Term
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Definition
Ownership of property. fractional interest in total property of the company.
Evidence by certificate of ownership. |
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Term
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Definition
1. Common Stock: has no right or priority over any other stock as to dividend distribution
2. Preferred stock: stock has priority or preference as to payment of dividends or upon liquidation
a) cummulative preferred stock
b) participatory preferred stock |
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Term
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Definition
| Has been reacquired by the corporation |
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Term
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Definition
-Par Value: specific amount assigned by corporation must be paid to acquire the stock
-Book Value: value formed by / value of corporate assets by # shares outstanding = accounting value
-Market Value: price at which stock can be voluntarily bought and sold in open market |
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Term
Specialized Statute of Frauds
LIST |
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Definition
1. Voting trust - transfer by 2 or more persons of their shares of stock to a trustee who is to vote and act for shareholders
2. Proxy - shareholder's right to authorize another vote in shares owned by the shareholder.
3. Stockholders Agreement - contract to buy a specific # of kinds of shares when they are issues by corporation |
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Term
3 Rights of Shareholders
LIST |
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Definition
1. To Vote
2. Inspect the books
3. Receive Dividends |
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Term
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Definition
| Physical transfer or certificate of ownership always must be endorsed. Can put restrictions to transfer to limit who it can be sold to but it must be on the face of the certificate to be binding. |
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Term
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Definition
| If corporation increases capital stock, original shareholders must first be offered chance to purchase new capital stock in order to retain the same percentage of ownership |
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Term
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Definition
Shareholders have right to receive portion of dividends if the are declared (no absolute right to be declared).
Must be earned surplus |
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Term
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Definition
| Earned surplus from previous years |
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Term
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Definition
| Companies designated wasting assets corporations (companies who are designed to use up assets of the corporation such as oil or coal) may pay without regard to preservation of corporate assets. |
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Term
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Definition
| There is no right for a company to pay with capital and a company can sue if they want the money back |
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Term
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Definition
| IRS will force a company to pay dividends if they are keeping their earning unfairly. |
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Term
Shareholders Lawsuits
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Definition
1. Minority shareholders suits - $ goes to the shareholders
2. Shareholders Derivative - $ goes to the corporation. This is when shareholders sue majority shareholders. Suing on behalf of corporation for something directors did. |
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Term
| Piercing the Corporate Veil |
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Definition
A court may disregard corporate entity when there are exceptional circumstances that mean the person responsible should no longer be protected. IF:
-Alter Ego
-Insufficient Capitalization |
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Term
| Exceptions to Limited Liability |
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Definition
| Liabilities imposed on shareholders as though there were no corporation under these particular circumstances |
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Term
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Definition
| Agreement setting forth the contractual terms of a particular bond issue. |
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Term
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Definition
| Instrument by which the grantor (owner of land) conveys or transfers title. |
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Term
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Definition
| Fixed amount of money set aside each year by borrowing corporation toward the ultimate payment of bonds. |
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