Unit Three Test Flashcards
form of business ownership in which one individual owns the business
sole or individual proprietorship
pooling of capital resources and the business or professional talents of two or more individuals with the goal of making a profit
partnership
partnership in which at least one partner has a liability limited to the loss of the capital contribution made to the partnership
limited liability partnership
a partnership for federal tax treatment and the limited liability feature of the corporate form of business organization
limited liability company
artificial being created by governmental grant, which, for many purposes is treated as a natural person
corporation
relationship in which two or more persons or firms combine their labor or property for a single undertaking and share profits and losses equally unless otherwise agreed
joint venture
combination of two or more persons for the furtherance of a common nonprofit purpose
unincorporated association
group of two or more persons or enterprises that acts through a common agent with respect to a common objective, such as buying or selling
cooperative
privilege or authorization, generally exclusive, to engage in a particular activity within a particular geographic area, such as a government franchise to operate a taxi company within a specific city, or a private franchise as the grant by the manufacturer of a right to sell products within a particular territory or for a particular number of years
franchise
party granting the franchise
franchisor
person to whom franchise is granted
franchisee
sets forth rights of franchisee to use trademarks etc of franchisor
franchise agreement
mark that identifies a product
trademark
name under which a business is carried on and if fictitious must be registered
trade name
products total image including its overall packaging look
trade dress
formula, device, or compilation of information that is used in ones business and is of such a nature that it provides an advantage over competitors who do not have the information
trade secret
FTC rule requiring detailed disclosures and prohibiting certain practices
franchise rule
partnership in which the partners conduct as coowners a business for profit, and each partner has a right to take part in the management of the business and has unlimited liability
general partnership
one of two or more persons who jointly own and carry on a business for profit
partner
partners who publicly and actively engage in the transaction of firm business
general partners
combination or two or more persons for the furtherance of a common nonprofit purpose
unincoprorated association
document prepared to evidence the contract of the parties
partnership agreement
ownership relationship that exists between partners under the uniform partnership act
tenancy in partnership
order by a court, after a business partners personal assets are exhausted, requiring that the partners share of the profits by paid to a creditor until the debt is discharged
charging order
authority of an agent to perform a certain act
express authority
apportions parters responsibility for partnership debt equally
joint liability
disproportionate satisfaction of partnership debt rendering each partner liable for the entire debt with the right to contribution from other partners
joint and several liability
attaching of certain consequences to certain facts because of legal principles that operate automatically, as contrasted with consequences that arise because of the voluntary action of a party designed to create those consequences
operation of law
partnership that can be formed by one or more general partners and one or more limited partners
limited partnership
partner who neither takes part in the management of the partnership nor appears to the public to be a general partner
limited partner
partnership in which the partners conduct as co-owners a business for profit, and each partner has a right to take part in the management of the business and has unlimited liability, general partners publicity and activity engage in the transaction of firm business
general partner
artificial being created by governmental grant, which for many purposes is treated as a natural person
corporation
written approval from the state or national government for a corporation to be formed
certificate of incorporation
grant of authority from a government to exist as a corporation, generally replaced today by a certificate of incorporation approving the articles of incorporation
charter
corporation that has been established for governmental purposed and for the administration of public affairs, cities
public corporation
corporation organized for charitable and benevolent purposes or for purposes of finance, industry, and commerce
private corporation
private corporation furnishing services on which the public is particularly dependent, for example, a gas and electric company
quasi public corporation
corporations formed by government that performs public services
authorities
corporation that has been incorporated by the state in question as opposed to incorporation by another state
domestic corporation
corporation incorporated under the laws of another state
foreign corporation
corporation whose shares are held by a single shareholder or a small group of shareholders
close corporation
corporation organized for a charitable or benevolent purpose
eleemosynary corporation, non profit
for profit corporation that sets a goal to create a public benefit while still providing economic returns to its investors
benefit corporation
power to govern, the power to adopt laws for the protection of the public health, welfare, safety, and morals
public power
states code listing certain requirements for creation of a corporation
general corporation code
rules and regulations enacted by a corporation to govern the affairs of the corporation and its shareholders, directors, and officers
bylaws
corporate stock that the corporation has reacquired
treasury stock
act or contract that the corporation does not have authority to do or make
ultra vires
persons who plan the formation of the corporation and sell or promote the idea to others
promoters
one or more natural persons or corporations who sign and file appropriate incorporation forms with a designated government official
