Business Organizations and Corporations

Flashcards for business law, covering different forms of business organizations and corporations.

Sole Proprietorship

A business owned and run by one person, where there is no legal distinction between the owner and the business entity.

Partnership

A business organization in which two or more individuals agree to share in the profits or losses of a business.

Corporation

A legal entity that is separate and distinct from its owners, possessing the rights and responsibilities of an individual.

General Partnership

All partners share in the business's operational management and liability.

Limited Partnership

Includes both general partners who manage the business and limited partners who have limited liability and involvement.

LLP (Limited Liability Partnership)

Provides limited liability to its partners, shielding them from the malpractice or negligence of other partners.

S-Corp (S Corporation)

A corporation that passes its income, losses, deductions, and credits through to its shareholders, avoiding double taxation.

C-Corp (C Corporation)

A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity. C corporations are also subject to corporate income taxation.

LLC (Limited Liability Company)

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Business Trust

A type of organization managed by trustees for the benefit of investors.

Syndicate

A temporary alliance of businesses or individuals formed to undertake a specific project.

Franchisor

The seller of goods or services under a specific trademark or business model.

Franchisee

A business owner operates under the brand name and system of a larger company (the franchisor).

Limited Partnership (Liability)

General partners have unlimited liability; limited partners have liability limited to their investment unless they participate in control of the business.

Limited Liability Partnerships (LLP)

Partners are not liable for the LLP's malpractice and negligent acts unless they commit the act.

Limited Liability Companies (LLC)

Members are not personally liable for the debts and obligations of the LLC.

Merger

A legal contract whereby two or more corporations combine and only one of the corporations continues to exist.

Consolidation

A legal contract whereby two or more corporations combine and an entirely new corporation results.

Hostile Takeover

A takeover to which the management of the target corporation objects.

Dissolution

The legal termination of the corporation.

Liquidation

The process by which the board of directors converts the corporation's assets into cash and distributes them among the corporation's creditors and shareholders.

Ultra Vires Act

A corporate action that is beyond the express and implied scope of the corporation's authority.

De Jure Corporation

A corporation that has met all the legal requirements for incorporation.

De Facto Corporation

A corporation that has not met all the legal requirements for incorporation but is recognized as a corporation by the courts.

Quorum

A minimum number of members needed to attend board of directors meetings.

Appraisal Right

The shareholder's right to have her or his shares appraised and to receive monetary compensation for their value.