Question 1

Although the theory is that a private corporation provides the best protection from liability for its incorporators,why is this not always the case in practice?

Accepted Answer

The answer of Although the theory is that a private...

Question 2

Creation of a by-law is a two-step process involving first the board of directors and then the officers.

Accepted Answer

The creation of a by-law typically involves the board of directors first proposing or drafting the by-law, and then it requires approval by the shareholders or members of the organization, not the officers.

Question 3

Under the articles of incorporation system,a corporation is formed by filing articles of incorporation in the prescribed form,filing a shareholder's agreement,and paying the required registration fee.

Accepted Answer

A corporation is formed by filing articles of incorporation in the prescribed form and paying the required registration fee; a shareholder's agreement is not a mandatory requirement for the formation of a corporation under the articles of incorporation system.

Question 4

A professional corporation is a special type of corporation that may be established by members of a profession.

Accepted Answer

A professional corporation (PC) is a type of corporation that is established by members of a particular profession, such as doctors, lawyers, or accountants. The purpose of a PC is to limit the personal liability of the professionals who own the corporation, while still allowing them to operate as a business entity. Only certain professions are eligible to form a PC, and there are specific rules and regulations that apply to this type of corporation.

Question 5

What capacity and powers does a corporation have in the eyes of the law?

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Question 6

If you are a small,local,one-person business,can you incorporate under the federal CBCA (Canada Business Corporations Act)? Explain.

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Question 7

John,Susan,and Terence retain a lawyer to incorporate a company that they expect will be taken public in the future.What basic information should the lawyer give to them concerning the incorporating documents?

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The answer of John,Susan,and Terence retain a lawyer to incorporate...

Question 8

Florence has $100 000 to invest.She decides to invest in the common shares of a well-known blue chip company.As part owner,how would she expect to participate in the company and to benefit from her investment?

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The answer of Florence has $100 000 to invest.She decides...

Question 9

Explain the general distinction between the capital of a corporation and indebtedness of a corporation.Who owns the capital of the corporation?

Accepted Answer

The answer of Explain the general distinction between the capital...

Question 10

A private corporation is one that is not permitted to offer its shares to the public.

Accepted Answer

A private corporation, also known as a privately held company, is owned by a small group of individuals or entities and is not publicly traded on a stock exchange. Therefore, it cannot offer its shares to the general public.

Question 11

The "charter" is an unsuitable instrument for reflecting special arrangements and side agreements between shareholders.Explain.

Accepted Answer

The answer of The "charter" is an unsuitable instrument for...

Question 12

The by-laws of a corporation are always appended to the articles of incorporation.

Accepted Answer

While the by-laws are an important part of a corporation's governance, they are a separate document from the articles of incorporation.

Question 13

The ultra vires doctrine applies in most provinces in Canada.

Accepted Answer

The answer of The ultra vires doctrine applies in most...

Question 14

In a private corporation without a shareholders agreement,why would it be necessary to restrict the transfer of shares by first requiring the consent of the board of directors?

Accepted Answer

The answer of In a private corporation without a shareholders...

Question 15

The attribute of negotiability of bond and share certificates has increased the problem of forged and stolen certificates.Explain.

Accepted Answer

The answer of The attribute of negotiability of bond and...

Question 16

What does it mean to pierce the corporate veil? When can this be done?

Accepted Answer

The answer of What does it mean to pierce the...

Question 17

What is the doctrine of ultra vires in corporate law and what is its current effect across Canada?

Accepted Answer

The answer of What is the doctrine of ultra vires...

Question 18

There is no practical difference between a limited liability partnership and a professional corporation.Explain.

Accepted Answer

The answer of There is no practical difference between a...

Question 19

Leaving aside certain mandatory requirements for federal corporations,what is the main consideration in deciding whether to incorporate federally or provincially?

Accepted Answer

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Question 20

Explain the concept of the preferred shareholder.

Accepted Answer

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Quiz 25: The Nature of a Corporation and Its Formation