Corporate Law Glossary
25 essential terms — because precise language is the foundation of clear thinking in Corporate Law.
Showing 25 of 25 terms
The foundational legal document filed with a state government to create a corporation, specifying its name, purpose, share structure, and registered agent.
The governing body of a corporation elected by shareholders, responsible for overseeing management, setting corporate policy, and making major business decisions.
A presumption that directors acting in good faith, with due care and on an informed basis, will not be held liable for honest business decisions.
Internal rules adopted by a corporation that govern its operations, meetings, voting procedures, and officer responsibilities.
The default corporate tax classification under the Internal Revenue Code, subject to corporate income tax on profits and double taxation when dividends are distributed.
The framework of rules, relationships, systems, and processes within which authority is exercised and controlled in a corporation.
A lawsuit filed by a shareholder on behalf of the corporation to enforce a right that the corporation has failed to assert on its own.
The formal legal process of winding up a corporation's affairs, settling debts, distributing remaining assets, and terminating its legal existence.
The taxation of corporate income at both the corporate level and again at the shareholder level when distributed as dividends.
A comprehensive investigation of a company's financial, legal, and operational status, typically conducted prior to a merger, acquisition, or major investment.
A fiduciary obligation requiring corporate directors to act with the care that a reasonably prudent person would exercise in similar circumstances.
A fiduciary obligation requiring directors and officers to act in the best interest of the corporation, avoid conflicts of interest, and refrain from self-dealing.
The highest standard of care in law, requiring directors and officers to act with loyalty, good faith, and care toward the corporation and its shareholders.
An acquisition of a target corporation without the consent or cooperation of the target's board of directors.
The illegal buying or selling of securities based on material, non-public information, in violation of a duty of trust or confidence.
The principle that shareholders of a corporation are not personally liable for the corporation's debts beyond the amount of their investment.
Transactions in which the ownership of companies, business organizations, or their operating units are transferred or consolidated.
A judicial remedy disregarding the separate legal personality of a corporation to hold shareholders personally liable for corporate obligations.
A defensive strategy used by a target company to make a hostile takeover prohibitively expensive by triggering shareholder dilution rights.
A written authorization allowing one person to act or vote on behalf of a shareholder at a corporate meeting.
A corporation that elects pass-through tax treatment under Subchapter S of the Internal Revenue Code, avoiding double taxation but subject to eligibility restrictions.
A 2002 U.S. federal law that established enhanced standards for corporate governance, financial disclosure, and accounting oversight for public companies.
The U.S. federal agency responsible for enforcing federal securities laws, regulating securities markets, and protecting investors.
The doctrine that a corporation is a distinct legal entity with its own rights and liabilities, independent of its shareholders.