Business Law 38;39 – Flashcards
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Articles of organization
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filed with a central state agency. Usually the secretary of state's office.
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business trust
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created by a written trust agreement that sets forth the interests of the beneficiaries and obligations and powers of the trustees.
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cooperative
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A business that is owned by the members it serves and is managed in their interest.
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joint stock company
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A company made up of a group of shareholders. Each shareholder contributes some money to the company and receives some share of the company's profits and debts.
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joint venture
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relationship in which two or more persons or business entities combine their efforts or their property for a single transaction or project or a related series of transactions or projects.
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limited liability company (LLC)
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hybrid form that combines the limited liability aspects of the corporation and the tax advantages of a partnership.
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member
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owners of an LLC
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operating agreement
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typically contain provisions relating to management, how profits will be divided, the transfer of membership interests, whether the LLC will be dissolved on the death or departure of a member, and other important issues.
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syndicate
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investing group, several individuals or firms join together to finance a particular project, such as the construction of a shopping center or the purchase of a professional basketball franchise.
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Alien corporation
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corporation formed in another country (ex. Mexico) but doing business in the United States.
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alter-ego theory
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courts pierce the corporate veil under the theory that the corporation was not operated as a separate entity, but was just another side (or alter ego) of the individual or group who actually controlled the corporation.
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articles of incorporation
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primary document needed to incorporate a business. Must include: name of the corporation, # of shares the corporation is authorized to issue, name and street address of the corporation's initial registered agent and registered office, and the name and address of each incorporator.
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bond
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A financial security that represents a promise to repay a fixed amount of funds
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bond indenture
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Legal document containing complete details of a bond issue
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bylaws
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A set of governing rules adopted by a corporation or other association.
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closely held corporation
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corporation that issues stock to only a few people, often family members
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commingled
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Personal and corporate interests are mixed together
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common stock
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true ownership of a corporation. Provides a proportionate interest in the corporation with regard to control, earnings, and net assets.
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domestic corporation
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a corporation is referred to in its home state. (state in which it incorporates.)
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foreign corporation
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Corporation formed in one state but doing business in another
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holding company
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A firm that buys up stocks and bonds of smaller companies.
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pierce the corporate veil
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To disregard the corporate entity, which limits the liability of shareholders, and hold the shareholders personally liable for a corporate obligation.
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preferred stock
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equity security with preferences. This means that holders of preferred stock have priority over holders of common stock as to dividends and payment on dissolution of the corporation.
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private equity capital
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to invest in existing corporations. Usually private equity firm buys an entire corporation and may later reorganize it as a publicly held corporation.
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public corporation
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formed by the government to meet some political or governmental purpose.
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publicly held corporation
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often called a public company, is any corporation whose shares are publicly traded in a securities market, such as the New York Stock Exchange or the NASDAW (electronic stock exchange founded by the National Association of Securities Dealers.) Closely held corporation- one whose shares are not publicly traded.
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retained earnings
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when a corporation earns profits, it can either distribute them to its shareholders in the form of dividends or retains the profits.
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S corporation
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A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
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securities
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monitors the stock market and enforces laws regulating the sale of stocks and bonds
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stock
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equity securities represent the purchase of ownership in the business firm
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ultra vires
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means "beyond the power" In corporate law, acts of a corporation that are beyond its express or implied powers.
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venture capital
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capital provided to new business ventures by professional, outside investors (venture capitalists, usually groups of wealthy investors and securities firms). They are high risk and the investors must be willing to lose their invested funds.
