1.Write exhaustively different types of c0mpanies? Information about the various kinds of companies (Business Studies).

Joint stock company can be classified into different kinds from different angles and considerations. Various kinds of companies can be found from the following angles or basis:

On the basis of incorporation. On the basis of nature of liability. From the point of view of nationality. From the point of view of transferability of shares. From the point of view of ownership.

On the basis of incorporation: From the point of view of incorporation or formation, there are there types of companies like: Charted company: The companies formed by the charter or special permission by the kings are called chartered company. These companies function and regulate their activities according to the charter laid down. the glaring example of a chartered company is the East India Company which is formed by the special royal charter of the British crown. Statutory company: The companies formed by the special act of the state legislature or the parliament are called statutory company. These companies are governed by the special act of the parliament. The glaring examples of statutory companies in India are, the Industrial Finance Corporation of India (IFCI), the Life Insurance Corporation of India (LIC), the Reserve Bank of India (RBI), and the Indian Posts and Telegraph department. The best examples of statutory companies in Orissa are State Financial Corporation of Orissa (OSFC) and the Industrial Development Corporation of Orissa (IDC). Registered company: The companies registered and incorporated under the Indian Companies Act, 1956 are called registered company. The registration of companies are made in the registrar of companies which is a central government official. On the basis of nature of liability: From the point of view of liabilities, there are three types of companies called: Company with limited liabilities: In this type of company, the liability of the shareholders is unlimited. In case of winding up of a company, the shareholders are liable to contribute the entire amount necessary to meet the obligation of the company. These companies are rare and the Indian companies act does not provide not for existence of such type of companies. Liability limited by guarantee: In this company the liability of its members is limited upto the guaranteed amount. The members of the company furnish guarantee to pay an amount in addition to the value of their share held. The additional amount beyond the share amount is laid

in the memorandum of Association. The shareholders will contribute the guaranteed amount in case of dissolution. These companies are formed with non-profit making objectives like chamber of commerce and other social clubs. Liability limited by shares: In this type of company, the liability of the member is limited to the extent of the face value of the shares held by the members. These type of companies are most popular and common type of companies found in modern times. From the point of view nationality: From the nationality point of view, there are two types of companies called: 1. National company: The companies formed and operated within national boundary of a country are called national companies. The operation of these companies are restricted within the country of registration. 2. Multi-national company: The companies which operate beyond the country of the original registration are called multinational companies. On the basis of transferability of shares: From the point of view of transferability of shares, there are two types of companies called: Private company: A private company is a company where the provisions of the articles of association restrict the right to transfer its shares. Its membership is restricted to a maximum of fifty only excluding the employees of the company. These companies prohibits invitation to the public to subscribe to its share capital. The minimum number of persons required to start a private limited company is 2. Public Company: A public company is a company where the minimum number of persons required to form a company is seven and there is no limit to maximum number of persons. The shares of a public limited company are transferable and it can invite public to subscribe to its share capital. This type of company is otherwise called as widely held company. On the basis of ownership: From the ownership point, there are four types of company like: Government company: A government company is a company where either the central government or the state government or both held at least 51 percent of the paid-up share capital. The glaring examples of government companies are Orissa Road Transport Company Ltd., Rehabilitation Housing Corporation Ltd. and the Eastern shipping Corporation Ltd. Holding Company: A company which holds majority of shares of another company is called a holding company.

Subsidiary company: The company whose majority of shares are held by other company is called a subsidiary company. Joint Stock company: The companies owned jointly by the government and private parties are called stock companies. 2.What is the scope of foreign exchange management Act?
The Foreign Exchange Management Act, 1999 came into effect from 1st June 2000. With the legislation of this Act, the focus of the foreign exchange policy shifted from control and conservation foreign exchange to that of effective management in order to facilitate external trade or payment and promote the orderly development and maintenance of the foreign exchange market in India. The scope of this Act extends to the whole of India and applies to all branches, offices and agencies outside India owned or controlled by any person resident in India. It is also applicable to any contravention committed outside India by any person to whom this Act is applicable. The Central Government has established the Directorate of Enforcement to enforce and investigate due compliance of the provisions of the Foreign Exchange Management Act, 1999 and to prevent leakage of foreign exchange which generally occurs through malpractices. The Act prohibits dealings in foreign exchange without general or special permission of the RBI with a view to facilitating external trade and promoting orderly development of foreign exchange market in India. 3.How is a company formed?

