Business Law: Agency, Partnerships, and Corporations

Comprehensive vocabulary flashcards generated from lecture notes covering agency law, legal authority, business organizations, corporate structures, and incorporation procedures.

Salomon v Salomon

A landmark legal case establishing the principle of corporate legal personality, where an individual formed a corporation to run his shoe manufacturing business, owning 20,001 shares while his family members held 6 shares, demonstrating that a corporation is a distinct legal entity separate from its owners.

Stakeholder

Any individual or group that has an interest in a corporation, categorized into internal stakeholders who govern and direct the corporate mission, and external stakeholders who deal with the corporation externally.

Internal Stakeholders

Individuals or groups who have a direct or indirect role in governing a corporation and determining its mission and objectives, including shareholders, directors, and officers.

External Stakeholders

Individuals or groups who have dealings with a corporation but do not have a role in its governance, such as customers, employees, creditors, and government entities.

Officers

High-level management employees, such as the president and secretary, appointed by the board of directors to handle and manage the day-to-day operations of a corporation.

Pre-Incorporation Issues

Initial organizational decisions made prior to creating a company, such as deciding between federal or provincial incorporation, determining share structure and types, and choosing a corporate name.

Federally Incorporated Corporation

A business entity incorporated under federal legislation that possesses the legal right to carry on business across all provinces in Canada.

Provincially Incorporated Corporation

A business entity incorporated under provincial law that has the direct right to carry on business only within its home province, though it may obtain licensing to operate in other provinces.

Share Structure

The formal framework defining the classes of shares a corporation will issue, including their specific rights, privileges, and whether the total quantity of shares is open-ended or limited.

Widely Held Corporation

A corporate entity whose shares are normally traded publicly on a stock exchange, making it subject to strict regulatory oversight pursuant to relevant securities legislation.

Closely Held Corporation

A private corporate entity that does not sell shares to the public and is exempt from securities legislation provided it meets private corporation restrictions, such as maintaining a limited number of shareholders.

Right of First Refusal

A contractual clause requiring a shareholder who wishes to sell their shares to first offer them to existing directors or shareholders at the same price negotiated with an outside buyer before completing a third-party sale.

Dual-Class Shares

A corporate share structure featuring different categories of equity, such as voting and non-voting shares, which can allow a specific group or trust to retain majority voting control of a company despite holding a minority of total equity.

Incorporator

The individual who initiates and sets the formal legal process of incorporation into motion.

Articles of Incorporation

The foundational document submitted during the incorporation process that defines the essential legal characteristics and structure of the corporation.

Notice of Registered Office

A mandatory filing submitted during incorporation that formally lists the official physical address of the corporation.

Notice of Directors

A formal corporate document submitted during incorporation that discloses the names and addresses of the appointed directors of the company.

NUANS Report

A mandatory search report submitted during incorporation to verify that a proposed corporate name is not dangerously similar to existing business names already in use.

Bylaws

Internal rules and regulations adopted by a corporation to govern its day-to-day operating procedures and corporate governance practices.

First Shareholders' Meeting Requirement

The statutory obligation requiring a newly incorporated business to hold its initial meeting of shareholders within 18 months of incorporation to elect its board of directors.