Corporations• A legal entity whose assets and liabilities are

separate from owners.• It’s an artificial being, existing only in the eyes of

the law.• Articles of incorporation must be drawn– name and address of corporation– objectives of corporation – type/number of shares to be issued– number of directors

Control of the Corporation

• Shareholders

• Board of Directors

• Senior Management

Types of Corporations

• The Federal and Provincial Charters allow for four types of commercial corporations:– Private– Public– Crown–Mixed

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Private Corporations

• Shareholders are limited to fifty (50)• Shareholders can not sell shares without the

approval of the Board of Directors• The general public is not permitted to buy

shares from a Private Corporation• Example: McCain Foods Limited

Public Corporations

• This form of corporation CAN BE owned by more than fifty (50) shareholders

• Can issue shares on the financial markets– (Example: NYSE, TSE)

• Usually owned by hundreds or thousands of shareholders

Crown Corporations

• A business that is owned and operated by the Government (either Federal or Provincial)

• Form of public ownership where the Government owns and operates a business on behalf of the general public

• Example: Canada Post

Why Crown Corporations?

• Some believe that certain sectors of the economy are too important to be left in the hands of private firms

• Provides services which would not likely be offered by others

Mixed Corporations• Jointly owned by the Government and the

general public (although can be privately held)• Politicians do not participate in day-to-day

decisions• Most operate in the exploration and natural

resource sectors– Ex: Telesat

Nonprofit Organizations

• Provide service rather than earn profit• Not owned by a government entity• Solicit donations• Example: Lions Clubs