How to Form a Corporation

by Nolo If youve decided to create a corporation, youre facing a list of important but manageable tasks. Heres what you must do: 1. Choose an available business name that complies with your states corporation rules. 2. Appoint the initial directors of your corporation. 3. File formal paperwork, usually called articles of incorporation, and pay a filing fee that ranges from $100 to $800, depending on the state where you incorporate. 4. Create corporate bylaws, which lay out the operating rules for your corporation. 5. Hold the first meeting of the board of directors. 6. Issue stock certificates to the initial owners (shareholders) of the corporation. 7. Obtain licenses and permits that may be required for your business. Choosing a corporate name The name of your corporation must comply with the rules of your states corporation division. You should contact your states office for specific rules, but the following guidelines generally apply:

The name cannot be the same as the name of another corporation on file with the corporations office. The name must end with a corporate designator, such as Corporation, Incorporated, Limited, or an abbreviation of one of these words (Corp., Inc. or Ltd.). The name cannot contain certain words prohibited by the state, such as Bank, Cooperative, Federal, National, United States or Reserve.

Your states corporations office can tell you how to check if your proposed name is available for your use. Often, for a small fee, you can reserve your corporate name for a short period of time until you file your articles of incorporation. Besides following your states corporate naming rules, you must make sure your name wont violate another companys trademark. Once youve found a legal and available name, you usually dont need to file the name of your business with your state. When you file your articles of incorporation, your business name will be automatically registered. However, if you will sell your products or services under a different name, you must file a fictitious or assumed name statement with the state or county where your business is headquartered. Appointing directors Directors make major policy and financial decisions for the corporation. For example, the directors authorize the issuance of stock, appoint the corporate officers and set their salaries, and approve loans to and from the corporation. Directors are typically appointed by the initial owners (shareholders) of the corporation before business begins. Often, the owners simply appoint themselves to be the directors, but directors do not have to be owners. Most states specifically permit a corporation to have just one director, regardless of the number of owners. In other states, a corporation must have at least three directors, except that a corporation with only one owner can have just one director, and a corporation with only two owners can have two directors. Filing articles of incorporation After youve chosen a name for your business and appointed your directors, you must prepare and file articles of incorporation with your states corporate filing office. Typically, this is the Department or Secretary of States office, located in your states capital city. While most states use the term articles of incorporation to refer to the basic document creating the corporation, some states (including Connecticut, Delaware, New York and Oklahoma) use the term certificate of incorporation. Washington calls the document a certificate of formation, and Tennessee calls it a charter. No state requires a corporation to have more than one owner. For single-owner corporations, the sole owner simply prepares, signs and files the articles of incorporation himself. For co-owned

corporations, generally all of the owners may sign the articles, or they can appoint just one person to sign them. Whoever signs the articles is called the incorporator or promoter. Articles of incorporation dont have to be lengthy or complex. In fact, you can usually prepare articles of incorporation in just a few minutes by filling out a form provided by your states corporate filing office. Typically, the articles of incorporation must specify just a few basic details about your corporation, such as its name, principal office address and sometimes the names of its directors. You will probably also have to list the name and address of one person usually one of your directors who will act as your corporations registered agent or agent for service of process. This person is on file so that members of the public know how to contact the corporation for example, if they want to sue or otherwise involve the corporation in a lawsuit. Generally, all of the LLC owners may prepare and sign the articles, or they can appoint just one person to sign and file the articles. Drafting corporate bylaws Bylaws are the internal rules that govern the day-to-day operations of a corporation, such as when and where the corporation will hold directors and shareholders meetings and what the shareholders and directors voting requirements are. To create bylaws, you can either follow the instructions in a self-help resource or hire a lawyer in your state to draft them for you. Typically, the bylaws are adopted by the corporations directors at their first board meeting. Plan for ownership changes with a shareholders agreement A shareholders agreement helps owners of a small corporation decide and plan for what will happen when one owner retires, dies, becomes disabled or leaves the corporation to pursue other interests. See Plan for Ownership Changes with a Shareholders Agreement for more information. Holding a first meeting of the board of directors After the owners appoint directors, file articles of incorporation and create bylaws, the directors must hold an initial board meeting to see to a few corporate formalities and make some important decisions. At this meeting, directors usually:

set the corporations fiscal or accounting year appoint corporate officers adopt the corporate bylaws authorize the issuance of shares of stock, and adopt an official stock certificate form and corporate seal.

