An interlocking directorate refers to the practice where individuals serve on the boards of multiple companies. While legal for non-competing firms, it is restricted by the Clayton Anti-Trust Act of 1914 for competing companies.
A judgment lien is a claim upon the property of a debtor resulting from a court judgment, granting the creditor a legal right to seek the debtor's assets as compensation for unpaid dues.
A junior partner is a partner in a firm who is limited as to both profits and management participation.
Expenses that are deemed not reasonable based on the facts and circumstances, which are subsequently not tax-deductible by law.
A legal entity refers to a person or organization that has the legal standing to enter into a contract and may be sued for failing to perform as agreed in the contract. A child under legal age is not a legal entity. A corporation is considered a legal entity since it is deemed a person in the eyes of the law.
A legal monopoly refers to the exclusive right granted to a company to offer a particular service or product within a specific territory. In exchange, the company agrees to have its policies and rates regulated.
A legal name is the official designation by which an individual or entity is recognized legally, distinct from any nickname or informal moniker.
A legal person, also known as an artificial person, is an entity recognized by law as having rights and duties similar to those of a natural person. Legal persons can enter into contracts, own property, sue, and be sued.
Lender liability refers to the legal responsibility of a financial institution, such as a bank, savings and loan association (S&L), or credit union, to a potential borrower when a loan commitment is made. If the lender fails to provide the loan as promised, it may be responsible for the damages suffered by the potential borrower.
Letter stock is a category of stock that derives its name from an inscription on the face of the stock certificate, indicating that the shares have not been registered with the Securities and Exchange Commission (SEC) and, therefore, cannot be sold to the general public.
Liable means being legally responsible or obligated for something. It often relates to situations where a person or entity is required to uphold their part of a legal duty or may be subjected to penalties if they fail to do so.
A licensee is an individual or entity who is granted a license to engage in certain activities or occupy premises without being a customer, servant, or trespasser. They have permission to use the property primarily for their own interest or convenience.
Lobbying expenditures refer to the amounts paid or incurred in connection with influencing federal or state legislation, or any communication with certain federal executive branch officials in an attempt to influence their official actions or positions. These expenditures are not tax deductible.
A technicality making it possible to circumvent a law's intent without violating its letter. Often used to refer to gaps in rules that allow for unintended advantages.
Mail fraud is the use of postal services to carry out fraudulent schemes designed to deceive consumers.
Marginal property refers to real estate that is barely profitable to use. The concept often applies to land that can produce income, but only by the smallest of margins when comparing production costs to revenue.
The master-servant rule is a legal doctrine whereby an employer can be held liable for the negligent acts or omissions of an employee if those acts occur within the scope of employment and result in bodily injury and/or property damage to third parties.
Maturity refers to the date at which legal rights in something ripen. In commercial contexts, such as negotiable instruments, it is the time when the paper becomes due and demandable. It also applies to character and emotional development in personnel management.
Mediation is a voluntary and structured process whereby a neutral third party helps disputing parties to communicate and negotiate to reach a mutually acceptable resolution.
Merchantable goods are products that are suitable for sale and meet reasonable standards for quality and usability.
Misrepresentation refers to an untrue statement, whether unintentional or deliberate. It can involve nondisclosure where there is a duty to disclose or the deliberate creation of a false appearance. When there is misrepresentation of material fact, the injured party may sue for damages or rescind the contract.
The principle that obligates an injured party to take reasonable actions to reduce the damages caused by another party's breach or tortious conduct.
Money laundering is the illicit process of concealing the origins of money obtained from criminal activities, typically by means involving foreign banks or complex transactions, making it appear as though it were acquired legally.
A non-divisive reorganization is a corporate restructuring process that involves changes to the structure, operations, or ownership of a company without a divisive impact, typically executed to enhance organizational efficiency and shareholder value.
A nondisclosure agreement (NDA) is a legally binding contract that establishes a confidential relationship between parties to protect sensitive information from being disclosed to unauthorized third parties.
A nonnegotiable instrument is a financial document that cannot be transferred or assigned to another party. Unlike negotiable instruments, nonnegotiable instruments are not easily transferable and often carry a specific notation indicating their non-negotiability.
Nonperformance refers to the failure to do something that one was legally bound to do. The nonperforming party is liable for damages or actions requiring specific performance.
