Ch 29 Vocab Flashcards
a legal entity formed in compliance with statutory requirements that is distinct from its shareholder-owners
corporation
a distribution of corporate profits to the corporation’s shareholders in proportion to the number of shares held.
dividend
the portion of a corporations profits that has not been paid out as dividends to shareholders.
retained earnings
a company whose business activity is holding shares in another company.
holding company
in a given state, a corporation that is organized under the law of that state.
domestic corporation
in a given state, a corporation that does business in that state but is not incorporated there.
foreign corporation
a corporation formed in another country but doing business in the united states.
alien corporation
a corporation whose shareholders are limited to a small group of persons, often only family members.
close corporation
a close business corporation that has most corporate attributes, including limited liability, but qualifies under the internal revenue code to be taxed as a partnership.
s corporation
the document containing basic information about the corporation that is filled with the appropriate state official, usually the secretary of state, when a business is incorporated.
articles of incorporation
the internal rules of management adopted by a corporation at its first organizational meeting.
bylaws
acts of a corporation that are beyond its express and implied powers to undertake (the latin phrase means “beyond the powers”).
ultra vires
the action of a court to disregard the corporate entity and hold the shareholders personally liable for corporate debts and obligations.
piercing the corporate veil
to put funds or goods together into one mass so that they are mixed to such a degree that they no longer have separate identities, as when personal and corporate interests are mixed together to the extent that the corporation has no separate identity.
commingle
generally, stocks, bonds, or other items that represent an ownership interest in a corporation or a promise of repayment of debt by a corporation.
securities
an ownership (equity) interest in a corporation, measured in units of shares.
stock
a security that evidences a corporate (or government) debt.
bond
shares of ownership in a corporation that give the owner of the stock a proportionate interest in the corporation with regard to control, earnings, and net assets. Common stock is lowest in priority with respect to payment of dividends and distribution of the corporation’s assets on dissolution.
common stock
stock that has priority over common stock as to payment of dividends and distribution of assets on the corporation’s dissolution.
preferred stock
financing provided by professional, outside investors (venture capitalists) to new business ventures.
venture capital
funds invested by a private equity firm in an existing corporation, usually to purchase and reorganize it.
private equity capital
the legal combination of two or more corporations in such a way that only one corporation (the surviving corporation) continues to exist, having acquired all of the assets and liabilities of the other corporation.
merger
a transaction in which some or all of the shares of one corporation are exchanged for some or all of the shares of another corporation, but both corporations continue to exist.
share exchange
a merger that can be accomplished without the approval of the shareholders of either corporation because one company (the parent corporation) owns at least 90 percent of the outstanding shares of each class of stock of the other corporation (the subsidiary corporation)
short-form (parent-subsidiary) merger
