Entrepreneuership/Entities Flashcards
Corporation
organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise funds with which to start a business or increase its capital
Holding company
type of financial organization that owns a controlling interest in other companies, which are called subsidiaries; the parent corporation can control the subsidiary’s policies and oversee management decisions but doesn’t run day-to-day operations
Shareholder
person who owns stock in a corporation
Board of directors
group of people, selected by the shareholders, who make the major decisions for the company; the exact responsibilities of the board are governed by the company’s articles of incorporation
Articles of incorporation
highest governing document in a corporation; also known as the corporate charter; generally include the purpose of the corporation, the type and number of shares, and the process of electing a board of directors
Bylaws
regulations and rules established by a company or other organization for internal management
LLC
Limited Liability Company; non-incorporated business organization that retains elements of both partnerships and corporations
Member managed
all owners (members) also act as managers who can serve as agents of the business and bind the business contractually
Articles of organization
public and official document used to create a limited liability company (LLC); LLC members must file the articles of organization before the relevant state authority (usually the Secretary of State) for approval
Operating agreement
governing contract adopted by members of a Limited Liability Company (LLC); lays out the business’s course and helps operations and management become more organized
Partnership
for-profit business organization comprised of two or more persons
Sole proprietor
someone who owns an unincorporated business by himself or herself
Group agreement
any agreement governing the acquisition, holding, voting or disposition of securities of a Person
Leaving member
an individual member of the Group who ceases to record and/or perform as a member of the Group, and to engage in other professional activities of the Group
Contracts
agreement between two parties that creates an obligation to perform (or not perform) a particular duty
Consideration
promise, performance, or forbearance bargained by a promisor in exchange for their promise; the main element of a contract; without consideration by both parties, a contract cannot be enforceable
Bargained-for-exchanged
consideration given by the promisor must induce the promisee to incur a legal detriment and/or provide a legal benefit to the promisor, either or both of which are sufficient to induce the promisor to make the promise
Material
term in the agreement that is considered to be material to the contract or without which the parties would not have entered into it
Independent contractor
payer has the right to control or direct only the result of the work and not what will be done and how it will be done
Employee
a person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed
Work-for-hire
work whose ownership belongs to a third party rather than the creator
Net income
gross earnings minus mandatory withholdings and deductions, such as state and federal income tax and social security contributions
Gross revenue
revenue minus costs of goods sold; money generated by all of a company’s operations, before deductions for expenses
Arbitration
alternative dispute resolution method where the parties in dispute agree to have their case heard by a qualified arbitrator out of court
Jurisdiction
power of a court to adjudicate cases and issue orders; territory within which a court or government agency may properly exercise its power
Venue
county where you file your action
Choice of law
an issue in conflicts of law as to what law (as among laws of different states or multiple federal laws) should be applied in a case
Judicial precedent
decided case that furnishes a basis for determining later cases involving similar facts or issues
