Business Law GLOSSARY
Glossary of Business Law Terms
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Par Value: The issued price of a security that bears no
relation to the market price.
Parent Corporation: A corporation that either owns
outright or controls a subsidiary.
Participate: To invest and then receive a part or share,
as in business profits, payments on a promissory note, title to
land, or as one of the beneficiaries of the estate of a person who
Partner: One of the co-owners and investors in a
"partnership" which is an ongoing business enterprise entered into
Partnership: A business enterprise entered into for profit
which is owned by more than one person, each of whom is a "partner."
A partnership may be created by a formal written agreement, but may
be based on an oral agreement or just a handshake; coming together
to operate a business for profit. Partnerships do not enjoy limited
liability, except in the case of limited partnerships.
Patent Ambiguity: An obvious inconsistency in the language
of a written document.
Peremptory Challenge: A challenge to a particular juror
that requires no reason. Normally an attorney has a limited number
of these challenges.
Personal Property: Defined by the law as "things movable."
This is distinguished from the term "real property," which includes
things such as trees, buildings and land.
Petition: A formal request that the court take some
action; a complaint.
Pierce the Veil: Doctrine that attaches liability to
corporate shareholders in cases of commingling of assets and failure
to observe corporate formalities.
Plaintiff: The party bringing the case against another.
Pleading: A pleading is the process of making formal,
written statements by the litigants. All papers filed with the court
are collectively referred to as "pleadings."
Precedent: The value that a completed case has on deciding
Preemptive Right: The right of a shareholder in a
corporation to have the first opportunity to purchase a new issue of
stock of that corporation in proportion to the amount of stock
already owned by the shareholder.
Preemptive Rights: Rights enjoyed by existing shareholders
to purchase additional shares of stock in the same proportion to
their existing holdings.
Preferred Stock: A separate and/or secondary class of
stock issued by some corporations. Preferred stock typically has
limited or no voting rights, but its holders are paid dividends or
receive repayment priority in the event the corporation is
Principal Place of Business: Location for the head office
of a business where the books and records are kept and/or management
works. In most states corporations must report their principal place
of business to the Secretary of State.
Principal: 1) Main person in a business. 2) Employer, the
person hiring and directing employees (agents) to perform
Pro Se: On one's own behalf; not using an attorney.
Process Serving: The method by which a defendant in a
lawsuit is notified that a plaintiff has filed a suit against him.
Product Liability: A type of strict liability in which the
manufacturer or seller is strictly liable for injuries caused by
Professional Corporation: A corporation whose members are
all licensed professionals, such as doctors, lawyers, accountants
Promoter: A person who puts together a business,
particularly a corporation, including the financing. Usually the
promoter is the principal shareholder or one of the management team
and has a contract with the incorporators or makes a claim for
shares of stock.
Proxy: An authorization by one shareholder giving another
person the right to vote the shareholder's shares. Proxy also refers
to the document granting such authority.
Public Benefit Corporation: A term used in some states for
a nonprofit community service corporation. Typical examples are
clubs like Kiwanis, Rotary, and Lions.
Public Corporation: A corporation created to perform a
governmental function or to operate under government control, such
as a municipal water company or hospital.
Puffing: Puffing is the exaggeration of the good points of
a product, business, or real property. Puffing may also include the
exaggeration of the prospects for future rise in value, profits and
Punitive Damages: Damages given for the purpose of
punishing the defendant.