BUSA 364 Business Law
Chapter 1 Law, Society, and Business
THE ROLE OF LAW
How do we define law?
It influences and controls the behavior of individuals in society.
It empowers, influences, and controls the actions of government.
o Rule of law: established legal principles that treat all persons equally and that government itself obeys.
o Public law: law that regulates the conduct of government and the relations between government and
It influences and controls interaction between individuals.
o Private law: law that regulates the relations between private persons and groups of private persons. –
How is Law Linked to Morals and Ethics?
Morals: optional standards of behavior that people “ought” to observe even though doing so is not compulsory.
Ethical behavior is generally considered to be a higher standard than the law, incolving concepts of integrity,
trust and honour.
The moral and ethical values of society as a whole shape the development and direction of the law.
Law and Justice: may not always coincide, law must be rooted in the ethical and moral values of the society in
order to be effective.
How Does Law Influence Behaviour?
How offensive society finds the conduct determines what area of the law regulates and therefore what type or
types of Legal liability the conduct will attract. It is possible for one event to attract all three types of liability.
o Criminal liability: responsibility arising from commission of an offence against the government or
society as a whole. Usually subject to public law.
o Regulatory or quasicriminal liability: responsibility arising from breaches of less serious rules of
public law, often enforced through specialized regulatory tribunals set up by the government for specific
purposes. E.g. driving habits.
o Civil liability: responsibility arising from a breach of a private law, enforced through a private or civil
lawsuit initiated by the victim.
LAW AND BUSINESS
The Significance of Law for the Business Environment
Law is part of every facet of doing business and is central to a business’s interaction with its customers, suppliers,
competitors, and government. Laws may be resented because they add to the cost of doing business. Too much
regulation can restrict economic freedom and make a country’s businesses less competitive.
To have a good environment for business, a country must provide an adequate legal infrastructure that clearly
defines rights and responsibilities and properly enforces them. Overregulation may be a severe inconvenience – but it is
far less of an obstacle to business than is the complete absence of regulation.
Law and International Business
Businesses may be faced with different rules for each country in which they operate. Determining which laws
apply to any given situations can lead to a conflict of laws. Governments and NGOs are trying to harmonize laws in
order to address these conflicts through the use of treaties, conventions, and model laws. Model Laws are recommended
templates for domestic laws that are developed by advisory organizations such as law reform commissions. International
agreements like treaties and conventions are often brokered through supergovernmental organizations such as the
LEGAL RISK MANAGEMENT
Legal risk: business activities, conduct, events, or scenarios that could expose a business to any type of legal liability.
Developing a Legal Risk Management Plan
Legal risk management plans: a plan developed by a business that identifies potential legal liability and
provides preventive and remedial strategies.
The process is continuous and includes ongoing revision as law evolves, business expands and diversifies, and
personnel changes. BUSA 364 Business Law
1. Undertake legal audit: a review of each area, action, and interaction of the business to identify potential legal
liability and legal compliance risks.
2. Prioritizing risks developed.
3. Developing effective strategies that have preventive and reactive elements.
5. Revision on a regular basis.
Strategies to Manage Legal risks
1. Avoid the risk: discontinuing the conduct or finding another way to achieve the result.
2. Reduce the risk: quality controls initiative that decreases likelihood of the risk or minimizes its damage.
3. Transfer the risk: shifts the consequences to someone else – insurance company, a consumer who assumes
responsibility through contracts.
4. Absorb the risk (selfinsuring strategy): accepts the possibility and budgets for expenses. (used with remote
risks or smallvalued risks, cost factored into the product)
LAW AND BUSINESS ETHICS
Corporate social responsibility: a concept that suggests business decisionmakers consider ethical issues
including the interests of customers, employees, creditors, the public and other stakeholders, in addition to legal
and financial concerns.
o 3 domains: ethical, legal, and economic, each overlaps with one another.
Codes of Conduct
Codes of Conduct take a variety of forms and can fill gaps that law cannot reach:
a. Binding codes: regulations laid down by a governing body or trade association.
b. Voluntary codes
c. Selfimposed codes
WHO MAKES LAW
Law comes from a variety of sources:
a. The constitution – the basic law from which all other laws draw their power. A higher law by which all other
laws are governed, all other laws must comply with the constitution in order to be valid and enforceable.
b. Legislation – the statute law, passed by Parliament and by provincial legislatures in compliance with Canada’s
i. Subordinate legislation: rules passed under authorization of a statue by a body designated in the statute,
such as the federal or a provincial cabinet, or by a cabinet minister, or by administrative bodies like
Canadian radiotelevision and telecomm commission. Referred to as regulation.
ii. Administrative rulings: rulings handed down by administrative bodies created by the legislation to hear
complaints and applications by individuals and groups, according to the terms of the legislation.
c. Court decisions – judgments handed down by single judges or a panel of judges after hearing of a case before
the court. These decisions are collectively referred to as case law.
