Chapter Eleven-Corporations

Question 1

Salomon case

Answer 1

Example of a Corp being a separate legal entity as salomon loaned his money to his company to buy his business and creditors could not chase him down for funds

Question 2

When will courts lift the corporate veil?

Answer 2

When created for wrong intentions or. Tax evasion or fraud

Question 3

Shareholders have what type of liability?

Answer 3

Limited unless they sign a personal guarantee

Question 4

Corporation acts through…

Answer 4

Agents who may have apparent authority

Question 5

How can a corporation be dissolved?

Answer 5

By dissolution, court ordered bankruptcy, or fail to file annual return.

Question 6

Three processes of incorporation

Answer 6

Registration- NS
Letters Patent- PEI
Articles of incorporation- everywhere else

Question 7

Non-par value shares

Answer 7

Where no value is put on shares and allows market place to determine value, only type of share allowed in Berta

Question 8

Corps with more than 15 shareholders are…

Answer 8

Distributing corps and file much more info

Question 9

Non-distributing corps with 16 or more shareholders…

Answer 9

Have more requirements

Question 10

Director’s fiduciary duty

Answer 10

Act in best interest
Be loyal
Avoid conflicts of interest
Act honestly many gains go to court
Any losses must be born by them alone

Question 11

When directors have a statutory duty and are personally liable

Answer 11

Wages (unpaid)
Unpaid taxes
Environment regulations
Offences under consumer protection legislation and other legislation
Occasionally tort liability

Question 12

Fiduciary duty in officers and managers

Answer 12

Owed

Question 13

Pre-emotive shareholder rights

Answer 13

Entitle current shareholders to be offered new shares first