29 - 34 Business Organization Flashcards
Termination of corporation’s operation except activities needed for liquidation of the corporation
Dissolution
Owner of sole proprietorship
Proprietor
a business owned and operated by one person who is subject to claims of creditors (an owner’s financial interest in a business)
Sole Proprietorship (Proprietorship)
Law requiring operator of business under assumed name to register with the state
Fictitious name registration statutes
Business debts payable from personal assets
Unlimited liability
Member of a partnership
Partner
The voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit
Partnership
Partnership with no limitation on rights and duties of partners
(2 names)
Ordinary partnership
General partnership
Partnership with partner whose liability is limited to capital contribution and who is not viewed as an active business manager
Limited partnership
One engaged in buying and selling merchandise
Trading partnership
Partnership devoted to professional services
Nontrading partnership
Those individuals actively and openly engaged in the business and held out to everyone as a partner
General partner
An individual who takes no active party in the management of a firm / partnership, and has capital invested in the business, whether known to the public or not
Silent partner
- partners who have their liability for the firm’s debts limited to the amount of their investments
- partner who takes no active party in management and whom the public knows as a partner
(silent partner is known as ___ if they are known)
Limited partner
Partner active in a business but UNKNOWN to the public
Secret partner
Partner unknown to public with no part in management
(2 names)
Dormant partner
Sleeping partner
Person who pretends to be a partner or permits others to represent him or her as a partner
Nominal partner
A judicial ignoring of the corporate entity
Piercing the corporate veil
Capital contribution is maximum loss
Limited liability
Business relationship similar to partnership, except existing only for a single transaction
Joint venture
- entity that issues shares of stock, but investors have unlimited liability
- association where the stock shares are transferable and control is delegated to a group or board
Joint-stock company
Registered partnership whose members run business but have limited liability
Limited liability partnership (LLP)
- partnership-type organization with limited personal liability
- combines features of both a corporation and partnership
- newest form of business ownership recognized in the US
Limited liability company (LLC)
- an artificial being, invisible, intangible, and exiting only in contemplation of law
- a business entity created by statutory law and owned by individuals known as stockholders
- association of people created by law into an entity
- an entity that is something that has a distinct existence separate and apart from the existence of its individual members
- a legal form of organization whereby a legal entity is authorized by a state to operate a business under the entity’s charter or articles of incorporation
Corporation
A written document (partnership agreement) that states explicitly the rights and duties of partners in a partnership
Articles of partnership
On the fact of it
Prima facie
Evidence sufficient on its face, if uncontradicted
Prima facie evidence
Ownership of a partner in partnership property
Tenancy or owner in partnership
While the partner acts as a partner in the business and in the promotion of partnership interests
In the ordinary course of business
Change in relation of partners by elimination of one partner
Dissolution of a partnership
Taking care of outstanding obligations of a partnership and distributing remaining assets
Winding up
A corporation formed to carry out government functions
Public corporation
Public body with powers similar to a corporation’s
Quasi-public corporation
A corporation formed by individuals to carry out some non-governmental function
Private corporation
One formed by private individuals for charitable, educational, religious, social, or fraternal purposes
Not-for-profit corporation
One organized to run a business and earn money
For-profit corporation
Corporation in which ownership is represented by stock
Stock corporation
Certificates representing ownership in a stock corporation
Shares of stock
A creation of the US tax codes, where shareholders elect to be taxed as a partnership (no double taxation) without losing corporate status
Subchapter S corporations
Corporation that has very small number of shareholders, in which outstanding shares of stock and managerial control are held by a limited number of people (often members of the same family)
Close / closely held corporation
- one which operates in the state that granted the charter
- one chartered in the state of incorporation
Domestic corporation
- designation that applies when a corporation operates in any state other than where it is chartered
- corporation chartered under the laws of another state
Foreign corporation
- one that is incorporated in a foreign country
- corporation chartered in another country
Alien corporation
One who takes initial steps to form a corporation
Promoter
People initially forming a corporation
Incorporators
Document giving specified information about a corporation
Prospectus
Written agreement to buy stock
Subscription agreement
One who agrees to buy stock in proposed corporation
Subscriber
Document stating facts about a corporation as required by law and for issuance of a charter
Articles of incorporation
The written application for permission to incorporate that is approved by a state official
Corporation charter
Rules enacted by directors to govern a corporation’s conduct
Bylaws
Contract exceeding a corporation’s power
Ultra vires contract
Declared VALUE of outstanding stock
Capital stock
Declared value of outstanding stock
Capital stock
Unit of stock
Share
- Person who owns stock
- those having title to one or more shares of stock in a corporation
- combined, they represent ownership of the corporation
Shareholder / stockholder
Stock that entitles owner to VOTE
Common stock
Stock giving special advantage as to payments of dividends, upon liquidation, or both
Preferred stock
Stock on which ALL DIVIDENDS must be paid before common dividends can be paid
Cumulative preferred stock
Stock on which CURRENT DIVIDENDS must be paid before common dividends are paid
Noncumulative preferred stock
Stock that SHARES with common stock in EXTRA dividends
Participating preferred stock
Stock on which maximum dividend is STATED PERCENTAGE of stock
Nonparticipating preferred stock
Stock with an assigned face value
Par-value stock
Stock without face value
No-par-value stock
Stock reacquainted by a corporation
Treasury stock
- stock paid for with property of inflated value
- stock issued by a corporation as being fully paid when in fact, it is not
Watered stock
Right to purchase shares at a set price during a set time
Stock option
Profits of a corporation allocated to stockholders
Dividend
State laws to protect the public by preventing the sale of worthless stocks and bonds
Blue-sky laws
Officer, director, or owner of more than 10% of stock or any other class of securities of a corporation
Insider
Profits made by insider buying and selling corporation’s stock in a six-month period
Short-swing profits
Minimum number of shares required to be represented to lawfully transact business
Quorum
Combining two corporations to form a new one
Consolidation
One corporation absorbed by another
Merger
Person who exposes wrongdoing in an organization
Whistleblower
A body of persons elected by the stockholders to define and establish corporate policy, to act on behalf of the corporation, and to carry out the board’s policies
Board of Directors
Right to purchase NEW shares in proportion to shares owned
Preemptive right
Attempt by competing sides to secure majority of stockholders’ votes
Proxy war
- person authorized to vote for another
- written authorization to vote for another
Proxy
Device whereby stock is transferred to trustee to vote its shares for two more more shareholders
Voting trust
Stockholders votes for directors of corporation and has votes equal to company shares owned times the number of directors to be elected
Cumulative voting