THE COURTS AND LEGISLATION
What do courts do?
Determine the validity of legislation.
Protect human rights.
Develop case law, creating new principles to be applied to resolve disputes without court intervention.
Determine disputes for the parties before the courts.
Federalism and the Constitution
In a federal country, there are two distinct levels of government: federal and provincial (or state in the US).
Each level has an independent existence and its own sphere of activity. When conflict arises, the courts determine if
legislation is within the jurisdiction of the enacting government. Whenever an act – or any provision in an act – is found BUSA 364 Business Law
by the court to be outside the legislature’s jurisdiction and therefore beyond its powers (ultra vires), that act or
provision is void.
Residual power: powers that fall within federal jurisdiction because they are not expressly allocated to the
provinces by the Constitution.
Concurrent power: when many problems overlap the jurisdiction of both provincial and federal government,
both levels have concurrent power to regulate the same activities.
o When both levels pass legislation and conflict arise, federal legislation prevails; the provincial law is
nullified because of the need for uniformity across Canada in areas of federal jurisdiction.
o The supreme court = constitutional umpire.
THE CHARTER OF RIGHTS AND FREEDOMS
In 1982, the Charter of Rights and Freedoms became part of the Constitution; it places limits on many aspects
of government action and protects human rights – recognized entitlements encompassing traditional freedoms
associated with civil liberty and basic human necessities. In the Canadian constitution, civil rights means private rights,
relating to the ownership of property, contract law and family relations. The constitution designates “property and civil
rights” as an area of provincial responsibility.
i. The Charter is entrenched in the Constitution: it cannot be repealed by an ordinary act of parliament or of
provincial legislatures in each of the areas here formerly they were able to pass and repeal laws at their will.
ii. To the extent that a statute offends a right in the Charter, the statute will be declared invalid. The idea of
rights based on a higher law was a major departure from British parliamentary supremacy, and is more like
the theory of the US Constitution. Canadian government goes further than just striking down provisions by
“reading into” words that the legislature had not chosen to include as part of the act.
iii. The charter permits a legislature to override certain other sections – if a statute states expressly that it “shall
operate notwithstanding” those specified sections, a legislature may infringe some of the most important
rights guaranteed by the charter.
a. Section 33 contains a sunset clause: the overriding section of the statute expires five years after it
comes into force unless it is reenacted by the legislature – and continues to expire after 5 years.
iv. None of these rights set out in the Charter is absolute: they are all subject “to such reasonable limits
prescribed by law as can be demonstrably justified in a free and democratic society.”
v. The Charter applies to governments and governmental activities, it has limited application between private
The Rights and Freedoms Protected by the Charter
a. Freedom of conscience and religion
b. Freedom of thought, belief, opinion and expression, including freedom of the press and other media of
c. Freedom of peaceful assembly
d. Freedom of association
a. Right to life, liberty and security of the person and the right not to be deprived thereof except in
accordance with the principles of fundamental justice.
b. Right to be secure against unreasonable search or seizure.
c. Right not to be arbitrarily detained or imprisoned.
d. Right on arrest or detention:
1. To be informed promptly of the reasons therefore.
2. To retain and instruct counsel without delay and to be informed of that right.
3. And to have the validity of the detention determined by way of habeas corpus and to be released if
the detention isn’t lawful.
a. Every individual is equal before and under the law and has the right to the equal protection and equal
benefit of the law without discrimination.
Democratic Rights: BUSA 364 Business Law
a. Every citizen of Canada has the right to vote in an election of members of the House of Commons or of
a legislative assembly and to be qualified for membership therein.
a. Every citizen of Canada has the right to enter, remain in and leave Canada.
b. Every citizen of Canada and every person who has the status of a permanent resident of Canada has the
right to move to and take up residence in any province, and to pursue the gaining of a livelihood in any
CHALLENGING THE VALIDITY OF A STATUTE
The court will declare a statute invalid if:
The subject matter is outside the constitutional jurisdiction of the government, or
The statute violates the Charter of Rights and Freedoms.
