Essay on Corporation and Subsidiary Company

With Paint-Pen having a debt ratio of 22.74%, Paint-Pen is less risky and has high debt capacity. Adding this high capacity to borrow will add to the value of the combined firm. This acquisition will increase the debt capacity of the combined firm. Aside from the tax benefits that can be exploited after acquiring Paint-Pen, Mr. Hamer’s firm can also put value to the effect of diversification as the firm can diversify by just at the acquisition cost (less other synergies).

4. Who are the stakeholders in this situation and what, if any, obligations do they have?

E) Does the agreement between Photolab Ltd and Photoproduction Ltd require the approval of shareholders? If so, why? (8 Marks)

1.What are conversion factors? Why were conversion factors developed? How do they impact on which bond is cheapest to deliver? Under what conditions would there be no cheapest to deliver? Explain in detail.

California Produce Company hires Drew to work on California Produce’s shipping dock, checking outgoing loads and dispatching the company’s drivers. With respect to California Produce, Drew is most likely

As the oldest of three daughters, she was the one who worked after school and on Saturday mornings in the store and on rare occasions in the lumber yard. Although her two sisters and cousin Donald (Douglas’s only child who was now a surgeon in Winnipeg) also helped out, it was Charlotte who was the mainstay among the siblings. However, taking over the operation of the business at this stage in her life was not a pleasant prospect to her and she resisted, arguing that her father should sell the business. He maintained that it was no time to sell with the business in such bad shape, and the risk of hiring another manager was too great. When he announced that he had no choice but to continue to manage the business himself, Charlotte realized that she had no choice but to assume the responsibility. Bradley started full time in January 1990. Gordon came in and worked with her for three months almost on a full time basis. In April he cut back to half time and then in July he and his wife took a vacation which turned out to be a return to his retirement. Before he left, Gordon transferred all the shares over to Charlotte as her share of his estate. His income from savings, plus his government pension cheques were sufficient to keep him and his wife comfortable. Giving Charlotte the shares now would help to motivate her and to reward her for her efforts in running the business.

1. Whether Casino Ltd. (the parent company) and Caterers Ltd. (its wholly-owned subsidiary company) are considered as separate legal entities. Additionally, whether the concept of corporate veil applies to the corporate groups (between Casino Ltd and Caterers Ltd).

e. A parent’s less-than-wholly-owned subsidiary issues its shares in exchange for shares of another subsidiary previously owned by the same parent, and the noncontrolling shareholders are not party to the exchange. That is not a business combination from the perspective of the parent.

“Only one reporting entity, if any, is expected to be identified as the primary beneficiary of a VIE. Although more than one reporting entity could have the characteristic in (b) of this paragraph, only one reporting entity if any, will have the power to direct the activities of a VIE that most significantly impact the VIE’s economic

Now, the advantages of debt capital centre on its relative cost. Debt capital is usually cheaper than equity because, the pre-tax rate of interest is invariably lower than the return required by shareholders. This is due to the legal position of lenders who have a prior claim on the distribution of the company’s income and who in liquidation precede ordinary shareholders in the queue for the settlement of claims. Debt is usually secured on the firm’s assets, which can be sold to pay off lenders in the event of default, i.e. failure to pay interest and capital according to the pre-agreed schedule;

* The ownership of the partners is dissolved and they become mere employees who are responsible to the shareholders and Board of Directors

o Weakness: there is a societal imbalance in the distribution of resources, and it is virtually impossible for courts/legislatures to make important decisions that do not make someone worse off

Brenda Franklin had been serving Allied Tech for the past 8 years. As any other organisations, Brenda used to be a part of the lunch hour conversations with her colleagues. One day when her colleagues were discussing about corruption and politics, something occurred to her. As a result she prepared a list called “Ethically Dubious Conduct” and pasted it on the common notice board. Her colleagues were taken by surprise. Brenda was now anticipating the next lunch where she was expecting her list to be analysed among her colleagues.

Large corporations such as Wal-Mart or Home Depot often come under criticism for putting mom-and-pop shops out of business. While this may be a valid criticism, the consumers neglect to realize that they play the biggest part in shutting these businesses down. Consumers across the country are always looking for the best deals or the lowest prices, and in most cases the larger corporations are where products can be found at the lowest price. Many small business owners and the populations of small towns dislike large corporations moving into the area because they believe it negatively effects the local

Corporation origin from the Latin word Corpus which means body. It is formed by a group of people and has separate rights and liability from those individual. In any means, corporation exists independently from its owner and this principle is called the doctrine of separate personality. Doctrine of separate personality is the basic and fundamental principle in a Company Law. This principle outline the legal relationship between company and its members. Company’s assets belong to the company not the shareholders as assets are the equity for creditors. Company must use up all its assets to pay off the creditors if it became insolvent. The same applies to the corporation’s debts. For limited liabilities company, the shareholder liability is limited which means that the shareholder is restricted to the number of shares they paid and not personally liable for the corporation’s debts. If the company does not have enough equity to pay off debts, the creditors cannot come after the shareholders. However, limited liability company can be very powerful when in hands who do fraud and on defeating creditors’ claims. Courts then can ignore the doctrine for exception cases and lifting the corporate veil. Lifting the corporate veil is a situation where courts put aside limited liability and hold a corporation’s shareholders or directors personally liable for the corporation’s debts.