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Module 4
Business Organizations and Agencies
Term | Definition |
---|---|
actual authority | The authorization |
Agent | A person who acts on behalf of another. |
apparent authority | Authority created when a principal holds out an agent as being able to represent the principal |
Fiduciary | A relationship where one owes another a very high standard of loyalty and care |
Indemnification | Where the principal must pay the agent back for properly incurring legal expense on the principal's behalf. |
joint and several liability | Where more than one party is liable to the plaintiff |
Principal | A person who is represented by another person |
Ratification | An after-the-fact authorization by the principal of an agent's contract with a third party. |
Reimbursement | A principal's paying the agent back for expenses the agent reasonably incurred in discharging the principal's task. |
Corporation | A business entity that is formed through application to the state |
Director | A person elected by shareholders to engage in broad management of a corporation. |
Dissolution. In a partnership | any change of membership. For a corporation |
Dividend | A share of corporate profits paid to its shareholders. |
Incorporator | The individuals who sign the articles or charter of incorporation. |
limited liability company | A business organization form that is formed through application to the state |
limited partnership | A business organization that can be created only by filing with the state |
Partnership | An association of two or more competent persons to carry on a business as co-owners for profit. The business itself is not a legal entity. |
Shareholder | An owner of a corporation; those individuals who hold stock or shares in equity in a company. |
sole proprietorship | A business owned and operated by a single person. The business has no separate legal existence from its owner. |