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Glossary of Terms

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Partnership

A business owned by two or more persons that is not organized as a corporation. A partnership is defined as a "relationship that subsists between persons carrying on business in common with a view to profit."

Partnership Agreement

A legal document that outlines the individual and joint obligations of all partners in a partnership.

Patent

A grant of a right to exclude others from making, using or selling one's invention which includes the right to license others to make, use or sell the invention.

Personal Guarantee

A legally enforceable promise to become liable for the debt of another. Most bank loans to corporations are backed by the personal guarantee of the shareholders of the corporation. If the corporation defaults on the debt, the shareholders are then personally liable to pay the debt on behalf of the corporation.

Prince Edward Island - Companies Act

The Act which sets out the legal and regulatory framework for all businesses incorporated in the Province of Prince Edward Island.

Private Company (Private Corporation)

A company that does not sell its shares to the general public. The transfer (sale) of shares in such a company is usually restricted in some way, such as by the requirement that the directors or shareholders of the corporation must approve any transfer of shares in advance of the sale.

Provincial Incorporation

Incorporation under the corporate statute of a particular province.

Provincial Jurisdiction

The areas of law in which the provincial and/or territorial governments have control as defined by the Constitution Act.

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