Management and Organizational Studies 2275A/B Lecture Notes - Lecture 6: Legal Personality, Fiduciary, Income Tax

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Frederick King

Document Summary

Corporations: for legal purposes, treated as a person, separate legal entity. Charitable corporations: sub-set of not-for-profit, can give out tax receipts, federal/provincial. Corporation owns it"s assets: shareholders can"t walk up and take inventory from corporation. Limited liability for shareholders (they can only lose what they have invested) Corporate carries out activities through agents: directors and officers (human agents) Management (officers) are appointed by directors: governance doesn"t change with respect to size. What duties do the directors and officers owe to the corporation: fiduciary duty. Have to act within the best interest of the corporation. Must act honestly and with good faith: duty of care. Also known as duty of competence: contractual duty. There is no such case in history: therefore no such duty to shareholders. Features of debt: debt (borrowing, equity (issuing shares, must be repaid, creditors don"t get a vote, may be secured, may be guaranteed, paid before shareholders (less risk, legal relationship: contractual.