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Business Law
Test #3
| Question | Answer |
|---|---|
| Partnership | Created by an agreement between two or more persons who agree to share profits and losses |
| Proprietorship | A business owned by one person who is personally liable for all losses |
| Limited partnership | Exists when some partners are treated like shareholders for liability purposes |
| Corporation | An artificial being created by a state |
| Legal capacity | The ability of an organization to sue or to own property |
| Buy-and-sell agreement | Provides for compensation to a deceased or withdrawing owner of a business in return for that owner's interest |
| Subchapter S corporation | Created when shareholders elect to be treated as partners for tax purposes |
| Joint venture | Two or more persons combine their efforts for a single transaction |
| Limited liability company | Owners receive limited liability and tax treatment as if they were a partnership without filing as a corporation |
| "Pass through" | Tax doctrine that allows income to be taxed at the owner level, not the organization level. |
| Partnership by estoppel | Partnership liability that is imposed on one who has held himself or herself out to be a partner when in fact he or she is not a partner |
| Implied partnership | A partnership created by conduct |
| Tenancy in partnership | Describes the title to property held in the partnership name |
| Articles of partnership | The agreement creating a partnership |
| Partnership capital | The contribution of partners to the partnership |
| Charging orders | A court procedure for collecting an undivided debt of a partner from the partnership. This assumes the partner has put his interest in the partnership up as collateral on a debt and has no paid the debt. |
| Dissolution | The legal destruction of the partnership relationship that occurs whenever any partner ceases to be a member |
| Winding up | The process of reducing assets to cash, paying creditors, returning capital contributions, and distributing the balance to the partners |
| Termination | The completion of the winding-up process |
| Marshaling of assets | A method for allocating property among the firm creditors and the individual creditors of the partner |
| Incorporator | One who signs an application for a corporate charter |
| Bylaw | A rule for governing a corporation |
| Foreign corporation | A corporation operating in a state other than the state that issues its charter |
| Promoter | One who assists in organizing a corporation |
| Ultra vires | A contract defense that is unavailable to the parties to a contract today. "Beyond the Authority". SH can sue corporation if go beyond their authority |
| Alter ego | A theory used to pierce the corporate veil |
| Quo warranto | Tests corporation's existence |
| Consolidation | Uniting of two or more corporations into a new one |
| Vertical merger | Merger of supplier with buyer |
| Horizontal merger | Merger of competitors |
| Watered stock | Stock issues for property overhauled |
| Treasury stock | Stock returned to the corporation |
| Cumulative voting | A shareholder is entitled to the # of votes in electing firectors that is the product of # of shares times # of directors to be elected. All shareholders' votes may be cast for one director |
| Preemptive right | The right of a shareholder to purchase additional stock of subsequent stock isses so he or she may maintain the overall percentage of total stock outstanding |
| Derivative suit | A lawsuit filed on behalf of a corporation by a shareholder as a result of the failure of the officers and directors to file the suit |
| Quorum | A majority of the shares of a corporation |
| Proxy | The right to vote someone else's stock |
| Ex-dividend date | The record date on which a dividend is payable |
| Stock split | A reduction in par value and an increase in the number of shares outstanding |
| Business Judgment Rule | Court's deference to officers and directors |
| Limited liability partnership | A form of business, often used in professional partnerships, that provides limited liability for its owners |
| Certificate of limited partnership | Document filed with the secretary of state's office that forms a limited partnership |
| Fiduciary duty | A duty of trust and confidence |
| Limited liability company | A form of business that guarantees owners limited liability for the debts of the business and "pass through" income tax treatment |
| Member-managed LLC | LLC managed by the membership |
| "Pass through" concept | Income from a business entity that is not treated as a taxable incident and is simply passed through to its owners |
| Right of first refusal | Guarantees current owners the opportunity to purchase an interest in an entity from a member who wishes to sell their interest before it is made available to those outside prospective buyers |
| Limited partnership | A form of doing business that consists of at least one general partner and one limited partner |
| Manager-managed LLC | LLC managed by individuals who are directed by the membership to manage the firm |
| Articles of organization | Document filed at the secretary of state's office that forms a limited liability company |
Created by:
kelsey cranmer-brown
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