Additionally, if the corporation will be an S corporation, the directors should approve the election of S corporation status. (For information on whether your corporation should adopt S corporation status, see S Corporation Facts.) Issuing stock You should not do business as a corporation until you have issued shares of stock. Issuing shares formally divides up ownership interests in the business. It also fulfills a substantial requirement

of the incorporation process and you must act like a corporation at all times to qualify for the legal protections offered by corporate status. Securities registration Issuing stock can be complicated; it must be accomplished in accordance with securities laws. This means that large corporations must register the stock issuance with the federal Securities and Exchange Commission (SEC) and the state securities agency. Registration takes time and typically involves extra legal and accounting fees. Exemptions to securities registration Fortunately, most small corporations qualify for exemptions from securities registration. For example, SEC rules do not require a corporation to register a private offering that is, a nonadvertised sale to a limited number of people (generally 35 or fewer) or to those who can reasonably be expected to take care of themselves because of their net worth or income earning capacity. And most states have enacted their own versions of this SEC exemption. In short, if your corporation will issue shares to a small number of people (generally ten or less) who will actively participate in running the business, it will certainly qualify for exemptions to securities registration. Passive shareholder rules If youre selling shares of stock to passive investors (people who wont be involved in running the company), complying with state and federal securities laws gets complicated. Get help from a good small business lawyer. For more information about federal securities laws and exemptions, visit the SEC website. For more information on your states exemption rules, go to your Secretary of States website. (The Wyoming Secretary of States office provides a helpful list of every states website and phone number at http://soswy.state.wy.us/sos/sos2.htm.) Issuing the shares When youre ready to issue the actual shares, youll need to document the following:

the names of the initial shareholders the number of shares each shareholder will buy, and how each shareholder will pay for his or her shares.

Finally, youll prepare and issue the stock certificates. In some states you may also have to file a notice of stock transaction or similar form with your state corporations office. Obtaining licenses and permits After youve filed your articles, created your bylaws, held your first directors meeting and issued stock, youre almost ready to go. But you still need to obtain the required licenses and permits that anyone needs to start a new business, such as applying for a business license (also known as a tax registration certificate). You may also have to obtain an employer identification number from the IRS, a sellers permit from your state or a zoning permit from your local planning board.

4.Write short notes on :a)Prospectus:- A prospectus means any document describe or issue as a prospectus and includes any notice, circular, advertisement or other documents inviting deposits from the public or inviting offers from the public for the subscription or purchase of shares in or debentures of a day corporate. The main contents of a prospectus are: I. Main object of the company with the names, addresses, description and occupation of signatories to the memorandum and the number of shares subscribed for by them. II. Number and classes of shares and the nature and extent of the interest of holders thereof in the property and profits of the company. III. The number of redeemable preference shares intended to be issued and the date of redemption or where no date is fixed; the period of notice required for redeeming the share s and proposed method of redemption. IV. The number of shares. if any, fixed by the Article as the qualification of a director and the remuneration of the directors for the service. V. The names, occupation and addresses of directors, managing director and manager together with any provision in the Articles or a contract regarding their appointment remuneration or compensation for loss of office. VI. The time of opening of the subscription list should be given in the prospectus. VII. The amount payable on application and allotment on each share should be stated. If any prospectus is issued within two years, the details of the shares subscribed for any allotted. VIII. The particular about any option or preferential right to be given to any person to subscribe for shares or debentures of the company. IX. The number of shares or debentures which within the two preceding year been issued for a considerations other than cash. X. Particulars about premium received on shares within two preceding years or to be received. XI. The amount or rate of underwriting commission. XII. Preliminary expenses. XIII. The names and addresses of auditors, if any, of the company. XIV. Where the shares are of more than one class, the rights of voting and rights as to capital and dividend attached to several classes of shares.