incorporator
corp with a legal right to exist by virtue of law
corporation de jure
existing in fact as distinguishing from as of right, as in the case of an officer or a corporation purporting to act as such without being elected to the office or having been properly incorporated
de facto
corporation that comes about when parties estop themselves from denying that the corporation exists
corporation by estoppel
combining of two or more corporations in which the corporate existence of each one ceases and a new corporation is created
consolidation
combining of corporations by which one absorbs the other and continues to exist, preserving its original charter and identify while the other corporation ceases to exist
merger
relationship of a parent corporation to subsidiary corporations engaged in diversified fields of activity unrelated to the field of activity of the parent corporation
conglomerate
name for shares of a company that have been issued to stockholders
outstanding
declared money value of the outstanding stock of the corporation
capital stock
specified monetary amount assigned by an issuing corporation for each share of its stock
par value
value found by dividing the value of the corporate assets by the number of shares outstanding
book value
price at which a share of stock can be voluntarily bought or sold in the open market
market value
document evidencing a shareholders ownership of stock issued by a corporation
certificate of stock
stock that has no right or priority over any other stock of the corporation as to dividends or distribution of assets upon dissolution
common stock
stock that has a priority or preference as to payment of dividends or upon liquidation or both
preferred stock
a debt investment, a loan to a corporation or govt entity usually for a defined period of time at a fixed interest rate
bond
date that corporation is required to repay a loan to a bondholder
maturity date
unsecured bond of a corporation, with no specific corporate assets pledged as security for payment
debenture
bonds held by owners whose names and addresses are registered on the books of the corporation to ensure proper payment
registered bonds
agreement setting forth the contractual terms of a particular bond issue
bond indenture
instrument by which a grantor conveys or transfers the title to a grantee
deed
usually a commercial banking institution, to represent the interests of the bondholders and ensure that the terms and covenants of the bond issue are met by the corporation
indenture trustee
fixed amount of money set aside each year by the borrowing corporation toward the ultimate payment of bonds
sinking funds
contract or agreement to buy a specific number and kind of shares when they are issued by the corporation
stock subscription
unqualified assent to the act or proposal of another, as the acceptance of a draft, of an offer to make a contract, of goods delivered by the seller, or of a gift or deed
acceptance
system of voting for directors in which each shareholder has as many votes as the number of voting shares owned multiplied by the number of directors to be elected, and such votes can be distributed for the various candidates as desired
cumulative voting
authorizing someone else to vote the shares owned by the shareholder
voting by proxy
written authorization by a shareholder to another person to vote the stock owned by the shareholder, the person who is holder of such a written authorization
proxy
transfer by two or more persons of their shares of stock of a corporation to a trustee who is to vote the shares and act for such shareholders
voting trust
shareholders right upon the increase of a corporations capital stock to be allowed to subscribe to such a percentage of the new shares as the shareholders old shares bore to the former total capital stock
preemptive right
corporation designed to exhaust or use up the assets of the corporation, such as by extracting oil, coal, iron, and other ores
wasting assets corporation
secondary action for damages or breach of contract brought by one or more corporate shareholders against directors officers or third persons
derivative action
state statutes designed to protect the public from the same of worthless stocks and bonds
blue sky laws
the original distribution of securities by the issuing corporations
primary offerings
stocks and bonds issued by a corporation, under some investor protection laws, the term includes any interest in an enterprise that provides unearned income to its owner
securities
document disclosing specific financial information regarding the security, the issuer, and the underwriter
registration statement
information provided to each potential purchaser of securities setting forth the key info contained in the registration statement
prospectus
provisions of the securities act of 1933 requiring advance disclosure to the public of a new securities issue through filing a statement with the sec and sending a prospectus to each potential purchaser
registration requirements
a theory that in an open and developed securities market, the price of a stock is determined by the information on the company available to the public, and misleading statements will defraud purchasers of stock even if they do not directly rely on these statements
fraud on the market
privileged information on company business known only to employees
insider imformation
full time corporate employee or a director
insider
someone retained by a corporation for professional services on an as needed basis, such as an attorney, accountant, or investment banker
temporary insider
individual who receives information about a corporation from an insider or temporary insider
tippee
profit realized by a corporate insider from selling securities less than six months after purchase
short swing profit
general offer to all shareholders of a target corporation to purchase their shares for cash at a specified price
cash tender offer
minimum number of persons, shares represented, or directors who must be present at a meeting in order to lawfully transact business
quorum
rule that allows management immunity from liability for corporate acts where there is a reasonable indication that the acts were made in good faith with due care
business judgment rule
