Final 305

Dissenting Shareholder

Shareholder who has objected to a merger or consolidation and votes against it; is entitled to receive the value of her shares before the merger or consolidation

Dissolution

In partnerships, occurs when one partner ceases to be associated with the business; in corporations, the termination of the corporate existence

Dodd-Frank Wall Street Reform and Consumer Financial Protection Act

Federal law over 2000 pages in length that increases and modifies the regulation of financial markets, investment firms, securities analysts, rating agencies, corporate boards, and consumer credit (including mortgage disclosures)

Domestic Corporations

A term used to describe a corporation in the state in which it is incorporated

Fiduciary

Position of trust and confidence

Foreign Corporations

A corporation in any state except the state in which it is incorporated.

Freeze-Out

Merger undertaken with the objective of eliminating minority shareholders.

General Partner

Partner in a general or limited partnership whose personal assets are subject to partnership creditors in the event of nonpayment of partnership debts.

Incorporators

Individuals who sign the incorporation papers for a newly formed corporation.

Initial Meeting

First meeting of a corporation’s organizers after the state provides certification that the corporation exists.

Joint Ventures

A partnership for one activity or business venture.

Limited Liability Company (LLC)

A business entity with limited liability but management participation permitted by all; created by statute.

Limited Liability Partnership

Partnership in which all partners have limited liability; statutory creature with strict formation requirements.

Limited Partner

Partner in a limited partnership who has no personal liability and can only lose his investment in the partnership; must be formed according to statutory requirements; cannot participate in the firm’s management.

Limited Partnership

Type of partnership in which some partners have unlimited liability (general partner) and other partners only have their investments at risk in the business (limited partners); must follow statutory procedures to properly create a limited partnership.

Limited Partnership Agreement

Contract governing the rights and relations of limited partners.

Model Business Corporation Act (MBCA)

Uniform law on corporations.

Novation

Process of reworking a contract to substitute parties or terms, so that the old contract is abandoned, and the new contract becomes the only valid contract.

Partnership by Estoppel

The conduct of two or more parties leads others to believe a partnership exists. Arise when others are led to believe there is a partnership.

Partnership by Implication

A partnership that exists because the parties agree to share profits in the absence of a formal agreement.