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Business Law Ch12 Business Organizations
Terms in this set (36)
a business owned by a person who is not organized as corporation
an association of two or more person to carry on a business as co-owners for a profit
a partner in a limited partnership or any partner in a general partnership who accepts, or has imposed by law, personal liability for all debts of the partnership
requires that each partner act in good faith for the benefit of the partnership.
the process of terminating or winding up a corporation or partnership that changes the nature of organization or ends it completely. This may come about involuntary, such as through forced bankruptcy, or maybe voluntary, as when a board of directors approves the end of the life of a company.
process of setting the accounts and liquidating the assets of a partnership or corporation for the purpose of dissolving the concern.
a business organization made up of two or more persons ( partners) who have entered into an agreement to carry a business venture for a profit.
a partner in a limited partnership whose liability for partnership debts is limited to the amount of his contribution to the partnership
a business organized under the laws of a state that allow an artificial legal being to exist for purpose of doing business in its name.
a certificate issued by a state government recognition the existence of a corporation as a legal entity; it is issued automatically upon filling the information required by state law and payment of a fee.
Example: giving a business the privilege of having the only bank in town.
certificate of incorporation
is a legal document relating to the formation of a company or corporation. It is a license to form a corporation issued by state government
the rules that regulate and govern the internal operation of the corporation with respect of directors, shareholders, and officer right and duties
the existence of a thing, other than a natural person, that has legal existence of that it can function in a legal capacity, such as a corporation doing business.
the owner of one or more share of stock in a corporation
the minimum number of members of a body, such as board of directors or shareholders of company, necessary to conduct the business of that group
giving another person the right to vote on one's behalf; in stock votes, when a person give another the right to vote in a certain manner, such as for candidates for board of directors.
board of director
the governing committee of a corporation, is specified in the articles of incorporation or choose by the incorporators at the first corporate meeting.
a legal obligation that is owed to another and that must be satisfied; an obligation for which somebody else has a corresponding right.
on the behalf of corporation, it sets corporate policy and decided corporate business, such as the sales of assets, entrance into new product lines, major financing decision, and appointment of corporate officers.
business judgment rule
make director and managers immune from liability when problems result from honest mistakes in judgment, so long as there is a reasonable basis for the decisions.
fiduciary duty of loyalty
a duty of loyalty require directors place the interests of the corporation before their own interests.
in businesses persons hired to perform certain functions in a firm who are given discretion to control certain business assets; ultimately responsible to the board of directors of a corporation or the owner of a proprietorship or partnership.
a closely held corporation; a corporation that has stock that is not allowed to be widely held; the number of shareholders is limited and usually, unlike a publicly held corporation, the shareholders are active in oversight of the firm.
a corporation may be granted S status if it does not own any subsidiaries, has only one class of stock, and has no more than seventy-five shareholders, all of whom must be U.S. citizens or U.S. residents.
in most states, a category of corporations that may be used by those providing a personal service that require a license, such as physicians, dentists, architects, and accountants. The primary reason to adopt this status is for tax benefits.
a corporate form that voluntarily meets high standards of purpose, accountability, and transparency.
the imposition of two taxes on the same property or income during the same period; especially the taxation again when remainder of profits are paid as income (dividends) to the shareholders.
the fact that shareholders of a corporation are not liable for the debts of the corporation beyond the amount of money they have invested in the corporation.
limited liability company (LLC)
or LLC, is a form of organization authorized by statute at the state level that is characterized by limited liability, management by members or managers, and limitations on ownership transfer.
articles of organization
limited liability companies must produce this document, and submit a copy to the state, to be recognized as a legal entity: generally provides minimal information necessary, such as name of LLC, its purpose, life, and names and addresses of organizers.
in LLCs, owners of the enterprise have this title rather than shareholder as in the case of a corporation; members report income or losses from the LLC on their personal tax returns.
shares of ownership in limited liability; much like shares in a corporation or shares in a partnership; the legal claim to a portion of an LLC's profits.
a contract among members of a limited liability company setting forth the parties' agreements about funding, development, operations, and other key issues of the LLC.
a general presumption in corporation law that a corporation will exist forever; i.e. most organizations do not have a specific date fixed for termination.
a contract between a parent company (franchisor) and an operating company (franchisee) to allow the franchisee to run a business with the brand name of the parent company, so long as the terms of the contract concerning methods of operation are followed.
the contract between a franchisor and franchisee that sets forth the terms and conditions of the franchise relationship. Federal law, and some state laws, regulate some terms of such agreements.
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