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Chapter

MGSC30H3 Chapter Notes -Limited Liability Partnership, Fiduciary, General Partnership


Department
Management (MGS)
Course Code
MGSC30H3
Professor
H Laurence

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Topic Goals Readings in the Text Key Events
Partnerships Understand
partnerships as a
vehicle for doing
business
Distinguish the
various forms of
partnership
Willes, Chapter 16
Smyth, sChapter 26
Assignment on
Partnerships posted
What should I be
able to answer after
this class?
How can I tell when persons have formed a partnership?
When is a partnership desirable, or necessary?
How can you, and should you, structure a partnership?
What are the risks, and difficulties of entering into a partnership?
What is the difference between a general partnership, a limited
partnership and a limited liability partnership?
What is a sole proprietorship?
What is a trust?
What is the larger
context for this
issue?
We are studying the legal structures in which persons can carry on
business. Partnerships are used when
(a) persons want tax losses to flow through to the partners, or
(b) the law requires that the business be carried on through a
partnership.
Limited liability partnerships can help limit the general liability of
partners in law and accounting firms. Limited partnerships can
limit the liability of passive investors, so limited partnerships are
often used as investment vehicles where tax losses can be used by
high tax individuals.
What are the key
ideas?
The unlimited liability of general partners for the debts and
obligations of the business.
The Partnership Act sets out defaults in a partnership relationship,
so partners must consider how to structure a partnership if they
wish to change these defaults.
Partners are fiduciaries of one another and thus have dutiess.
What do I do to
prepare for next
class?
Consider how partnerships differ from corporations, and how a
corporation develops from partnerships and trusts.
What does limited liability mean?
What does it mean that the corporation is a separate legal person?
How can use corporate law to set up a suitable business structure?

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Topic Goals Readings in the Text Key Events
Corporate Law I Understand
corporations as a
vehicle for doing
business
Willes, Chapter 17
Smyth, Chapter 27,
28, Chapter 29, pp.
662-665, 671-3
What should I be
able to answer after
this class?
What does it mean that a corporation is a legal person?
What does limited liability mean, and when is it not limited?
How is corporate capital established and organized?
What rights attach to shares in general, and what rights normally
attach to specific classes of shares?
How are debt and equity issues different?
What is the larger
context for this
issue?
We want to understand how a corporation can be used to carry on
a business.
How does a corporation differ from a partnership, and from other
forms used for carrying on a business?s
Since corporate share structure gives wide room for strategic
planning, how can you organize the shares of a corporation to
realize various goals?
What are the key
ideas?
The corporation as a separate legal person, with limited liability
The rights that attach to share classes and the ability to use share
classes to plan a corporate structure
What do I need to
think about as I
prepare for next
class?
What role do directors and shareholders play in a corporation?
What are the special duties of directors?
What are the powers of shareholders?
How does corporate law protect minority shareholders?
Topic Goals Readings in the Text Key Events
Corporate Law II Understand the
rights and
obligations of
corporate directors
and shareholders
Willes, Chapter 17
Smyth, Chapter 27,
28, Chapter 29, pp.
662-665, 671-3
First assignment is
due in this class.

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What should I be
able to answer after
this class?
What is the difference between the business and the affairs of a
corporation?
What are the powers and the obligations of the directors?
What duties do the directors have, and what is the standard of care
they must satisfy?
What rights and obligations do shareholders have?
How do shareholders exercise voting rights?
What are the remedies available to minority shareholders?
How do the different solvency tests work?
How does the indoor management rule work?
How does a corporation deal with pre-incorporation contracts?
What is the larger
context for this
issue?
We need to consider the rights and obligations of both corporate
directors and shareholders, so we know the planning possibilities
associated with corporations.
We need to consider fiduciary duties, and how directors can
satisfy them.
We need to consider how the law protects minority shareholders,
especially through the oppression remedy, so that directors and
shareholders keep an even hand between the interests of the
majority and the minority.
What are the key
ideas?
How are the powers to act in the name of the corporation
apportioned between directors and shareholders?
What is a fiduciary duty, and how do the fiduciary duties limit
what directors can do?
What are the rights of shareholders, especially minority
shareholders who consider that the corporation has been run in a
way that prejudices their interests?
What are the rights of persons outside the corporation in dealing
with a corporation?
What do I do to
prepare for next
class?
In negligence, what is meant by the duty of care, the standard of
care and causation?
When does one person owe a duty of care to another person?
What standard of care must a person meet?
What are some of the problems with requiring that the negligence
of a person actually cause the injury to another?
What damages can be recovered in a negligence suit?
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