Business Law- Chapter 36 Flashcards
Corporation
A fictitious legal entity that is created according to statutory requirements
Corporation Codes
State statutes that regulate the formation, operation and dissolution of corporations.
Limited Liability of Shareholders
A general rule of corporate law which provides that generally shareholders are liable only to the extent of their capital contributions for the debts and obligations of their corporation and are not personally liable for the debts and obligations of the corporation.
Revised Model Business Corporation Act (RMBCA)
A 1984 revision of the MBCA that arranges the provisions of the act more logically, revises the language to be more consistent, and makes substantail changes in the provisions.
Private Corporation
A corporation formed to conduct privately owned business.
Profit Corporation
A corporation created to conduct a business for profit that can distribute profits to shareholders in the form of dividends.
Publically Held Corporation
A corporation that has many shareholders and whos securities are often traded on national stock exchanges.
Closely Held Corporation
A corporation owned by one or a few shareholders.
Professional Corporation
A corporation formed by lawyers, doctors, and other professionals.
Domestic Corporation
A corporation in the state in whcih it was formed.
Foreign Corporation
A corporation in any state or jurisdiction orther than the one in which it was formed.
Alien Corporation
A corporation that is incorporated in antoehr country.
Incorporator
The person or persons, partnerships or corporations that are responsible for incorporation of a corporation.
Promoter
A person or persons who organize and start a corporation, negotiate and enter into contracts in advance of its formation, fine the initial investors to finance the corporation and so forth.
Promoters’ Contracts
A collective term for such things as leases, sales contracts, contract to purchase property, and employment contracts entered into by promoters on behalf of the proposed corporation prior to its actual incorporation.
Articles of Incorporation
The basic governing documents of a corporation. It must be filied with the secretary of state of the state of incorporation.
Registered Agent
A person or corporation that is empowered to accept service of process on behalf of a corporation.
Bylaws
A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for manageing the business and the affairs of the corporation.
Organizational Meeting
A meeting that must be held by the initial directors of a corporation after the articles of incorporation are filed.
Equity Securities
Representation of ownership rights to a corporation.
Common Stock
A type of equity security that represents the residual value of a corporation.
Common Stockholder
A person who owns common stock
Preferred Stock
A type of equity security that is given certain preferences and rights over common stock.
Preferred Stockholder
A person who owns preferred stock.
Dividend Preference
The right to receive a fixed dividend at stipulated periods during the year.
Liquidation Preference
The right to be paid a stated dollar amount if a corporation is dissolved and liquidated.
Cumulative Preferred Stock
Stock for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends.
Participating Preferred Stock
Stock that allows the preferred stockholder to participate in the profits of the corporation along with the common stockholders.
Converticle Preferred Stock
Stock that permits the preferred stockholders to convert their shares into common stock.
Redeemable Preferred Stock
Stock that permits a corporation to buy back the preferred stock at some future date.
Authorized Shares
The number of shares provided for in the articles of incorporation.
Inssue Shares
Shares that have been sold by a corporation.
Debt Securities
Securities that establish a debtor-creditor relationship in which the corporation borrows money from the investor to whom a debt security is issued.
Debenture
A long-term unsecured debt instument that is based on a corporation’s general credit standing.
Bond
A long-term debt security that is secured by some form of collateral.
Note
A debt security with a maturity of five years or less.
Indenture Agreement
A contract between a corporation and a holder that contains the terms of a debt security.
Express Powers
Powers given to a corporation by the U.S. Constitution, state constitutions, federal statutes, state statutes, articles of incorporation, bylaws and resolutions of the board of directors.
Implied Powers
Powers beyond express powers that allow a corporation to accomplish its corporate purpose.
Ultra Vires Act
An act by a corporation that is beyond its express is implied powers.
Voluntary Dissolution
Dissolution of a corporation that has begun business or issued shares upon recommendation of the board of directors and a majority vote of the shares entitled to vote.
Administrative Dissolution
Involuntary dissolution of a corporation that is ordered by the secretary of state if a corporation has failed to comply with certain procedures required by law.
Judicial Dissolution
Dissolution of a corporaion through a court proceeding instituted by the state.
Winding up and Liquidation
The process by which a dissolved corporation’s assets are collected, liquidated and distributed to creditors, preferred shareholders and common shareholders.
