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Lecture 8

MGTA01H3 Lecture Notes - Lecture 8: The Province, Profit Motive

Course Code
Bill Mc Conkey

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Chapter 8: Planning and Organising a Business: Limited Partnerships, Corporations & Co-
operative Societies:
Limited partnership: A form of partnership that allows for two classes of partners: general and
- Principal (general partner): An individual who has authority to hire and instruct others to
act on behalf of a business, and who bears the liability and responsibility
- Limited partner: An individual who puts capital into a business, and shares in the profit,
but takes no role in management or decision-making
- In order to create a limited partnership, the general partner(s) must comply with the
Limited Partnership Act
- Limited partners, who are explicitly barred from having any decision making authority
have limited liability: An individual’s responsibility or obligations relating to a business
is limited to the amount of capital that they provided. If the business is sued, someone
with limited liability can lose only the values of his or her capital
Corporation: A legal entity created to own and operate a business, which has the most of the
same rights and responsibilities as a human being
- Corporations come into existence when one or more individuals conceives a business
enterprise, and then looks for the most appropriate way to create it
- Incorporators: The individuals who create a corporation
- The essential steps to creating a corporation are: Choosing a name for the corporation,
Conduct a name search, Complete the Articles of Incorporation, Submit the paperwork
and pay the fee, The Province issues the Certificate of Incorporation
- Articles of Incorporation: The document that provides basic information that must be
submitted to the relevant jurisdiction, in order to create a corporation
- Certificate of Incorporation: In effect, the birth certificate of the corporation. The
government’s authorisation that a legal organisation has been created, which conducts a
business under its own name
Ownership of a Corporation Shares and Shareholders: (**Focus on for the final exam)
- Share: An ownership stake in a corporation. The owner is entitled to a share of the
corporations profits
- Shareholder: Any individual or organisation who owns shares in a corporation
- If original entrepreneurs or investors depart the corporation, as a distinct legal entity, can
- Directors: Individuals elected by the shareholders of a corporation to represent their
interests, and to administer the affairs of the corporation
- Board of Directors: The collective group elected by the shareholders of a corporation to
represent their interests, and to administer the affairs of the corporation
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