Glossary Flashcards
Advisory board of directors
Individuals appointed to advise an elected board of directors.
Not bound by duties imposed upon elected board members.
Agent for service of process
An agent required to be appoint by a corporation whose authority is limited to receiving process issued against the corporation.
Articles of incorporation
Title of the document filed in many states to create a corporation.
Authorized shares
The maximum number of shares that a corporation May issue pursuant to its articles of incorporation
Certificate of incorporation
The title of the document filed in many states to creat a corporation.
Common shares
Class of shares that has no special features and possesses no greater rights than any other shares
Corporation
Artificial entity created under and governed by laws of the state of incorporation
Derivative suit
Lawsuit brought by a shareholder on behalf of a corporation to protect the corporation from wrongs committed against it
Fractional share
Ownership in a corporation in an amount less than a full share
Hostile takeover
A takeover that occurs without the approval of the target corooration’s board of directors
Limited liability company
Artificial entity created under and governed by the laws of the jurisdiction in which it was formed. Limited liability companies are generally able to provide the limited perosnal liability of corporation and the pass through taxation of partnership of S corporation
Limited partnership
Statutory form of partnership consisting of one or more general partners who manage the business and are liable for its debts, and one or more limited parents who invest in the business and have limited personal liability
S Corporation
Corporation granted a special tax status as specified under the Internal Revenue a Code. Pays no income tax, all gains and losses of the corporation pass through to the individual shareholders in proportion to their holding.
Administrative dissolution
Involuntary dissolution by an act of Secretary of State or similar state authority. Caused by corporation failure to comply with certain statutory requirements.
