Corporations: Formation and Organization

_______ is a takeover to which the management of the target corporation objects

Hostile takeover

___________ is a takeover-resistance strategy in which a group within the target corporation buys all the corporate stock held in the public, thereby turning the company into a privately held corporation.

Leveraged buyout (LBO)

_________ are stock shares that do not have a par value

No-par shares

___________ may earn profits but they do not distribute these profits to shareholders.

Nonprofit corporations

_________ are stock shares that have a fixed face value noted on the stock certificate

Par-value shares

_______ offer is a type of takeover in which the aggressor corporation offers to pay the target shareholders cash for their stock

Cash Tender

_________ is a document that the corporation is incorporated in the state and is authorized to conduct business.

Certificate of incorporation

________ generally do no offer stock to the general public

Closely held corporations

______ legally combine two or more corporations

Consolidations

_________ is when the courts estop (prevent) the corporation from denying its corporate status.

Corporation by estoppel

_________ is a type of takeover in which the aggressor corporation offers to exchange the target shareholders' current stock for stock in the aggressors corporation

Exchange tender offer

________ begin the corporate creation and organization process by arranging for necessary capital, financing, and licenses.

Promoters

_______ are named after the subchapter of the Internal Revenue Code that provides for them

S Corporations

_________ is a takeover-resistance strategy in which the target corporation offers to buy its shareholders stock

Self-tender offer

_________ is a lawsuit filed by a shareholder on behalf of the corporation

Shareholders derivative suit

__________ is a lawsuit filed by a shareholder against the corporation

Shareholders direct suit

________ are given to shareholders when they can redeem for a certain number of shares at a specified price within a given time period.

Stock warrants

_______ is the purchase of one corporation stock by another corporation as a means of gaining control of the selling corporation

Takeover

________ a type of takeover in which the aggressor corporation offers the target shareholders a price above their stocks current market value

Tender offer

________ is stock that is issued to individuals below its fair market value

Watered stock

An __________ is a business incorporated in another country.

alien corporation

An ________ is a dissenting shareholders right to have her shares appraised and to receive monetary compensation from the corporation for their value.

appraisal right

At the first organizational meeting, shareholders adopt a set of corporate ______ or rules and regulations that govern the corporations internal management

bylaws

A ________ has not substantially met the requirement of the sate incorporation statute, but courts recognize it as a corporation for most purposes to avoid unfairness to third parties who believed it was properly incorporated.

de facto corporation

A __________ has met the substantial elements of the incorporation process.

de jure corporation

Corporations most commonly obtain financing by issuing and selling corporate securities: ________ (bonds) which represent loans to a corporation and _________

debt securities;equity securities

If the incorporator or promoters make an error or omission during the incorporation process, courts may rule that the organization is not a corporation. In this case, the organization is a __________.

defective corporation

Corporations can distribute their income to shareholders in the form of _________ although they do not receive tax deductions for distributing these dividends.

dividends

A corporation is a _________ in the state in which it is incorporated.

domestic corporation

Most corporations are ___________ thus, their objective is to operate for profit.

for-profit corporations

A corporation is a _________ in states in which it conducts business but is not incorporated

foreign corporation

An__________ is an individual who applies to the state for incorporation on behalf of a corporation.

incorporator

A ______ occurs when a legal contract combines two or more corporations and only one of the corporations continues to exist.

merger

A ____________ is a corporation created by government to help administer law.

public corporation

The stock of __________ is available to the public

publicly held corporations

Alternatively, corporations can keep profits, or ________ to reinvest.

retained earnings

One method of restricting stock transferability is called the ____________

right of first refusal

When directors or officers violate their duty of loyalty, they are _________

self-dealing.

Some corporations issue __________ to shareholders as proof of ownership in the corporation.

stock certificates

Promoters raise capital for the infant corporation by making _________ with subscribers (investors) in which the subscribers agree to purchase stock in the new corporation.

subscription agreements

__________ is a document providing basic information about the corporation.

Articles of incorporation

Owners of _________ own a portion of a corporation but do not enjoy any preferences

common stock

Owners of _________ enjoy preferences with respect to assets and dividends

preferred stock

Private persons create ____________ for private purposes

private corporations