BU231 Lecture Notes - Strict Liability, Plaintext, Regulatory Offence
Document Summary
Chapter 29 external responsibilities of a corporation. Prohibit payments to shareholders if it renders a corporations liquid assets insufficient to pay creditors. Then the directors become personally liable to the corporation for the deficiency: maintenance of capital test, goes beyond the solvency test, provided for by s. 42 of the cbca. Stipulates that dividends can only be paid if net assets will still exceed stated assets after the dividends are paid out ie. only pay dividends out of profit or if assets increase in value. Only buy back shares if your assets will still equal or exceed your liabilities and stated capital. Protection of investors: securities legislation (ontario securities act, objectives of securities legislation. Prevent and punish fraudulent practices in the securities industry. Require full disclosure of financial information in prospectus when dealing with ipo"s: two devices for achieving this. Licensing (persons engaged in securities industry: renew on an annual basis, revoke, suspend, criminal offence to be unlicensed.
