Business law Test 3

General Partnership

A business arrangement where partners share all assets, profits, and legal liabilities.

Partnership Property

All assets that are acquired by the partnership.

Limited Partnership

A partnership consisting of at least one general partner and one limited partner.

Dissolution

The process of ending a partnership or corporation.

Members Managed LLC

An LLC where all members participate in the management.

Piercing the Corporate Veil

A legal concept where a court disregards a corporation’s separate legal status to hold shareholders personally liable.

Operating Agreement

A basic contract that governs the affairs of a limited liability company.

Taxation of Corporations

Corporations face double taxation: corporate income and dividends to shareholders.

Proxy

Authorization allowing one person to act on behalf of another, particularly in voting situations.

Preemptive Rights

The right of existing shareholders to purchase new shares to maintain their percentage of ownership.

Fiduciary Duties

Legal obligations of directors and officers to act in the best interest of the corporation.

Quorum

The minimum number of members required to be present at a meeting to conduct business.

Treasury Stock

Shares that were once a part of the outstanding shares of a company but were later repurchased by the company.

Joint Venture

An unincorporated business association of two or more persons to carry out a particular business enterprise for profit.

Convertible Bond

A bond that can be exchanged for other securities of the corporation.

Derivative Suit

A lawsuit brought by a shareholder on behalf of a corporation against third parties.

Business Judgment Rule

Legal principle that protects directors from liability for honest mistakes made in good faith.

Foreign LLC

An LLC that is registered in one state but does business in another state.

Limited Liability Corporation (LLC)

A business structure that protects its owners from personal liability while allowing for flexible management.

Limited Liability Partnership (LLP)

A partnership in which some or all partners have limited liabilities.

Dividend

A payment made by a corporation to its shareholders, usually from profits.