Business and Corporate Law: Important Terms from Black's Law Dictionary

*corporation: An entity (usually a business) having authority under law to act as a single person distinct from the shareholders who own it and having rights to issue stock and exist indefinitely;

a group or succession of persons established in accordance with legal rules into a legal or juristic person that has a legal personality distinct from the natural persons who make it up, exists indefinitely apart from them, and has the legal powers that its constitution gives it.

*C corporation: A corporation whose income is taxed through it rather than through its shareholders (the default status for non-S corporations).

*charitable corporation: A nonprofit corporation that is dedicated to benevolent purposes and thus entitled to special tax status under the Internal Revenue Code (see also: “nonprofit corporation”).

*close corporation: A corporation whose stock is not freely traded and is held by only a few shareholders (often within the same family). Requirements and privileges vary by jurisdiction.

*collapsible corporation: A corporation former to give a short-term venture the appearance of a long-term investment in order to portray income as a capital gain, rather than profit (usually formed for the sole purpose of purchasing property and usually dissolved before the property has generated substantial income).

*dummy corporation: A corporation whose only function is to hide the principal’s identity and to protect the principal from liability.

*parent corporation: A corporation that has a compelling interest in another corporation (called a “subsidiary corporation”), usually through ownership of more than one-half the voting stock.

*private corporation: A corporation founded by and composed of private individuals principally for a nonpublic purpose, such as manufacturing, banking and railroad corporations (including religious and charitable organizations).

*public corporation: A corporation whose shares are traded to and among the general public;

A corporation that is created by the state as an agency in the administration of civil government;

A government-owned corporation that engages in activities that benefit the general public, usually while remaining financially independent (managed by a publicly appointed board).

*registered corporation: A publicly held corporation a security of which is registered under the Securities Exchange Act of 1934.

*S corporation: A corporation whose incomes is taxed through its shareholders rather than through the corporation itself (only corporations with a limited number of shareholders can elect such status).

*shell corporation: A corporation that has no active business and usually exists in name only as a vehicle for another company’s business operations.

*small-business corporation: A corporation having no more than 75 shareholders and otherwise satisfying the requirements of the Internal Revenue Code provisions permitting a subchapter S election;

A corporation receiving money for stock (as a contribution to capital and paid-in surplus) totaling not more than $1M, and otherwise satisfying the requirements of IRC Sec. 1244(c), thereby enabling shareholders to claim an ordinary loss on worthless stock.

*corporate citizenship: Corporate status in the state of incorporation, though a corporation is not a constitutional citizen for the purposes of the Priveleges and Immunities Clauses in Article IV, Sec. 2 and in the 14th Amendment to the US Constitution.

*corporate purpose: The general scope of the business objective for which a corporation was created. A statement of corporate purpose is commonly required in the articles of incorporation.

*corporate veil: The legal assumption that the acts of a corporation are not the actions of its shareholders, so that the shareholders are exempt from liability for the corporations actions.