Three ways to challenge a statute:
Argue that the statue is invalid because the subject matter of the legislation is not within the jurisdiction of the
Argue that statute is invalid because the legislation violates the Charter of Rights and Freedoms.
Argue that the interpretation of the legislation is wrong and the statute does not apply to the particular conduct.
Chapter 2 The Machinery of Justice
Other than private and public laws, laws are also divided into two other basic categories:
Substantive law: the rights and duties that each person has in society. The rules that define the acceptable
conduct or the rights and duties of each person.
Procedural law: rules that deal with how substantive rights and duties may be enforced. BUSA 364 Business Law
WHO MAKES LAW
The government through legislations.
The courts through case decisions.
LEGAL SYSTEMS: CIVIL LAW AND COMMON LAW
Civil law: The older of the two. It covers the whole of continental Europe, Scotland, much of Africa, and the
whole of South and Central America, Quebec, Mexico, some of southern US (eg. Louisiana, French territory
until early 19 century).
o What is it? – the system of law involving a comprehensive legislated code, derived from Roman law
that developed in continental Europe and greatly influenced by the Code Napoleon of 1804. Civil law
theory requires that all law be collected into a consolidated body of legislation known as the civil code,
and this code is far more important than any case decision. The court always refers to the code to settle
Common law: Originated in England at the time of the Norman Conquest. Covers most of the Englishspeaking
world including Canada, the US and Australia, nonenglishspeaking world that were part of the British Empire,
notably India, Pakistan, Bangladesh, and the former colonies in Africa and the Caribbean.
o What is it? – Based on case law, the recorded reasons given by courts for their decisions and adapted
by judges in later cases.
The Need for Consistency and Predictability
We need like cases to be treated alike. Equal and consistent treatment in like situations is a central concern of
justice and hence of law as well. Therefore, whether in civil law or in common law countries, judges must be interested
in, and influenced by, what other judges have decided in similar cases.
The law itself must be fairly predictable.
In civillaw countries, judges try to decide similar cases in the same way most of the time, although they are
under no binding rule to do so.
COMMON LAW: THE THEORY OF PRECEDENT
Certainty Versus Flexibility
England adopted the custom of following already decided cases, which is called the theory of precedent. The
latin phrase for the rule is stare decisis – to stand by previous decision. But this rule is not absolute.
First, although judges may be influenced by all prior decisions, they’re only bound to follow decisions of a
higher level court. Second, in order to be fair, precedents bind only the same circumstances. No two sets of facts are
identical in every respect – even when the same parties are involved, the time must be different.
Overrule: to declare an existing precedent no longer binding or effective. Generally speaking, in order to
overrule and established precedent, the matter must be addressed by a court higher than the one establishing the
The Canadian Supreme Court: in 2007, the Ontario Court of Appeal took the unusual step of overruling its own
2005 precedent on realestate fraud.
Chapter 24 – Sole Proprietorships and Partnerships
Choosing the Appropriate Form of Business Organizations
Almost all businesses in Canada are carried on in at least one of the following forms:
• Sole proprietorships
• Partnerships BUSA 364 Business Law
Sole Proprietorships ▯ unincorporated business owned by a single individual
Any individual who starts doing business has created a sole proprietorship; no formalities are necessary. No distinct
rules regulating sole props but they are subject to the same regulations that apply to all forms of business. Municipal or
provincial lincensing may be requires and proprietor must keep proper accounts for income tax purposes even if the
income is reported on the personal income tax form.
Advantages and Disadvantages
Partnership may be formed by two+ people who may be natural persons or legal persons (corps). Working together ▯
pool knowledge and skills and physical + financial resources.
Disagreements can lead to stalemate; the dishonesty or imcompetence of one member may lead to losses suffered by
The Partnership Act ▯brought together numerous cases under more general principles and codified the law
Partnerships can be formed without gov’t approval but their affairs are governed by a welldeveloped body of laws.
THE NATURE OF PARTNERSHIP
Partnership = the relation which subsists between persons carrying on a business in common with a view of profit.
• General partnership
• Limited partnership
• Limited liability partnership
Definitions of partnership is important bc of the consequences that follow from finding that a person is a partner.
The Partnership Relationship
It is a consensual and contractual relationship. Normally ▯contractual. But a person can be partner if he has been
considered to be acting as such. The courts look at the substance of the relationship and are not necessarily guided by
what the parties may themselves choose to call it.
