midterm

Question 1

what must be filed if a corporation has a USA?

Answer 1

(USA - Unanimous Shareholders’ Agreement)

the companies office must be notified by completing and filing a Notice of Execution of Termination of Unanimous Shareholders Agreement

Question 2

what is the purpose of a USA?

Answer 2

Unanimous Shareholders Agreement

• it is an agreement between all shareholders and the corporation
• meant to restrict the powers of the directors to manage the business and affairs of the corporation

Question 3

what are the advantages to incorporating federally vs provincially?

Answer 3

the corporation can operate under the same name across Canada

The registered office address can be located anywhere in Canada

Corporation would be recognized as a Canadian entity

Question 4

what is a NUANS search?

Answer 4

Newly Updated Automated Name Search

It searches existing corporate a business names and trademarks throughout Canada, that are similar to the name being proposed

also pre-approves a business name for 90 days

Question 5

what are the types of articles?

Answer 5

Articles of Incorporation
- share capital incorporates a new business with a view to profit
- no share capital incorporates a new non-profit business to serve the public

Articles of Amendment
- used to amend the Articles of Corporation

Articles of Amalgamation
- Used to amalgamate two or more Manitoba Corporations to continue as one

Articles of Dissolution
- to dissovle a Manitoba corporation

Articles of Revival
- to revive a dissolved Manitoba corporation

Question 6

what is the annual maintenance of a corporation?

Answer 6

Directors and Shareholders must each hold annual meetings to:
- adopt and ratify financial statements
- appoint offices and elect directors for another term

corporations must also complete and file with the companies office an Annual return each year

Question 7

differentiate between common shares and preference shares

Answer 7

preference shares
- share class having one right or preference over any other share class

common shares
- share class having no right or preference over any other share class

Question 8

who are the principals of a corporation?

Answer 8

Directors
- responsible for managing the business and affairs of a corporation

Officers
- officers and directors form the management of a corporation. offices are responsible for the day-to-day operations

shareholders
- person who own shares in the capital of the corporation

Question 9

differentiate between minutes of a meeting and resolutions

Answer 9

minutes of a meeting
- summary of activities conducted with the resolutions passed at an actual meeting

resolutions (in lieu of meeting)
- passed by such principals without an actual meeting

Question 10

what is decided when organizing a corporation

Answer 10

once a corporation has been incorporated, it needs to be organized

• directors must decide certain things as part of the organization of the company
• shareholders need to be documents, directors need to be elected, officers need to be appointed

Question 11

what is the registered office address of corporation

Answer 11

location or address where the physical minute book of the corporation is kept, and where legal documents may be served

• cannot be PO box number
• must be in Manitoba if it is a Manitoba Corporation

Question 12

what is a minute book and what does it contain?

Answer 12

a minute book is used to maintain an official record of a corporations activities
- reviewed annually and for business transactions

Question 13

which document creates a non-profit organization

Answer 13

Articles of Incorporation (without share capital)

Question 14

which document creates a business corporation

Answer 14

Articles of incorporation ( share capital)

Question 15

what are the implications of incorporating

Answer 15

• complex structure
• expensive to create and maintain

Question 16

what are the reason to incorporate

Answer 16

to minimize total taxes paid and to reduce personal liability

Question 17

what is a corporation

Answer 17

it is a separate legal entity
- duties distinct from the individuals involved in creating it, investing in it and managing it

has all the powers of a natural person, can acquire assets, obtain loans, enter contracts

continuing existence
- continues to exist even upon death

Question 18

when is consent required with respect to business names or firm names

Answer 18

consent or consent and undertaking forms are needed when a new entity is being created using all or part of a business name

Question 19

what documents are required to register an LP

Answer 19

• Request for Name Reservation form
• Registration of a Limited Partnership form

Question 20

who is the GP in an LP

Answer 20

General partner is responsible for managing the business

ONLY the GP has unlimited personal liability for debts and obligations of the LP

GP is almost always a corporation

Question 21

how are LPs different from GPs and LLPs

Answer 21

for GPs and LLPs, all partners have a share in the management and liabilities of their respective businesses

in an LP the General Partner is involved in the management of business and has unlimited personal liability for debts and obligations of the LP

