Business Law Glossery

Acquisition: The purchase of one corporation by another, through either the purchase of its shares, or the purchase of its assets.

Administrative Dissolution: The involuntary dissolution of a corporation by the Secretary of State, or other equivalent department, due to the failure of a corporation to meet statutory requirements such as periodic filing and tax reporting requirements.

Advisory Board: A body that advises the board of directors and management of a corporation but does not have authority to vote on corporate matters.

Affidavit: A written statement under oath.

Age Discrimination in Employment Act: A federal law that protects older employees from employment discrimination on the basis of age.

Agent for Service of Process: The person or entity that is authorized to receive legal papers on behalf of a corporation.

Agreement: Mutual assent between two or more parties; normally leads to a contract; may be verbal or written.

Alter Ego Liability: Doctrine that attaches liability to corporate shareholders in cases of commingling of assets and failure to observe corporate formalities.

Alter Ego: Corporation used by an individual to conduct personal business. It's illegal. In alter ego scenario, individuals will be held liable to the corporation. See also piercing the corporate veil.

Amendment of Articles of Incorporation: The procedure by which one or more changes is made to a corporation's articles of incorporation.

Americans with Disabilities Act: A federal law that protects employees from discrimination on the basis of disability, and imposes upon employers the requirement that they make "reasonable accommodations" for their employees' disabilities.

Annual Meeting of Directors: A meeting held each year to elect officers of a corporation, and to address other corporate matters. Usually follows immediately after an Annual Meeting of Shareholders.

Annual Meeting of Shareholders: A meeting held each year to elect directors of a corporation, and to address other corporate matters.

Annual Meeting: Yearly meeting of shareholders in corporate law context for the purpose of electing shareholders.

Answer: Pleading filed by the defendant that responds to a complaint, petition, or motion.

Appeal: A request to the higher court for review of the lower court's decision and to request a reversal of the judgment.

Apportionment: The allocation of income earned from activities in a particular state or assets present in a particular state to determine the tax due in that state.

Arbitration: The procedure by which a dispute may be resolved by a person who is not a judge. Arbitration is often used to limit legal costs to both parties.

Arbritrator: A person who conducts an arbitration.

Articles of Incorporation: The document which gives birth to a corporation by filing in the state of incorporation. Articles cover foundational matters such as the name of the corporation, the shares it is authorized to issue, its corporate purpose, and its agent for service of process.

Assumption of Risk: A doctrine that states if the plaintiff has knowingly accepted the danger of doing something, recovery from the defendant in an action brought for negligence will be barred.

At Will Employment: A type of employment relationship in which there is no contractual agreement and either party may end the employment relationship at any time, for any reason or for no reason at all, without incurring a penalty.

Audit: An examination by a trained accountant of the financial records of a business or governmental entity, including noting improper or careless practices, recommendations for improvements, and a balancing of the books.

Auditor: An accountant who conducts an audit to verify the accuracy of the financial records and accounting practices of a business or government. A proper audit will point out deficiencies in accounting and other financial operations.

Authorized Capital: The total number of a corporation's authorized shares multiplied by the share's par value. For example, 1,000,000 authorized shares of stock with a one cent par value equals an authorized capital of $10,000.

Authorized Shares: The number of shares of a corporation's stock that the corporation has the authority to issue. The authorized shares of a class of stocks is stated in a corporation's articles of incorporation.
Back Pay: A type of damages award in an employment lawsuit that represents the amount of money the employee would have earned if the employee was not fired or denied a promotion illegally.

Bait and Switch: A dishonest sales practice in which a business advertises a bargain price for an item in order to draw customers into the store and then tells the prospective buyer that the advertised item is of poor quality or no longer available and attempts to sell them something else that is higher priced.

Balance Sheet: The statement of the assets and the liabilities (amounts owed) of a business at a particular time usually prepared each month, quarter of a year, annually, or upon sale of the business.

Bench Trial: A trial without a jury. The judge rules on facts and evidence presented to him.

Blue Sky Laws: The securities laws of individual states, collectively. These laws seek to protect people from investing in sham companies-companies that offer nothing more than "blue sky."

