Lecture 10 Summary for Submission
2
Name: Boon Te h Student #: 100866301 Section: C Le ct ure #: 10 Lect ur e ti tl e: Bu si ness Or ga ni zati ons and Cor orate !o"ernance Sole rorietorshis are the most asic $orm o$ usiness entit% and $orm the ma&orit% o$ small usinesses' (o)e"er* a sole rorietor also has unlimited liailit%' +artnershis $orm )hen at least t)o ersons conduc t a usiness together )ith a common aim o$ ro$i t' (o)e"er* a ar tne rshi is not a legal enti t% ' The re are there mai n t%es o$ artnershis and the% are general* limited and limited liailit% artner shis' Cororations are legal entities searate in la) $rom its o)ners and can o)n roert%* os sess rights* er$orm usiness and e su&ected to ta,' Shareholders o$ a cororation o)n the cororation % o)ning its shares ut the% do not o)n the usiness or roert% o$ the cororation itsel$' -ights and liailities o$ the cororation di$$er $rom that o$ its shareholders )here the latter has limited liailit%' . cororation can e incororated either as a ro"incial or $ederal cororation' .n .rticle o$ /ncororation )as $irst sent to the go"ernment and the cororation comes into e,istence on the date sho)n on the Certi$icate o$ /ncororation once it is issued' .n .rticle o$ /ncororation states the cororations urose and regulation and ma% include reemti"e rights o$ shareholders* "oting matter o$ directors and limitations on the right to urchase shares' La)%ers are resonsile $or the legal accurac% o$ the article s contents' Cororate %la)s regulate usiness and a$$airs o$ cororation' B%la)s must e aointed % the directors and assed % shareholders' -esolutions in coror ations can e asse d % simle ma&or it% o$ direc tors or shareh older s' The $ormer determines the election o$ resident o$ the cororation* aointment o$ o$$icers* allotment o$ issue o$ share and declaration o$ di"idends )hereas the latter deals )ith election o$ direction and aointment o$ auditors including their remuneration' 2irectors are resonsile to suer"ise the management o$ the cororation and are oligated at honestl% to the est interest o$ the cororation' O$$icers are also su&ected to the same $iduciar% dut% and dut% o$ care o$ directors and their authorit% to act is stated in the articles* %la)s and directors resolution'
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Transcript of Lecture 10 Summary for Submission
Name: Boon TehStudent #: 100866301Section: C
Lecture #: 10Lecture title: Business Organizations and Corporate Governance
Sole proprietorships are the most basic form of business entity and form the majority of small businesses. However, a sole proprietor also has unlimited liability. Partnerships form when at least two persons conduct a business together with a common aim of profit. However, a partnership is not a legal entity. There are there main types of partnerships and they are general, limited and limited liability partnerships. Corporations are legal entities separate in law from its owners and can own property, possess rights, perform business and be subjected to tax. Shareholders of a corporation own the corporation by owning its shares but they do not own the business or property of the corporation itself. Rights and liabilities of the corporation differ from that of its shareholders where the latter has limited liability. A corporation can be incorporated either as a provincial or federal corporation. An Article of Incorporation was first sent to the government and the corporation comes into existence on the date shown on the Certificate of Incorporation once it is issued. An Article of Incorporation states the corporations purpose and regulation and may include pre-emptive rights of shareholders, voting matter of directors and limitations on the right to purchase shares. Lawyers are responsible for the legal accuracy of the articles contents. Corporate by-laws regulate business and affairs of corporation. By-laws must be appointed by the directors and passed by shareholders. Resolutions in corporations can be passed by simple majority of directors or shareholders. The former determines the election of president of the corporation, appointment of officers, allotment of issue of share and declaration of dividends whereas the latter deals with election of direction and appointment of auditors including their remuneration. Directors are responsible to supervise the management of the corporation and are obligated at honestly to the best interest of the corporation. Officers are also subjected to the same fiduciary duty and duty of care of directors and their authority to act is stated in the articles, by-laws and directors resolution.
