Ticker symbol: An abbreviation of the company name, the ticker or stock symbol is usually expressed in two to five letters. This is how a public company is represented on stock exchanges.
Size is the number of shares available at each of the bid and ask prices, and it is usually expressed in multiples of 100. So if a bid/size is $3/8, it means there is demand for 800 shares at a maximum price of $3. If the ask/size is $4/6, then there are 600 shares available for $4.
Dividend yield: This ratio is expressed as a percentage, which reflects the amount of annual dividends a company pays out divided by the current stock price. A higher dividend yield is usually indicative of higher earnings, but if the current stock price goes down, the dividend yield goes up.
Example: You place a market order to buy 500 shares of a security. You notice that 400 shares are listed with an ask of $3 (which you get) and the next best-priced ask is $4.50, which is the rate you pay for the remaining 100 shares.
You can instead place a stop-limit order with the stop at $4.50 and the limit at $3. When the price goes down to $4.50, a limit order is placed to sell your 100 shares, but not at a price any lower than $3.
Another way to diversify your investments and gain access to the stock market without having to research every company ad nauseam is to invest in exchange-traded funds or in mutual funds. These are like mini-portfolios of stocks and other investments.
The articles can allow for one or more classes of shares. There is no limit on the number of classes of shares that can be set out in the articles. If there is more than one class, the rights, privileges, restrictions and conditions for each class must also be indicated in the articles.
If there are more than one class of shares, each of the three rights have to be assigned to at least one class of shares, but one class does not need to have all three. Also, each right can be given to more than one class.
If the directors wish to change the classes of shares described in the articles, or any of the rights attached to a class of shares, an amendment to the articles (see Amending your articles) of the corporation will be required. A special resolution of the shareholders is needed. In certain circumstances involving changes to classes of shares and rights, the shareholders of each class or group may be entitle to vote separately as a class or group.
A person who owns shares in your corporation is a shareholder. Shares represent an ownership interest in the corporation. They are property, much like a car or a house. Any \"person\" can hold shares in a corporation. In addition to an individual, a \"person\" can include a legal entity such as trust, a mutual fund or another corporation.
Generally speaking and unless your articles provide otherwise, each share in the corporation entitles the shareholder to one vote. The larger the number of shares a shareholder holds, the larger the number of votes the shareholder can exercise.
Share owners can transfer, that is sell their shares and the rights that go with them (also called \"rights attached to the shares\"). Transfers must conform to any conditions or restrictions that apply to the corporation's shares and their transfer. For example, directors could have to approve all transfers of shares.
A shareholder's right to attend and vote at a meeting depends on the rights attached to the shares that person holds (see Class of shares). As a general rule, shareholders who are entitled to vote at a meeting are entitled to attend the meeting. The Canada Business Corporations Act (CBCA) gives holders of non-voting shares the right to attend certain meetings and vote on certain fundamental issues.
No business that is binding on the corporation can be conducted at annual or special shareholders' meetings unless a quorum of shareholders is present or represented. Your corporation's by-laws can define a quorum. Unless the by-laws state otherwise, a quorum is present at a meeting when the holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy, regardless of the number of persons actually present at the meeting.
Another provision is the right of first refusal, which basically states that any shareholder who wants to sell his or her shares must first offer those shares to the other shareholders of the company before selling them to an outside party.
Shareholder agreements can also set out rules for the transfer of shares when certain events occur, such as the death, resignation, dismissal, personal bankruptcy or divorce of a shareholder. The restrictions can include detailed plans governing when a shareholder can or must sell his or her shares, or what happens to those shares after the individual shareholder has left. The shareholder agreement, for example, could require that the shares be transferred to the remaining shareholders or to the corporation, often at fair market value.
These provisions are complex and usually set out mechanisms to manage the transfer, such as sending notices and establishing how the transfer price will be funded. Operators of small corporations who enter into agreements with this sort of exit provision sometimes purchase life insurance to fund the payment obligations of the party who will be purchasing the shares.
Generally speaking and unless the articles provide otherwise, each share in the corporation entitles the holder to one vote. The larger the number of shares a shareholder holds, the larger the number of votes the shareholder can exercise. The Articles of Incorporation describe the rights attached to each category of shares.
A person ceases to be a shareholder once his or her shares are sold either to a third party or back to the corporation (in accordance with the terms of the Articles of Incorporation) or when the corporation is dissolved. Please note that there is no need to notify Corporations Canada when a person becomes or ceases to be a shareholder.
The shareholders' liability in a corporation is limited to the amount they paid for their shares; shareholders are usually not liable for the corporation's debts. At the same time, shareholders usually do not actively run the corporation.
A shareholder's right to attend and vote at a meeting depends on the rights attached to the class of shares that person holds. As a general rule, shareholders who are entitled to vote at a meeting are entitled to attend the meeting. (The CBCA gives holders of non-voting shares the right to attend certain meetings and vote on certain fundamental issues. These issues are not addressed in this guide.)
A shareholder agreement is an agreement entered into by some, and usually all, of the shareholders of a corporation. The agreement must be in writing, and must be signed by the shareholders who are party to it. While shareholder agreements are specific to each company and its shareholders, most of these documents deal with the same basic issues.
The relationship among shareholders in a small corporation tends to be very much like a partnership, with each person having a say in the significant business decisions the company will be making. Obviously, a shareholder agreement is not necessary in a one-person corporation. However, you may consider entering into a shareholder agreement if you have more than one shareholder or when you want to bring in other investors as your business grows.
A very common shareholder agreement provision for a small corporation is one that gives all the shareholders the right to sit on the board of directors or nominate a representative for that purpose. Each shareholder agrees in the document to vote his or her shares in such a way that each one is represented on the board, thus ensuring all shareholders an equal measure of control.
Shareholder agreements may set rules directing how the future obligations of the corporation will be shared or divided. For instance, each shareholder invests a minimal amount to get the business going, looking to bank loans or other credit for growth. The shareholders may agree that, when other means of raising funds are not available, each shareholder will contribute more funds to the corporation on a pro rata basis. This means simply that the extent of a shareholder's obligation to fund the corporation would be determined by the extent of that shareholder's ownership interest (the percentage of shares held) in the corporation. So, three equal partners starting a corporation (with equal shares held by each) might sign a shareholder agreement that each will be responsible to fund one third of any future obligations of the company through the purchase of more shares.
Other rules often found in shareholder agreements govern the future purchase of shares in a corporation when no funding is needed. In such a case, the shareholders could agree to maintain the same percentage of holdings among themselves. Three equal partners could agree that no shares in the corporation will be issued without the consent of all shareholders/directors. In the absence of such a provision, two shareholders/directors could issue shares by an ordinary or special resolution (because they control two thirds of the votes) to themselves without including or requiring the permission of the third shareholder/director.
By placing such restrictions in a shareholder agreement instead of in your Articles of Incorporation, shareholders can remove or alter them without the company having to file Articles of Amendment. Note that these are separate from the restrictions placed in your Articles of Incorporation as part of the non-distributing corporation restrictions (see Section 2.3.4 of this guide). 59ce067264