Board of Directors: The directors of a corporation, collectively. The directors of a corporation are its governing board. Elected by shareholders, they vote on major corporate matters such as the issuing of shares of stock, election of officers, and approval of mergers and acquisitions.

Bond: An interest-bearing instrument issued by a corporation or other entity that serves as evidence of a debt or obligation.

Book Account: An account of a customer kept in a business ledger of debits and credits (charges and payments), which shows the amount due at any given time. This can provide a clear basis for suing for a debt.

Bucket Shop: An unofficial and usually illegal betting operation in which the prices of stocks and commodities are posted and the customers bet on the rise and fall of prices without actually buying stock, commodities, or commodity futures.

Burden of Proof: The obligation of one party in a suit to prove all the requirements necessary to show entitlement to recovery. If the burden is not met, the party with the burden will lose the issue or the case.

Business Judgment Rule: The rule that shields directors from liability for mismanagement of the corporations that they serve.

Business Law: Business law is the general field of law relating to business organizations, business structures, and business transactions. Also included in the business law field are issues related to real estate, tax, and the environment. Business law courses are available for non-lawyers at the college level. For law students, business law courses are very detailed and will allow the attorney to give competent business law advice as to what kind of business organization might be appropriate for a client and what course of action may be best in certain business transactions.

Bylaws: The internal operating rules of a corporation usually set out in a five to twenty page document. Bylaws govern such matters as holding meetings, voting, quorums, elections, and the powers of directors and officers.
Cafeteria Plan: A type of employment benefits plan in which the employee selects benefits from a "menu," up to a specified dollar amount.

Capital Account: The record which lists all basic assets of a business, not including inventory or the alleged value of good will.

Capital Assets: Equipment, property, and funds owned by a business.

Capital Expenditure: Payment by a business for basic assets such as property, fixtures, or machinery, but not for day-to-day operations such as payroll, inventory, maintenance and advertising.

Capital: The basic assets of a business (particularly corporations or partnerships) or of an individual, including actual funds, equipment and property; distinguished from stock in trade, inventory, maintenance, advertising and payroll.

Carrier: In general, any person or business which transports property or people by any means of conveyance (truck, auto, taxi, bus, airplane, railroad, ship), almost always for a charge.

Carrying For Hire: The act of transporting goods, or people, for a fee. It is important to determine if the carrier has liability for safe delivery or is subject to regulation.

Carrying on Business: Pursuing a particular occupation on a continuous and substantial basis. There need not be a physical or visible business "entity" as such.

Casualty: A loss of property due to fire, storm shipwreck or other casualty, which is allowable as a deduction in computing taxable income.

Cause of Action: The plaintiff's legal claim against the defendant. There is often more than one cause of action in a lawsuit.

C-Corporation: Any corporation that has not elected S Corporation status.

Certificate of Authority: A document issued by the secretary or state or equivalent department that authorizes a foreign corporation to operate in a state other than its state of incorporation.

Certificate of Good Standing: A document issued by the secretary or state or equivalent department that certifies that a corporation in validly existing and in compliance with all periodic and taxation requirements.

Civil Law: That part of the law which governs relationships between people where there is no criminal activity involved.

Close Corporation: A corporation owned by a small number of individuals. Corporations must elect to be close corporations by inserting a statement in their articles of incorporation. State laws typically permit close corporations to be operated more informally than non-close corporations

Co- Partner: One who is a member of a partnership. The prefix "co" is a redundancy, since a partner is a member of a partnership. The same is true of the term "co-partnership."

Co-Defendant: A defendant joined together with one or more other defendants in the same case.

Commercial Law: All the laws which apply to the rights, relations and conduct of persons and businesses engaged in commerce, merchandising, trade and sales. In recent years this body of law has been codified in the Uniform Commercial Code.

Commission: A fee paid based on a percentage of the sale made by an employee or agent, as distinguished from regular payments of wages or salary.

Common Counts: Claims for debt alleged in a lawsuit (included in the complaint), which are general and alleged together so that the case will not be dismissed based on a technicality.

Common Law: Body of law that has grown based on the decisions of courts long ago. It originated in England and has since passed to the United States. It is always changing to reflect the current needs society.

Common Stock: A corporation's primary class of stock. Common stock holders typically have voting rights.

