The Role of Boards, Advisory Panels and Service Providers

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Speaker: Craig Thorburn, Blake Cassels, Graydon

This presentation looks at the start-up and administration of a business through a corporation with a focus on the efficient use of professional service providers, the management of the corporation through a board of directors and the relationships among shareholders of the corporation.

Part of the CIBC Presents Entrepreneurship 101 lecture series.

For more information including video, please visit: http://www.marsdd.com/Events/Event-Calendar/Ent101/2009/the-role-of-03252009.html

Published in: Business, Economy & Finance
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The Role of Boards, Advisory Panels and Service Providers

  1. 1. The Role of Boards, Advisory Panels and Service Providers MaRS Entrepreneurship 101 Craig C. Thorburn Blake, Cassels & Graydon LLP March 25, 2009
  2. 2. The Corporate Model   Corporation →  Separate legal person →  Limited liability   Triad →  Shareholders →  Directors →  Officers 3
  3. 3. Shareholders   Shareholders →  Election of Directors (also removal) →  Appointment of Auditors →  Entitlement to receive Dividends →  Proceeds on Winding up →  Approval of major changes •  sale of all or substantially all assets •  change of name •  change of articles of incorporation 4
  4. 4. Directors   Duty to Manage →  “the directors shall manage, or supervise the management of, the business and affairs of the corporation”   Fiduciary Duty (Duty of Care) →  Every director of a corporation in exercising powers and duties shall •  “act honestly and in good faith with a view to the best interests of the corporation” •  “exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances” 5
  5. 5. Director Liabilities   Directors are “jointly and severally” liable to restore to the corporation any amounts distributed or paid and not otherwise recovered by the corporation in certain circumstances for: →  a purchase or redemption of shares →  payment of a dividend →  payment of an indemnity   Directors also liable in certain circumstances for: →  unpaid wages of employees →  unpaid income tax remittances →  failure to make withholding tax payments →  unpaid PST and GST →  environmental liabilities →  criminal offences 6
  6. 6. Director Protections   Due Diligence   Reliance on expert reports   D&O Insurance 7
  7. 7. Officers   Same duty of care as directors   Few statutory liabilities   Risk/Reward Mismatch 8
  8. 8. Advisory Panels Expertise for corporation   No liability for panel members   Diversity of skills and views   Don’t select people in your own image   Angels   9
  9. 9. Service Providers Accountants   Lawyers   Investment bankers   Advertising agencies   MaRS   →  Business Mentorship and Entrepreneurship Program 10 12202509.2

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