Corporation

In this section

• 11. Corporations And Their Financial Statements
  Learn about corporate structures, financial statements, public company disclosures, investor rights, takeover bids, and insider trading in this detailed chapter overview.
  • 11.1 Introduction
    An in-depth overview on the necessity of understanding financial statements for wise investment decisions, emphasizing a corporation's future performance and past records.
  • 11.2 Corporations And Their Structure
    Comprehensive guide to understanding the structure and types of corporations, including advantages, disadvantages, process, and comparison with other business structures.
    • 11.2.1 Advantages And Disadvantages Of Incorporation
      Explore the advantages and disadvantages of incorporation in this comprehensive guide. Understand why incorporation as a legal entity might benefit or constrain your business.
    • 11.2.2 Private And Public Corporations
      Learn the differences between private and public corporations, their by-laws, voting rights, and shareholders' meetings. Understand the importance of voting by proxy, voting trusts, and more in the Canadian context.
    • 11.2.3 Corporate Structure
      Understanding the executive-level corporate structure including roles and responsibilities can significantly benefit those preparing for the Canadian Securities Course (CSC). Learn about the duties and obligations of directors, the chairman, president, vice-presidents, and officers.
  • 11.3 Financial Statements Of Corporation
    Understand the structure, purpose, and importance of various corporate financial statements. Learn how Canadian adoption of International Financial Reporting Standards (IFRS) enhances transparency and comparability in financial disclosures.
    • 11.3.1 Statement Of Financial Position
      Understand the components and significance of the Statement of Financial Position, an essential financial document for Canadian publicly traded companies, delineating assets, equity, and liabilities.
    • 11.3.2 Statement Of Comprehensive Income
      Understanding the importance and detailed components of the Statement of Comprehensive Income, a vital document revealing a company’s profitability during a fiscal year.
    • 11.3.3 Statement Of Changes In Equity
      An in-depth guide to understanding the statement of changes in equity, retained earnings, total comprehensive income, and non-controlling interest in the context of financial statements.
    • 11.3.4 Statement Of Cash Flows
      Comprehensive overview and guide on the Statement of Cash Flows, highlighting its importance in evaluating a company's liquidity, solvency, and overall quality, along with its structure and components.
  • 11.4 Annual Report
    This section discusses the important components of a corporation's annual report and their significance.
    • 11.4.1 Notes To Financial Statements
      Explore the nuances and importance of the notes to financial statements for a comprehensive understanding of a company's financial condition.
    • 11.4.2 Auditor’s Report
      Comprehensive guide to understanding the auditor's report as required by Canadian corporate law, including roles and responsibilities, stakeholder impact, and essential audits features.
  • 11.5 Public Company Disclosures And Investor Rights
    Understand the rules for public company disclosure and the statutory rights of investors in Canada. Explore periodic financial statements, insider trading reports, proxy solicitation, and more.
    • 11.5.1 Continuous Disclosure
      Understand the continuous disclosure requirements for reporting issuers in Canada, including the significance of material changes, the standards for financial statements, and the necessary steps to ensure compliance.
    • 11.5.2 Statutory Rights Of Investors
      An in-depth guide to understanding the statutory rights of investors in Canada, including withdrawal, rescission, and action for damages under National Instrument 41-101 General Prospectus Requirements.
  • 11.6 Takeover Bids And Insider Trading
    Detailed guide on the regulatory and disclosure requirements for takeover bids and insider trading within Canadian securities markets.
    • 11.6.1 Takeover Bids
      Comprehensive guide to understanding takeover bids, related legislation, and early warning disclosure requirements in the Canadian financial markets.
    • 11.6.2 Insider Trading
      Comprehensive exploration of insider trading, including the definition of insiders, the implications of insider reporting, and a case study on NFR Inc.
  • 11.7 Summary

    Summary

    In this chapter, we discussed key aspects of corporations and their financial statements:

    • Corporate Liability:

      • Unlike owners of a sole proprietorship or partnership, the owners of a corporation are not personally liable for the entity’s debts, losses, or obligations.
      • A corporation is owned by its shareholders but functions as a separate legal entity taxed independently.
      • The property of the corporation belongs to the corporation itself, not its shareholders.
      • Corporations can raise funds by issuing debt or equity.