XV. If nay reserve or profits of the company have been capitalized, particulars of capitalizations and particulars of the surplus arising from any revaluation of the assets of the company. XVI. A reasonable time and place at which copies of all accounts on which the report of auditors is based may be inspected. b)Solomous case Mr Aron Salomon made leather boots and shoes in a large Whitechapel High Street establishment. He ran his business for 30 years and "he might fairly have counted upon retiring with at least 10,000 in his pocket." His sons wanted to become business partners, so he turned the business into a limited company. His wife and five eldest children became subscribers and two eldest sons also directors. Mr Salomon took 20,001 of the company's 20,007 shares. The price fixed by the contract for the sale of the business to the company was 39,000. According to the court, this was "extravagent" and not "anything that can be called a business like or reasonable estimate of value." Transfer of the business took place on June 1, 1892. The purchase money the company paid to Mr Salomon for the business was 20,000. The company also gave Mr Salomon 10,000 in debentures (ie, Salomon gave the company a 10,000 loan, secured by a charge over the assets of the company). The balance paid went to extinguish the business's debts (1000 of which was cash to Salomon). Soon after Mr Salomon incorporated his business a series of strikes in the shoe industry led the government, Salomon's main customer, to split its contracts among more firms (the government wanted to diversify its supply base to avoid the risk of its few suppliers being crippled by strikes). His warehouse was full of unsold stock. He and his wife lent the company money. He cancelled his debentures. But the company needed more money, and they sought 5000 from a Mr Edmund Broderip. He assigned Broderip his debenture, the loan with 10% interest and secured by a floating charge. But Salomon's business still failed, and he could not keep up with the interest payments. In October 1893 Mr Broderip sued to enforce his security. The company was put into liquidation. Broderip was repaid his 5000, and then the debenture was reassigned to Salomon, who retained the floating charge over the company. The company's liquidator met Broderip's claim with a counter claim, joining Salomon as a defendant, that the debentures were invalid for being issued as fraud. The liquidator claimed all the money back that was transferred when the company was started: rescission of the agreement for the business transfer itself, cancellation of the debentures and repayment of the balance of the purchase money.

Judgment
High Court

At first instance, the case entitled Broderip v Salomon[1] Vaughan Williams J said Mr Broderip's claim was valid. It was undisputed that the 20,000 shares were fully paid up. He said the company had a right of indemnity against Mr Salomon. He said the signatories of the

memorandum were mere dummies, the company was just Mr Salomon in another form, an alias, his agent. Therefore it was entitled to indemnity from the principal. The liquidator amended the counter claim, and an award was made for indemnity. c)Vertical Integration:In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly, although it might be more appropriate to speak of this as some form of cartel. Nineteenth century steel tycoon Andrew Carnegie introduced the concept and use of vertical integration. This led other businesspeople to use the system to promote better financial growth and efficiency in their businesses.

Three types
Vertical integration is the degree to which a firm owns its downstream suppliers and its upstream buyers. Contrary to horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g. growing raw materials manufacturing, transporting, marketing, and/or retailing). There are three varieties: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both upstream and downstream) vertical integration.

A company exhibits backward vertical integration when it controls subsidiaries that produce some of the inputs used in the production of its products. For example, an automobile company may own a tire company, a glass company, and a metal company. Control of these three subsidiaries is intended to create a stable supply of inputs and ensure a consistent quality in their final product. It was the main business approach of Ford and other car companies in the 1920s, who sought to minimize costs by centralizing the production of cars and car parts. A company tends toward forward vertical integration when it controls distribution centers and retailers where its products are sold. Balanced vertical integration means a firm controls all of these components, from raw materials to final delivery.

The three varieties noted are only abstractions; actual firms employ a wide variety of subtle variations. Suppliers are often contractors, not legally owned subsidiaries. Still, a client may effectively control a supplier if their contract solely assures the supplier's profitability. Distribution and retail partnerships exhibit similarly wide ranges of complexity and

interdependence. In relatively open capitalist contexts, pure vertical integration by explicit ownership is uncommonand distributing ownership is commonly a strategy for distributing risks.

