Chapter 11 Flashcards
Annual general meeting
A meeting where shareholders elect directors and vote on other important resolutions
Articles of association
Internal regulations setting out the procedures for governing a corporation in a registration jurisdiction
Articles of incorporation
A method of incorporating based on a US approach and used in some jurisdictions in CAD
Auditor
A party responsible for ensuring that an organizations financial statements have been properly prepared
Bond
A share interest in the indebtedness of a corporate
Broadly held corporations
Corporations that are publicly traded on the stock market; referred to as distributing corporations in some places
Closely held corporations
Corporations in which there are relatively few shareholders; called non distributing corporations in some places
Common shareholders
Holders of common shares who do not have any preferential rights or privileges
Common shares
Shares to which no preferential rights or privileges are attached
Corporate myth
A corporation is a legal fiction
Debenture
An acknowledgment of debts by a corporation normally involving more than one creditor, may be secured by a floating charge against inventory or unsecured
Deeds of settlement
Contracts used historically for setting up a company
Derivative action
A lawsuit in which certain shareholders are given the right to launch a civil action against the directors on behalf of an injured corporation; also called representative action
Dissent and appraisal
The right of minority shareholders who are adversely affected by major changes to indicate their opposition and force the corporation to buy back the shares at a fair price
Distributing corporations
Corporations that are publicly traded on the stock market
Dividend
Payment to shareholders out of corporate profits
Due diligence
Doing everything reasonable to avoid a problem leading to legal liability
Franchising
Arrangements based on contracts of service and the supply of products between larger and smaller units of one organization
Insider knowledge
Info that affects share pricing that is not publicly known
Insider trading
When people use their insider knowledge to trade shares
Letters patent
A method of incorporating used in some jurisdictions in Canada whereby a government grants recognition to the company as a separate legal entity
Limited liability
Liability is restricted to capital contributed; shareholders are shielded from liability for corporations debts
Memorandum of association
The constitution of a corporation in a registration jurisdiction
Non distributing corporations
Corporations in which there are relatively few shareholders
Oppression action
An action against the directors who have allegedly offended the rights of creditors or minority shareholders
Par value shares
A share with a stated value at issuance (most shares are now no par value)
Personal guarantee
A guarantee of payment for another’s obligation
Preemptive right
The right of a shareholder to buy new shares in the same proportion as their current ownership of sales
Preferred shareholders
Holders of preferred shares who may have a right to vote arising if dividends are not paid
Preferred shares
Shares giving the shareholders preference over other classes of shares; often pertains to dividends
Promoter
A person who participated in the initial setting up of a corporation or who assist the corporation in making a public share offering
Prospectus
A public document disclosing relevant info about a corporation
Proxy
When shareholders designate another person to vote on their behalf at an annual general meeting
Registration
A legislated requirement for incorporating a company in some jurisdictions in Canada
Representative action
Same as derivative action
Securities commission
A provincial agency that serves as a watchdog for the stock market
Separate legal entity
The principle that a corporation exists separately to the people who created it
Share
The means of acquiring funds from a large number of sources to run a corporation; an interest in a corporation held by an investor
Shareholder agreement
An agreement among the shareholders of a corporation that sets out the terms of their relationship
