BUSI 301 Week 5: Ch. 15 Study Guide 2024.

BUSI 301 Week 5: Ch. 15 Study Guide 2024. Business corporation law - CORRECT ANSWER Often the title for a specific state law that covers such matters as the structure of the corporation, oversight of the activity of the corporation's managers, rights of the principals in the case of the sale of assets or ownership interests, annual reporting requirements, and other issues that affect the internal rules of the business venture. Revised Model Business Corporation Act (RMBCA) - CORRECT ANSWER Model act drafted by the American Law Institute and adopted by over half of the states as a template for compiling their own statutes governing corporations. Corporation - CORRECT ANSWER A fictitious legal entity that exists as an independent "person" separate from its principals. privately held corporations - CORRECT ANSWER A corporation that does not sell ownership interests through sales via a broker to the general public or to financial institutions or investors. are owned exclusively by a group of private individuals __________________ held corporations have substantial flexibility in terms of their internal operating procedures and do not generally have to comply with rigorous corporate structures or formalities. For example, in lieu of an actual meeting, privately held corporations often use a single document signed by each principal to dispose of necessary tasks such as electing directors or issuing stock. This document is known as a unanimous consent resolution. Many states give privately held corporations the option of electing to become a closely held or family-held entity. This option further restricts the number or type of owners that a corporation may have, but it provides even more flexibility in regard to how the business venture may be organized and managed. Note: even though many ________________ held corporations have a relatively small number of shareholders, there is no limit in terms of revenue. It is not uncommon for corporations with revenues in the eight-figure range to be ______________ held. Often, the flexibility of a ________________ held corporation outweighs any desire of the principals to capitalize the business through a sale to the general public. publicly held corporations - CORRECT ANSWER sell their ownership interests via public stock exchanges. initial public offering (IPO) - CORRECT ANSWER When a privately held corporation wishes to fund capitalization through the sale of ownership interests to the general public and commercial investors, the principals pursue an __________ __________ _______________ (IPO) and then continue their corporate existence as a publicly held corporation. After the ________, the corporation trades (buys and sells) stocks through a public stock exchange (the New York Stock Exchange, or NYSE, is perhaps the most famous and influential, but many more exist). A publicly held corporation is subject to a substantial amount of federal and state regulation, primarily through securities laws and corporate governance statutes such as the Sarbanes-Oxley Act. A publicly held corporation is subject to close scrutiny by a variety of regulatory agencies because investors across the globe depend on regulation to ensure integrity among the insiders managing the corporation.