[edit] Examples
One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was made, but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was cooked, etc. The company also focused heavily on developing talent internally from the bottom up, rather than importing it from other companies.[1] Later on, Carnegie even established an institute of higher learning to teach the steel processes to the next generation. d).Auditor:An official whose job it is to carefully check the accuracy of business records. An auditor can be either an independent auditor unaffiliated with the company being audited or a captive auditor, and some are elected public officials. The term is sometimes synonymous with "comptroller." Auditors are used to ensure that organizations are maintaining accurate and honest financial records and statements Auditors can work for many different entities, such as the IRS or a state government. Auditors are also found in the private sector at accounting firms. There are both internal and external auditors; internal auditors are usually employees or contractors with the company they are auditing, while external auditors generally work either directly for or in conjunction with governmental agencies. Auditors of financial statements can be classified into two categories:

External auditor / Statutory auditor is an independent Public accounting firm engaged by the client subject to the audit, to express an opinion on whether the company's financial statements are free of material misstatements, whether due to fraud or error. For publiclytraded companies, external auditors may also be required to express an opinion over the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, are regarded as independent auditors.

The most used external audit standards are the US GAAS of the American Institute of Certified Public Accountants; and the ISA International Standards on Auditing developed by the International Auditing and Assurance Standards Board of the International Federation of Accountants

Internal auditors are employed by the organization they audit. They perform various audit procedures, primarily related to procedures over the effectiveness of the company's internal controls over financial reporting. Due to the requirement of Section 404 of the Sarbanes Oxley Act of 2002 for management to also assess the effectiveness of their internal controls over financial reporting (as also required of the external auditor), internal auditors are utilized to make this assessment. Though internal auditors are not considered independent of the company they perform audit procedures for, internal auditors of publicly-traded companies are required to report directly to the board of directors, or a sub-committee of the board of directors, and not to management, so to reduce the risk that internal auditors will be pressured to produce favorable assessments.

The most used Internal Audit standards are those of the Institute of Internal Auditors

Consultant auditors are external personnel contracted by the firm to perform an audit following the firm's auditing standards. This differs from the external auditor, who follows their own auditing standards. The level of independence is therefore somewhere between the internal auditor and the external auditor. The consultant auditor may work independently, or as part of the audit team that includes internal auditors. Consultant auditors are used when the firm lacks sufficient expertise to audit certain areas, or simply for staff augmentation when staff are not available. Quality auditors may be consultants or employed by the organization. e)Sharp v/s Dawer 5.Write a detailed note on a)Meeting & Resolution:-

b)Director Borrowing power

Corporate governance is to ensure that a system is in place to protect the individual as well as collective interests of all the stakeholders in a company. In this respect the role of Board of Directors becomes very important

because by its very nature a company is an artificial juridical person in the sense that it can sue and can be sued. But it works through its directors who are its eyes, brain and muscle. Directors are the persons who run day to day affairs of the company and possess the first hand information about every aspect of its operations. Directors are also in the best of position to determine its future course i-e set objectives, formulate strategy, devise operational plans etc. Shareholders are the owners of the company who provide capital to the company for its operations but do not run its affairs and delegate this function to professional managers. These professional managers may also be shareholders of the company. This separation of brain and capital poses agency problem and dual role of directors, shareholders as well as directors creates conflict of interest with other stakeholders such as outside shareholders.

Borrowing Powers of Directors of Public Limited Company

Introduction
Corporate governance is to ensure that a system is in place to protect the individual as well as collective interests of all the stakeholders in a company. In this respect the role of Board of Directors becomes very important because by its very nature a company is an artificial juridical person in the sense that it can sue and can be sued. But it works through its directors who are its eyes, brain and muscle. Directors are the persons who run day to day affairs of the company and possess the first hand information about every aspect of its operations. Directors are also in the best of position to determine its future course i-e set objectives, formulate strategy, devise operational plans etc. Shareholders are the owners of the company who provide capital to the company for its operations but do not run its affairs and delegate this function to professional managers. These professional managers may also be shareholders of the company. This separation of brain and capital poses agency problem and dual role of directors, shareholders as well as directors creates conflict of interest with other stakeholders such as outside shareholders.

