Commercial Law: Business Forms

Front 1

Preventative Actions to Protect Yourself

Back 1

1. Insurance
2. Creditor Proof Assets
3. Transfer Assets

Front 2

Advantages of Sole Proprietorships

Back 2

1. Ability to make all business decisions
2. Right to all profits
3. Right to deal with all assets without interference 4. Simple to set up 5. Very inexpensive

Front 3

Disadvantages of Sole Proprietorships

Back 3

1. Liable for all liabilities of the business and all non-business assets are exposed to creditors of the business

Front 4

Basic Principles of Cooperatives

Back 4

1. Each member has one vote regardless of the number of shares held and the capital contributed (Participatory Democracy)
2. There are no proxy votes
3. There’s no fixed rate of return on capital
4. Profits not required to operate the co-operative are paid to the members in accordance with the quantity of goods purchased or sold through the organization by a member

Front 5

Duties of an Agent to a Principal

Back 5

1. Duty to comply with Agency agreement
2. Duty of care
3. Personal Performance
4. Good faith

Front 6

Duties of Principal to Agent

Back 6

1. Exclusive listing agreement

Front 7

Features of a Partnership

Back 7

1. The element of agreement which is implicit, the absence of the agreement isn’t fatal
2. The need for business is said to include every trade, occupation or profession, but does not include every activity carried on for profit
3. Sharing of a Profit

Front 8

Sharing of Profits

Back 8

1. Contribution of Capital
2. Active role in business
3. Existence of ongoing business as opposed to isolated transaction

Front 9

3 Elements of Estoppel

Back 9

1. Make representative that something is true to a 3rd party 2. 3rd party reasonably relies on it
3. 3rd party suffers loss because of it

Front 10

Elements of Agency/Principal Relationship in Partnerships

Back 10

1. Partner may not sue partnership
2. A partner may not be an employee of the partnership
3. Separate assets of each partner are at risk

Front 11

Things to do before entering into a Partnership

Back 11

1. Incorporate if possible
2. Utilize preventative methods of sole proprietorship to protect assets
3. Attempt to select individuals with certain characteristics

Front 12

Advantages of Partnerships

Back 12

1. Multiple people to carry out goals
2. More people, more resources

Front 13

Disadvantages of Partnerships

Back 13

1. Hard to get out of
2. Shared losses
3. Disagreement stalemates

Front 14

Elements of Retirement of Partner

Back 14

1. Only liable for obligations while in firm
2. Must give notification in press
3. Must give notification to people you have dealt with

Front 15

Elements of Unlimited Liability

Back 15

1. Partnership creditors have the first call for partnership assets, before individual partners
2. A deceased partner’s personal creditors have first call against the partner’s assets and personal estate
3. Real property holdings – individual partner’s personal interest is personal property
4. A partnership may bring an action in partnership without naming all the partners

Front 16

Special types of Partnerships

Back 16

1. Limited Partnership
2. Limited Liability Partnership (LLP)

Front 17

Elements of Limited Partnership

Back 17

1. Must have at least 1 general partner
2. Limited partner can not manage, will be converted to general if they do

Front 18

LLP not enjoyed when

Back 18

1. Partner knew of negligence and did not take reasonable steps to prevent it
2. Negligence was committed by an employee, agent or rep of partnership for who the partner was directly responsible in a supervisory role

Front 19

Advantages of LLPs

Back 19

1. Limited Liability
2. Tax Advantages

Front 20

Characteristics of a Corporation

Back 20

1. Limited Liability
2. Management Board of Directors
3. Transfer of Ownership
4. Continued Existence
5. Loyalty and Fidelity
6. Separation of Ownership and Management

Front 21

2 Types of Corporations

Back 21

1. Public
2. Private

Front 22

Categories of Piercing the Corporate Veil

Back 22

1. Taxation
2. Residence of the Corporation
3. Agency Laws
4. Fraud

Front 23

Methods of Incorporation

Back 23

1. Royal Charter
2. Special Acts
3. General Acts

Front 24

How to Organize Company in MB

Back 24

1. Clear name Search
2. Articles of Incorporation

Front 25

Articles of Incorporation

Back 25

1. Entrenched articles of corporate constitution
2. Name of company
3. Corporate office
4. First Director name and address
5. Nature and types of shares
6. Restrictions on business
7. $300

Front 26

Component Parts of a Corporation

Back 26

1. Articles of Incorporation
2. Bylaws

Front 27

Bylaws Indicate

Back 27

1. Board of Directors
2. Officers of Company
3. Specific procedures for meetings of directors, shareholders and officers
4. Provide for signing authority for the constitution document
5. Specific fiscal year end 6. Voting privileges

Front 28

Personnel of the Company

Back 28

1. Directors
2. Officers
3. Shareholders/Owners

Front 29

Categories of Shareholders

Back 29

1. Common Shareholders
2. Preferred Shareholders
3. Secure Creditors

Front 30

To be exempt from Securities Act

Back 30

1. Restriction on right to transfer shares
2. Less than 50 Shareholders
3. Any invitation to the public to subscribe to purchase shares isn’t allowed

Front 31

3 Areas of Apparent Authority

Back 31

1. Effect of publicly filed documents
2. Indoor management rule
3. Corporate contracts

Front 32

2 Types of Agency by Estoppel

Back 32

1. Apparent Authority
2. Holding Out

Front 33

Director’s Duties

Back 33

1. Care & Skill
2. Good Faith
3. Account for Statutes

Front 34

Statutes Directors must account for

Back 34

1. Employment Standards Act
2. Income Tax Act
3. Canadian Pension Act
4. Immigration Act
5. Environment Legislation

Front 35

Minority Shareholder Protection

Back 35

1. Disclosure of Company Affairs
2. Fundamental Changes
3. Oppression remedies
4. Shareholder Agreements

Front 36

Criteria for Selection of Basic Forms of Business

Back 36

1. Limited Liability
2. Desirability of perpetual existence
3. Estate planning
4. Number proposed proprietors
5. Relationship of proposed proprietors
6. Borrowing requirements available
7. Available government grants
8. Employees
9. Costs
10. Flexibility of structure
11. Income tax consideration
12. Applicable government requirements

Front 37

Categories of Liability

Back 37

1. Torte
2. Contract
3. Property
4. Restitution