Notice is information concerning a fact actually communicated to a person by an authorized source, or derived from a proper source, usually in the context of legal proceedings.
A Notice of Default is a formal letter sent to a party in default to remind them of their breach of contract, potentially including a grace period to rectify the default and outlining any penalties for failing to cure the default.
The term 'null and void' refers to something that cannot be legally enforced, such as a contract provision that does not conform to the law.
An offerer is the party who presents an offer in a contractual agreement and has the ability to rescind the offer any time before it is accepted.
Order paper is a type of negotiable instrument that is payable to a specified person or their assignee, requiring the payee to be named with reasonable certainty.
The common practices of commercial transactions that refer to necessary activities normal and incidental to a business's operations.
Detailed exploration of partial liquidation in corporate finance, including examples, FAQs, related terms, resources, and suggested books for further studies.
Relating to or consisting of money; that which can be valued or assessed in monetary terms. A pecuniary loss is a financial loss, or one that can be quantified in terms of money.
A Permit Bond is a type of surety bond required by a government agency to ensure that businesses or individuals comply with laws and regulations governing a specific activity requiring a permit.
Personal liability refers to the legal obligation that exposes an individual's personal assets to potential claims. Corporate stockholders and limited partners generally avoid personal liability, while general partners incur personal liability.
Piercing the corporate veil refers to the legal decision to hold shareholders or directors personally liable for the debts and obligations of the corporation. This process is invoked by a court to disregard the separate legal corporate entity status typically afforded to corporations.
Premises are commonly understood as land and its appurtenances, including structures thereon. The term also refers to any place where an employee may go in the course of his employment for purposes of Workers' Compensation.
Proprietary refers to anything that is owned by a particular person or entity. In the realm of trade secrets law, proprietary information is protected information or knowledge where ownership rights are established and are typically safeguarded by contractual agreements, rather than through patents.
A proviso is a condition or stipulation which serves to except something from the basic provision, qualify or restrain its general scope, or prevent misinterpretation.
A Purchase Contract, also known as a Contract of Sale or Purchase Agreement, is a legal document that outlines the terms and conditions under which a buyer agrees to purchase, and a seller agrees to sell, a particular property, item, or service.
Ratification refers to the official approval or confirmation by a person or entity of a previous contract or act, which would not be legally binding without such approval. It often occurs in situations where the initial agreement was not properly authorized or where further consent is essential for the agreement's enforceability.
The act of paying or rewarding an individual for services, or remuneration for goods or other property.
Recoupment refers to the process of regaining or recovering losses, typically through legal means, compensation, or adjustments of accounts, often seen in various fields such as accounting, business law, and insurance.
A relocation clause is a stipulation in a lease agreement that allows the landlord to move the tenant to another unit within the same building.
A removal bond refers to a type of judicial bond which guarantees that an individual or entity will follow a court order for the removal of an item or person.
Renegotiation is the process of legally revising the terms of a contract to better suit the needs of the involved parties due to changing circumstances or the realization that original terms are no longer applicable or fair.
Renewal is the continuation in force and effect of a previously existing arrangement for a new period, either on the same or different terms.
Repudiation refers to the refusal by one party to fulfill their contractual obligations, signaling an intention to withdraw from the contract.
Rescission refers to the cancellation of a contract and the return of the parties to their pre-contractual positions. It may occur due to various reasons including fraud, failure of consideration, or a material breach.
Respondeat Superior is a doctrine in agency law that holds a principal liable for the acts of an agent. This principle is crucial in determining liability and legal responsibility in various business and professional relationships.
Revocation refers to the withdrawal or cancellation of an authority, offer, or instrument that was previously effective. It impacts the offeree's power of acceptance and has legal implications in various contexts, such as contracts, wills, and licenses.
The Robinson-Patman Act is a federal law designed to prevent anticompetitive practices by producers, specifically price discrimination.
A sale or exchange refers to the disposition of property in a value-for-value transaction, as opposed to a disposition by gift, contribution, or similar means.
Satisfaction of Debt refers to the release and discharge of an obligation where the performance is executed to fulfill a debt.
The term 'scope of employment' refers to acts done while performing one's job duties. It is used to determine an employer's liability for the acts of its employees.
Setoff refers to a counterclaim put forth by the defendant against the plaintiff, often diminishing the amount recoverable by the plaintiff by considering an independent cause of action.
