Exam 7: Methods of Carrying on Business

Explain what is meant by pre-emptive rights.

Discuss and contrast the various methods of financing a corporation.Deal with the advantages and disadvantages of each.

Which of the following is true with regard to the characteristics of corporations?

The rights associated with preferred shares are always the same, and there is no actual right to a dividend.

In a franchise arrangement, describe the advantages offered in such a business structure to the franchisee.

Changes to the Criminal Code in response to the Westray mining disaster in Nova Scotia make partnerships and corporations more responsible for the negligence of their employees when the negligence results in injury or death.

Explain what must be done to create a limited partnership.

Explain under what circumstances a shareholder will not be permitted to sell his shares.

A director can be held responsible for unpaid taxes, wages, and environmental harm.

You have been asked by two fellow graduates to join them in incorporating a closely held corporation that would commence a consulting business.One was in your class, so you know him quite well, but the other is graduating from a different school.You have been discussing the law to review the protection it gives you.Read each of the following statements separately and indicate which is true.

Contrast the obligations and duties of directors and shareholders of a corporation.

A franchisee and franchisor are considered to be in a partnership with each other.

Chuck, Howard, and Ben decide to start a business venture, developing and distributing educational software.For tax reasons, they do not incorporate.Each contributes $10 000, and Howard also contributes a truck and his programming expertise.They agree that all three will be actively involved in the day-to-day management of the business.To determine their rights and obligations, they enter into a one-page agreement that provides only that each of Chuck, Howard, and Ben will receive 33.3% of the profits but also states specifically they are not to be viewed as partners.Based on these facts, which of the following statements is true?

In 2011, Rambolin incorporated Rambolin Industries Ltd.and became its sole shareholder.He loaned the corporation $10 000 and took a chattel mortgage from the corporation as security for repayment of the loan.He became director, president, and secretary of the corporation.The corporation prospered.Last year, you began supplying the corporation with office supplies.You were paid at the end of each month for supplies delivered during that month.For the last six months, however, you have not been paid.You learn that other suppliers also have not been paid because sales have dropped drastically, apparently due to Rambolin's nasty temper caused by ill health.Which of the following is true?

"In modern business practice, the shareholders of a corporation own that corporation." Explain the accuracy of this statement.

Discuss appropriate measures that a business might take to prevent and detect corporate fraud.

The Partnership Act provides that no major decisions can be made that affect the nature of the business itself without unanimous agreement of the partners.Provide three examples of major decisions.

Which of the following is considered to be a separate legal person in law?

Which of the following statements is correct with respect to regulation of the purchase, sale, and promotion of securities in Canada?

Adams was approached by a Mr.McCarthy of XYZ Co., who requested that Adams pay $10 000 to extinguish a debt owed by the partnership of Adams and Jefferson.Adams denied the partnership and the liability.In asserting his claim, McCarthy cited the following facts, all of which he could prove.Which of these facts is the strongest evidence of the existence of a partnership?