Business Entities, Financial Systems, and Labor Organizations Review

Comprehensive vocabulary flashcards covering corporate accounting, Costa Rican financial regulations and institutions, cooperatives, solidarity associations, and trade union legal frameworks.

Partnership

An unincorporated association of two or more individuals who carry on a business for profit.

General Partnership

A partnership where all partners are individually liable.

Unlimited Liability (Partnership)

A condition where a partner may be called on to use their personal assets to satisfy partnership debts when the partnership cannot meet its obligations.

Limited Partnership

A partnership that must include at least one general partner who maintains unlimited liability.

Liquidation of the Partnership

The process when a partnership decides to liquidate, selling partnership assets, paying off liabilities, and distributing remaining cash to partners according to their capital account balances.

Withdrawal Account

An account used to track the amount taken from the business for personal use.

Corporation

A legal entity separate from its owners (stockholders) that pays income taxes, may be profit-making or non-profit, and is treated as a person with most rights and obligations of a real person.

Organization Cost

Expenses such as legal fees, underwriters' fees for stock and bond issues, and incorporation fees, recorded as intangible assets and amortized over a period time not to exceed $40\,years$.

Pre-emptive Right

The first right of refusal held by a stockholder when additional shares are issued, allowing them to maintain the same ownership percentage before and after new shares are issued.

Authorized Stock

The type and number of shares of stock a corporation may sell per its articles of incorporation.

Issued Stock

The number of shares transferred to stockholders in exchange for cash, assets, or services rendered.

Outstanding Stock

Issued stock that is held by stockholders and has not been bought back by the corporation.

Treasury Stock

Issued stock that has been bought back by the corporation.

Par Value

The value assigned in a corporation's articles of incorporation to one share of stock, appearing on the stock certificate.

Legal Capital

The amount of contributed capital that must remain in the corporation and may not be paid out in dividends.

Stated Value

The value assigned to no-par value stock by the Board of Directors of a corporation.

No-Par Value Stock

Shares of stock that do not include a par value.

Contributed Capital (or Paid-In Capital)

The amount of value received by the corporation when it issues its stock, including the par value and any amount received in excess of the par value.

Stockholder's Equity

The equity section on a balance sheet that includes contributed capital accounts and retained earnings.

Retained Earnings

The amount of net income a corporation has earned since it began in business that has not been distributed as dividends to stockholders.

Preferred Stock

A class of stock that normally has the right to receive dividends and return of investment before common stockholders upon liquidation, usually without voting rights.

Common Stock

The class of stock issued most frequently by a corporation, carrying voting rights on stockholder matters and receiving dividends/assets only after preferred stockholders.

Dividends

A distribution by a corporation to its owners in the form of cash, assets, or the company's stock, requiring authorization by the Board of Directors.

Date of Declaration

The date the Board of Directors formally authorizes the payment of a cash dividend or issuance of stock, establishing company liability.

Date of Record

The date that establishes who will receive the dividend, requiring no formal accounting entry.

Date of Payment or Distribution

The date when the dividend is given to the stockholders of record.

Cumulative Dividend

A dividend feature ensuring preferred stockholders receive their current year dividend plus any unpaid prior year dividends before common stockholders receive a dividend.

Participating Dividend

A feature providing preferred stockholders the opportunity to receive dividends above the stated rate after common stockholders receive the same rate of return on their shares.

Stock Dividends

Dividends used when a company needs to maintain cash in the business but wants to provide a dividend to stockholders.

Financial System

A country's set of institutions, rules, and markets that mobilize savings, channel funds, and allow trading and transfer of financial assets (claims) between savers and borrowers.

Banco Central de Costa Rica (BCCR)

The policy and monetary authority of Costa Rica whose primary objective is maintaining internal and external currency stability and convertibility under Law 7558.

CONASSIF

National Council for the Supervision of the Financial System, a top-level collegiate body directing the four superintendencies and approving financial system regulations under Article 171 of Law 7732.

Money Market

Financial market dealing with short maturities, short-term funding, BCCR open-market operations, liquidity management, short bills, and interbank transactions.

Capital Market

Financial market focused on medium and long maturities, including bonds, equities, and investment funds.

SUGEF

General Superintendence of Financial Institutions, which supervises state and private banks, finance companies, mutuals, cooperatives, and foreign exchange market entities.

SUGEVAL

General Superintendence of Securities, supervising the securities market, market participants, transparency, price formation, and investor protection under Law 7732.

SUPEN

General Superintendence of Pensions, overseeing basic and complementary pension regimes, pension fund operators, and funds created by special laws using a risk-based model.

SUGESE

General Superintendence of Insurance, created by Law 8653 on August 7, 2008, to authorize, regulate, and supervise insurance and reinsurance activities.

Decreto-Ley No. 71 (1948)

The decree-law following the 1948 civil conflict that nationalized commercial banking in Costa Rica, concentrating intermediation in state banks.

Cooperative

An autonomous association of persons who voluntarily unite to meet common economic, social, and cultural needs through a jointly owned and democratically controlled enterprise.

Rochdale Pioneers

A group in Rochdale, England, that in 1844 established the first modern cooperative, forming the basis of today's cooperative values and principles.

Cooperative Law No. 4179

The primary law regulating cooperatives in Costa Rica, outlining their formation, rights, obligations, structure, supervision, and dissolution.

Legal Reserve (Cooperative)

A mandatory accumulation of a portion of annual surpluses required by law to strengthen cooperative capital.

Solidarity Association

A socio-economic entity uniting employers and workers to eliminate labor conflict, promote savings, and improve living standards under Law No. 6970.

Law No. 6970

Solidarity Associations Act, the primary legal framework governing the creation, operation, rights, and responsibilities of solidarity associations in Costa Rica.

Fiscal (Solidarity Association)

An independent oversight officer who monitors legality, reviews accounting books, and protects member interests in a solidarity association.

Trade Union Association

A permanent association of workers or employers created exclusively for the study, improvement, and protection of shared economic and social interests under the Costa Rican Labor Code.

Fuero Sindical

Protection of union rights that shields union founders and board members from retaliatory dismissals without a proven just cause.

Law No. 9343

Labor Procedure Reform (Reforma Procesal Laboral) implemented in 2017, which overhauled strike procedures, mandated mediation, and banned strikes in essential services.

Trade / Craft Unions (Gremiales)

Unions built by workers of the same occupation, regardless of employer.

Company Unions (De Empresa)

Unions formed by workers of various occupations working for the exact same specific employer.

Industrial Unions (Industriales)

Unions composed of individuals offering services in different companies within the same industrial branch.

Mixed Unions (Mixtos)

Unions formed by workers of different occupations and industries when the number of workers in a specific category falls below the legal minimum required.

Solidarity Association Economic Resources Structure

The breakdown of a solidarity association's total patrimony into member savings (minimum $3\%$ to $5\%$ of monthly wage) and employer contribution (advances severance payout; negotiated percentage of payroll).

Types of Unions Diagram

Classification chart categorizing trade unions into Trade/Craft, Company, Industrial, and Mixed/Varied (Mixtos) unions under Article 342 of the Labor Code.

Trade Union Chart of Accounts Structure

The line item chart of accounts structure for trade unions under IFRS, categorized into 1000 Assets, 2000 Liabilities, 3000 Net Assets / Patrimony, 4000 Revenue, and 5000 Expenses.