Management and Organizational Studies 2275A/B Lecture Notes - Lecture 7: Low-Profit Limited Liability Company, Limited Liability Company, Oppression Remedy

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

Document Summary

A corporation is a separate legal entity. For legal purposes, a corporation is a person. Abc company limited: land, buildings, accounts receivable. What duties do the directors and officers owe to the corporation: fiduciary duty, duty of care, contractual duty. What duties do the directs and officers owe to the shareholders: none. Corporations can raise money through: debt (borrowing money, equity (issuing shares) Features of debt: debt must be repaid, creditors do not get a vote, debt may be secured, debt may be guaranteed, creditors are paid before shareholders (less risk) Features of equity: no obligation to repay investment, shareholders get to vote, shareholders share in the profits, shareholders are paid after creditors (more risk) Shareholders: have no right to sue directors, have no right to dividends, have no right to be repaid. Shareholders: do own the corporation, have a right to financial information, have a right to vote.