LAW 603 Lecture Notes - Lecture 2: Business Judgment Rule, Corporate Social Responsibility, Fiduciary

• School: Ryerson University
• Department: Law and Business
• Course: LAW 603
• Professor: Andre Serero

Document Summary

Corporation most common for of business organization (can be one-person business to a large multi-national) separate legal person. The corporation (not shareholders, officers or directors) carries on business, incurs liabilities, and generates revenue, profits, losses, etc. Incorporation process: file articles of incorporation (basic characteristics of the corporation) Restrictions, if any, on transfer of shares. A shareholder can be an employee or creditor of the corporation. The corporate existence or status is unaffected by any change in shareholders, directors or officers. The corporation has separate income and tax status. Shareholders gain income from the corporation by receiving dividends paid on their shares. Subject to exceptions, shareholders, directors, officers and employees are not personally liable for the actions of the corporation. Stakeholders employees, creditors, shareholders . (anyone who will be effected by poor choices within the corporation) Shareholders appoint auditors; elect director; vote on proposals typically presented by the board of directors. Shareholders own equity, they own shares in the business.