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Submitted By amirahmachher
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MGSC30 / LEC01 / Summer 2015
The Legal Environment of Business I
MIDTERM
Instructions:

This midterm has four pages and there is one long case question. You will have one hour and fifty minutes to complete the work. No additional aids are allowed or in any way required.

The University of Toronto's Code of Behaviour on Academic Matters applies to all University of
Toronto Scarborough students. The Code prohibits all forms of academic dishonesty including, but not limited to, cheating, plagiarism, and the use of unauthorized aids. Students violating the Code may be subject to penalties up to and including suspension or expulsion from the University.

As you’ll recall, when we last left CanBro Gaming they were thinking about incorporating their business in the future. And that’s eventually what they did. Online gaming has become big business, and it’s no surprise that business structures, problems, and approaches would follow. As co-founders and co-captains of the CanBro Gaming team, Terry Cole and Jon Cheung wanted to make sure they would not lose control of the corporation once they created one.
But they also wanted to attract new capital and interest new stakeholders in their venture. So near the start of 2014, they set up CanBro Gaming Incorporated (a newly registered corporation) with a shareholder agreement that specified the following. First, in order to be a director elected to the board, an individual must own at least 100 shares of the company.
Second, anyone holding at least 300 shares in the company must be elected to the board if they personally put their name forward as a candidate and they are legally qualified to serve.
Third, the Board of Directors must authorize any proposed sale of shares to any individual who is not already a shareholder. And fourth, if the board ever issued new shares following the initial

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