Question 22

how are LLPs different from GPs

Answer 22

LLPs have all the characteristics of a GP except

• limited to persons practicing a professions
  common in professional business law firms and accounting firm

Question 23

what must a general partner do if they want out of a partnership

Answer 23

to make changes to the composition of the partnership, partners may file a Change of Registrants form

Question 24

how do we register a proposed firm name

Answer 24

1. reserrve firm name by submitting Request for Name Reservation
2. Register firm name by submitting Registration of a Business Name

Question 25

what is a firm name

Answer 25

name under which the partnership is carrying on business

Question 26

what must be present for a General Partnership to exist at will

Answer 26

may exist at “will” without any expressed or written agreement where:

• each person contributes to capital
• each person participates in management decisions
• each person shares in profits and losses

Question 27

list the authorities involved with General Partnerships

Answer 27

expressed authority
- clearly stated by the principal orally or in writing

implied authority
- agents have the ability to enter into transactions with third parties on behalf of their principal

apparent authority
- principals actions could result in a third party believing the agent had authority

Question 28

partners as agents and fiduciaries - what does this mean?

Answer 28

general partners are both agents and fiduciaries of eachother that have expressed, implied, and apparent authority

as agents:
- can bind each other to contracts with third parties

as fiduciaries:
- owe a duty of utmost good faith to eachother
- each partner is obliged to act in good faith and honestly

Question 29

what are the characteristics of a limited partnership

Answer 29

• not a separate legal entity from individual partners
• used most often for financing large capital projects
• limited partners cannot involve themselves in the management

Question 30

what are the characteristics of a limited liability partnership

Answer 30

LLPs have all the characteristics of a GP except:
- they are limited to persons practicing a profession

• not a separate legal entity
• all partners share in management and liability

Question 31

what are the characteristics of a general partnership

Answer 31

• two or more persons or legal entities carrying on business with a view to profit
• not separate legal entity from its partners

Question 32

what is required to expedite documents with the companies office

Answer 32

the filing fee for the expedited documents is double the regular cost of filing. up to $200 maximum

Question 33

what documents are involved in registering a sole proprietorship

Answer 33

• request for Name Reservation form
• Business Name Registration

Question 34

list the name reservation guidelines

Answer 34

should consist of a distinctive element

shoudl consist of a descriptive element

cannot be confusingly similar to an already existing registered business name

only coporations names can end with a legal element

Question 35

list the reasons for registering a business name

Answer 35

• avoid confusion
• permit the person to sue
• to determine the legal entity

Question 36

what are the disadvantages of a sole proprietorship

Answer 36

no liability protection

sole proprietor is liable for all actions of such employees

obtaining disability insurance may be difficult or expensive

Question 37

what are the advantages to a sole proprietorship

Answer 37

only legislation regulating the operations is The Business Names Registration Act

Inexpensive to establish and maintain

Owner has direct control

Tax treatment

Question 38

What is a sole proprietorship liable for

Answer 38

Sole proprietors have unlimited personal liability for the debts and obligations of the business

Question 39

what is a sole proprietorship

Answer 39

• simplest form os business structure
• one person carrying on a business
• no separate legal entity
• may have employees

Question 40

list and explain the 5 factors that determine the best business organization to use

Answer 40

liability
- what is the business owner liable for

tax treatment
- how the business will be taxed

estate planning
- how does a business owner plan for a business in the event they pass away

control
- what type of control they have

income splitting
- is there opportunity to write off business losses

Question 41

what entities are governed by The Corporations Act?

Answer 41

Corporations

Question 42

what entities are governed by The Partnership Act

Answer 42

General Partnership, Limited Partnership, and Limited Liability Partnership

Question 43

What entities are governed by The Business Registration Act

Answer 43

Sole Proprietorship