BU397 Lecture Notes - Lecture 5: Stock Split, Share Capital, Capital Account
Document Summary
Articles of incorporation corporation charter issue corporation recognized as legal entity. The canada business corporation act (cbca) is a relevant business corporation act: provincial business corporation acts also exist but vary from province to province. Articles of incorporation prepared and submitted: company name, location of registered office, classes and authorized shares, share transfer restrictions (if any, directors, business restrictions. Ha(cid:396)es g(cid:396)ouped (cid:271)y (cid:862)(cid:272)lass(cid:863) (cid:894)e. g. (cid:272)lass a (cid:272)o(cid:373)(cid:373)o(cid:374)(cid:895: within each class, each share equal. Ease of transfer of ownership: advantage to both issuing corporation and investor, share becomes more attractive investment. As a minimum each share has these basic or inherent rights: to share proportionately in profits and losses, the right to vote for directors, to share proportionately in assets upon liquidation. Preemptive right for any new share issues can also be assigned under cbca. Limited liability of shareholders: unlike partnership or proprietorship form of business, shareholders not generally liable for the obligations of the corporation.
