MGMT402 Exam #1 (Integrating Business Fundamentals with Ethics and Law in Management)

Chapter 1

Sources of Laws

removal

The transfer of a lawsuit from state court to federal court.

executive order

A presidential statement ordering members of the executive branch to do something or refrain from doing something.

jurisdiction

The scope of authority of a governmental body.

supreme court

The highest court in a given jurisdiction.

precedence

A legal doctrine that requires courts to follow the decisions made by previous courts in the same jurisdiction.

administrative court

A court housed in an executive branch agency to hear a specific type of dispute.

state courts

Courts established under the laws of a state, including the state supreme court, appellate courts, trial courts, and special purpose courts.

Constitution

The founding document of a government. The constitution sets forth the system of a government and other important matters.

venue

The geographic location of the court where a lawsuit is filed.

case law

Law created by a court when it makes a decision in a lawsuit.

statute of limitations

A law that prohibits a party from initiating a lawsuit after a certain amount of time has passed.

enumerated powers

The specific authority granted to Congress by the Constitution.

ripeness

The requirement that a situation must actually be causing harm to someone in order to be heard in court.

administrative law judge 

A judge in an administrative court.

federal laws

Laws created by the U.S. government that apply everywhere nationwide. 

diversity jurisdiction 

A method of conferring subject matter jurisdiction on a federal court when the parties do not reside in the same state and the dispute involves more than $75,000.

standing

The requirement that the plaintiff in a lawsuit have a personal stake in the case that is ripe.

uniform laws

Statutes that have been adopted in essentially the same form by multiple states to make doing business across state lines easier.

administrative order

The final judgment of an administrative law judge.

judicial review

The judicial branch’s authority to determine whether actions taken by the other branches of government comport with the requirements of the Constitution.

federalism

The U.S. system of government whereby governing powers are shared by the central government of the United States and by the individual states.

tolling

When a statute of limitations is extended for a period of time because the plaintiff did not know of the wrongful act.

common law

A legal system in which decisions made by courts are precedential and become legally binding for all future parties.

subject matter jurisdiction

A court’s authority to hear a certain type of case.

personal jurisdiction

A court’s ability to exercise authority over someone.

ordinance

A law enacted by a municipality.

supremacy clause

Part of the U.S. Constitution that makes all federal laws supreme over state laws.

federal courts

Courts established pursuant to Article III of the Constitution, including the U.S. Supreme Court, U.S. courts of appeals, U.S. district courts, and special purpose federal courts.

state laws

Laws created by states that only apply within the borders of the state.

administrative regulation

A law issued by one of the executive branch’s numerous agencies and departments.

enabling legislation

A statute that authorizes an administrative agency to create regulations to implement the statute’s purposes.

court of limited jurisdiction

A court with the authority to handle only limited types of case(s).

appellate court

The intermediate court of appeals in a jurisdiction.

federal question jurisdiction

A method of conferring subject matter jurisdiction on a federal court when the dispute arises out of a federal law.

Equal Protection Clause

Part of the 14th Amendment that requires the law to treat all people equally.

federal statute

A law passed by both houses of the U.S. Congress and signed into law by the president.

treaty

An agreement between countries.

forum

The type of court in which a lawsuit is filed.

trial court

The entry-level court where most cases begin and where trials are conducted.

municipality

A smaller unit of state government, such as a city or county.

court of general jurisdiction

A court with the authority to handle all types of cases.

Due Process Clause

The constitutional requirement that everyone be provided with notice and a hearing before being deprived of “life, liberty, or property.”

state statute

A law passed by a state legislature and signed by the governor.

law

A set of rules that must be obeyed or else an authority figure will impose some form of consequence.

Chapter 2

The Constitution and Governmental Powers

checks and balances

Constitutional provisions granting each branch the power to curtail the authority of the other two branches.

enumerated powers

Powers specifically granted to the federal government by the Constitution.

partially protected speech

Speech that may only be regulated by the government with respect to time, place, and manner of communication.

First Amendment

An amendment to the U.S. Constitution that provides for freedom of religion, speech, the press, and peaceable assembly, and to petition the government.

impeachment

An affirmative vote by the House of Representatives accusing the president of “treason, bribery, or other high crimes and misdemeanors.”

principle of legality / clear statement rule

The requirement that laws be clear and understandable.

House of Representatives

The house of Congress in which members are allocated based on population.

executive branch

The branch of the federal government that enforces laws and administers the various programs of the federal government.

