Presentation on theme: "Ingenuity. JRW / SHK 679002.2 CE 402 Law for Engineers 1. The Canadian Legal System 5. Business Organizations 25. Securities Law – Disclosure & Liability."— Presentation transcript:
The Canadian Constitution Statutes British North America Acts, Canadian Constitution Act; Charter of Rights and Freedoms Conventions Common Law & Caselaw
Division of powers: Most areas are provincial by default. private law is generally within provincial government jurisdiction; exceptions arise where jurisdiction is expressly federal: competition, criminal, railways, ports, banks. Operational conflicts: federal statute prevails
Canadian Constitution (Continued) Law within provincial government jurisdiction varies between provinces: lien legislation, most employment and labour legislation. Territories: power assigned by federal government, but act much like provinces Federal Law applies across the country
Canadian Court System “Rule of Law” = Law governs, not people. Separation of powers is a constitutional principle requiring independence of the judiciary: an essential element of the Rule of Law. Each province has a superior trial level court and court of appeal: judges federally appointed Supreme Court of Canada: matters of national importance (require leave) (Continued)
Canadian Court System (Continued) Each province has a lower trial court: jurisdiction is limited by subject matter (e.g. cannot deal with liens) and value of claim (e.g. BC Small Claims Court has claim value limit of $25 000) Lower trial courts typically also handle criminal and family matters
The Creation of Law Law is dynamic: Courts add interpretations. Statutes and regulations: federal and provincial. Authority can be delegated e.g. to Municipalities. E.g. 2013, Parisian women got the right to wear pants without a permit, required since 1800. Common law: rules established by previous decisions. As judges interpret and apply statutes and common law rules, more law is created.
International Law (beyond Scope) International treaties; must be ratified NAFTA Professionals must be licensed or permitted in other jurisdictions: often by agreement between Associations Tax treaties: minimize double taxation
Subject Areas and Principles (details by others) Contract law Contracts are voluntary, often need not be in writing, define rights and responsibilities Tort law –Duty to not harm neighbours –Negligence is just one type of tort, but is common in construction disputes
Overview Many different forms of business organization: each has strengths and weaknesses Main types: –Sole proprietorship [need not register] –Corporation (Company) [must register] –Partnership [should be registered, not must] –Others: LLP, LP, JV, etc.
Corporations: Introduction The corporation is a separate legal person Limited liability Requires registration of a name, and that name must warn the public of the limited liability nature of the enterprise Can be incorporated federally or provincially
Corporations: Separate Legal Entity The corporation has a separate legal identity from its shareholders and directors Corporation should have separate bank accounts and must keep separate records. Shareholder's may be required practically, to guarantee the obligations of the corporation
Corporations: Organization & Control Articles of incorporation define the nature of the business, and the ownership structure. Owned by shareholders, who elect directors. Directors appoint officers, who may also be directors Day to day management is by the officers Officers and directors must be individuals i.e. a corporation cannot be an officer or director
Corporations: Capacity Being a legal person, the corporation can enter into contracts in its own name Depending on the type of contract, special authorization may be required The articles of incorporation are like a corporate constitution may restrict the activities the business can engage in, or specify special approval procedures for certain contracts.
Corporations: Debt and Equity Debt: corporate funding obtained through borrowing. Equity: corporate funding obtained through investment by shareholders. Equity is also generated through profits of the corporation.
Corporations: Public v Private Private (closely held) corporation: –all shares held by a small group of shareholders –shares not traded on a public market –more limited disclosure requirements than for public corporations Public corporation: –shares traded publicly –stringent filing and disclosure requirements
Corporations: Officers & Directors Officers and Directors owe fiduciary duties to the corporation; must disclose conflicts [eg. personal v. corp interest; opportunities; cost v. quality] Risk of personal liability for officers and directors: –Derivative action [Co. v. officer/director] –Liability under statute e.g. environmental regulations, employment standards, tax Due diligence defense: Acted reasonably and took reasonable precautions? Mitigate risk: corporate indemnity; insurance
Corporations: Insider Trading Unlawful insider-trading = trading in reliance on information not disclosed to the public Not all insider trading is unlawful Stock tipping also prohibited Insider trading rules apply to share and commodities markets Civil and criminal liabilities
Sole Proprietorship An individual carrying on business Least expensive / Simple to administer Unlimited liability Required to register a business name? [NOT] Not tax efficient for high income levels, BUT few barriers to entry
Partnerships: Introduction Simple to set up and administer Governed by provincial legislation Each partner is jointly liable for the debts and obligations of the partnership Liability of partners is not limited to the partner's proportionate share. Not liable for a partner’s other debts.
Partnerships: Formation Do not require written agreement The nature of the relationship, not the label given to it by the partners, determine whether it is a partnership Parties jointly participating to make a profit are likely in partnership Generally, registration is required [Practically] (Continued)
Partnership: Formation (Continued) A corporation may be a partner Fewer fees and filing requirements for partnerships than for corporations Tax implications may be complicated for partnerships but may have benefits.
Partnerships: Fiduciary Duty Partners owe each other fiduciary duties Fiduciary duty: –Special relationship of trust –Required to put the interests of the partnership ahead of one's own interest where there is a conflict. Partnership agreement cannot negate the fiduciary duty
Limited Partnerships [beyond scope] Require at least one general partner and at least one limited partner Limited partners liable only to the extent of their investment General partner has unlimited liability (but the general partner could be a corporation) Limited Liability Partnerships [WAY beyond scope]
Overview Securities = Publicly traded shares, bonds, and other investment devices feds and provinces regulate securities Mostly provincial Securities commissions promote fair and efficient trading of securities prohibit insider trading regulate disclosure of information
Disclosure Requirements Prospectus = A document that provides the public with information about a publicly traded corporation A prospectus must contain full, true, and plain disclosure of all material facts about the security being issued Before being released to the public, the prospectus must be approved by the relevant securities commissions Disclosure requirements are ongoing
Technical Disclosure Guidelines Special standards have developed for disclosure related to mining: Scientific and technical information must be reviewed by a qualified person before being released Often these are engineers, most often mining or geological
Common Law and Statutory Liability Geoscientists and engineers face liability for misrepresentation if their reports, or a prospectus contains false statements Securities legislation creates another cause of action if the contents of inaccurate technical reports are used to support a prospectus or to attempt a company takeover It is not possible to disclaim statutory liability