WEEK 4

Question 1

Basic requirement for directors in private corporations

Answer 1

Minimum of one director or minimum set out in articles of incorporation

Question 2

Basic requirements for directors in a public corporation q

Answer 2

Minimum 3 directors and majority needs to be an outsider and Canadian resident

Question 3

Primary duties of directors

Answer 3

• Fiduciary duty
• Duty of due care

Question 4

Situations when fiduciary duty can be breached

Answer 4

• Self-interest in transaction
• Taking of corporate opportunity
• Competing with the corporation

Question 5

Consequences for breach of duties

Answer 5

Directors are held personally liable

Question 6

Stakeholder remedies

Answer 6

• Oppression Remedy
• Appraisal Remedy (2/3)
• Derivative Action
• Winding up

Question 7

Requirements for a derivative action

Answer 7

• Directors must be given 14 day notice
• Compliant needs to be acting in good faith
• The case needs to be serious enough to actually raise a trial

Question 8

Payment upon dissolution of a corporation

Answer 8

1. Secured creditors
2. Unsecured creditors
3. Preferred shareholders
4. Common shareholders

Question 9

Test to pay dividends

Answer 9

1. Solvency test
2. Capital maintenance test