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Chapter 18
Business Law
| Term | Definition |
|---|---|
| Corporation | An organization formed with state governmental apporval to act as an artificial person to carry on business (or other activities), which can sue and be sued. |
| Dividend | The payment of a corporation's profits to its shareholders. Not mandatory. |
| Retained Earnings | The accumulated profits of a corporation that are not paid out as dividends. |
| Domestic Corporation | A corporation that does business in the jurisdiction in which it is incorporated. |
| Foreign Corporation | A corporation which is incorporated or registered under the laws of one state or foreign country and does business in another. |
| Alien Corporation | A corporation that was created in another country but is doing business in the U.S. (Term is generally used in the U.S. |
| Public Corporation | A company whose shares are lsited to be traded on a public market. |
| Publicly Held Corporation | A corporation whose shares of stock are held by and are available for purchase by members of the public. |
| Class Corporation | Any company subsidaries, primarily controled companies, partially controlled companies or additional companies. |
| S Corporation | Corporation that elects to pass corporated income, losses, deductions, and credits through their shareholders for federal tax purposes. |
| Benefit Corporation | A corporation created to generated social and public good, and to operate in a responsible and sustainable manner. |
| Articles of Incorporation | The document filed with a state to create a corporation. |
| Bylaws | The regularions and rules established by a company or other organization for internal management. |
| Securities | An instrument that evidences the holder's ownership rights in a firm, the holder's creditor relationship with a firm or government, or the holder's other rights. |
| Bond | An obligation to pay a specified amount of money. Funciton similar to a loan and is sold by entities seeking an inflow of chash now in exhcange for the pormise of future interest on that cash later. |
| Stocks | The share in the ownership of a corporation. The ownership of a corporation is divided into shares of a definite value. The character of the company will define how many shares and classes of shares will be issued. |
| Common Stock | A class of stock that represents equity ownership in a corporation. Owners of commo stock, are entitled to the following rights: --Voting rights to elect the members of the board of directors. Typically shareholder,s may cast one vote per share. |
| Preferred Stock | Stocks that confers the holder a right to be paid first, before common stockholders in the event of a divident or liquidation payout. This confers no voting rights. |
| Venture Capital | An equity investment made in a startup company. The invetor provides capital in exchange for a part of the company. |
| Private Equity Capital | The investment of equity capital in private companies. An investor buys a stake in private company with the hope of ultimately realising an increase in the value of that stake. |
| Crowdfunding | A financing method in which money is raised through soliciing relatively small individual investments or contributuons from a large number of people. |
| Ultra Vires | Actions taken by government bodies or corporation that exceed the scope of power given to them by laws or corporate charters. |
| Piercing the Corporate Veil | The owners of a corporation losing the limited liability that having a corporation privides them. When this happens, the owners' personal assets can be used to satisty business debts and liabilities. |
| Commingled | The mixing of funds belonging to on eparty with funds belonging to another party. |
| Insider Director | A board member who is an employee, officer, or direct stakeholder in the company. |
| Outside Director | A member of a company's board of directors who is not an employee or stakeholder in the company. They are paid an annual retainer fee in the form of cash, benefits and/or stock options. |
| Quorum | The minimum number of members of a group or commitee required to be in attendance in order for that group to be able to take official action. |
| Business Judgement Rule | Provides a director of a corporation immunity from liability when a plaintiff sues on grounds that the director violated the duty of care to the corporation so long as the director's actions fall within the paramenter of the rule. |
| Proxy | A person who represents a member in the shareholders' meeting of a company, with a legal document that could prove their authority. |
| Stock Certificate | A printed certificate issued by the corporation to a shareholder, dodumenting ownership in a stated number of shares of that corporation's stock. |
| Preemptive Rights | A right of existing shareholders in a corporation to purchase newely issues stock before it is offered to others. |
| Stock Warrant | The right to purchase a company's stock at a specific price and a specific date. |
| Shareholder's Derivative Suit | A lawsuit brought by a shareholder or group of shareholders on behalf of the corporation against the corporation's directors, officers, or other third partied who breach their duties. |
| Warranted Stock | The rigth to purchase a company's stock at a specific price and at a specific date. |
Created by:
merazl
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