Canadian Business Law/Corporations
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A corporation enjoys special status in the law. Among the characteristics of the corporation include:
- exists as a separate legal entity
- existence is perpetual
- has limited liability
- control by shareholders
- shares are transferable
Process of incorporation
There are three ways in which to incorporate a company in Canada.
- Letters Patent
- A grant of a Charter from the Crown. This practice is only still used in PEI.
- Memorandum of Association
- The rights and obligations of the corporation are determined contractually by the Articles of Association. This partice is only used in Nova Scotia and British Columbia.
- Statutory enactment
- The corporation is enacted under a Corporations Act, which can either be federal or provincial.