Company: Any formal business entity for profit, which may be a corporation, a partnership, association or individual proprietorship. Often people think the term "company" means the business is incorporated, but that is not true.

Comparable Worth: A legal concept which requires that people who work similar jobs of similar worth to the employer must be paid the same amount regardless of gender.

Comparative Negligence: A defense to negligence used when it is believed that the plaintiff's negligence contributed to his or her injuries. Based on the amount of negligence by each party, the amount of damages is adjusted accordingly.

Complaint: A pretrial document filed in a court by one party against another that states a grievance, called a "cause of action."

Conscious Parallelism: An un-discussed imitation by a business of a competitor's action, such as changing prices up or down without the active conspiracy between business rivals, which would make this coincidental activity a violation of anti-trust laws.

Consignee: A person or business holding another's goods for sale or for delivery to a designated agent.

Consignment: The act of consigning goods to one who will sell them for the owner or transport them for the owner.

Consolidated Omnibus Budget Reconciliation Act ("COBRA"): A federal law that requires employers to allow employees to continue their health insurance coverage after termination, in the same insurance group, at the group rate, and providing the same benefits.

Constructive Discharge: A type of termination of the employment relationship in which the employee quits, but the employer is liable as if a wrongful termination occurred, because the employee was forced to resign due to intolerable working conditions.

Contingency Fee Agreement: An agreement between an attorney and their client, which allows the attorney to be paid only if the client prevails in a lawsuit and collects monetary damages. The lawyer then receives a percentage of the damages, generally 1/3 of the award.

Contributory Negligence: A defense to negligence, which points out that the plaintiff's negligence contributed to his or her injuries. Contributory negligence is an absolute bar to the plaintiff's recovery against the defendant.

Conversion; Conversion Rights: Rights allowing the holder of shares of stock or other financial instrument to convert to other shares of stock.

Convertible Instrument: Financial instruments such as bonds or notes that can be converted into shares of stock. Shares of stock may also be convertible into shares of another class.

Cooperation: An organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise funds.

Cooperative Consortium: A group of separate businesses or business people joining together and cooperating to complete a project, work together to perform a contract or conduct an ongoing business.

Corporate Secretary: A corporate officer, elected by the directors, usually charged with record-keeping responsibilities.

Co-sign: To sign a promissory note or other obligation in order to share liability for the obligation.

Counterclaim: A demand by the defendant against the plaintiff asserting an independent cause of action in the same lawsuit.

Cross Examination: Questioning the witness who has been presented by the opposition at trail or a deposition.

Cumulative Voting: A system of voting shares of stock used in some states. Cumulative voting gives minority shareholders additional voting power by allowing them to "cumulate" their votes for a single director.
D.B.A.: Short for "doing business as," when a person or entity uses a business name instead of his/her/its own.

Damages: The sum of money awarded to the injured party in a personal injury lawsuit.

Deadlock: The circumstance that arises when either the board of directors or shareholders are evenly split on a vote and cannot take action. Deadlock can lead to judicial resolution of the underlying dispute.

Dealer: Anyone who buys goods or property for the purpose of selling as a business.

Debenture: A form of bond certificate issued by a corporation to show funds invested, repayment of which is guaranteed by the overall capital value of the company under certain specific terms. Thus, it is more secure than shares of stock or general bonds.

Debt Financing: A method of financing where the company receives a loan and gives its promise to repay the loan.

Default Judgment: A judgment issued when the defendant offers no defense by not responding to the complaint. A judge may issue a judgment without the necessity of a trial.

Defendant: The person against whom a claim is brought.

Deponent: The person who testifies at a deposition.

Deposition: A pretrial discovery device in which one party verbally answers questions from the other party.

Dilution: The effect of reducing an existing shareholder's interest in a corporation when new shares are issued.

Director: A member of the governing board of a corporation or association elected or re-elected at annual meetings of the shareholders or members. As a group the directors are responsible for the policy making,

Discovery: Methods and procedures by which information is made available to each party prior to trial. Discovery may include depositions, interrogations, requests for production of documents, and demands for independent medical examinations.

Dissolution of Corporation: Termination of a corporation

Dissolution: The process of shutting down a corporation, settling its affairs, and ending its life.

Distribution: A transfer of profits or property by a corporation to its shareholders.