In the wake of recent financial crises and recent past failure of Enron, Worldcom andPa rma la t, a heated debate is going on the role of directors and the board in the governance of corporate world. Much of the debate is centered round the structure of the board, integrity of the financialreports, auditing, shareholder activism, corporate governance rules and regulations etc. A very little attention has been given to the concept of borrowing powers of the directors. One of the elements of the powers enjoyed by the directors is that these may be misused and abused as well. Ifthese are being misused, it means due care and necessary diligence has not been taken care of and if these are being abused, it means these are used for the purposes other than the benefit of the company. In these both cases,the tendency or some inclination to misuse and /or abuse powers can lead to disaster. As a precautionary measure, there is a need to put some checks on the use of powers enjoyed by the directors. One of the powers given to directors or used by the directors on behalf of the company is borrowing power. There is no restriction on the borrowing powers of the directors in Articles of Association and neither there is any law that restricts this power.However, there are rules and regulations for the lenders that prohibit them to lend in case of borrowing beyond a certain percentage of equity but generally there is no restriction on borrowers. As directors manage a corporation for and on behalf of the shareholders who own it, it is critical that any regulatory and legal requirements placed on directors do not seriously compromise their goal of maximizing shareholder wealth. Directors behavior influences the efficient operation of corporations. If directors are subject to undue transaction costs in protecting themselves from personal liability, these costs will ultimately be passed onto, and borne by, the corporation itself. On the other hand, if directors are permitted to operate completely unfettered by regulation and a degree of shareholder control, investor confidence in the corporate may potentially be undermined. In this regard, it is clear from past experience, particularly in relation to the corporate collapses as mentioned above, that the conduct of directors through corporations can have a significant impact on public perceptions and market confidence.
6.What are the Power,Duties &functions of Director?

Directors' rights

Management access The board of directors is responsible for the effective management of the affairs of the not-forprofit corporation. In fact, the Policy Summary provides that the bylaws of a federal not-forprofit corporation must state explicitly that the board has this power, although they may also specifically exclude certain powers that are instead to be exercised by the membership of the corporation. The power to manage the corporation involves:

ensuring that the objects of the corporation are properly carried out; setting long-range objectives and strategic plans for the corporation; being responsible for all aspects of the corporation's operations; ensuring the corporation's financial stability and overall performance; and, supervising management and staff.

Each individual director of a not-for-profit corporation is also responsible for his or her own acts and omissions while in office. The board of directors must, therefore, have unimpaired access to all the resources of the corporation as necessary in order to effectively perform their management duties. Books and records A federal not-for-profit corporation is required to keep a book, or books, that records all the constitutional (otherwise known as "constating") documents of the corporation, as well as the names, addresses and occupations of all members and directors of the corporation.3 It must also keep proper books of account and accounting records of all financial matters and other transactions of the corporation.4 Failure to do so is an offense under the Canada Corporations Act. The Income Tax Act (Canada)5 requires charitable corporations to keep certain records and books of account, duplicates of all charitable receipts issued for donations by the charitable corporation, and information that verifies donations made to the charitable corporation.6 Because of these statutory requirements, a director of a federal not-for-profit corporation has the right at any reasonable time to inspect and copy all the books, records, and documents (not only those that are publicly available) and to inspect the physical property owned or used by the corporation. This allows directors to exercise their managerial and administrative powers, make informed decisions about the affairs of the corporation, confirm that the corporation is in compliance with all applicable laws, and ensure that any funds collected from the public by the corporation in trust are used only for the designated purposes. Notice of meetings Meetings of the board of directors of a not-for-profit corporation are an essential way for directors to exercise their power to manage and administer the affairs of the corporation. Therefore, each director has a right to receive proper advance notice of all board meetings. Federal not-for-profit corporations must include provisions in their bylaws that address how the corporation will hold its meetings.7 Generally, the bylaws must establish either a specific amount of time that is reasonable for notice of directors' meetings or must indicate that reasonable notice will be given. While a specific time period is not outlined in the Canada Corporations Act, the Policy Statement recommends a minimum of 14 days for notices sent to directors by mail. The bylaws may also permit notice of directors' meetings to be sent by electronic means, including email or facsimile, or notice to be waived by directors who attend the board meeting. If a director is not able to attend a meeting of the board of directors, he or she has the right to review the minutes of such a meeting and any financial statements presented, and may voice an objection to any information these contain. The right to attend meetings is subject to directors' fiduciary duty to avoid any conflict of interest. In some circumstances, conflict of interest issues will preclude the director from being present for discussions and votes on particular matters; occasionally, where curing the conflict requires that the director resign, the right to attend meetings will be lost. In such situations, other

