Module 6: Post Incorporation Procedures: Resolutions

Question 1

Ordinary resolutions can be made by:

(a) Directors
(b) Shareholders
(c) Both of the above

Answer 1

(c) Both of the above

Question 2

Dissolution of a corporation is an example of a:

(a) Special resolution
(b) Ordinary resolution

Answer 2

(a) Special resolution

Question 3

In Non-Distributing corporations, most resolutions are passed in writing:

Answer 3

True

Question 4

Dividends are declared by:

(a) Directors
(b) Shareholders

Answer 4

(a) Directors

Question 5

Solvency Test wording from Section 43 of the ABCA should be included on resolutions where dividends are declared:

Answer 5

True

Question 6

If a company wants to change its’ name from a named name to a named name, who passes the resolution:

(a) Directors
(b) Shareholders

Answer 6

(a) Directors

Question 7

When can a Director pass an ordinary resolution amending the Articles of Incorporation?

Answer 7

When they are changing the corporate name from a numbered name to a named name

Question 8

A Transfer Register tracks the share transfer history of whom:

(a) One shareholder
(b) All shareholders

Answer 8

(b) All shareholders

Question 9

A Securities Register tracks the share history of whom:

(a) One shareholder
(b) All shareholders

Answer 9

(a) One shareholder

Question 10

A resolution approving the issuance of shares is passed by whom:

(a) Directors
(b) Shareholders

Answer 10

(a) Directors

Question 11

If changes are made to the Articles of a Corporation, the following would be filed on CORES:

(a) The resolution changing the Articles
(b) Articles of Amendment
(c) Both of the above
(d) None of the above

Answer 11

(b) Articles of Amendment

Question 12

When a director’s resolution is done in writing in lieu of a meeting, it must be signed by all directors:

Answer 12

True

Question 13

There is one circumstance where non-voting shareholders would sign a written resolution in lieu of a meeting in order to have the resolution passed. This resolution would be:

(a) Appointing directors
(b) Appointing an Auditor
(c) Dispensing of an Auditor
(d) None of the above

Answer 13

(c) Dispensing of an Auditor

Question 14

Resolutions passed by directors or shareholders must always be filed with the Corporate Registry:

Answer 14

False - Resolutions are never filed on CORES

Question 15

This must always be filed after a meeting, and must always be signed before filing into the Minute Book:

Answer 15

Minutes

Question 16

5 common director’s ordinary resolutions:

Answer 16

1) Change of registered office
2) Issuing shares
3) Transfer of shares
4) Declaring dividends
5) Appointing officers

Question 17

5 common shareholder’s ordinary resolutions:

Answer 17

1) Election of Directors
2) Removal of Directors
3) Confirming, amending, repeal of bylaws
4) Appointment of auditor
5) Dispensing with appointment of auditor

Question 18

3 common shareholder’s special resolutions:

Answer 18

1) Amendment to Articles
2) Sale, lease or exchange of corporation’s property
3) Dissolution of the corporation

Question 19

How are ordinary director’s and shareholder’s resolutions passed:

Answer 19

If at a live meeting, by majority of votes cast (if a shareholder ordinary resolution - only shareholders with voting shares can vote).

If in writing in lieu of a meeting, all directors or shareholders must sign the resolution or it will not be passed.

Question 20

How are shareholder’s special resolutions passed:

Answer 20

By a majority of not less than 2/3 of the votes cast.

Or if in writing in lieu of a meeting, signed by all shareholders entitled to vote on the resolution.

Question 21

What Section of the ABCA states a Solvency Test is required when declaring dividends, and what is it:

Answer 21

Section 43 ABCA.

1) If the corporation is, or would be, unable to pay its liabilities
2) Or the value of the corporation’s assets does not, or would not, cover the liabilities and stated capital of the corporation

Question 22

What happens if the Directors declare dividends and are not able to pay their liabilities:

Answer 22

They would have to pay the corporation, to cover their liabilities, out of their own pocket

Question 23

What is Stated Capital:

Answer 23

The total amount of money the corporation receives for each class of shares issued

Question 24

What is Corporate Governance?

Answer 24

Rules, policies, and procedures that internally govern a corporation, these are outlined in documents such as the Unanimous Shareholders Agreement (USA), Bylaws, Business Corporations Act of Alberta, and the Articles of Incorporation.

Question 25

What is a Resolution?

Answer 25

Resolutions are essentially corporate decisions made in writing in lieu of a meeting or at a meeting by Directors and/or Shareholders.

Question 26

Who drafts resolutions?

Answer 26

Legal Assistant.

Question 27

What does abstain mean in respects to voting?

Answer 27

Formally declining to vote either for or against a proposal or motion.

Question 28

2 examples of resolutions that would require the legal assistant to take care of further tasks:

Answer 28

1) Change in Registered Office:
Notice of Change of Address
CORES
Minute Book

2) Transfer of Shares:
Share certificates
Update registers (No CORES filing required)

Question 29

What is a Securities Register?

Answer 29

One for each and every shareholder and it just gives information on shares that shareholder has.

Question 30

What is a Transfer Register?

Answer 30

This tracks all shareholders and shares, and movement, of the corporation through time.

Question 31

What is the difference between a cumulative and non-cumulative dividend?

Answer 31

Cumulative dividends are declared every year at a rate fixed in the Articles. The right to a cumulative dividend does not expire at the end of the financial year. If the directors do not declare a dividend in one year, the following year they must declare and pay a dividend for the prior year, and for the current year.

Non-cumulative dividends are dividends that, if not declared by the end of a financial year of a corporation, the shareholders have no right to receive dividends.

Question 32

What is a Quorum?

Answer 32

The minimum number of members necessary to conduct the business of a group. Usually established in the bylaws.

Question 33

What is a Proxy?

Answer 33

The authority to represent someone else, usually at a meeting and to vote on behalf of someone else.
(The person voting on behalf of that person is called a “proxy holder”).
• You can be fined $5,000.00 or be jailed for 6 months if you do not vote the way the person wants you to.

Question 34

What is a Unanimous Shareholders Agreement?

Answer 34

Agreement between shareholders outlining their rights and responsibilities, and to prevent the directors of a corporation from taking too much control of the corporation.