Questions

1. How are debit cards governed?
2. What is a general security agreement?
3. What are the rights of a secured creditor under a PPSA registration?
4. Who are the parties to a guarantee? What rights and obligations does each party have?
5. Compare equity financing with debt financing. What are the advantages and drawbacks of both?
6. Identify the risks and benefits of crowdfunding.
7. What is the definition of insolvency?
8. Explain what constitutes an act of bankruptcy.
9. Indicate whether the following are federal or provincial/territorial chartered financial institutions:
10. Commercial banks

Caisses populaires

Credit unions

Branches of a foreign bank

11.Explain whether a patent may be used as collateral to secure a loan.

Case #1

Jared's business has been experiencing a huge decline in sales over the past 12 months. Five months ago, Jared had to suspend payments on the two loans with his bank and a private investor in order to keep business going. The business is now $65,000 in debt and he is not sure what to do. Jared believes that the business will improve in another three months when a new bus stop in front of his store is added to the transit line. On the other hand, Jared is not sure he can take another three months of phone calls and letters from his lenders and suppliers demanding payment or else.

1. Explain to Jared the differences between insolvency and bankruptcy.
2. Explain to Jared the process of submitting a proposal to creditors under theBankruptcy and Insolvency Act.
3. What are Jared's alternatives if the proposal is rejected?

Case #2

Adelaide had saved a considerable sum of money over the years. She was very proud of her niece Elandra, who had incorporated and started her own horseracing stable, which had become quite successful and quickly grown to four horses. Elandra's horses had done very well at the racetrack and she was in the process of planning the next stage in the development of her racing stable. To make her plans a reality, Elandra required financing of $100,000. She was experiencing difficulty in finding the money because of the risky nature of horse racing and the fact she had been in operation for only four years.

Adelaide believes Elandra has what it takes to be a success and wants to help her by investing in the racing stable. Adelaide also wants to make sure that the risk to her investment is minimal. Adelaide heard that you took an excellent business course at college and has come to you for advice.

Please advise Adelaide on:

1. The options available for investing in Elandra's business.
2. The process involved with each form of investment.
3. The risks and benefits associated with each form of investment.

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Case #3

Kendal's 10-year-old IT security company, Security Focus First (SFF), has achieved great success. It began as a sole proprietorship that later became a corporation that moved progressively forward toward obtaining financing with selling shares in the company to friends and family. Now Kendal has been told by other successful CEOs that the time is ripe for SFF to obtain more financing by "going public."

How should Kendal take his company public? What is involved? What advice would you give to Kendal?