The Business Nature of Partnership
The term “business” is an imprecise one. It includes “every trade, occupation, or profession” but does not include every
activity carried on for a profit.
Isolated transactions undertaken jointly do not by themselves make the parties partners. BUSA 364 Business Law
The Profit Motive
The words have generally taken to mean that a sharing of profits is an essential element of partnership
The receipt of a share of the profits of the business is strong evidence tending to establish a partnership, though it is not
by itself conclusive. In particular, it does not by itself amount to a partnership to a partnership if the sharing of profits is
part of an arrangement to
• Repay a debt owed;
• Pay an employee or agent of the business as part of his remuneration;
• Pay an annuity to a widow, widower, or child of a deceased partner;
• Repay a loan under which the lender is to receive a rate of interest varying with the profits;
• Pay the seller of a business an amount for goodwill that varies according to the profits
The courts consider profitsharing that coincides with the ratio of capital contribution to be strong evidence of
partnership. Another important factor is whether the person receiving the profits has taken part in the management of the
The Legal Nature of Partnership
As a matter of law, a corporation has a separate legal indentity of its own ▯the law of partnerships is not the same.
Strictly, a partnership has no independent existence and merely represents the collective rights and duties of all the
When a partner dies or retires or a new partner is admitted, the partnership comes to an endand is replaced by a new
The Partnership Act recognizes the concept of a firm which members join or leave.
Partnership property ▯they don’t own the property itself, but rather an interest in it.
Creditors ▯partnership creditors have 1 call against partnership assets before the personal
creditors of an individual partner; bc until the creditors of the partnership have been paid, it is
impossible to identify and distribute the share of an individual partner. However, personal creditors have dibs on the
personal assets of the estate upon death.
Legal proceedings ▯partnership may bring an action in the name of the firm without naming all the partners as plaintiffs
– outside party can sue a partnership in its name without naming the partners as defendants.
THE CREATION OF A PARTNERSHIP
A partnership comes into existence bty the agreement, express or implied, of the partners. They may agree to whatever
terms, provided the terms are not illegal and do not offend public policy.
A partnership agreement may be wholly oral and yet be valid and enforceable.
Agreements should be drafter with expert advice and assistance.
Only limited partnerships and limited liability partnerships require registration. However,
almost all provinces do require the filing of a declaration giving such essential information as
the name and addresses of each partner and the name under which they intend to carry on
THE LIABILITY OF A PARTNER
As a general rule, a person who is held to be a partner becomes personally responsible for the debts and liabilities of the
Any acts done by a partner within the scope of his apparent authority and relied upon by an outsider binds the firm and
all the partners.
Joint Liability ▯Every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm
incurred while he is a partner. BUSA 364 Business Law
Apparent Partners – In principle, a person is liable only for the obligations of a partnership incurred while he is a
member of the firm. A person who, not being a partner, represents himself to be, or allows himself to be represented as a
partner in a firm, is liable to any person who has given credit to the firm on the faith of that representation.
Steps to be taken on retirement from a partnership
Ensure that all existing clients of the firm are notified
Place a notice in the official gazette of the province
Ensure that his name is removed from the register
Ensure to the best of his ability that any letterheads are destroyed or altered to remove his name
Tort and Breach of Trust
Liability of a firm and of its partners is not restricted to contracts. The Act makes the firm liable for “any wrongful act or
omission of any partner acting in the ordinary course of the business of the firm”. The firm is also liable for some
breaches of fiduciary duty and breaches of trust committed by a partner.
THE RELATIONSHIP BETWEEN PARTNERS
Terms of partnership may be found in the partnership agreement, they may be inferred from the conduct of the parties,
or they may be implied from the Partnership Act. BUSA 364 Business Law
1. Partnership property: all property and rights and interest in property originally brought itnto the partnership stock or
acquired, whether by purchase or otherwise, on account of the firm or for the purposes and in the course of the
partnership’s business are called “partnership property” and must be held and applied by the partners exclusively for the
purposes of the partnership and in accordance with the partnership agreement. Unless contrary intention appears, all
property bought with firm’s money is deemed to have been bought on account of the firm and is available only for the
use of the firm.
