AFM391 Chapter Notes - Chapter 15: Leveraged Buyout, Issued Shares, Liquidating Distribution
21 Feb 2017
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A corporation is a separate legal entity which provides equity owners greater legal protection. Public sector corporations: government units such as cities. Shares not available for public purchase and governed by shareholder agreements. Shares trade on a stock exchange and governed by securities laws through sec and exchanges. Reits are spes which are set up as limited purpose trust funds. When the trust pays out its income to unitholders, the trust pays no income tax. Non-real estate trusts are no longer exempt from taxes. A corporation is created by submitting articles of incorporation to the provincial or federal government. Article of incorporation details company name, place of registered office, classes and maximum number of shares authorized, restrictions of rights to transfer shares, number of directors, and any restrictions on the business. Share certificates are then issued to shareholders. Rights of a share can only be restricted by provisions in the articles of incorporation.
