Business Orgs Final

Front 1

Distribution

Back 1

use strictly to refer to payments to shareholders that are not a sharing of profits; used loosely to refer to any type of payment to shareholders

Front 2

Equity insolvency test

Back 2

Test to determine if dividends can be paid in which corporation must be able to pay debts as they become due

Front 3

MCBA/ modern test

Back 3

requires that after the distrabution of dividend, either the corporation must be able to pay its debts as they become due or assets must exceed liabilities.

Front 4

Illegal dividends

Back 4

Distributions made when a corporation is insolvent or from an unauthorized account.

Front 5

Balance sheet test

Back 5

equity exceeds liability, if they have enough money to pay dividends and debts.

Front 6

SEC

Back 6

The security Exchage Commision, charged with regulating securities (share distributions, bond exchanges) Helps enforce the Securities Exchange Act of 1934

Front 7

Underwriter

Back 7

once a corporation goes public, they enter into an agreement with the underwriter, such as an investment bank or a security firm who sells their stocks

Front 8

firm commitment agreement

Back 8

Underwriter purchases all stock as a set price then re-sells it to others.

Front 9

Best Efforts Agreement

Back 9

Underwriter agrees to use its best efforts to sell securities but does not guarantee the amount of capital that will be raised by the offering.

Front 10

Standby Agreement

Back 10

underwriter purchases all pr a portion of the portion of a corporation not sold through the IPO

Front 11

All or Nothing Agreement

Back 11

Underwriter agrees to use best effort to sell securities by a fixed date if all the shares are to sold by that date, offering is then cancelled, and any money received from some of the sale is returned to the buyer.

Front 12

Blue Sky Laws

Back 12

Each state as its own securities regulation for the issuance of securities within its own jurisdiction. They all include: Prohibit fraud, enforce Broker and Dealer Registration to regulate the "who" of selling securities and the enforce registration requirements by a corporations.

Front 13

Extinguished Corp.

Back 13

corporation that does not survive a merge.

Front 14

Short-form merge

Back 14

merge of a subsidiary into a parent

Front 15

Letter of Intent

Back 15

Initial document setting forth basic understanding of parties to a transaction.

Front 16

Plan of Merge

Back 16

Document setting forth particulars as to planned merge

Front 17

Dissenting SH

Back 17

Shareholders who vote against merger or some other transaction.

Front 18

Appraisal Right

Back 18

right of dissenting shareholder to have shares purchased at their fair market value

Front 19

Share exchange

Back 19

Exchange of all of target's shares for shares in acquiring corporation

Front 20

Defacto Merger Doctrine

Back 20

Legal principle that if a transaction has the effect of a merger, it must follow procedural requirements of a merge

Front 21

Domestication

Back 21

the changing of a corporations state of incorporation

Front 22

Transacting business

Back 22

A statutory list of activities in which a corporation can engage in a foreign state without being required to qualify to do business therein

Front 23

Qualifying to transact

Back 23

process of seeking permission from foreign jurisdiction to do business therein

Front 24

certificate of good standing

Back 24

Document issued by a date of incorporation verifying corporation is compliance with state requirements

Front 25

withdrawal

Back 25

process of canceling authority to do business in a foreign state

Front 26

Notice of Intent

Back 26

Document filed with the state indicating corporations intent to dissolve

Front 27

Judicial Dissolution

Back 27

Dissolution brought before a court, or involuntary dissolution

Front 28

Administrative Dissolution

Back 28

dissolution intended for technical or administrative defaults, such as failing to file reports or pay taxes

Front 29

Reinstatement

Back 29

process of reviving a corporation dissolved for administrative reasons

Front 30

Nonjudicial Liquidation

Back 30

process of winding up by corporate managers

Front 31

Judicial liquidation

Back 31

process of winding up by court appointee

Front 32

known claim

Back 32

a claim known by entity, they must send them a written letter of dissolution, known creditors have 120 day after that letter to file a claim.

Front 33

unknown claim

Back 33

claim has not yet been made against an entity- they must publish a notice in the paper and the unknown creditor has 3 years from the date of publication to file a claim