Eileen Is Considering Incorporating a Corporation Under the Canada Business

question 66

Multiple Choice

Eileen is considering incorporating a corporation under the Canada Business Corporations Act to carry on her toxic waste disposal business.She has heard that incorporation is a foolproof strategy to avoid personal liability for obligations of the business.Which of the following is FALSE?

• A)Sometimes,at the request of a creditor,courts will disregard the separate legal existence of the corporation and impose liability on a shareholder,but these circumstances generally involve egregious or fraudulent conduct using the corporation as a cloak to facilitate that conduct.
• B)Sophisticated creditors may demand that a shareholder guarantee a debt of the corporation,with the result that the shareholder becomes liable for the debt as well as the corporation.
• C)Incorporation will generally shield shareholders for the claims of trade creditors and consumers.
• D)Incorporation does reduce risk for shareholders by protecting them against liability for torts for which the corporation is liable.
• E)A shareholder of a corporation obtains no business advantage by conducting business through a corporation as opposed to a proprietorship.

Analyze the factors and characteristics that lead to successful venture capital deals.

Understand different financing strategies for companies including last resort options.

Comprehend the critical elements of valuation in private company fundraising.

Identify and define economic agreements and their participants within business contexts.

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Definitions:

Norm

Standards or expectations that are accepted by a group as guiding principles of behavior.

Scientific Method

A systematic approach to research and experimentation used to explore observations and answer questions.

Laboratory Setting

A controlled environment where scientific research, experiments, and measurement are conducted.

Qualitative Methods

Research methods focused on obtaining data through open-ended and conversational communication, emphasizing the analysis of content and meaning in textual or visual data.