2. Financial arrangement:
a. All partners are entitled to share equally in the capital and profits of the business and must contribute equally towards
the losses. (commonly varied).
b. if a partner incurs expenses or personal liabilities in the ordinary and proper conduct of the business of the firm, the
firm must indemnify him for these expenses or liabilities. If one partner is sued for the firm’s debts, he is entited to a
contribution from his fellow partners.
c. A partner is not entitled, before the ascertainment of profits, to interest on the capital subscribed by him
d. no partner is entitled to remuneration for acting in the partnership business. A partner is not an employee, salary is not
expensed but a distribution of profit like interest on capital.
information: information regarding the firms business that is provided to any of the parners must be made
available to all of them.
Secret benefits: without full disclosure and authorization, any benefit belongs to the firm.
Duty not to compete
TERMINATION OF PARTNERSHIP
It is advisable to take express provision for what is to happen on termination – in particular on the retirement or death of
Implied Statutory Rules
In the absense of express agreement ▯Partnership Act sets out a number of rules to govern termination
• Notice or expiry
• Death or insolvency ▯Acts says partnership will end but usually agreements state that it will continue.
Dissolution by Law
Court can order the partnership dissolved under the following circumstances:
• Partner is found to be mentally imcompetent
• Partner becomes permanently incapable of performing his part of the agreement
• Partner has been found guilty of conduct likely to prejudicially affect the business
• Partner commits a breach of the agreement or otherwise conducts himself in such a manner that is not
reasonably practicable for the other partners to carry on the business in partnership with him
• Where it is just and equitable that the partnership be dissolved
Effects of Dissolution
Dissolution ▯property of the partnership is applied in payment of the debts and liabilities of the firm and the surplus
assets are applied in payment of what is due to the partners respectively.
In settling accounts ▯losses paid 1 out of profits ▯capital ▯by the partners individually in the porportion in which they
were entitled to share in the profits. BUSA 364 Business Law
Sequence of payments on dissolution: debts of the firm owed to nonpartners ▯repayment of loans made to the firm by
partners ▯repayment of the capital contributed by partners ▯sharing any surplus among the partners according to their
entitlement to share the profits.
A limited partnership may carry out business, under certain very restricted conditions,
without exposing some of its partners to personal liability.
There must be one or more general partners. A general partner has unlimited liability
while a limited partner has lia limited to the amount paid by her to the limited partnership
as a capital contribution.
The Act prohibits a limited partner from taken an active part in the mangement of the
partnership; if she does does so ▯becomes liable as a general partner.
A limited partnership allows a partnership to raise capital without borrowing, just as a
corp does through the issue of shares (buy shares = become limited partner).
LIMITED LIABILITY PARTNERSHIP (LLP)
A partner remains liable for his own negligent acts or omissions, and for those of a person
who is under the partner’s direct supervision or control. It also appears that the firm
itself remains liable, so that a nonnegligent partner still stands to lose the entire value
of his partnership share. However, an injured party may not look beyond the assets of
the firm to the assets of the individual nonnegligent partners.
The most important restriction ▯an LLP may carry on business only fo the purposes of
practicing an eligible profession. In addition that statute must expressly permit a LLP to
practice the profession, and the governing body of the profession must require the
partnership to maintain a min amount of liabiliy insurance.
Agreement between 2 or more parties (often corps) to collaborate on the management
of a specific project, to each contribute a part of their respective resources and to share the profit. Also spreads the risk
among the participants.
Ventures are for a specific project, or series of explorations, and of limited duration,
not a continuing activity like a partnership.
The income trust structure involves the transfer of incomeproducing assets from the
operating company to a trust. The trust is created by an agreement known as a
declaration of trust and this document, in conjunction with trust law, governs the
Operating company contintues to manage the assets under the supervision of the
trustees, but all income less expenses is the property of the trust. The income is then
distributed by the trust to unitholders and taxed only once in the hands of the
unitholders. BUSA 364 Business Law
Chapter 25 – The Nature of a Corporation and Its Formation
THE NATURE OF A CORPORATION
The Corporation as a Legal Person
In the eyes of the law, it is a legal person.
Natural persons = human beings
Once a corp is created, it is a separate and distinct legal person apart from its members.
Characteristics of Corporations vs. Partnerships
Liability ▯Corporation itself is liable to the full extent of its assets but shareholders can
lose no more than amount they paid for their shares. ▯shareholders have limited
Limited liability is widely regarded as one of the main advantages of
incorporation. However, the benefits of limited liability are sometimes
overestimated since, for a small corp to obtain credit, its directors or
shareholders are often required to give personal guarantees or mortgage their
own property as collateral security.
Transfer of ownership ▯A shareholder may sever all connections with the corporation simply by transferring his shares
to another person. Unlike in partnership.
