Business Law - Business Organizations
Say-on-Pay
A policy of companies that allow the compensation of executives to be reviewed by shareholders
Closely Held
Organization that is owned by only a few people
Shareholder
Owners of corporations. typically these owners vote on major decisions impacting their corporations, most commonly the election of a board of directors.
Organizer
Parties responsible for bringing a limited liability company into existence. These parties correspond to the functions of incorporators with respect to corporations
Charter
legal document issued by a state when creating a new corporation
Articles of Partnership
Another name for a formally drafted partnership agreement
Corporation
Artificial, but legal person, created by state law. As a business organization, the corporation's separation of owners and managers gives it a high level of flexibility
Partnership
Business organization involving two or more persons agreeing to conduct a commercial venture while sharing its profit and losses
S Corporation
Business organization that is formed as a corporation but, by a shareholder's election, is treated as a partnership for taxation purposes
Foreign Corporation
Business organization, created by the issuance of a state charter, that operates in states other than the one issuing the charter
Dissolution
Cancellation of an agreement thereby rescinding its binding force. A partnership is dissolved anytime there is a change in partners. A corporations dissolution occurs when that business entity ceases to exist
Derivative Suit
Lawsuit filed by one or more shareholders of a corp against that organization's management. This suit is brought to benefit the corporation directly and its shareholders indirectly
Piercing the Corporate Veil
Legal doctrine used by courts to disregard the existence of a corporation, thereby holding the shareholders personally liable for the organizations debt
Articles of Incorporation
Legal document that forms the application for a state charter of incorporation
Proxy
Legal documentary whereby a shareholder appoints an agent to vote the stock at a corporation's shareholders' meeting
Jointly and Severally Liable
Legal principle that makes two or more people, usually partners, liable for an entire debt as individuals or in any proportional combination
General Partner
Owner of a limited partnership that enjoys the control of the partnership's operation. This type of partner is personally liable for the debts of the limited partnership
Limited Parter
Owners of a limited partnership who forgo control of the organization's operation in return for their liability being limited to the amount of their investment
Limited Liable Company
Type of business organization that has characteristics of both a partnership and corporation. The owners of an LLC are called members, and their personal liability is limted to their capital contributors
Domestic Corporation
business organization created by the issuance of a state charter that operates in the state that issued the charter
Alien Corporation
corporation created under the authority of a foreign country
Articles of Organization
document used to create a limited liability company. Its purpose correspond to the purpose of the articles of partnership and the articles of incorporation
Director
individuals who are elected by the shareholders to decide the goals and objectives for the corporate organization
Alter-Ego Theory
one method use by courts to pierce the corporate veil when a shareholder fails to treat the corporate organization as a separate legal entity
Manager
person designated and charged with day-to-day operations of a limited liability company
Limited Personal Liability (Limited Liability)
term used to describe the exposure of business owners to pay the debts of their businesses when such exposure does not exceed the owner's investment in the business
Publicly Held
A business organization that has hundreds if not thousands of owners who can exchange their ownership interests on public exchanges
Double Tax
A disadvantage of a corporate form of organization in that the corporation must pay a tax on the money earned and the shareholder pays a second tax on the dividends distributed
Limited Liability Partnership
A hybrid business partnership
Buy and Sell Agreement
Contract usually among partners, but perhaps among Shareholders, wherein one party agrees to buy the ownership interest held by another party or the first party agrees to sell such an interest to the other party. These contractual provisions help provide a transition of owners without harming the business of the organization
Officer
Individuals appointed by directors of a corporation to conduct the daily operations of the corporate organization
Member
Individuals or business entities that belong to a limited liability company
Incorporator
Individuals who are responsible for bringing a corporation into being
Sole Proprietorship
Simplest form of business organization, created and controlled by one owner
Assumed-Name Statute
State law that requires partners to make a public filing of their identities if their partnership operates under a name that does not reveal the partner's indentites