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32 Cards in this Set
- Front
- Back
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Legal person
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An entity recognized at law as having its own legal personality
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Corporation
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A legal person formed by incorporation according to a prescribed legal procedure
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Limited liability
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The liability of shareholders is limited to the amount of their capital contributions
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Contrast Partnerships and Corporations
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Legal Personality >> Corporation
Personal liability of participants >> Partnership Transferability of ownerships >> Corporation Participation of owners in management >> Partnership Continuity >> Corporation Taxable entity >> Corporation |
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Ultra Vires
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Beyond the powers
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Associated corporations
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Corporations that are related either (a) vertically, as where one corporation controls the other, or (b) horizontally, as where both corporations are controlled by the same person
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What three conditions must be met in order to identify an individual with a corporation?
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- The individual must control the corporation
- That control must have been exercised to commit a fraud, a wrong, or a breach of duty - The misconduct must be the cause of the plaintiff's injury |
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Royal charter
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A special licence given by the Crown to form a corporation for the purpose of carrying on a particular activity
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Special act of parliament
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A legislative act creating a specific corporation
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Memorandum of association
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A document setting out the essential terms of an agreement to form a corporation
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Certificate of incorporation
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A certificate that a corporation has come into existence
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Letters patent
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A document incorporating a corporation, issued by the appropriate authority, and constituting the "charter" of the corporation
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Articles of incorporation
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The basic constitutional document of corporations incorporated in most Canadian jurisdictions
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Name some of the contents in the articles of incorporation
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- Name of corporation
- Place where the registered office is situated - Classes and any maximum number of shares that the corporation is authorized to issue - If there are two or more classes of shares, the rights and restrictions attached to each class - Any restriction on the transfer of shares - Number of directors - Any restrictions on the business that may be carried on - Other provisions that the incorporators choose to include |
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By-laws
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The internal working rules of corporation
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What are some provisions included in typical by-laws?
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- the qualification of a director shall be the holding of at least one share in the capital of the corporation
- A director shall hold office until the third annual general meeting following his appointment - Notice of a meeting of directors shall be given in writing to each director not less than seven days before the meeting - Three directors shall constitute a quorum for the transaction of any business, except as other provided in these by-laws - Questions arising at any meeting of directors shall, except as herein provided, be decided by a majority of votes; in the event of an equality of votes, the Chair of the meeting shall have a second or casting vote - Any cntract entered into by the corporation that involves the expenditure of the incurring of a liability in excess of $10,000 must be approved by a majority of all the directors - Written notice of not less than 28 days, in the case of an annual general meeting, and 21 days, in the case of other shareholder meetings, shall be given to all shareholders entitled to vote at the meeting - A quorum is present at a general meeting of shareholders if not less than 10 shareholders, together holding a majority of the shares entitled to vote at the meeting, are present in person or by proxy - Shares in the corporation shall be allotted by resolution of the board of directors, approved by not less than two-thirds of all directors, on such terms, for such consideration, and to such persons as the directors determine. - The directors may at any time by resolution, approved by not less than two-thirds of all directors, declare a dividend or an interim dividend, and pay the same out of from the funds of the corporation available for that purpose. |
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Private company
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A corporation with a restricted number of shareholders prohibited from issuing its shares to the general public
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Distributing corporation
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A corporation that issues its securities to the public
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Professional corporation
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A special type of business corporation that may be formed by members of a profession
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Authorized capital
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The maximum number (or value) of shares that a corporation is permitted by its charter to issue
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Issued capital
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The shares that have been issued by a corporation
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Paid-up capital
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The shares that have been issued and fully paid for
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Stated capital account
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The amount of received by a corporation for the issue of its shares
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Share
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A member's proportionate interest in the capital of a corporation
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Par Value
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A nominal value attached to a share at the time of issue
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No par value share
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A share that has no nominal value attached to it
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Preferred share
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A share carrying preferential rights to receive a dividend and/or to be redeemed on the dissolution of the corporation
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Bond
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A document evidencing a debt owed by a corporation
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Common share
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A share carrying no preferential right
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What is the priority payment of a corporation in case of a liquidation?
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(1) Secured creditors
(2) Unsecured creditors (3) Preferred shareholders (4) Common shareholders |
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Cumulative right
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The right of the holder of a preferred share to be paid arrears from previous years before any dividend is paid on the common shares
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Participating right
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The right of a holder of a preferred share to participate in surplus profits or assets of the corporation in addition to the amount of the preferred dividend or redemption price
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