Dividend: A share of profits issued to the holders of shares in a corporation. Dividends can be paid in shares of stock or other property such as shares in a subsidiary or parent company.

Dividend Priority: Special rights enjoyed by holders of a secondary class of stock that entitle holders to receive dividends before other shareholders.

Docket: A summary system kept by the clerk's office which contains a record of all pleadings, court orders and other important activities in a case.

Doing Business As (DBA): A company whose operating name differs from its legal name is said to be "doing business as" the operating name. Some states require DBA or "fictitious business name" filings to be made for the protection of consumers conducting business with the entity.

Doing Business: Carrying on the normal activities of a corporation on a regular basis or with substantial contacts-not just an occasional shipment.

Domestic Corporation: In general, a corporation whose articles of incorporation are filed in the state in which it operates and maintains its principal office.

Dram Shop Rule: A statute (Dram Shop Act) or case law in 38 states which makes a business which sells alcoholic drinks or a host who serves liquor to a drinker who is obviously intoxicated or close to it, a crime.
EIR: Popular acronym for environmental impact report, required by many states as part of the application to a county or city for approval of a land development or project. See also: environmental impact report.

Emotional Distress: Mental anguish.

Employee Stock Ownership Plan: An employer-provided benefit that allows employees to purchase stock in the company under certain favorable terms.

Employee Assistance Program ("EAP"): A workplace program provided by the employer to assist employees in recovering from drug or alcohol abuse, emotional problems, job stress, marital discord, or workplace conflict.

Entity: A general term for any institution, company, corporation, partnership, government agency, university or any other organization which is distinguished from individuals.

Environmental Impact Report: A study of all the factors which a land development or construction project would have on the environment in the area, including population, traffic, schools, fire protection, endangered species,

Equal Employment Opportunity Commission: The federal administrative agency that enforces laws prohibiting discrimination in employment.

Equal Pay Act: A federal law that requires employers to pay the same to all employees who do the same work, regardless of gender.

Equitable Remedies: Remedies that do not include monetary settlements. Examples include injunctions and restraining orders.

Equity Financing: A method of financing where a company issues shares of its stock and receives money.

Equity Interest: Another term for an ownership interest in a company.

Evidence: The body of law concerning the manner of presentation of information to a judge or jury in a trial.

Ex Officio: Latin for "from the office," to describe someone who has a right because of an office held, such as being allowed to sit on a committee simply because one is president of the corporation.

Exhibit: Any piece of physical evidence that is used at a trial.

Expense: In business accounting and business taxation, any current cost of operation, such as rent, utilities and payroll, as distinguished from capital expenditure for long-term property and equipment.

Expert: A witness who may give an opinion in court based on the particular competence of that witness.
Fair Trade Laws: State laws which permit manufacturers or producers to set minimum rates for resale of the product. These laws have been repealed and/or found to be in violation of state constitutions in several states.

Fair Use: The non-competitive right to use of copyrighted material without giving the author the right to compensation or to sue for infringement of copyright. With the growing use of copy machines,

Family Medical Leave Act: The federal law that requires certain employers to give time off to employees to take care of their own or a family member's illness, or to care for a newborn or adopted child.

Fictitious Business Name: A company whose operating name differs from its legal name is said to be doing business under a fictitious business name. Some states require DBA (doing business as) or fictitious business name filings to be made for the protection of consumers conducting business with the entity.

Fiduciary Relationship: A special relationship in which one party, the fiduciary, owes heightened duties of good faith and responsibility to the other party.

Final Judgment: The written ruling on a lawsuit by the judge who presided at trial. This completes the case unless it is appealed to a higher court. This term can be used interchangeably with a final decree or final decision.

Foreign Corporation: A corporation which is incorporated under the laws of a different state or nation. A "foreign" corporation must file a notice of doing business in any state in which it does substantial regular business.

Franchise Tax: A tax levied in consideration for the privilege of either incorporating or qualifying to do business in a certain state. A franchise tax may be based upon income, assets, outstanding shares, or a combination.

Franchise: A right granted by the government to a person or corporation, such as a taxi permit, bus route, an airline's use of a public airport, business license or corporate existence.

Fraud: Occurs when intentional false statements are made to entice a victim to give up something of value.