A shell corporation is a company that is incorporated but has no significant assets or operations. It may serve legitimate purposes, such as obtaining financing, but can also be used in fraudulent schemes.
A silent partner, also known as a limited partner, is an investor who contributes capital to a business but does not involve themselves in the daily management or operations of the company. Unlike general partners, silent partners have limited liability, meaning they can only lose the amount of their investment.
Slander involves making false spoken statements which are damaging to another person's reputation. It is a form of defamation that is communicated orally.
The Statute of Frauds is a statutory requirement that mandates certain kinds of contracts to be in writing to be enforceable. Contracts such as answering a creditor for another's debt, contracts made in consideration of marriage, contracts for the sale of real estate, or contracts not to be performed within a year must be written and signed by the party to be bound.
A stipulation refers to a specific term or condition within a written contract, or any set of agreed-upon terms and conditions that establish duties, rights, and responsibilities of the parties involved.
Stock-for-asset reorganization is a form of corporate restructuring where an acquiring corporation exchanges its voting stock (or its parent's voting stock) for substantially all of the assets of another corporation.
A stop payment is the revocation of payment on a check after the check has been sent or delivered to the payee. So long as the check has not been cashed, the writer has up to six months to request a stop payment. The stop payment right does not apply to electronic funds transfers.
A subsidiary company is a firm that is fully or partially owned and controlled by another company, known as the parent company or holding company. The parent company owns more than 50% of the subsidiary's voting stock, giving it control over the subsidiary's operations and strategic direction.
A supplemental agreement is a legal document that amends a previous contract by adding additional conditions and stipulations. It serves as an extension or modification to the original agreement without entirely replacing it.
A suspension refers to a disciplinary action imposed on an employee for a specific period of time. It is less severe than discharge or dismissal, and the employee can resume their duties after the suspension period ends.
A tender offer is a public proposal made to shareholders of a particular corporation to purchase a specified number of shares at a predetermined price. The offer generally contains specific conditions, such as the requirement that the offeror must obtain the total number of shares specified in the tender to proceed.
Termination of a plan refers to the cessation of a pension plan, done either through a standard termination or a distress termination method. Each approach has specific legal and financial implications.
A third party refers to any individual or entity that is not directly involved in a given transaction or dispute. This term is commonly used in legal and business contexts to denote an outsider who has no direct interest in the matter.
A phrase in a contract signaling that all time-based obligations must be performed punctually and within the specified dates and times.
The concept of 'Trade or Business' encompasses all activities and operations undertaken with the aim of generating profit through commercial or trading transactions. It is a critical term for both taxation and business regulation purposes.
Travel and Entertainment (T&E) expenses are ordinary and necessary expenses incurred while traveling away from home for business purposes, subject to specific tax regulations.
Actions of a corporation that are not authorized by its charter and may therefore lead to shareholder or third-party suits.
Unfair competition encompasses acts or practices of businesses that lead to consumer deception, misappropriation of trade symbols, and violations of trade practices laws that ultimately result in the unfair gain of market advantage over competing entities.
The Uniform Commercial Code (UCC) is a collection of standardized laws designed to regulate commercial transactions across the United States. It aims to harmonize and streamline business laws to create consistency and facilitate easier trade and commerce between states.
The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States. It is designed to provide consistency and predictability in the regulation of business activities across all states.
Unjust enrichment refers to a scenario where an individual or entity gains or benefits from another's efforts or acts without providing compensation, leading to an obligation to make restitution.
Understanding the concept of 'Up Front' in financial, legal, and conversational contexts is essential for clear communication and transparency in agreements and interactions.
A Value-Added Tax (VAT) is a type of indirect tax levied on goods and services at each stage of production or distribution where value is added. It is prevalent in many countries worldwide and represents a significant source of revenue for governments.
In legal terms, void refers to something that is null, empty, unenforceable, or incapable of ratification.
Intentional and voluntary surrender of some known right, which generally may either result from an express agreement or be inferred from circumstances.
A warranty that ensures goods are reasonably fit for the general purposes for which they are sold.
White-collar crime encompasses a variety of non-violent offenses committed by businesspersons, confidence men, and public officials, characterized by deceit and misrepresentation. Examples include consumer fraud, bribery, and stock manipulation.
