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Corporation Minute Book Shares

SKU: SF117vd

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To understand shares, you must first appreciate that the corporation is basically a separate legal 'person' and as such, it owns all the assets of the corporation. The ownership of the corporation itself is divided into pieces or 'shares.' The people who own these shares are called the shareholders.

Any 'person' may own a share, and this includes individuals, corporations and trusts. Shares are a form of property, and can be bought and sold. However, these rights may be subject to any limitations that may be set out in the Act, the Articles, by-laws, shareholders' agreements, etc.

3 types of rights associated with shares:

a. the right to vote
b. the right to receive dividends
c. the right to receive the remaining property of the corporation upon dissolution.

These rights can be divided among different types or classes of shares. Normally, the Articles of Incorporation will provide that an unlimited number of shares can be issued of each class. Classes can be assigned names (eg. common, preference, non-voting) or simply be listed (eg. Class A, Class B, Class C).

Where there is only one class of shares, the rights of all shareholders are equal. Where there are more classes of shares, each class may have different rights, privileges, restrictions and conditions. The number of shares of each class is unlimited, unless there is a maximum specified in the Articles.

Most small businesses begin needing only one class of shares - often called Class 'A' common shares (voting shares) . If there is a single proprietor, then the shares will be issued to them. If there is more than one 'owner', then these shares are split in the proportion agreed upon.

'Class B' or non-voting shares can also be issued. This type of share typically has no voting rights, and is only entitled to dividends upon the discretion of the Board of Directors.

Each class may have different rights, privileges, restrictions and conditions. This document provides a template to work from that describes each share,what types and their effects of ownership.  The document also will describe to you the effects to a company has when issuing the shares. Always consult a legal representative before issuing your company shares.

To assist you with this document we do have an "Minute book Index" SKU 118.

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