Business Structures Vocabulary Flashcards

These flashcards cover key vocabulary terms and definitions related to business structures, as discussed in the lecture.

Limited Partner

A partner in a limited partnership who has limited liability and does not participate in management.

General Partner

A partner in a general partnership who has unlimited liability and manages the partnership.

Sole Proprietorship

A business owned and operated by one individual, with full control and personal liability.

Limited Liability Company (LLC)

A business structure that combines the flexibility of a partnership with the limited liability of a corporation.

Incorporation

The legal process of forming a corporation.

Articles of Incorporation

The document that establishes a corporation's existence and details its structure.

Corporate Bylaws

Rules that govern the internal management of a corporation.

Shareholder

An individual or entity that owns shares in a corporation.

Board of Directors

A group of individuals elected to oversee the activities of a corporation.

Indemnification

Protection provided to directors and officers against personal financial loss due to their roles.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another.

Equity Financing

Raising capital by selling shares of stock in the company.

Debt Financing

Raising funds through borrowing, which must be repaid with interest.

Partnership Agreement

A contract among partners detailing the terms of the partnership.

Pass-Through Taxation

A tax structure where business income is passed directly to owners and taxed at individual rates.

Domestic Corporation

A corporation that operates within the state in which it is incorporated.

Foreign Corporation

A corporation that operates in a state different from where it was incorporated.

Alien Corporation

A corporation formed in another country but doing business in the U.S.

Limited Liability

Protection that limits the financial liability of owners to their investment in the company.

Perpetual Existence

The ability of a corporation to continue indefinitely, regardless of changes in ownership.

Double Taxation

The taxation of corporate profits at both the corporate and individual levels.

Nonprofit Corporation

A corporation established for charitable, educational, or social purposes without profit as a primary goal.

Articles of Organization

The document that establishes a limited liability company.

Dissolution

The process of legally terminating a partnership or corporation.

Administrative Law

The body of law that regulates government agency operations.

Common Law

Law derived from judicial decisions and precedents rather than statutes.

Statutory Law

Law enacted by legislative bodies, such as statutes and regulations.

General Partnership

A business structure where partners share management responsibilities and liabilities.

Corporate Powers

The legal abilities granted to corporations to conduct business and make decisions.

Operating Agreement

A document that outlines the management structure and operations of an LLC.

Breach of Fiduciary Duty

A failure to act in the best interests of another party, often resulting in liability.

Limited Partnership

A partnership consisting of one or more general partners and one or more limited partners.

Corporate Governance

The system of rules and practices that directs and controls a corporation.

Shareholder Voting Rights

The rights of shareholders to vote on key corporate matters.

Equity Share

A share that represents ownership in a corporation and comes with voting rights.

Preferred Stock

A type of stock that grants shareholders fixed dividends and priority in asset liquidation.

Common Stock

A type of stock representing ownership in a corporation, typically with voting rights.

Legal Liability

The legal responsibility to compensate for damages or loss caused by one's actions.

Commercial Paper

Short-term unsecured promissory notes issued by corporations to raise funds.

Equity Securities

Financial instruments that represent ownership in a company.

Tax Exemption

A legal status that relieves an entity from paying certain taxes.

Market Analysis

The study of market conditions to inform business decisions.

Profit Distribution

The process of allocating profits to shareholders or partners.

Financial Projections

Forecasts of future revenue, expenses, and profitability.

Business Structure

The legal framework that defines how a business is organized and operated.

Conflict of Interest

A situation where an individual has competing interests affecting their decisions.

Responsibility

An obligation to perform duties or take accountability for actions.

Uniform Partnership Act

A model statute that regulates partnership law in the U.S.

Securities Regulation

Laws governing the issuance and trading of financial securities.

Government Regulations

Rules imposed by governmental agencies to control business conduct.

Ownership Structure

The way in which the ownership of a company is organized and managed.

Liability Clause

A provision in a contract outlining the extent of liability for parties involved.