BU397 Lecture Notes - Lecture 3: Liquidating Distribution, Share Capital, Debits And Credits
Document Summary
Corporate law: the canada business corporation act (cbca) is a relevant business corporation act. Provincial business corporation acts also exist but vary from province to province: articles of incorporation prepared and submitted. Share capital system: shares grouped by (cid:498)class(cid:499) (e. g. class a common, each share contains certain rights and privileges, ease of transfer of ownership. Share becomes more attractive investment: as a minimum each share has these basic or inherent rights. To share proportionately in assets upon liquidation: preemptive right for any new share issues can also be assigned under cbca. Preferred shares: certain inherent rights given up or exchanged for other special rights or privileges, preference given on, preferred shares features (some or all may be attached to a preferred share) Cumulative: dividends in arrears must be paid before any profits can be distributed to common shareholders shares at a predetermined ratio. Convertible: the company or holder can exchange the shares for common.
