vote — something that would not have been available while the target remained under Nova Scotia's own corporate statute.
See also: Amalgamation · Holding company.
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