Business Law: Ch. 39- Corporate Formation-Financing – Flashcards
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means "beyond the power," refers to acts of a corporation that are beyond its express or implied powers.
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Ultra vires
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A corporation formed in another country but doing business in the United States.
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Alien corporation
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The primary document needed to incorporate a business; includes the name of the corporation, the name and address of each incorporator, etc.
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Articles of incorporation
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Represent the borrowing of funds by firms and governments.
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Bond
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A lending agreement that involves various features and terms of a particular bond issue that are specified.
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Bond indenture
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Internal rules of management adopted by the corporation at its first organizational meeting.
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Bylaws
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Corporation whose shares are not publicly traded.
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Closely held corporation
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Personal and corporate interests that are mixed together.
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Commingle
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The true ownership of a corporation; provides an interest in the corporation with regard to control, earnings, and net assets.
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Common stock
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When a corporation earns profits, it can distribute them to its shareholders in this form.
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Dividends
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When a corporation is in the state in which it is incorporated.
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Domestic corporation
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A corporation formed in one state but doing business in another.
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Foreign corporation
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A company whose business activity consists of holding shares in another company.
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Holding company
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Refers to exposing the shareholders to personal liability if the situation arises to do so.
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Pierce the corporate veil
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An equity security with preferences; holders of this stock have priority over holders of common stock.
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Preferred stock
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Firms use this to invest in existing corporations; private equity firms obtain their capital from wealthy investors in private markets.
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Private equity capital
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A corporation formed by the government to meet some political or governmental purpose.
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Public corporation
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A corporation whose shares are publicly traded in a securities market.
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Publicly held corporation
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When a corporation retains profits; they will essentially cause the price of the company's stock to rise.
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Retained earnings
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A closely held corporation that is taxed like a partnership; it avoids the double taxation imposed on regular corporations.
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S corporation
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Corporations are financed by the issuance and sale of securities, which include stocks and bonds.
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Securities
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Represent the purchase of ownership in the business firm.
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Stock
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Is capital provided to new business ventures by professional, outside investors.
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Venture capital
