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29 Cards in this Set
- Front
- Back
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Corporation
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a type of legal entity created by the state
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shareholder
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A person who holds a share interest in a corporation; a part owner of the corporation
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director
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under corporate late, a person elected by the shareholders of a corporaton to manage its affairs
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officer
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a person elected or appointed by the directors of a corporation to fill a particular office (such as president, secretary, treasurer)
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Letters patent
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a government that creates a corporation as a legal entity
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Special-Act
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a corporation created by an Act of Parliament or a legislature for a specific purpose
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General-Act
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A form of incorporation whereby a corporation may be created by filing specific information required by the statute
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Certificate of incorporation
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a government certificate creating the corporation
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Doctrine of constructive notice
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Presumption at law that everyone has knowledge of the content of all statutes
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Indoor Management rule
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a party dealing with a corporation may assume that the officers have the valid and express authority to bind the corporation
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Shareholders' agreement
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an agreement between shareholders of a private corporation concerning management and/or future reorganization of the corporation such as buy-out of interests
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Share
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the ownership of a fractional equity interest in a coporation
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Floating Charge
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a debt security issued by a corporation in which assets of the corporation, such as stock-in-trade, are pledged as security. Until such time as default occurs, the corporation is free to dispose of the assets
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Debenture
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A debut security issued by a corporation that may or may not have specific assets of the corporation pledged as security for payment
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Fiduciary
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A relationship of utmost good faith in which a person, in dealing with property, must act in th best interests of the person for whom he or she acts, rather than his or her own personal interest
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Doctrine of Corporate opportunity
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the use of corporate information for a personal benefit to the detriment of the corporation
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Due diligence
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the obligation on the directors of a corporation to ensure that effective systems are in place to comply with legislation, and to monitor the systems to ensure compliance
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outside director
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a director who is not an officer or employee of the corporation
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Business judgement rule
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the reluctance o the court to interfere with decisions of a board of directors
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Sarbanes-Oxley Act
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A U.S. statute that imposes extensive duties on corporations to ensure accuracy of financial and securities information provided to the public
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fiduciary
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relationship of utmost good faith in which a person must act in the best interest of the person for whom they act rather than in their own interests
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What is the leading decision on corporate opportunity?
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Canadian Aero Services Ltd. v. O'Malley
(created company called Terra Surveys Limited to win contract) |
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what are some factors to take into account when raising due diligence?
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- absolute liability based on prohibited act
- can the due diligence defense even be raised? - cost/benefit analysis? - use of an impartial outside director/s |
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what are the rights of shareholders?
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-right to info
-right to elect directors - right to approve actions of directors -right to vote |
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What are some objections to the majority rule?
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- act objected to is ultra vires
- act personally affects the rights of minority shareholders - corporation fails to comply with procedural rules - act of majority constitutes fraud |
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what is derivative action?
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an action brought by the shareholders on behalf of the corporation to remedy a wrong
- plaintiff shareholders derive their status from the corporation |
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what is included in the shareholder agreement?
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1) SH and corp - employment
2) SH and SH - voting/ Buy-out 3) SH and Directors - restricting behaviours |
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what is the oppression remedy?
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court is free to make an order to remedy an oppressive or unfair situation
-force majority and directors to treat minority with fairness |
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What is the kamloops v. Nielson case about?
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tort law, negligence, decomposed snail
-established that manufacturers have the highest duty of care for end consumers |