    • Financial Statements:

• 12. Financing And Listing Securities
  An in-depth introduction to the processes involved in financing and listing securities, including government and corporate financing, the dealer's advisory relationship, prospectus systems, and the advantages and disadvantages of listing shares.
  • 12.1 Introduction
    Introduction to the process by which companies list their securities on stock exchanges and the necessary regulatory requirements.
  • 12.2 Government And Corporate Finance
    Comprehensive overview of the processes governments and corporations use to raise capital, including methods, differences, and implications.
    • 12.2.1 Investment Dealer Finance Department
      Comprehensive guide on the role and responsibilities of the finance department within investment dealers, focusing on both government and corporate finance.
    • 12.2.2 Canadian Government Issues
      An in-depth look at Canadian Government Issues, including the competitive tender system for marketable bonds and Treasury bills, types of bonds, bid structures, and the example auction process.
    • 12.2.3 Provincial And Municipal Issues
      An in-depth look at the issuance, management, and characteristics of provincial and municipal bonds in Canada. Understand the roles of financial agents, syndicate groups, and institutional portfolios in these securities.
    • 12.2.4 Corporate Financing
      Comprehensive guide on corporate financing including equity and debt financing in Canada. Explore types of securities, share capital, market capitalization and public float with real-world examples.
  • 12.3 Dealer’s Advisory Relationship With Corporations
    Explore the intricate advisory relationship between dealers and corporations in the context of financing and issuing securities. Learn about the roles, advisory services, key considerations, and protective provisions involved in these financial transactions.
    • 12.3.1 Method Of Offering
      Explore the different methods of offering securities in corporate financing, including private placement, public offerings, and the distinctions between primary and secondary offerings.
  • 12.4 Bringing Securities To Market
    Learn the key steps and regulatory requirements involved in bringing securities to the market, including the prospectus system and after-market stabilization.
    • 12.4.1 When Prospectus Is Required
      Learn about when a prospectus is required for the distribution or sale of securities, including scenarios for new issues and obligations in various provinces in Canada.
    • 12.4.2 Preliminary Prospectus
      A comprehensive guide to understanding the Preliminary Prospectus in Canadian securities regulations, including its definitions, requirements, and the Passport System.
    • 12.4.3 Permitted Activities During Waiting Period
      A detailed guide on the activities permitted for underwriters and dealers during the waiting period between the preliminary prospectus and final prospectus in the Canadian Securities Course.
    • 12.4.4 Final Prospectus
      Understand the complete details provided in a final prospectus, including the requirements for material facts, cover page, summary, issuer information, securities data, and more.
    • 12.4.5 Short Form Prospectus System
      An in-depth guide to understanding the Short Form Prospectus System in Canada, including its uses, conditions, and distinctions from the long form prospectus.
    • 12.4.6 After-market Stabilization
      A comprehensive guide to understanding after-market stabilization in securities offerings, including greenshoe options, penalty bids, and stabilizing bids.
    • 12.4.7 Securities Distributions Through Exchanges
      An in-depth guide to securities distributions through exchanges, focusing on the approval process, requirements, and exemptions for issuers.
  • 12.5 Other Methods Of Distributing Securities To Public
    Explore alternate methods of distributing securities to the public in Canadian stock exchanges, such as junior company distributions, treasury shares, CPCs, the NEX board, and crowdfunding.
    • 12.5.1 Junior Company Distributions
      An in-depth exploration of junior company distributions, focusing on the capital raising strategies of junior mining and oil companies. Aimed at helping candidates prepare for the Canadian Securities Course (CSC) certification exam.
    • 12.5.2 Options Of Treasury Shares And Escrowed Shares
      An in-depth guide to understanding the options and features of treasury shares and escrowed shares, including their benefits, restrictions, and the impact on secondary market performance.
    • 12.5.3 Capital Pool Company Program
      Comprehensive guide to the Capital Pool Company (CPC) Program designed by the TSX Venture Exchange for small and emerging businesses to obtain early-stage financing.
    • 12.5.4 Nex Board
      A comprehensive guide to understanding the NEX Board on the TSX Venture Exchange, including its purpose, types of issuers, benefits, and FAQs.
    • 12.5.5 Crowdfunding
      Explore the mechanism and regulatory aspect of crowdfunding in raising start-up capital through online platforms.
  • 12.6 Listing Process
    Detailed overview of the listing process for securities on recognized exchanges, including the associated advantages, disadvantages, and regulatory compliance.
    • 12.6.1 Advantages And Disadvantages Of Listing
      Detailed analysis and comparison of the advantages and disadvantages of listing a public company on a major stock exchange, exploring impacts on prestige, market visibility, management controls, and market dynamics.
    • 12.6.2 Withdrawing Trading Privileges
      Understand the processes and reasons behind the withdrawal of trading privileges on stock exchanges, including temporary interruptions and delisting procedures.
  • 12.7 Summary
    Comprehensive summary of Chapter 12 focusing on financing and listing securities in capital markets, including federal and provincial financing, corporate capital raising, the Passport System, short form prospectuses, continuous disclosure requirements, after-market stabilization, and pros and cons of listing shares on an exchange.