Lecture 14 notes Nov 3

Lecture 14 notes Nov 3 - Corporate Governance and Corporate...

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Corporate Governance and Corporate structure o Corporate Governance: Definition Traditional vs. Emergent View o Diagram of Corporate Structure Shareholder Rights (review) Role of the Board of Directors o Are Corporations Really Democratic? Who Really controls Large Public Corporations? The Nature of the Corporate Voting Process Factors the May Impede Corporate Democracy? 1. Shareholder Apathy 2. Proxy Voting o Solicited by Management o Wording of Proxy Cards 3. Nature of the Voting System Employed o Majority Voting o Cumulative Voting 4. Staggered Terms for Directors Shareholder Recourse Attend Annual Meeting Proxy Battles Sell Shares
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Public Corporations Advantages o Limited Liability of owners (shareholders) o Easier to obtain capital Can sell shares in the capital markets o Ease of transferability of Ownership o Greater Efficiency if Management (Hire functional specialists & ease of replacing non-performing managers) Disadvantages o Loss of secrecy. ..legally required to publish annual reports o Increased record keeping Shareholder records Proxy Voting Annual Meetings of shareholders Government forms o Lack of Personal involvement by many employees o Annual reports must be audited by CA firms Costly and time consuming o Dual Taxation of corporate profits if distributed to owners in the form of dividends Once at the public corporation of 30% o Again on dividend of 44% Gross up/17% of fed Credit and 6.4% prov Credit (Different gross up and tax credits than dividends received from private corporations? o Most heavily regulated by governments Forming a Corporation o Federal Incorporation Fee $200
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Right to carry on business under corporate name anywhere in Canada Head office anywhere in Canada Business # and HST # automatically assigned Annual filing fee; Corporation information return $40 o Provincial Incorporation Fee $300 Right to carry on business under corporate name anywhere in Ontario
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Lecture 14 notes Nov 3 - Corporate Governance and Corporate...

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