MGT120H5 Chapter Notes - Chapter 9: Canada Business Corporations Act, Share Repurchase, Legal Personality

• School: UTM
• Department: Management
• Course: MGT120H5
• Professor: Catherine Seguin

Document Summary

Separate legal entity - a corporation is a business entity formed under federal or provincial law. It has a distinct entity, and artificial person that exists apart from its owners, the shareholders. The corporation has many rights that a person has. Likea corporation my buy, sell, and own property. It can be sued, sue, enter into contracts. Assets and liabilities in the business belong to the corporation not the owners. Corporations have continuous lives regardless of changes in their ownership. They have no personal obligation for the corporation"s liabilities. The most a shareholder can lose on an investment in a corporation"s shares is the cost of the investment. Shareholders own the corporation, but a board of directors - elected by the shareholders - appoints officers to manage the business. Corporate taxation - corporations are separate taxable entities. They pay a variety of taxes not borne by proprietorships or partnerships, such as federal and provincial taxes.