UF BUL4310 Exam 1 Terms – Business Law Study Guide & Key Definitions
Laws - correct answer ✔✔enforceable rules governing conduct and relationships in society
Code - correct answer ✔✔in the common law, a collection of statutes enacted by legislature
bodies, including congress and state legislature
duress - correct answer ✔✔wrongful threat of one person induces another person to preform
an act that he or she would not usually do
Actus Reus - correct answer ✔✔guilty act
Mens Rea - correct answer ✔✔guilty mind
statute - correct answer ✔✔a written law passed by a legislative body
Lex Talionis - correct answer ✔✔Law of retaliation, an eye for an eye
pass-through entity - correct answer ✔✔A business entity that has no tax liability. The entity's
income is passed through to the owners, and they pay taxes on the income.
dissolution - correct answer ✔✔the breaking up into parts; termination of a legal bond or
contract such as a partnership
winding up - correct answer ✔✔The process of liquidating a partnership's assets and
distributing the proceeds to satisfy claims against the partnership
,limited liability partnership - correct answer ✔✔All partners are limited partners and not
responsible for the debts and other liabilities of other partners
limited partnership - correct answer ✔✔form of partnership where one or more partners are
not active in the daily running of the business, and whose liability for the partnership's debt is
restricted to the amount invested in the business
Limited Liability Company (LLC) - correct answer ✔✔a form of business ownership that offers
both limited liability to its owners and flexible tax treatment
Dividends - correct answer ✔✔earnings distributed to stockholders
close corporation - correct answer ✔✔A corporation whose shareholders are limited to a small
group of persons, often family members.
appraisal right - correct answer ✔✔Shareholder's right to have his/her shares appraised, and to
receive monetary compensation for their value
Corporate Governance - correct answer ✔✔the system of governing a company so that the
interests of corporate owners and other stakeholders are protected
SEC Rule 10b-5 - correct answer ✔✔A rule of the Securities and Exchange Commission that
makes it unlawful, in connection with the purchase or sale of any security, to make any untrue
statement of a material fact or to omit a material fact if such omission causes the statement to
be misleading.
prospectus - correct answer ✔✔document issued to possible buyers of a stocks and bonds
outlining the financial condition of the company issuing those securities
, preemptive right - correct answer ✔✔A provision in the corporate charter or bylaws that gives
common stockholders the right to purchase on a pro rata basis new issues of common stock (or
convertible securities).
short-form merger - correct answer ✔✔A merger between a subsidiary corporation and a
parent corporation that owns at least 90 percent of the outstanding shares of each class of
stock issued by the subsidiary corporation. Short-form mergers can be accomplished without
the approval of the shareholders of either corporation.
Benefit Corporation (B Corp) - correct answer ✔✔a corporate form for businesses whose stated
goals are to combine making a profit with benefiting society and the environment
charging order - correct answer ✔✔In partnership law, an order granted by a court to a
judgment creditor that entitles the creditor to attach profits or assets of a partner on dissolution
of the partnership.
information return - correct answer ✔✔A tax return submitted by a partnership that only
reports the income and losses earned by the business. The partnership as an entity does not
pay taxes on the income received by the partnership.
Automatic Stay - correct answer ✔✔prohibits creditors from collecting debts that the bankrupt
incurred before the petition was filed
Estate in Property - correct answer ✔✔All of the property owned by a person, including real
estate and personal property.
cram-down provision - correct answer ✔✔A provision of the Bankruptcy Code that allows a
court to confirm a debtor's Chapter 11 reorganization plan even though only one class of
creditors has accepted it.
Laws - correct answer ✔✔enforceable rules governing conduct and relationships in society
Code - correct answer ✔✔in the common law, a collection of statutes enacted by legislature
bodies, including congress and state legislature
duress - correct answer ✔✔wrongful threat of one person induces another person to preform
an act that he or she would not usually do
Actus Reus - correct answer ✔✔guilty act
Mens Rea - correct answer ✔✔guilty mind
statute - correct answer ✔✔a written law passed by a legislative body
Lex Talionis - correct answer ✔✔Law of retaliation, an eye for an eye
pass-through entity - correct answer ✔✔A business entity that has no tax liability. The entity's
income is passed through to the owners, and they pay taxes on the income.
dissolution - correct answer ✔✔the breaking up into parts; termination of a legal bond or
contract such as a partnership
winding up - correct answer ✔✔The process of liquidating a partnership's assets and
distributing the proceeds to satisfy claims against the partnership
,limited liability partnership - correct answer ✔✔All partners are limited partners and not
responsible for the debts and other liabilities of other partners
limited partnership - correct answer ✔✔form of partnership where one or more partners are
not active in the daily running of the business, and whose liability for the partnership's debt is
restricted to the amount invested in the business
Limited Liability Company (LLC) - correct answer ✔✔a form of business ownership that offers
both limited liability to its owners and flexible tax treatment
Dividends - correct answer ✔✔earnings distributed to stockholders
close corporation - correct answer ✔✔A corporation whose shareholders are limited to a small
group of persons, often family members.
appraisal right - correct answer ✔✔Shareholder's right to have his/her shares appraised, and to
receive monetary compensation for their value
Corporate Governance - correct answer ✔✔the system of governing a company so that the
interests of corporate owners and other stakeholders are protected
SEC Rule 10b-5 - correct answer ✔✔A rule of the Securities and Exchange Commission that
makes it unlawful, in connection with the purchase or sale of any security, to make any untrue
statement of a material fact or to omit a material fact if such omission causes the statement to
be misleading.
prospectus - correct answer ✔✔document issued to possible buyers of a stocks and bonds
outlining the financial condition of the company issuing those securities
, preemptive right - correct answer ✔✔A provision in the corporate charter or bylaws that gives
common stockholders the right to purchase on a pro rata basis new issues of common stock (or
convertible securities).
short-form merger - correct answer ✔✔A merger between a subsidiary corporation and a
parent corporation that owns at least 90 percent of the outstanding shares of each class of
stock issued by the subsidiary corporation. Short-form mergers can be accomplished without
the approval of the shareholders of either corporation.
Benefit Corporation (B Corp) - correct answer ✔✔a corporate form for businesses whose stated
goals are to combine making a profit with benefiting society and the environment
charging order - correct answer ✔✔In partnership law, an order granted by a court to a
judgment creditor that entitles the creditor to attach profits or assets of a partner on dissolution
of the partnership.
information return - correct answer ✔✔A tax return submitted by a partnership that only
reports the income and losses earned by the business. The partnership as an entity does not
pay taxes on the income received by the partnership.
Automatic Stay - correct answer ✔✔prohibits creditors from collecting debts that the bankrupt
incurred before the petition was filed
Estate in Property - correct answer ✔✔All of the property owned by a person, including real
estate and personal property.
cram-down provision - correct answer ✔✔A provision of the Bankruptcy Code that allows a
court to confirm a debtor's Chapter 11 reorganization plan even though only one class of
creditors has accepted it.