directors need to be wary of the former director's continuing presence at meetings even as a guest, as this may give rise to an opportunity to improperly influence decisions. Where a director is absent temporarily, owing to a conflict of interest issue, this absence should be carefully recorded in the minutes. (Please see Chapters 2 and 6 for more information on conflicts of interest.) Right to vote All directors of a federal not-for-profit corporation, except ex-officio and honourary directors, have the right to vote at meetings of the board of directors. The bylaws of the corporation may also, however, give ex-officio and honourary directors the right to vote. However, where the bylaws of the corporation provide voting rights to directors, such voting rights must be equal for all voting directors. This means that such directors may not be given either votes that are weighted differently than other votes (for instance, double or half votes) or the right to vote only on certain specified matters (for instance, giving an honourary treasurer a vote only on financial matters). While the right to vote is a basic right, it is subject to directors' fiduciary duty to avoid any conflict of interest in any contract or proposed contract of the corporation. (Please see Chapters 2 and 6 for more information of this duty.) Minutes A federal not-for-profit corporation must keep minutes of all meetings of its members, directors and the executive committee.8 Directors have the right to vote on the approval of the minutes of all previous meetings of the board of directors and to voice any objections to them. Directors also have a right to inspect the minutes of all meetings as part of their right to access and inspect the corporation's books and records. If the corporation has established committees, the board of directors has the right to receive copies of the minutes of each committee's meetings. This allows directors to fulfill their responsibility to exercise overall management of the corporation.
Directors' powers

Generally, the powers of directors of a federal not-for-profit corporation are set out in its letters patent. Directors should carefully review the letters patent of the corporation on which they serve as a board member. They should also refer to the Canada Corporations Act, which sets out the standard powers of a federal not-for-profit corporation. Power to manage the affairs of the corporation The board of directors of a federal not-for-profit corporation has the power to manage the affairs of the corporation. In all provinces except Quebec, directors of a charitable corporation have an additional trustee-like duty imposed on them by common law and must manage and account for the assets of the corporation in a manner akin to that of a trustee. As such, directors of charities are considered to have a higher fiduciary position in relation to the assets of the corporation and a higher duty of care than directors of either other not-for-profit corporations or for-profit corporations. This means that they have the same powers as directors of other not-for-profit

corporations but must exercise such powers with somewhat greater care than their not-for-profit counterparts. As it is a civil law jurisdiction, this additional trustee-like common law duty does not apply in Quibec. Compliance One of the important functions of the Director of Corporate Enforcement is to encourage compliance with the requirements of the Companies Acts. The Director and his staff discharge this role by communicating publicly the benefits of compliance with the law and the consequences of non-compliance. The strategies employed include:

public presentations on, for example, the ODCE, its powers and functions; the publication of information, via the printed and electronic media, on the legal duties and powers which exist under Irish company law; consultations with professional bodies and interests to secure the conformity of their members with the requirements of the law; discussions with Government and other parties as required to facilitate and support the compliance role of the Director.

Enforcement The investigative and enforcement function of the Director is quite extensive. His main legal powers arise in the following areas:

the initiation of fact-finding company investigations; the prosecution of persons for suspected breaches of the Companies Acts; the supervision of companies in official and voluntary liquidation and of unliquidated insolvent companies; the restriction and disqualification of directors and other company officers; the supervision of liquidators and receivers and the regulation of undischarged bankrupts acting as company officers.

A more detailed description of the powers and functions of the Director is available in the Appendix to our publication, "Introduction to the ODCE" which may be downloaded in pdf format.