LGS 200 Final Exam Review

Shareholders and officers are protected frompersonal

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shareholders and officers are protected frompersonal claims, unless they commit fraud. Nonprofit Corporation · an organization incorporated under statelaws and approved by both the state's Secretary of State and its taxingauthority as operating for educational, charitable, social, religious, civic orhumanitarian purposes. A non-profit corporation (also called "not forprofit corporation") is formed by incorporators, has a board of directorsand officers, but no shareholders. These incorporators, directors and officersmay not receive a distribution of (any money from) profits, but officers andmanagement may be paid reasonable salaries for services to the corporation. De Jure Corporation · a corporation in good standing under thelaw, as compared to a de facto corporation which is acting while not fulfillinglegal requirements De Facto Corporation · a company which operates as if it were acorporation although it has not completed the legal steps to becomeincorporated (has not filed its articles, for example) or has been dissolved orsuspended but continues to function. The court temporarily treats thecorporation as if it were legal in order to avoid unfairness to people whothought the corporation was legal. To pierce the corporate veil · - to prove that acorporation exists merely as a completely controlled front (alter ego) for anindividual or management group, so that in a lawsuit
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the individual defendantscan be held responsible (liable) for damages for actions of the corporation. Board of Directors · the policy managers of a corporation ororganization elected by the shareholders or members. The board in turn choosesthe officers of the corporation, sets basic policy, and is responsible to theshareholders. In small corporations there are usually only three directors. Inlarger corporations board members provide illustrious names, but the company isoften run by the officers and middle-management who have the expertise. SHAREHOLDERS an individual or institution (including acorporation) that legally owns a share of stock in a public or privatecorporation Quorum · the minimum number of members of adeliberative assembly (a body that uses parliamentary procedure, such as alegislature) necessary to conduct the business of that group. Business Judgement Rule · is a United States case law-derivedconcept in corporations law whereby the "directors of a corporation . . .are clothed with [the] presumption, which the law accords to them, of being[motivated] in their conduct by a bona fide regard for the interests of thecorporation whose affairs the stockholders have committed to theircharge". Duty of loyalty · a term used in corporation law todescribe a fiduciaries' "conflicts of interest and requires fiduciaries toput the corporation's interests ahead of their own." Cumulative Voting a multiple-winner voting system intended topromote more proportional
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