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REGULATION > Business Structure > Flashcards

Business Structure Flashcards

1
Q

An association of two or more persons (or entities) organized to carry out a single business undertaking (or series of related undertakings) for profit

A

Joint ventures

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2
Q

Law for Limited Liability Companies

A

Revised Uniform Limited Liability Company Act (RULLCA)

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3
Q

A form of business in which the liability of all owners is limited to their capital contributions (including any obligation to make contributions in the future) plus any equity

A

LLC

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4
Q

An LLC in which all members have authority to bind LLC under agency law to contracts on behalf of LLC

A

member-managed LLC

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5
Q

LLC in which only managers have authority to bind LLC to contracts for LLC

A

manager-managed LLC

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6
Q

Specifies the manner in which an LLC with conduct and wind up operations–can contain restrictions of authority that can negate claims of apparent authority, if restirctions are given to the 3rd parties

A

Operating Agreement

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7
Q

A statement that lays out who has what authoirty in an LLC that, if filed with the SEcretary of State, is deemed proper notice to 3rd parties

A

Statement of Authority

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8
Q

A form of business that works well for professionals who want ot do business as professionals in a partnership but still pass through tax benefits while limiting personal liability of the partners (popular for accounting and law firms)

A

Limited Liability Partnership (LLP)

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9
Q

Divided corporations into 2 categories: Subchapter S and Subchapter C

A

Federal Subchapter S Revision Act

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10
Q

A corporaiton that operates and does business within the state in which ti was incorporated

A

Domestic corporation

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11
Q

A corporaiton that does business in any state except the state in which ti was incorporated–“doing business” means having an office or selling personal property in that state

A

Foreign corporation

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12
Q

Corporations that allow professionals to incorporate under state laws (doctors, accountants, attorneys)–shares can typically onnly be owned by licensed professionals and shareholders retain personal liability for their professional acts

A

Professional corporations

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13
Q

Corporations with 50 or fewer shareholders that are allowed to function without a BOD, shareholder meetings, and restricted transfer of ownership rights—has to be elected by 2/3 of corp and declared as one

A

Close corporation (Closely-held, closed)

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14
Q

Act passed to allow corporations to choose to be close corporations

A

Model Statutory Close Corporation Supplement

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15
Q

A corporation that has been formed in fact but has not been formed properly under law

A

De facto corporation

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16
Q

A corporation that has been formed properly in compliance with the incorporaiton statute

A

De jure

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17
Q

Persons who form corporations and arrange capitalization to begin corporations; handle issuing of prospectus, draw charter; has fiduciary re-ship with corp, but not an agent of the corp

A

Promoter

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18
Q

A corporate charter filed with the state that contains teh name, address, purpose, powers, etc.

A

Articles of incorporation

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19
Q

Adopted by the directors at the start of a corporation that provide specific rules for management–do not need to be filed wth a gov/t agency

A

Bylaws

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20
Q

Securities not represented by written documents

A

Uncertificated securities

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21
Q

Amount and type of stock permitted to be issued in Articles of Incorporation

A

Authorized stock

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22
Q

Stock authorized and delivered to shareholders

A

Issued stock

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23
Q

Stock authorized but not yet issued

A

Unissued stock

24
Q

Stuck that has been issued and not repurchased by the corporation

A

Outstanding stock

25
Q

Stock that has been issued but is not outstanding

A

Treasury stock

26
Q

Stock purchased or received by a corporation that is canceled (no longer issued or outstanding–makes room for more stock to be issued)

A

canceled stock

27
Q

Stock issued without a set par value

A

No-par stock

28
Q

The number of shares issued times par/stated value

A

Stated (legal) capital

29
Q

The cumulative amount of income (net of dividends) retained by the corporation during its existence or since a defict was properly eliminated

A

Earned surplus (retained earnings)

30
Q

Excess of total assets over total debts

A

Net assets

31
Q

Excess of net assets over stated capital

A

Surplus

32
Q

Entire surplus of corporation less earned surplus

A

Capital surplus

33
Q

Total consideration received by corporation upon issuance of stock

A

Contributed capital

34
Q

Stock that participates further in corporate earnings reamining after a fixed amount is paid to preferred shares

A

Participating prefrred stock

35
Q

If a periodic dividend is not paid at the scheduled time, it accumulates and must be satisfied before common stock may receive a dividend if these exist

A

Cumulative preferred stock

36
Q

Preferred shares that have no claims on past, nonpaid, dividends

A

Noncumulative preffered stock

37
Q

Stock that may be redeemed at a fixed price by the corporation as laid out in the Articles of Incorporation

A

Callable/redeemable stock

38
Q

Stock that gives the shareholder the option to convert preferred stock to common stock at a fixed exchange rate

A

Convertible preferred stock

39
Q

Written contracts to purchase a given number of shares in an existing corporaiton or one to be organized–not binding until accepted by the corporation

A

Stock subscriptions

40
Q

Stock in which the cash or property exchanged is less than par value or stated value–most states require stock to be issued at par, so creditors can recover hte difference

A

Watered stock

41
Q

Long-term unsecured debt

A

debenture

42
Q

long-term secured debt

A

bond

43
Q

Any benefit given to the corporaiton for the shares received

A

Valid consideration

44
Q

Acts in violation of statute or public policy

A

illegal acts (ex. false advertising)

45
Q

Acts that are merely beyond the scope of corporate powers—may be legal

A

Ultra vires acts (ex. even though it’s legal to become a surety, the Articles of Incorporation may not allow it)

46
Q

If a director is acting in good faith they will not be held liable for errors of judgment unless they are negligent

A

Business judgment rule

47
Q

fiduciary duties of an agent (3)

A

loyalty, due care, and obedience

48
Q

Act that prohibits dividneds that cause total liabilities to exceed total assets after the effect of the distribution is considered

A

Model Business Corporation Act

49
Q

A lawsuit in which the shareholder sues on behalf of the corporation, with all damages going to the corporation

A

Derivative suit

50
Q

When a corporation is a sham, engages in Fraud or other wrongful acts, or is used solely for the personal benefit of its directors, officers, or shareholders, courts may disregard the separate corporate existence and impose personal liability on the directors, officers, or shareholders.

A

Piercing the corporate veil–rarely happens

51
Q

The union of 2 corporations where one is absorbed by another and surviving corp issues its own shares to shareholders of the original corp

A

merger

52
Q

The joing of two or more coroporations int o a single new corporation

A

Consolidation

53
Q

The winding up of affairs and distribution of assets

A

Liquidation

54
Q

Occurs when winding up and liquidation are completed

A

Termination

55
Q

Dissolution that occurs when BOD passes resolution to dissolve and the resolution is ratified by majority of SH’s

A

Voluntary dissolution

REGULATION (17 decks)

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