Business Law & Ethics Final Exam
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What should be included regarding the management of the
enterprise in the Partnership Agreement?
- How much time each partner will devote to the business
- What responsibilities each partner will have
- What happens if one of the partners becomes too ill to work in
the business
What is the one arrangement of profits in a Partnership not
allowable under the QCC?
One which excludes a person from any share of the profits (a
partner must have some share in the profits, no matter how small)
In a Sole Proprietorship or Partnership, are you taxed on
earnings reinvested into the enterprise?
Yes, it is still considered personal earnings
How can a Partnership be terminated?
Being a relatively fragile form of business:
- By the agreement of the partners
- By the bankruptcy of the business
- Upon the accomplishment of its objective
- Some by the death/bankruptcy of 1 partner
How does a limited partnership differ from a general
partnership?
It differs in the liability for debts and in the right to participate in
the management of the business. The special partners are liable
for the debts only to the extent of a stipulated amount they
,contributed, as stated in the partnership declaration. If not stated,
they are soldarily liable, just like the general partners.
How can a special partner check on the business?
They can meet periodically with their partners to discuss the
business, but cannot partake in any day-to-day operations
What are the advantages of a partnership?
- Simple registration
- Inexpensive to start - under $50
- Profits shared only between partners
- Partners able to assist each other
- Partners pool their talents
- Quite flexible
- Simple to dissolve
- More scope for specialization
- Enjoyment of personal involvement
- Limited Partnership allows for some limitation in liability
What are the disadvantages of a partnership?
- Partners personally liable for all debts and the liability is solidary
- Potential for conflict between partners
- Lack of continuity
- Difficult to transfer ownership
- May be difficult to recover one's investment
- Required a written agreement if partners do not share equally or
if some partners are to be excluded from carrying out some of the
functions of the business
- Partner's share of the profits taxed at full personal income tax
rates
- Restriction on hiring members of their families
What is the main difference between the corporation and
other forms of business?
Corporations are created by the government as separate legal
persons (a fiction of the law)
,What is meant by a corporation acting as an incorporator?
A corporation can form or simply buy another corporation in whole
or in part with other corporations
Can the owners of a corporation sue the company?
Yes, because they are seen as separate entities
How did John Marshall define a corporation in the case
Dartmouth College v. Woodward?
A corporation is an artificial being, invisible, intangible, and
existing only in contemplation of law. Being the mere creature of
law, it possesses only those properties which the charter of its
creation confers upon it, either expressly, or as incidental to its
very existence... immortality and individuality...
How do you start a corporation?
Most complex and expensive, in order for its legal personality to
become reality, an application must be prepared and approved by
the government authorities.
What are the decisions to be made regarding incorporation?
i) Federal or Provincial Incorporation?
ii) Determine By-Laws
iii) Identify Principal Place of Business
iv) Select Name
Which other province has an agreement with Quebec that
allows corporations registered on of the provinces can
operate (have a branch) in either province?
Ontario
How can you file for federal incorporation?
Anyone over the age of 18, of sound mind, and not bankrupt can
request for a Federal Incorporation by filling out a document
called the Articles of Incorporation
What do the Articles of Incorporation outline?
The details of the structure of the proposed corporation as well as
the persons who are the original incorporators
, Which files are submitted along with the current filing fee, to
the Director, Canada Business Corporations Act in Ottawa?
A notice stating where in Canada the registered (head) office will
be located, and another stating who will be the first directors of
the corporation
Which certificate is given following approval of Incorporation
by the Federal Government?
Certificate of Incorporation
Which certificate is given following approval of Incorporation
by the Quebec Government?
Certificate of Constitution
What is the main difference between the QBCA and the
CBCA?
The QBCA's Articles of Incorporation require the identification of
the incorporator(s), the name and share structure of the
corporation, and any limitations to be imposed on its activities
What is a corporate By-Law?
A set of internal rules governing the corporation that state how the
company may borrow money, issue bonds or debentures, elect
directors and officers, and hold meetings of shareholders
Who proposes and who approves the corporate by-laws?
The by-laws are proposed by the Board of Directors and
approved by the Shareholders
What is the purpose of the registered or head office?
To provide a place where the important documents of the
corporation are to be kept.
Which documents are kept at the head office?
- The Articles of Incorporation and by-laws
- The Certificate of Incorporation/Constitution
- Any unanimous shareholder agreement
- Minutes of shareholder and directors' meetings
Review Questions with 100% Correct
Answers Latest Versions 2025 Top
Rated A+
What should be included regarding the management of the
enterprise in the Partnership Agreement?