Management ▯management is delegated to an elected BOD that normally reaches decisions by majority votes.
Separation of ownership and management ▯enables investor to invest a specific sum of money and receive a return
without taking any addiotional risk and doesn’t have to take an active part in the management of business affairs.
Continuity ▯a corp continues in existence perpetually unless it is dissolved by order of a court or by voluntary resolution
of its shareholders, or it is truct off the register for failure to comply with statutory regulations.
Taxation ▯unlike a partnership, a corp is a taxable entity. Income of a corp is taxed first in the corp and again in the
hands of a shareholder when a dividend is declared.
Consequences of Separate Corporate Personality
Capacity ▯a corp is created by statute law and has the characteristics that the legislators give it. Originally, corps were
formed for specific purposes and could act only for those purposes expressly stated in their constitution. Any act outside
the scope of those objects was ultra vires.
Now a corp has the capacity and all the rights, powers, and priviledges of a natural person. (section 15).
Separate existence: Salomon’s Case BUSA 364 Business Law
Since this case, the complete separation of the company and its members has never been doubted.
Limitations on the Principle of Separate Corporate Existence
Exceptions to limited liability ▯the limited lia of shareholders is not absolute.
Other statutory provisions ▯e.g. CCPCs are taxed at a lower rate on the 1 $500K of
their annual income but it is not possible to multiply this concession by forming several
distinct corps because associated corporations are only entitled to a single concession
between them. No group liability ▯it is only in exception circumstances that a parent
company will be held liable for the debts of its subs or vice versa.
Lifting the Corporate Veil
There have been cases where the courts have been prepare to disregard the separate
existence of corporations and “lift the veil” of incorporations to impose liability on those that control it. 3 conditions
must be met:
1. The invididual must control the corp
2. That control must have been exercised to commit a fraud, a wrong, or a breach of duty
3. The misconduct must be the cause of the plaintiff’s injury
METHODS OF INCORPORATION
Early Methods of Incorporation
Oldest method of incorp in the common law system dates back to the 16 century ▯by
royal charthr granted by the sovereign. Until 19 century, all corps created by charter.
End of 18 century, corps began to be created by special Acts of Parliament, esp for
large projects of public interest.
General Incorporation Statutes
Today, almost all business corps incorporated under general incorporation statues. In
Canada, there is both federal and provincial incorporation legislations.
Incorporation roots ▯ memorandum and letters patent systems; register a memorandum
of association and if the document complies with the statute, the authorized gov’t
office issues a certificate of incorporation – “memorandum corporations” only
employed in Nova Scotia.
Quebec and PEI, document is called the letters patent, an offspring of the royal charter
but issued under the authority of the Crown’s representative in each jurisdiction.
The Articles of Incorporation System ▯ Ontario passed a substantially different Business
Corporation Act, creating a new method of incorporation adapted from a system in use in
the US. Federal parliament adopted same system in new statute.
The Choice of Jurisdiction
The 1 decision to be made in forming a corp is whether to incorp federally or
The CBCA is suitable for large businesses that carry on their activities nationwide; but even a small, local, oneperson
business may incororate under it. BUSA 364 Business Law
*Corps not incorp’ed within a province – including federally incorporated corps as well as those incorporated in other
provinces – must comply with certain registration requirements in order to carry on business there.
The act under which it was incorped governs its internal operating rules for holding shareholder meetings, electing
directors, declaring dividends, and other matters that are examined in Chapter 26.
THE CONSTITUTION OF A CORPORATION
Articles of Incorporation
Under this system, a corp is formed by filling articles of incorporation in the prescribed form and paying the required
registration fee. Articles often referred to as the “charter” or “constitution” of the corp and set out essential info about
The Corporate Name
Names ▯closely regulated. Prohibit names that falsely suggest an association with the gov’t or with certain professional
bodies, or that are scandalous or obscene, or likely to be confused with the name of some other existing corp. To
prevent, name search.
It must register the name under the business names legislation. One of the words “limited”, “incorporated”, or
“corporation” must form part of the name of every corporation.
Falls into two main categories: general rules and specific director authorizations
TYPES OF BUSINESS CORPORATIONS
Public and Private Corporations
Public Corporation ▯CBCA applies to both public and private. Imposes various
obligations upon what it calls a distributing corporation with respect to such
matters as proxy solicitation, the number of directors, and the need for an audit
committee. Public corps are also subject to regulation under the relevant provincial
securities acts in those provinces in which thei