Front Pay: A type of damages award in an employment lawsuit that represents the amount of money the employee would have earned if the employee was reinstated or hired into the higher-paying position from which he or she was illegally rejected.

Fully Reporting Company: A public company that is subject to the Securities and Exchange Commission's periodic reporting requirements.

Fungible Things: Sometimes merely called "fungibles," goods which are interchangeable, often sold or delivered in bulk, since any one of them is as good as another. Grain or gravel are fungibles, as are securities which are identical.
Garnishment of Wages: Taking or seizing the amount owing pursuant to a child support order or other order, directly from the employee's wages; a proceeding whereby a debtor's money, or other property, which is under the control of another is given to a third person to whom the debtor owes a debt.

General Partner: Usually one of the owners and operators of a partnership, which is a joint business entered into for profit, in which responsibility for management, profits and, most importantly,

Go Public: The process of becoming a public, fully reporting company either by filing a registrations statement with the SEC, or by merging with a public company.

Good Standing: A state a corporation enjoys when it is in full compliance with the law.

Goods: Items held for sale in the regular course of business, as in a retail store.

Gross Negligence: Failure to use even the slightest amount of care in a way that shows recklessness or willful disregard for the safety of others.
Hearing: A proceeding usually without a jury.

Hidden Trust: An item of value which does not show on the books of a business, often excluded for some improper purpose such as escaping taxation or hiding it from a bankruptcy trustee.

Hostile Working Environment: A work environment that is so charged with harassment or similar unwanted behavior that it interferes with the ability to do one's job and is said to violate anti-discrimination laws.
Illiquidity Discount: A discount in the value of an interest in a business because of legal restrictions on the resale of such interest.

Impaneling: Selecting a jury from the list of potential jurors.

Impeach: Attacking the credibility of a witness.

Implied Contract: A type of enforceable contract that is not made explicitly, but is implied from the circumstances or the parties' conduct.

Incorporate: To obtain an official charter or articles of incorporation from the state for an organization, this may be a profit-making business, a professional business, such as a law office or medical office; or a non-profit entity which operates for charity.

Incorporator: The person or entity that organizes a corporation and files its Articles of Incorporation. The incorporator can take corporate actions before directors and officers are appointed.

Independent Contractor: A person or business which performs services for another person or entity under a contract between them, with the terms spelled out such as duties, pay, the amount and type of work and other matters.

Individual Retirement Account ("IRA"): A tax-deferred savings account in which the employee contributes no more than a set maximum amount annually.

Injunction: A court order requiring a person to do, or to refrain from doing, a particular thing.

Insider: Someone who has a position in a business or stock brokerage, which allows him/her to be privy to confidential information (such as future changes in management, upcoming profit and loss reports).

Intentional Infliction of Emotional Distress: Intentionally causing severe emotional distress by extreme or outrageous conduct.

Interrogatories: A written set of questions sent from one party to the other during the discovery process.

Interstate Commerce: Commercial trade, business, movement of goods or money, or transportation from one state to another, regulated by the federal government according to powers spelled out in Article I of the Constitution.

Involuntary Dissolution: The forced dissolution of a corporation by a court or administrative action.

Glossary of Business Law Terms

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Jobber: A merchant who buys products (usually in bulk or lots) and then sells them to various retailers. This middleman generally specializes in specific types of products, such as auto parts, electrical and plumbing materials, or petroleum.

Joint Adventure: When two or more people go together on a trip or some other action, not necessarily for profit, which may make them all liable for an accident or debt arising out of the activity.

Joint Enterprise: A generic term for an activity of two or more people, usually (but not necessarily) for profit, which may include partnership, joint venture or any business in which more than one person invests, works,

Joint Venture: An enterprise entered into by two or more people for profit, for a limited purpose, such as purchase, improvement and sale or leasing of real estate.

Judgment Notwithstanding The Verdict: An order by the trial judge entering a judgment in a manner contradictory to the jury's verdict. This is granted only when the verdict is unreasonable and unsupportable.

Judgment: A court's decision.

Judicial Dissolution: The forced dissolution of a corporation by a court at the request of a state attorney general, shareholder, or creditor.

Jurisdiction: The power of a court to act in particular case.

