Textbook Notes (367,974)
Canada (161,538)
MGSC30H3 (57)
H Laurence (33)
Chapter 17

Chapter 17 Notes

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Management (MGS)
H Laurence

Chapter 17 Corporation Law NotesThe Nature of a Corporation y a corporation is a separate legal entity in the sense that it has an existence at law but no material existence y a corporation possesses many of the attributes of a natural person but it is artificially created and never dies in the natural sense y its rights and duties are delineated by law and its existence may be terminated by the state y it has a number of important characteristics which may be summarized as follows a a corporation is separate and distinct from its shareholders and it acts not through them but through its authorized agents b a properly authorized agent may bind the corporation in contract with third parties c the shareholders of a corporation possess limited liability for the debts of the corporation and the creditors may look only to the assets of the corporation to satisfy their claims y the directors of the corporation are free to carry out the general management functions of the corporation in accordance with the corporations objects but their powers are limited by any restriction imposed on them in the articles of incorporation or the charter Methods of Incorporation Royal Charter y the royal charter was an exercise of the kings prerogative and the issue of the charter gave the entity all the rights at law of a natural person subject to certain exceptions however the charter did not generally give those persons connected with the corporation limited liability if the corporation was a trading company y the royal charter method of incorporation has not been used to incorporate ordinary trading corporations for many years Letters Patent y Letters Patent is a government document that grants a special right or privilege y in the case of a corporation it represents the creation of a legal entity a corporation created by Letters Patent acquires all the powers of a royal charter corporation and has as a result all of the usual rights at law of a natural person SpecialAct y parliament may use its powers to create corporations by way of special statute and these corporations are known as SpecialAct y the SpecialAct corporation has only the powers specifically granted to it by the statute y many are for public or quasipublic purposes such as for the construction of public utilities y SpecialAct corporations as a general rule do not use the words limited incorporated or their abbreviations in the corporate name GeneralAct y business corporations under federal jurisdiction are governed by the Canada Business
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