Chapter 9 Vocab

Front 1

Promoter

Back 1

One involved in organizing a corporation

Front 2

Preincorporation contracts

Back 2

Agreements enter into by promoters on behalf of a corporation

Front 3

Ratification

Back 3

Approval of a transaction

Front 4

Relation back

Back 4

Doctrine that certain actions are viewed as having occurred on an earlier date

Front 5

Assignment

Back 5

Transfer of one's interest in some asset or right

Front 6

Nune pro tune

Back 6

Literally "now for then", a reference to an act or document having an effective date earlier than the date of its execution

Front 7

Novation

Back 7

A substitution of one party or document for another

Front 8

Preincorporation share subscriptions

Back 8

Offers to purchase shares in a corporation before its formation

Front 9

Franchise tax

Back 9

Fee paid for maintaining a business registration in a state

Front 10

Name reservation

Back 10

Process of reserving a name for a corporation while its incorporation papers are being prepared

Front 11

Name registration

Back 11

Process of reserving a name in a foreign jurisdiction

Front 12

Name saver

Back 12

Corporation formed by another for purpose of reserving a corporate name in a foreign jurisdiction

Front 13

Assumed name

Back 13

A name under which a business operates that is not the name under which it was formed

Front 14

Articles of incorporation

Back 14

The document that creates a corporation; also called certificate of incorporation of charter

Front 15

Broad purpose clause

Back 15

Clause in corporate articles that states the corporation is formed to conduct any legal activity ; also called full purpose clause

Front 16

Ultra vires doctrine

Back 16

Seldom used legal theory that certain acts are invalid as being beyond a corporation's powers

Front 17

Authorized shares

Back 17

The member of shares set forth in a corporation's articles that the corporation has authority to issue

Front 18

Common stock

Back 18

Stock of a corporation having no special privileges

Front 19

Preferred stock

Back 19

Stock of a corporation issued with desirable privileges

Front 20

Par value

Back 20

The minimum amount for which a corporation's stock can be sold

Front 21

Preemptive right

Back 21

Right of shareholder to buy pro rata share of newly issued stock before it is offered to nonshareholders

Front 22

Opt out provision

Back 22

State laws providing that preemptive rights exist unless specifically denied by the articles

Front 23

Bylaws

Back 23

Internal rules governing corporate procedures and operation

Front 24

Special meeting

Back 24

A meeting held between regularly scheduled meetings

Front 25

Quorum

Back 25

Minimum number of persons required to transact business

Front 26

Supermajority

Back 26

A vote greater than a simple majority, often two thirds

Front 27

Tax year

Back 27

An annual accounting period for keeping records and reporting income and expenses

Front 28

Calendar year

Back 28

The period between Jan 1 and Dec 31st

Front 29

Fiscal year

Back 29

Any 12-consecutive month period

Front 30

Seal

Back 30

Device used to impress documents to verify authenticity

Front 31

Minute book

Back 31

Binder or book used to maintain minutes of corporate meetings and other information

Front 32

Stock certificate book

Back 32

Book containing stock certificates to be issued to shareholders

Front 33

Organizational meeting

Back 33

First corporate meeting held to launch corporation

Front 34

Dummy directors

Back 34

Nominee directors, often a legal team, named in organizational articles, not intended to be permanent directors

Front 35

Written consent

Back 35

Document reflecting action taken by agreement in writing rather than action taken in person at a meeting

Front 36

Annual report

Back 36

Form required to be filed annually by domestic and foreign corporations in most states providing information about the corporation

Front 37

De jure corporation

Back 37

A corporation that substantially complied with statutory requirements and is unassailable

Front 38

De facto corporation

Back 38

A corporation that attempted in good faith to comply with statutory requirements and can only be challenged by the state

Front 39

Corporation by estoppel

Back 39

Corporation that cannot be attacked by third parties because they have dealt with corporation as if it was validly organized