- How much time each partner will devote to the business
- What responsibilities each partner will have
- What happens if one of the partners becomes too ill to work in
the business
What is the one arrangement of profits in a Partnership not
allowable under the QCC?
One which excludes a person from any share of the profits (a
partner must have some share in the profits, no matter how small)
In a Sole Proprietorship or Partnership, are you taxed on
earnings reinvested into the enterprise?
Yes, it is still considered personal earnings
How can a Partnership be terminated?
Being a relatively fragile form of business:
- By the agreement of the partners
- By the bankruptcy of the business
- Upon the accomplishment of its objective
- Some by the death/bankruptcy of 1 partner
How does a limited partnership differ from a general
partnership?
It differs in the liability for debts and in the right to participate in
the management of the business. The special partners are liable
for the debts only to the extent of a stipulated amount they
,contributed, as stated in the partnership declaration. If not stated,
they are soldarily liable, just like the general partners.
How can a special partner check on the business?
They can meet periodically with their partners to discuss the
business, but cannot partake in any day-to-day operations
What are the advantages of a partnership?
- Simple registration
- Inexpensive to start - under $50
- Profits shared only between partners
- Partners able to assist each other
- Partners pool their talents
- Quite flexible
- Simple to dissolve
- More scope for specialization
- Enjoyment of personal involvement
- Limited Partnership allows for some limitation in liability
What are the disadvantages of a partnership?
- Partners personally liable for all debts and the liability is solidary
- Potential for conflict between partners
- Lack of continuity
- Difficult to transfer ownership
- May be difficult to recover one's investment
- Required a written agreement if partners do not share equally or
if some partners are to be excluded from carrying out some of the
functions of the business
- Partner's share of the profits taxed at full personal income tax
rates
- Restriction on hiring members of their families
What is the main difference between the corporation and
other forms of business?
Corporations are created by the government as separate legal
persons (a fiction of the law)
,What is meant by a corporation acting as an incorporator?
A corporation can form or simply buy another corporation in whole
or in part with other corporations
Can the owners of a corporation sue the company?
Yes, because they are seen as separate entities
How did John Marshall define a corporation in the case
Dartmouth College v. Woodward?
A corporation is an artificial being, invisible, intangible, and
existing only in contemplation of law. Being the mere creature of
law, it possesses only those properties which the charter of its
creation confers upon it, either expressly, or as incidental to its
very existence... immortality and individuality...
How do you start a corporation?
Most complex and expensive, in order for its legal personality to
become reality, an application must be prepared and approved by
the government authorities.
What are the decisions to be made regarding incorporation?
i) Federal or Provincial Incorporation?
ii) Determine By-Laws
iii) Identify Principal Place of Business
iv) Select Name
Which other province has an agreement with Quebec that
allows corporations registered on of the provinces can
operate (have a branch) in either province?
Ontario
How can you file for federal incorporation?
Anyone over the age of 18, of sound mind, and not bankrupt can
request for a Federal Incorporation by filling out a document
called the Articles of Incorporation
What do the Articles of Incorporation outline?
The details of the structure of the proposed corporation as well as
the persons who are the original incorporators
, Which files are submitted along with the current filing fee, to
the Director, Canada Business Corporations Act in Ottawa?
A notice stating where in Canada the registered (head) office will
be located, and another stating who will be the first directors of
the corporation
Which certificate is given following approval of Incorporation
by the Federal Government?
Certificate of Incorporation
Which certificate is given following approval of Incorporation
by the Quebec Government?
Certificate of Constitution
What is the main difference between the QBCA and the
CBCA?
The QBCA's Articles of Incorporation require the identification of
the incorporator(s), the name and share structure of the
corporation, and any limitations to be imposed on its activities
What is a corporate By-Law?
A set of internal rules governing the corporation that state how the
company may borrow money, issue bonds or debentures, elect
directors and officers, and hold meetings of shareholders
Who proposes and who approves the corporate by-laws?
The by-laws are proposed by the Board of Directors and
approved by the Shareholders
What is the purpose of the registered or head office?
To provide a place where the important documents of the
corporation are to be kept.
Which documents are kept at the head office?
- The Articles of Incorporation and by-laws
- The Certificate of Incorporation/Constitution
- Any unanimous shareholder agreement
- Minutes of shareholder and directors' meetings
