Business Law and Corporate Structures

A comprehensive set of vocabulary flashcards based on business law and corporate structures.

Joint and Severally Liable

Partners are individually and collectively liable for obligations of the partnership.

Tort Liability

Legal responsibility arising from a civil wrong or injury.

Vicarious Liability

Legal responsibility imposed on one person for the acts of another.

Fraud

Intentional deception for personal gain or to damage another.

Negligence

Failure to exercise appropriate care resulting in damage or injury.

Limited Partnership (LP)

A partnership with both general and limited partners.

Limited Liability Company (LLC)

A business structure offering limited liability to its owners.

Operating Agreement (LLC)

Document outlining the management structure and operating procedures of the LLC.

Limited Liability Partnership (LLP)

A partnership where some or all partners have limited liabilities.

Market Value

The price at which an asset would trade in a competitive auction.

Liability of Shareholders in a Corporation

Typically limited to the amount of their investment.

Pass Through Taxation

Business income is taxed only at the individual level.

Articles of Incorporation

Documents filed to establish a corporation.

Management of LLCs

Can be managed by members (owners) or designated managers.

Fiduciary Responsibility

An obligation to act in the best interests of another party.

General Partnership

A partnership where all partners manage the business and are personally liable.

Indemnification

Reimbursement for costs or damages incurred while acting on behalf of the organization.

Preferred Stock

A class of stock with preferential rights over common stock.

Nonprofit Corporation

An organization that does not earn profits for its owners.

Bylaws

Internal rules governing the management of a corporation.

General Partners

Individuals in a partnership who are fully liable for the debts of the partnership.

Loan Agreement

A contract outlining the terms of a loan.

Registered Agent

An individual or business designated to receive legal documents on behalf of an entity.

Active Owners

Shareholders who are involved in the management of the company.

Duty of Care

An obligation to act with a degree of care that a reasonable person would exercise.

Shareholder Rights

Entitlements of shareholders concerning management and decision-making in a corporation.

Dissolution

The formal closing or termination of a business entity.

Disassociation

When a partner voluntarily leaves a partnership.

Sole Proprietorship

A business owned and managed by a single individual.

Corporate Liability in Criminal and Tort Law

Rules governing legal responsibility of a corporation.

Equity Financing

Raising capital by selling shares of stock.

Business Judgement Rule

Legal principle protecting directors from personal liability for decisions made in good faith.

Common Stock

A type of equity share that represents ownership in a corporation.

Debentures

Unsecured bonds that rely on the creditworthiness of the issuing company.

Treasury Stock

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

Alien Corporation

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

Close Corporation

A corporation with a limited number of shareholders that is not publicly traded.

Charitable Organizations

Nonprofit entities created for a philanthropic purpose.

Parent Company

A corporation that controls one or more subsidiary companies.

Voluntary Association

A group of individuals who voluntarily enter into an agreement for a common purpose.

Private Corporation

A corporation owned by a small number of shareholders.

Disadvantages of Sole Proprietorship

Lack of personal liability protection and limited capital-raising ability.

Corporate Governance

The system of rules and practices by which a corporation is directed and controlled.

Fiduciary Duties of Directors

Obligations to act in the best interests of the corporation and its shareholders.

Rights of Board of Directors

Entitlements of directors concerning corporate governance and decision-making.

Limited Liability

Financial responsibility limited to an investor's share in the company.

Statutory Law

Written laws enacted by legislatures.

Statutory Corporations

Created by statutes and considered legal entities.

Collegial Decision Making

Collaborative approach among partners or members in a business.

General Partnership vs. LLCs

Differences in liability, management structure, and taxation.

Business Formation

The process of creating a new business entity.

Essential Elements of a General Partnership

Sharing profits, joint ownership, and mutual authority.

Articles of Corporation

A document that establishes a corporation, outlining its structure and purpose.

Business Autonomy

Ability of a business or its owners to operate independently.

Corporate Perpetuity

A corporation's continued existence regardless of changes in ownership.

Voting Rights of Shareholders

Entitlements of shareholders to vote on corporate matters.

Legal Obligations of Corporations

Duties and responsibilities that corporations must adhere to under the law.

Hybrid Organizations

Structures that combine features of partnerships and corporations.

Corporate Sustainability

Practices that promote long-term economic, environmental, and social viability.

Employment Contracts

Agreements outlining the terms of employment between an employer and employee.

Dividend Distribution

Payments made to shareholders from a corporation's earnings.

Personal Liability of General Partners

Unlimited financial responsibility for the debts incurred by the partnership.

Operating Procedures

Guidelines by which a business operates.

Financial Structure of Corporations

Framework guiding how a corporation manages its capital and finances.

Court Order

A directive from a judicial authority to enforce a law or command.

Registration of Corporations

Process required for formal recognition and legal standing of a business entity.

Management Structure

Hierarchy established to manage operations and decision-making.

Principles of Corporate Governance

Fundamental guidelines that direct the operation and management of corporations.

Reimbursement Policies

Rules governing compensation for expenses incurred by individuals acting on behalf of an organization.

Intellectual Property Rights

Legal rights to inventions, designs, and artistic works.

Operational Autonomy

Independent functioning of different divisions or subsidiaries within a corporation.

Duty of Obedience

Responsibility to adhere to the laws, regulations, and internal policies governing an organization.

Business Risk Management

Strategies for protecting an organization against potential losses.

Taxation of Corporations

Tax obligations incurred by a business entity, distinct from its owners.

Contractual Obligations

Legal responsibilities outlined in agreements between parties.

Business Ethics

Moral principles guiding behavior in the world of business.

Partnership Agreement

A contract between partners outlining terms, responsibilities, and profit sharing.

Corporate Structure

The arrangement of different departments or business units within a corporation.