Class_9_-AFM231posted

Class_9_-AFM231posted - AFM 231- Business Law Business...

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AFM 231- Business Law Business Organization
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Discussion Points Business Structures Director Responsibilities Securities Regulation Regulatory Framework Policy Discussion on Regulation Shareholders Rights
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Business Structures Three most common forms of for-profit business structure Sole Proprietor Partnership Corporation There are variations of partnership and corporations Limited partnerships, limited liability partnerships Limited liability corporations
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Business Structures Not the only forms of for-profit business structure Income Trusts Other types of business structure also exist Co-operative organizations Customer coops Member coops
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Business Organization Summary Char. Sole Pro. Part. Corp. Creation Owner Agreement or Conduct Registration Duration Life of owner Agreement or Death Continuous until windup Liability Unlimited Joint and Several Limited Taxation Personal Personal Corporate and Personal Transfer Assets only Interest and Assets Equity and Assets Mngmnt. Owner managed Owner managed Representative Management
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General Duties: Competence: “display the care, exercise in comparable circumstances” (diligence and skill that a reasonably prudent person would corporations acts). Note: evidence of what is competent will include the changing statutory standards and the general change in expectations. See ‘best practices’ material box p. 379. Fiduciary Duties: Above duty (this is the catch-all provision). • Avoid conflicts of interest. Specifically: Avoid self-dealing contract. – Abuse of corporate opportunities. » Note here the Canadian Aero Space Case (381). » Another eg Peso Silver Mines: key facts – mining opportunity presented to full Board, Board rejected it (routine review and rejection). Subsequently, several individual directors and CEO were presented with opportunity. Formed corporation and corporation bought mining rights. Were successful. Was this an abuse? No. But in practice, what might those Directors and
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Class_9_-AFM231posted - AFM 231- Business Law Business...

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