Jury: The panel of people who decide the facts in a lawsuit.

Legal Tender: All money issued by the government.

Libel: A libel case consists of published material with the following criteria: (1) The material is defamatory; (2) the written statements are about someone who is identifiable and living; (3) the material is distributed to someone other than the victim. A key in a libel case is that the victim's reputation must suffer as a result of these written words in order for the action to be actionable.

Limited Liability: The maximum amount a person participating in a business can lose or be charged in case of claims against the company or its bankruptcy. A stockholder in a corporation can only lose his/her investment.

Limited Liability Company: A new and flexible business organization that offers the advantages of liability protection with the simplicity of a partnership.

Limited Partnership: A special type of partnership which is very common when people need funding for a business, or when they are putting together an investment in a real estate development.

Liquidate: To sell the assets of a business, paying bills and dividing the remainder among shareholders, partners or other investors.

Liquidation Preference: Certain classes of stock (usually preferred stock) may have a liquidation preference, which entitles the holders to be paid first in the event of the liquidation of a corporation's assets.

Loss of Consortium: Damages awarded to a family member (usually a spouse) for loss of companionship.
Mental Anguish: Mental suffering. In some cases, damages may be awarded for mental anguish even though no physical injury is present.

Mercantile Law: Broad area of the law (also called commercial law), statutes, cases and customs which deal with trade, sales, buying, selling, transportation, contracts and all forms of business transactions.

Merger: The joining together of two corporations in which one corporation transfers all of its assets to the other, which continues to exist.

Minimum Wage: The set minimum hourly rate that employers in certain industries are required by law to pay their employees.

Mitigation: Action by an employee that will reduce the amount of damages resulting from an unlawful employment practice, i.e., obtaining new employment after a wrongful termination.

Monopoly: A business or inter-related group of businesses which controls so much of the production or sale of a product or kind of product as to control the market, including prices and distribution.

Motion: An application to the court requesting an order or rule in favor of the applicant.
National Origin Discrimination: Discrimination on the basis of an employee's ethnicity.

Negligence: Failure to exercise reasonable care to avoid injuring others or their property. Negligence includes both actions and failure to act.

No Par Shares: Shares for which there is no designated par value.

Non- Compete Agreement: A contract (or part of a contract) in which an employee promises not to work for a competing employer (or to set up a competing business) during, or for a certain length of time after, the employment with the employer.

Non-Profit Corporation: A business organization that serves some public purpose, and therefore enjoys special treatment under the law. Nonprofits corporations, contrary to their name, can make a profit, but cannot be designed primarily for profit-making. Distributions upon liquidation typically must be made to another nonprofit.
Occupational Disease: An illness resulting from long term employment in a particular type of work, such as those employees exposed to asbestos, who later develop cancer.

Occupational Safety & Health Administration (OSHA): The federal agency charged with creating and enforcing workplace health and safety standards.

Officer: The managers of a corporation such as the President, CFO, and Secretary. The officers are appointed by the board of directors.

Offshore Corporation: A corporation chartered under the laws of a country other than the United States. Some countries (particularly in the Caribbean) are popular nations of incorporation since they have little corporate regulation or taxes.

Opinion: An explanation written by the judge explaining his decision.

Ordinance: A law passed by a local or municipal government.

Ordinary Course of Business: Conduct of business within normal commercial customs and usages.

Original Jurisdiction: The first court to which a legal dispute is referred.

Outside Director: A independent member of the board of directors that is not a shareholder or regular employee of a corporation.

Overrule: In a trial, to overrule means to reject an objection.

Overtime Compensation: A higher rate of pay (usually 1.5 or 2 times the regular hourly rate) an employer is obligated to pay employees who work more than a certain number of hours in a day or week.
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 has died.

Partner: One of the co-owners and investors in a "partnership" which is an ongoing business enterprise entered into for profit.

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 future cases.

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 liquidated.

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 his/her/its business.

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 defective products.

Professional Corporation: A corporation whose members are all licensed professionals, such as doctors, lawyers, accountants and architects.

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 growth.

Punitive Damages: Damages given for the purpose of punishing the defendant.
Qualification: The process by which a foreign corporation registers in a state of operation other than its state of incorporation.

