Key Terms 9 Flashcards
Articles of organization
The document filed with a designated state official by which a limited liability company is formed
Articles of incorporation
The document containing basic information about the corporation that is filed with the appropriate state official, usually the Secretary of State, when a business is incorporated
Close corporation
A corporation whose shareholders are limited to a small group of persons, often only family members
Commingle
To out 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 interest are mixed together to the extent that the corporation has no separate identity
Corporation
A legal entity formed in compliance with statutory requirements that is distinct from its shareholder-owners
Joint and several liability
In partnership law, a doctrine under which a plaintiff may sue, and collect a judgment from, all of the partners together (jointly) or one or more of the partners separately (severally, or individually). A partner can be held liable even of she or he did not participate in, ratify, or know about the conduct that gave rise to the lawsuit
Limited liability company
A hybrid form of business enterprise that offers the limited liability of a corporation and the tax advantages of a partnership
Limited liability partnership
A hybrid form of business organization that is used mainly by professionals who normally do business in a partnership. An LLP is a pass-through entity for tax purposes but a partners personal liability for the malpractice of other partners is limited
Limited partnership
A partnership consisting of one or more general partners (who manage the business and are personally liable for debts of the partnership) and one or more limited partners (who contribute only assets and are liable only up to the extent of their contributions.
Partnership by estoppel
Partnership liability imposed by a court on persons who have held themselves out to be partners, even though they were not, and others have detrimentally relied on their representations
Piercing the corporate veil
The action of a court to disregard the corporate entity and hold the share holders personally liable for corporate debts and obligations
S corporation
A close business corporation that has most corporate attributes, including limited liability, but qualifies under the internal revenues code to be taxed as a partnership
Shareholder derivative suit
A suit brought by a shareholder to enforce a corporate cause of action against a third person
