gb 110 ch 15
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20 terms
Terms | Definitions |
|---|---|
 holding company | a company whose business activity is holding shares in another company |
| domestic corporation | in a given state, a corp that does business in and is organized under the law of that state |
| foreign corporation | in a given state a corp that does business in the state without being incorporated therein |
| alien corporation | a designation in the US for a corporation formed in another country but doing business in the US |
| close corporation | a corp whose shareholders are limited to a small group of persons, often including only family members. rights to transfer shares are restricted |
| bylaws | internal rules of management adopted by a corporation or other organization |
| ultra vires | latin term meaning "beyond the power" refers to acts of a corporation that are beyond its express and implied powers to undertake |
| pierce the corporate veil | an action in which a court disregards the corporate entity and holds the shareholders personally liable for corporate debts and obligations |
| commingle | to mix funds or goods together in one mass so that they no longer have separate identities. |
| quorum | the number of members of a decision-making body that must be present before business may be transacted. |
| inside director | a person on the board of directors who is also an officer of the corporation |
| outside director | a person on the board of directors who does not hold a management position in the corporation |
| business judgement rule | a rule that immunizes corporate management from liability for actions that result in corporate losses or damages if the actions are undertaken in good faith and are within both the power of the corporation and the authority of management to make. |
| proxy | a written agreement between a stockholder and another under which the stockholder authorizes the other to vote the stockholder's shares in a certain manner |
| voting trust | an agreement (trust contract) under which legal title to shares of corporate stock is transferred to a trustee who is authorized by the shareholders to vote the shares on their behalf. |
| preemptive rights | rights held by shareholders that entitle them to purchase newly issued shares of a corporations stock equal in percentage to shares already held before the stock is offered to any outside buyers. |
| stock warrant | a certificate that grants the owner the option to buy a given number of shares of stock, usually within a set time period |
| right of first refusal | the right to purchase personal or real property such as corporate shares or real estate before the property is offered for sale to others |
| shareholder's derivative suit | a suit brought by a shareholder to enforce a corporate cause of action against a third person. |
| watered stock | shares of stock issued by a corporation for which the corporation receives as payment less than the stated value of the shares |
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