Quasi Corporation: A business which has operated as a corporation without completing the legal requirements, often in the period just before formal incorporation.

Quorum: The number of people required to be present before a meeting can conduct business. Unless stated differently in bylaws, articles, regulations or other rules established by the organization, a quorum is usually a majority of members.
Reasonable Care: The standard of care in negligence cases; the duty to act reasonably so as to avoid harming others.

Records: In business, particularly corporations, all the written business documents, especially about financial dealings. Thus, shareholders and partners are entitled to access to the "records" of the business.

Redemption Rights: Right of repurchase enjoyed by a corporation that exist for certain shares of stock.

Redemption: A repurchase of shares from shareholders by a corporation.

Register: In corporations, the record of shareholders, and issuance and transfer of shares on the records of the corporation.

Registered Agent: The person or entity that is authorized to receive legal papers on behalf of a corporation.

Registered Office: The official address of a corporation. Typically this address is the same as that of the registered agent.

Remand: The decision of an appellate court to send a case back to the trial court with instructions on how to correctly decide the case; often used with the term "reversed." Reversed means that the appellate court overturned the trial court's decision.

Remedies: Relief that the plaintiff receives from the defendant in a lawsuit. Often this will include monetary damages or equitable relief (i.e. injunctions).

Reorganization: The implementation of a business plan to restructure a corporation, which may include transfers of stock between shareholders of two corporations in a merger.

Resident Agent: The person or entity that is authorized to receive legal papers on behalf of a corporation.

Respondent: The party that won at trail.

Restraint of Trade: In antitrust law, any activity (including agreements among competitors or companies doing business with each other) which tends to limit trade, sales and transportation in interstate commerce or has a substantial impact on interstate commerce.
S Corporation: A "subchapter S" corporation is a corporation that elects by filing with the IRS to be treated as a partnership for taxation purposes.

Secondary Boycott: An organized refusal to purchase the products of, do business with or perform services for (such as deliver goods) a company which is doing business with another company where the employees are on strike or in a labor dispute.

Secret Rebate: A kickback of money by a business to a "preferred" customer, not offered to the public or by a subcontractor to a contractor not shown on a job estimate. Both are illegal in most states as unfair business practices and may result in criminal charges.

Secretary (Corporate Secretary): A corporate officer, elected by the directors, usually charged with record-keeping responsibilities.

Secretary of State: A state official charged with responsibility for the filing of legal documents, including corporation papers. In some states, and the District of Columbia, this responsibility falls upon another department, such as Hawaii's Department of Commerce and Consumer Affairs, or Arizona's Corporation Commission.

Securities: The broad term that refers to shares of stock, bonds, and some debt instruments.

Service of Process: Providing a formal notice to the defendant that orders him to appear in court to answer plaintiff's allegations.

Sexual Harassment: Harassment is an un-welcomed sexual advance by an employer or supervisor that becomes a condition of the employee's employment or represents a threat to the employee's continued employment. A "hostile work environment" harassment claim can arise when the presence of demeaning or sexual photographs, jokes, threats, or overall atmosphere is so pervasive as to create an intimidating and offensive work environment.

Shareholder: An owner of a corporation and one who holds shares of stock in a corporation.

Shareholder's Agreement: An agreement between the shareholders of a corporation that can cover various matters such as a commitment to vote particular persons as directors and

Shelf Corporation: A fully formed corporation without operations, assets, or liabilities that remains in inventory, or on a "shelf," waiting for a buyer. The advantages: a shelf corporation can be operating within hours, and uses its original formation date.

Silent Partner: A non-legal term for an investor who puts money into a business, but takes no part in the management and is usually unknown to the customers. A "limited partner" is prohibited from taking part in management and has no liability for debts beyond his/her initial investment.

Simple Majority: With respect to shareholder and director voting, more than 50%.

Social Security: A federal program of retirement or disability payments created by taxing employees' income.

Sole Proprietorship: Simply, a business owned and managed by one person. Sole proprietorships do not enjoy liability protection.

Special Meeting of Directors: A meeting of directors, but not an annual meeting, called for a specific purpose.

Special Meeting of Shareholders: A meeting of shareholders, but not an annual meeting, called for a specific purpose.

