Corporations!!!! Flashcards
Businesses acquire legal rights by going through what process?
incorporation
What is incorporation?
completion of document that outlines the structure in general terms
What does a company no longer have to do after becoming a corporation?
specify business activity
Why do most choose to incorporate?
Limited liability
Unlike partnerships and sole proprietorships, shareholders only lose what if the company collapses?
Capital investment
Who makes decisions about assets, liabilities?
corporate agents (officers, directors, employees)
What are the requirements to be a director?
age 18, resident of Canada, sound mind, NOT undischarged bankrupt
For a public corporation how many directors at minimum must there be?
3
what does buck stop mean?
directors, legally responsible for all business affairs of corporation
What are the two duties owed to the CBCA and OBCA?
act in good faith and honestly, exercise care diligence and skill that reasonable person would
Why can employees cause criminal and civil liability?
Vicarious liability associated with them
What are common shares?
Equity Shares, right to vote, DO NOT provide dividend, last to pay out
What are preference shares?
Income shares, no voting rights but paid dividends. Paid before common shares in dissolution.
What are the 4 rights of shareholders?
right to vote
receive dividends
remaining property of corporation upon dissolution
right to receive information about company
Bondholders
right to receive interest but have no rights to vote
