Business Law

5.01 Vocabulary

Alien Corporation

A corporation chartered in another nationnation doing business in the statestate.

Articles of Incorporation

application form from the secretary of state’s office filed for incorporatingincorporating a business.

Articles of Partnership

a partnership agreement usually expressexpress (may be written or oral)

Common Stock

basic form of corporate ownershipownership payable to shareholders as dividendsdividends at par or no-par value.

Corporation- a legal entityentity that is treated as an artificialartificial personperson by the law. with limitedlimited liabilityliability of owners

Corporation by Estoppel

courts will not allow denialdenial of existence of a corporation when a situation of some party’s willingness to treattreat a person as a corporation occurs.

de facto corporation

– does not exist in lawlaw but exists in factfact.

de jure corporation

lawfully exists after all formalitiesformalities have been completed.

Dissolution– changechange in the relationship of the owners that occurs when one owner stopsstops beingbeing associatedassociated with the business.

Dividend

– profitprofit paid through common stock to the shareholders, based on the corporation’s performanceperformance.

Domestic Corporation—a corporation chartered in a particular statestate.

dormant partner

—is one who is neither knownknown to the public as a partner or activeactive in management.

employer identification number

– assigned by IRSIRS for income taxtax purposes when employees are hiredhired.

fictitious name

– proprietor uses any name but his/her ownown namename (made-up).

Foreign—a corporation that doesdoes businessbusiness in one state but is charteredchartered in another state.

general partnership

—one which all the partners assume full personalpersonal liabilityliability for debts of the firm.

Incorporators—signorssignors of the Articles of Incorporation.

joint liability

–all the owners of the business must be suedsued togethertogether in the event of a lawsuit.

joint venture—partnership in which one or more persons or firms combinecombine their resources to complete oneone complexcomplex projectproject.

Liquidation

—the endingending of a corporation.

Merger

— the process by which one corporation blendsblends into another existing corporation.

Nonprofit

—a corporation organized for a socialsocial, charitablecharitable, or educationaleducational purpose.

partnership by estoppel– occurs because someone does or says something that leadsleads a thirdthird partyparty to believe that a co-co-ownershipownership exists.

partnership by proof of existence

– the way twotwo people conduct their business together.

partnership (general)

– two or more competent parties combinecombine their moneymoney, laborlabor and skillsskills for the purpose of carrying on a lawful business.

perpetual life

—one major advantage of corporations, which means the corporationcorporation can continue indefinitelyindefinitely with new owners.

preferred stock—a type of stock that entitles its owner to a statedstated dividend.

Private

—a corporation established for businessbusiness or charitablecharitable reasons.

Promoter

– person who carries out the incorporationincorporation processprocess and is personally liableliable for contracts entered into before the corporation is formed.

Public

—a corporation established for governmentalgovernmental purpose.

secret partner

—one who is not known to the publicpublic as a partner yet participates in managementmanagement.

Share

– certain amount of moneymoney paidpaid for each single unitunit of ownershipownership owned.

Shareholder

—a person who ownsowns one or more sharesshares of stock.

silent partner

—one who may be knownknown to the public as a partner but takes nono activeactive partpart in management.

sole proprietorship

– a form of business that is owned and operated by oneone person

Tenancy in partnership

—a co-ownershipco-ownership of partnership property.

Termination

—endingending of a partnership.

Uniform Partnership Act

(UPA) – the lawlaw that governs most business associations of twotwo or moremore persons.

unlimited liability

– business owner is responsibleresponsible for allall losseslosses experienced by the business.