Statute of Limitations: The time period within which a plaintiff must file his action against the defendant. This time frame varies by state. In North Carolina, the statute of limitations is three years.

Stock Options: A type of retirement plan in which employees have the opportunity to purchase stock in the company for which they work.

Stockholder: An owner of a corporation and one who holds shares of stock in a corporation.

Straw Man: A person to whom title to property or a business interest is transferred for the sole purpose of concealing the true owner and/or the business machinations of the parties.

Strict Liability: The defendant is liable to the plaintiff regardless of fault.

Subpoena: A form issued by the court requiring someone to appear in court and/or bring documents. (Also referred to as a "Summons.")

Subscriber: A person who contracts to purchase the shares of a corporation.

Subscription Agreement: A contract to purchase the shares of a corporation.

Subsidiary: A corporation that is owned outright or controlled by a parent corporation.

Supermajority: With respect to shareholder and director voting, any required percentage higher than 50 percent.

Syndicate: A joint venture among individuals and/or corporations to accomplish a particular business objective, such as the purchase, development and sale of a tract of real property, followed by division of the profits.
Tender: To present to another person an unconditional offer to enter into a contract or to present payment to another.

Trade: A business or occupation for profit, particularly in retail or wholesale sales or requiring special mechanical skill. A trade is also an exchange one thing for another, which includes money for goods, goods for goods and favors for goods or money.

Trade Secret: A process, method, plan, formula or other information unique to a manufacturer, which gives it an advantage over competitors. Therefore the trade secret has value and may be protected by a court-ordered injunction against use or revelation of trade secret.

Transfer Agent: A person or company retained by a corporation to process transfers and registration of shares of stock (stock certificates). One difficulty is that the stock certificates do not always include the name and address of the current transfer agent

Telecommuting: Working from home or another location remote from the office, using technology such as telephones and computers.

Third Party Litigation: When a lawsuit is brought against a defendant and that defendant wants to add another party to the suit, the original defendant may file a "third party complaint" which results in a third party litigation or lawsuit.

TITLE VII: Part of the federal Civil Rights Act of 1964 that prohibits discrimination in employment on the basis of age, color, national origin, race, religion, or sex.

Tort: A civil wrong; a wrongful injury to a person's property. There are three types of torts: intentional, negligence and strict liability.

Transfer Agent: A person or company retained by a corporation to process transfers and registration of shares of stock (stock certificates). One difficulty is that the stock certificates do not always include the name and address of the current transfer agent.

Tuitition Reimbursement: An employee benefit in which the employer pays all or part of the employee's tuition for coursework or training.
Undercapatilization: The condition that exists when a company does not have enough cash to carry on its business and pay its creditors.

Unfair Competition: Wrongful and/or fraudulent business methods used to gain an unfair advantage over competitors.
Voting Trust: A trust which solicits vote proxies of shareholders of a corporation to elect a board of directors and vote on other matters at a shareholders' meeting. A voting trust is usually operated by current directors to insure continued control.

Venue: The place of trial.

Verdict: The decision of the case reached by the jury.

Vicarious Liability: The liability of one person for the torts of another.

Voluntary Dissolution: The intentional dissolution of a corporation by its own management.

Voting Right: The right enjoyed by shareholders to vote their shares.
Warranty: A written statement stating good quality merchandise, clear title to real estate or that a fact stated in a contract is true.

Whistleblower: The term for an employee who "blows the whistle" on an employer. In other words, an employee is reporting to the authorities an employer's illegal action or practice. Whistleblowers are entitled to a number of protections under state and federal law.

Winding Up: The process of paying creditors and distributing assets that occurs before the dissolution of a corporation.

Witness: One who testifies at a trial or a deposition.

Written Consent: A document executed by either the shareholders or directors of a corporation in lieu of a formal meeting.

Wrongful Death Statues: Laws giving the family members of a deceased a cause of action if the death of their loved one resulted because of another's negligence.

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Joe Griffith Law Firm, LLC (sometimes "JGLF") exclusively practices litigation, led by top rated trial attorney Joseph P. Griffith, Jr., a former federal prosecutor. Located at 946 Johnnie Dodds Boulevard, Mt Pleasant, S.C., Joe Griffith Law Firm, LLC handles cases in South Carolina and, on a select basis, nationwide.

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