Glossary

• Author: J. Anthony Vanduzer
• Pages: 473-485

GLOSSARY

Affiliated

corporations:

corporations where

one is the

subsidiary

of

the

other,

both

are

subsidiaries

of the

same corporation,

or

both

are

controlled

by the

same person.

One

corporation

is the

subsidiary

of

another

if it is

controlled

by the

other. These

are the

basic

and

most

common types

of

affiliated

corporations.

If two

corporations

are

affilat-

ed

with

the

same corporation, they

are

deemed

to be

affiliated.

"Con-

trol"

for the

purpose

of the

definition

of

"affiliate"

is

legal control:

holding voting securities

of the

corporation which carry more than

50

percent

of the

votes that

may be

cast

for the

election

of

directors, where

such votes

are

sufficient

to

elect

a

majority

of the

board

of

directors.

See

CBCA,

ss.

2(2)-(5),

and

Chapter

9.

Agency

costs:

costs

arising

as a

result

of

someone other than

the

share-

holders being responsible

for

managing

the

corporation's business.

They include

the

direct costs associated with directors

and

officers

act-

ing to

further

their personal interests,

in an

opportunistic way,

at the

expense

of the

corporation,

and the

related costs that shareholders

must incur

to

monitor their agents,

the

directors

and

officers,

for the

purpose

of

guarding against such opportunistic behaviour

and to

hold

them accountable.

See

Chapter

7.

Amalgamation:

a

statutory procedure

by

which

two or

more corpora-

tions

are

combined into one.

The

rights

and

liabilities

of the

amalgamat-

ing

corporations continue

as

rights

and

obligations

of the

amalgamated

corporation.

See

Short-form

amalgamation,

and

Chapter

10.

473