MGTA01H3 Lecture Notes - Lecture 11: Legal Personality, Fire People, Authorised Capital

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Published on 28 Nov 2018
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- Corporations
o A legal entity which runs an organization
o Does require some paperwork and fees
o Appropriate for businesses that want:
larger number of owners
split between owners / managers
limited liability for owners
o A separate legal entity
o With the same rights as people:
The right to borrow money
The right to buy and own property
The right to hire and fire people
The obligation to pay its debts
The obligation to pay taxes
The right to sue others in court
The liability of being sued
o A legal entity, which runs a business
o Responsible for its own debts
o Owned by shareholders
o Shareholders own it, they dont run it
o Shareholders have limited liability
- How are corporations Created?
o Creating a corporation does require some paperwork
o The founder (the "incorporators") must complete some legal documents
o A Corporation is created by the legal authority (e.g. Prov. of Ontario).
o Complete the “Articles of Incorporation”:
Invent a name
Provide an address (for tax purposes)
Identify the “Directors”
Indicate purpose of corporation
Indicate number of shares “authorized”
Submit the “Articles” + $360 to Province
o The province issues “Certificate of Incorporation”
o The "Certificate" creates the legal entity which is a “corporation”
- Corporations Sell Shares
o The “Corporation” can sell shares to anyone who wants to invest
o The “shareholders” own the corporation
o A share is a piece of paper
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