MGMT 3100 Lecture Notes - Lecture 8: Fiduciary, Legal Personality, Natural Person
Document Summary
The nature of a corporation and its formation. The nature of a corporation: corporation: a legal person formed by incorporation according to a prescribed legal procedure, legal person: entity recognized by law as having rights and duties of its own. Shareholders can sever all connections by simply transferring shares to another person: management. Partners may enter a contract on behalf of the partnerships but shareholders have no authority to do so, only officers can enter contracts. Partnership requires unanimity shareholders have much more investors, elected board of director reaches decisions based on majority. Income is taxed first in the corporation, again at the hands of a shareholder when dividends are declared. Consequences of separate corporate personality: capacity: ultra-vires (any act outside/beyond the powers of the corporation were invalid) has been abolished in canada. A corporation has all the rights, powers of a natural person.