Why are Multiple Corporations Necessary?
Much debate has occurred about possible problems in the future due to unforeseen circumstances.
The main purpose of creating a corporation is to protect the owners from liability, in this case Henvey Inlet First Nation and its Membership. The main benefit to creating two corporations is to further limit the liability of the Band by separating economic development and leasing activities from each other to protect lands and monies made from leasing these lands.
An example:
If the Band, through Chief and Council, sets aside lands and leases these lands to a non-member for business purposes, consider what could happen if a law suit sought to gain compensation for a loss. A contractor, bank, organization or an individual could suffer a loss, for example, from a failed project. If the law suit was successful assets could be seized and re-distributed by the courts. In this case Band assets and assets of other corporations and programs are entirely separate and not exposed to the liabilities of the Bekanon Lease management Corporation.
If the Band didn't set up a separate corporation other Band assets could be lost in a law suit. In this case the law suit could only be launched against the Band's corporation and its assets.
CLICK HERE to read Appendix “B” on how these corporations are set up.