Bill of Rights

The first 10 amendments to the Constitution.

bicameral legislature

A legislature divided into two separate houses.

federal government

The national government of the United States.

speech

The dissemination of information or opinions via any medium.

Articles of Confederation

The first document granting power to the federal government of the United States; precursor to the Constitution.

Establishment Clause

A provision of the First Amendment prohibiting the government from sponsoring any religion.

procedural due process

The requirement that the government provide notice and a hearing before depriving anyone of life, liberty, or property.

Due Process Clause

The provision found in the Fifth and 14th Amendments requiring the government ensure laws are clear and understandable, and to provide notice and a hearing before depriving anyone of life, liberty, or property.

federalism

A governmental structure in which a national government and several regional governments share governing power.

separation of powers

The doctrine that divides federal government powers among the legislative, executive, and judicial branches.

judicial branch

The branch of the federal government that reviews laws for constitutionality and interprets laws as they apply to specific situations.

U.S. Constitution

The document that delegates powers between the federal and state governments and outlines the structure of the federal government.

incorporation

The process by which the Supreme Court has held that many limits on federal authority also limit state authority.

Commerce Clause

The constitutional provision granting Congress the power to regulate interstate commerce, international commerce, and commerce with Indian tribes.

override

A two-thirds vote of both houses of Congress in favor of a bill that was vetoed by the president, resulting in the bill becoming law.

unprotected speech

Speech that may be completely prohibited by the government.

Privileges and Immunities Clause

A constitutional provision prohibiting states from unreasonably discriminating against residents of other states.

Senate

The house of Congress in which each state is allocated two members.

reserved powers

Governmental powers not specifically granted to the federal government.

Free Exercise Clause

A provision of the First Amendment prohibiting the government from interfering with the right to freely practice the religion of one’s choosing.

Necessary and Proper Clause

The constitutional provision granting Congress the authority to pass laws outside the scope of its authority if they are required in order to appropriately regulate matters within Congress’s authority.

Equal Protection Clause

The provision found in the 14th Amendment requiring laws to protect all people equally.

veto

A president’s refusal to sign a bill passed by Congress, thereby preventing it from becoming law.

fully protected speech

Speech that may not be regulated by the government at all.

legislative branch

The branch of the federal government that drafts and passes new statutes.

Full Faith and Credit Clause

A constitutional provision requiring each state to recognize the laws and judicial proceedings of other states.

Chapter 4

Corporations: Their Characteristics, Formation, and Shareholders’ Roles and Rights

initial meeting of directors

A meeting of the initial directors of a corporation, which may occur in person or in writing, to appoint the officers.

municipal corporation

A corporation owned entirely by a governmental body. Also known as a public corporation or government-owned corporation.

shareholders’ agreement

A contract shareholders of a corporation enter that governs any number of issues related to their roles as shareholders, including their ability to freely transfer their stock to other parties.

stock

A shareholder’s ownership interest in a corporation. Also known as shares.

decree of dissolution

A court order setting forth the date on which a corporation is being judicially dissolved.

preemptive rights

The rights of shareholders to purchase newly issued shares in proportion to the percentage of shares they currently own to avoid their being diluted.

buy-sell agreement

An agreement among shareholders that requires any shareholder wishing to sell their shares to sell them to the corporation or to the other shareholders and that specifies a mechanism for determining the sale price.

piercing the corporate veil

The process by which in a very narrow set of circumstances a corporation’s creditors can pursue a corporation’s shareholders to satisfy its debts.

defective incorporation

When all of the statutory requirements for forming a new corporation are not fully satisfied and the corporation is not formed effectively.

promoter

Someone who works on behalf of a corporation before it has been formed to negotiate contracts, line up investors, and so on.

shareholder

An owner of a corporation.

dissolution

The process of terminating a corporation’s existence.

winding up

The process of ending a corporation’s contractual relationships, liquidating its assets, and distributing its assets to creditors and other claimants.

right of first refusal

A legal contract clause that gives a designated person or party the first opportunity to buy an asset, property, or business share before the owner can sell it to someone else.

for-profit corporation

A corporation that seeks to earn a profit to distribute to its shareholders.

direct shareholder lawsuit

When a shareholder sues the directors and/or officers of a corporation in his or her personal capacity for damages done directly to the shareholder.

director

A person appointed by the shareholders of a corporation to guide the company’s strategy.

proxy

A shareholder’s consent for another person to vote his or her shares at a shareholder meeting.

articles of incorporation

A document filed with the secretary of state that officially creates a new corporation and sets forth certain operating principles of the company.