Corporations and Corporate Governance

Flashcards of vocabulary terms related to corporations and corporate governance.

Corporation

Fictitious legal entity created according to statutory requirements.

Shareholders

Owners of corporations.

Board of Directors

Elected by shareholders to make policy decisions for the corporation.

Corporate Officers

Appointed by the board of directors to manage the day-to-day operations.

Articles of Incorporation

Governing documents that include the corporation's name, shares authorized, and registered agent.

Corporate Bylaws

Detailed rules adopted by the board of directors for managing the business and affairs of the corporation.

Dividends

Paid distribution of profits of the corporation to shareholders.

Merger

Occurs when one corporation is absorbed into another, with one surviving and the other ceasing to exist.

Share Exchange

One corporation acquires all shares of another, but both retain separate legal existence.

Tender Offer

Acquiring company makes an offer directly to the shareholders of the target corporation to purchase their shares.

Dissolution

The termination of a corporation's legal existence.

Winding Up

The process of collecting, liquidating, and distributing a dissolved corporation's assets.

Liquidation

The conversion of a dissolved corporation's assets into cash for distribution.

Termination

Occurs after winding up, liquidation, and distribution of proceeds to claimants.

Multinational Corporations

Operate in more than one country.

International Subsidiary Corporation

Separate legal entity used by a multinational corporation to conduct business in another country.

Promoter

Person who organizes and starts a corporation.

Incorporators

Parties who sign the articles of incorporation.

Domestic Corporation

A corporation in the state in which it was formed.

Foreign Corporation

A corporation in any state or jurisdiction other than the one in which it was formed.

Alien Corporation

A corporation incorporated in another country.

Publicly Held Corporation

For-profit corporation that has many shareholders and is usually traded on securities markets.

Closely Held Corporation

For-profit corporation owned by a few shareholders, often family or friends.

Public Benefit Corporation

For-profit corporation with a mission to create public benefits, such as social or environmental.

Limited Liability

Shareholders are liable only to the extent of their capital contributions, not for the corporation's debts.