Business Finance
short assignment

Question Description

questions in file

find the answer in the website which is in the file.

answer the questions in detail with the specific section number from website.

This is not a paper writing, just answer questions.



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Situation You are considering incorporating a business. As you plan on carrying on business in more than one province, you intend to incorporate with federal legislation, the Canada Business Corporations Act. As this is your business, you intend on being a director of the corporation. You are particularly concerned about the obligations of directors. However, you are unsure about some of the legal rules that directors must be aware of. Therefore you have decided to do some research to find the answers to your questions. You have looked up the Canada Business Corporations Act online and are sure that it contains the information that you are looking for. You found the Canada Business Corporations Act at the Government of Canada website: http://laws-lois.justice.gc.ca/eng/acts/C-44/ You are looking for answers to the following questions. In case you need to refer back to the statute for more detail, you have decided to include the specific section number(s) of the statute in the answers to the questions. 1. What corporate records and directors records must be kept? 2. What tests must be met before the directors can declare a dividend? 3. How many directors must the corporation have? 4. After the corporation is created what do the directors do at their first meeting? 5. How long do directors hold office for after the first meeting of shareholders? 6. What types of corporation payments authorized by directors are improper and may result in the director having to personally repay the corporation? 7. When does a director have to disclose any interest they have in contracts with the corporation? 8. What is the duty of care that a director owes the corporation? 9. What defence is available to a director if it is claimed that the director has violated their duty of care? 10. What information must the directors provide shareholders at shareholder’s meetings? 1 ...
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Final Answer

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Surname1

Student Name
Instructor’s name
Course
Date

Surname2

1. What corporate records and directors records must be kept?
Corporate records
❖ 20 (1) states that every corporation must prepare and maintain, at its registered office or
at any other place in Canada designated by the directors, records containing


the articles and the by-laws, and all amendments thereto, and a copy of any unanimous
shareholder agreement;



(b) minutes of meetings and resolutions of shareholders;



(c) copies of all notices required by section 106 or 113; and



(d) A securities register that complies with section 50.

Marginal note: Directors records
❖ (2) In addition to the records described in subsection (1), a corporation shall prepare and
maintain adequate accounting records and records containing minutes of meetings and
resolutions of the directors and any committee thereof.
2. What tests must be met before the directors can declare a dividend?
42 A states that a corporation shall not declare or pay a dividend if there are reasonable grounds
for believing that


The corporation is, or would after the payment be, unable to pay its liabilities as they
become due; or



(b) The realisable value of the corporation’s assets would thereby be less than the
aggregate of its liabilities and stated capital of all classes.

3.

How many directors must the corporation have?

Surname3

Canada Business Corporations Act (2) states that a corporation shall have one or more directors
but a distributing corporation, any of the issued securities of which remain outstanding and are
held by more than one person, shall have not fewer than three directors, at least two of whom are
not officers or employees of the corporation or its affiliates.
4.

After the corporation is created what do the directors do at their first meeting?

After incorporation, the incorporators or first directors are required to call an "organisational
meeting" of the directors. The main goal of this first meeting of the directors is to organise the
corporation by adopting a number of resolutions that will allow the corporation to conduct its
activities. A minimum of five days' notice of this meeting must be given to each director listed in
Form 4002 – Initial Registered Office Address and First Board of Directors. During this meeting,
the directors will make by-laws, appoint officers, make banking appointments and appoint an
interim public accountant.
5. How long do directors hold office for after the first meeting of shareholders?
The general rule in the Canada Business Corporations Act is that directors are elected by a
majority of the votes cast at an annual meeting of the members and they can hold the office for a
term that cannot exceed four years. (see Directors terms and vacancies on the board of directors;
you ...

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