Term
| limited liability company |
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Definition
- unincorporated business entity
- may elect to be taxed as a partnership
- owners can manage business
- owners have limited liability |
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Term
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Definition
- formed by delivering articles of organization to the office of the secretary and state of the state of organization for filing
- articles include name, address of office, name and address of agent and organizers
-existence begins when filed |
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Term
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Definition
-llc is liable for loss or injury caused by wrongful act or omission or member, manager, employee, or with authority of the llc
- managers are not personally liable for debt obligations or liabilities of the LLC
- members or mangers are personally liable for their own torts |
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Term
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Definition
= all members can bind the llc to authorized contracts
- each member has equal rights in the management of the business regardless of the size of his or her capital contribution
- any matter relating to the business of the llc is decided by a majority vote of the members |
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Term
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Definition
- only the managers can bind the llc to authorized contracts
- members and nonmembers who are designated managers control the management of the llc
- members who are not managers have no rights to manage the llc unless otherwise provided in operating agreement
- certain actions cannot be delegated to managers but must be voted on by members |
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Term
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Definition
-member of an llc has the power to disassociate from the lcc
-wrongful disassociation occurs when member withdraws from a term llc prior to the expiration of the term or from an at will llc when the operating agreement eliminates a member's power to withdraw (may owe damages) |
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Term
| llc notice of disassociation |
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Definition
-document filed with the secretary of state that gives constructive notice that a member has disassociated
-effective against any person who later deals with llc |
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Term
| nature of the corporation |
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Definition
-corporations created under state corporations codes
-state statutes regulate the formation operation and dissolution of corporations
- courts interpret state corporations statute to decide individual corporate and shareholder disputes |
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Term
| characteristics of corporations |
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Definition
- limited liability of shareholders
- free transferability of shares
- perpetual existence
- centralized management |
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Term
| publicly held v. closely held corporations |
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Definition
publicly held corporation
- many shareholders
- shares traded on organized security markets
- shareholders rarely involved in management
closely held corporation
- few shareholders
- shareholders may have buy and sell agreement
- shareholders often involved in management |
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Term
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Definition
- corporation formed by lawyers, doctors, etc.
- shareholders called members
- members not usually liable for torts committed by agents or employees
- may be liable for malpractice of members |
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Term
| articles of incorporation |
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Definition
basic governing document of the corporation
- must be filed with secretary of state of state incorporation
- contains name of corporation, number of shares authorized, name and address for registered agent and incorporators
-may contain term, purpose, limitations, regulations of affairs |
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Term
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Definition
RM BCA provides that corporate existence begins when the articles of incorporation are filed
- filing of articles is concluzive proof that a corporation exists
- after that only the state can challenge status of the corporation
- failure to file articles is conclusive proof that corporation does not exist |
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Term
| registered agent of a corporation |
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Definition
- a person or corporation empowered to accept service of process on behalf of the corporation
- articles must identify registered office with designated resident agent in state of incorporation |
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Term
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Definition
a detailed set of rules adopted by the board of directors after the corporation is incorporated
- contains provisions for managing the business and the affairs of the corporation
- governs internal management structure
- board of directors may amend |
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Term
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Definition
- corporations are seperate legal entities
- they generally must pay corporate income taxes to federal and state governments
- if a corporation distributes its profits to shareholders in the form of dividends shareholders must pay personal income tax on dividends
- this double taxation of corporations is a disadvantaged of doing business |
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Term
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Definition
- some corporation and their shareholders can avoid double taxation by electing to be an s corporation
- pay no federal income tax
- income or loss flows to the shareholders' individual income tax returns |
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Term
| eligibility to be an s corporation |
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Definition
- domestic corporation
- not member of affiliated group of corporations
- no more than 100 shareholders
- only one class of stock |
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Term
| dissolution of corporations |
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Definition
- voluntary
- administrative
- judicial |
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Term
| administrative dissolution |
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Definition
dissolved by secretary of state if:
- failed to file annual report
- failed to maintain registered agent for 60 days
- did not pay franchise fee etc.
certificate of dissolution |
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Term
| termination of a corporation |
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Definition
after the:
- winding up of corporation's affairs
- liquidation of its assets
- distribution of the proceeds to the claimants |
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Term
| governance of non-profit organizations |
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Definition
- directors are liable
- require more detailed disclosures
- directors generally not compensated
- can make profit but must be used to pay salaries/support organization of mission |
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