Chapter 3 Flashcards
What are whistle blowers?
whistleblowers Employees who inform the appropriate authorities about an employer’s wrongdoing
What are soul proprietorships?
sole proprietorships Individually operated unincorporated businesses
What are partnerships?
partnerships Unincorporated businesses run by two or more individuals
What are partnership agreements?
partnership agreement An agreement spelling out the organizational details of a partnership
What are general partnerships?
general partners Partners who run the partnership’s business and who are liable for its actions
What are limited partners?
limited partners Partners whose liability is limited to the amount of money they invested in the partnership and who generally aren’t involved in running the business
What are corporations?
corporations Legal “persons,” or entities, established for the purpose of doing business and distinct from their owners in terms of liability
What is limited liability?
limited liability The principle that shareholders are not generally liable for the debts or actions of the corporation
What are supravoting shares?
supravoting shares Shares of a corporation’s stock that have superior voting rights
What is the pierce the corporate veil?
pierce the corporate veil The situation where creditors of a corporation are able to break
What is a board of directors?
board of directors The governing board of a corporation, which generally must have at least three members
What are inside directors?
inside directors Corporate board of directors members employed full-time by the company; for example, the CEO or other corporate officers
What are outside directors
outside directors Corporate board of directors members not employed full-time by the company
What are independent outside directors?
Outside directors who do not have any financial or other relationship with the corporation beyond their service as a director
What is the business judgment rule?
The requirement that corporate directors and officers act in good faith and exercise at least an ordinary prudent person’s judgment in making business decisions
