Business Associations Glossary
Business Associations Glossary
Word	Definition
Affiliate	Someone who is controlling the company or under common control of some other company
Agency	an agreement by one person (an agent) to act for a principal at the principal’s direction and control
Agent	Someone who is authorized to act on behalf of the principal
Beneficial title
Bona fide purchaser	Someone who gives consideration, acts in good faith, and who is not on notice of an adverse claim
C Corporation	Any corporation that hasn't elected the status of an S corporation
Callable	Can be redeemed at the option of the issuer
Capital	Productive capacity: tangible assets (equipment and buildings), intangible assets (intellectual property and human capital), money
Come to rest
Common stock	Residual interest in a corporation: including the right to elect directors and receive dividends and distributions
Community property
Contractual subordination
Convertible	Describes securities that include the right to exchange them at the option of the holder for a certain number of shares of another class of stock
Corporation
Corporation by estoppel	Doctrine that prevents personal liability for an obligation entered into in the name of a non-existant corporation
Cumulative voting	Method of voting where each shareholder multiplies the number of shares owned by the number of seats on the board and can distribute those votes all to one candidate or spread them among several candidates, allowing minority shareholders to be represented on the board
De facto corporation	A partially formed corporation that protects shareholders from personal liability; it can only be attacked by the state
De jure corporation	A corporation sufficiently formed to be recognized as a corporation for all purposes, even though there may have been a few small flaws in its incorporation
Deadlock	A situation where shareholders factions can block corporate action; often arises when there is a split between two factions over electing directors
Directors
Distribution
Dividend	A distribution to shareholders out of earnings
Equitable subordination
Equity	Ownership interest in a business venture, equal to assets minus liabilities plus amounts due to senior securities
Equity investor
ERISA
Ex dividend	The date when it's too late to purchase shares of publicly traded stock and still receive a previously declared dividend
Executive stock options
Family errand doctrine
Fiduciary duty
Flow-through
General partnership	A partnership in which all partners are general partners
Guaranty
In blank
Integration
Investment securities
Legended
Lien
Limited liability corporation	A business entity that has the limited liability benefits of a corporation with the tax benefits of a partnership
Limited liability partnership	A type of general partnership with some limitation of liability under state law
Mutual companies
Mutual funds	A publicly held open end investment company which will redeem its shares at net asset value at any time
Negotiable
Notes
Not-for-profit association
Not-for-profit corporation
Officers
Partnership
PIC
Poison pill
Preemptive rights	Rights that give existing shareholders the chance to buy part of a new issue of shares before the general public can, thus protecting them from dilution of value and control
Preferred stock	Shares that have preferential rights to dividends or distributions over common stock
Principal
Professional corporations
Promoter	This is a person who brings together labor, capital, and management to start a business enterprise
Proxy	Written permission to have another shareholder vote on your behalf
Proxy agent
Quo warranto	A proceeding to determine "by what right" someone holds a corporate office
REIT	Real estate investment trust
Registered form
Respondeat superior
Revised Model Business Corporation Act
Rule 10b-5
Security title
Servant-agent
Shareholder derivative action
Shareholders
Sole proprietorship
State court receivership
Stock transfer books
Straight debt
Straight voting
Subchapter C
Subchapter K
Subchapter S
Suretyship
Sweat equity	A person who partners with a capitalist who doesn't have much money of his or her own, but has skills and the willingness to work hard
Tender offer
Trustee in bankruptcy
Trusts
Ultra vires	Beyond the powers of the corporation
Uniform Partnership Act
Workers' compensation