A B C D E F-H I J-L M N-O P Q-R S T U-Z

C corporation Is taxed as a separate entity, meaning the corporation's income is taxed twice, once at the corporate level and again when distributed to shareholders as dividends. Chapter 20.

Call The decision to hold a meeting at a particular time and place, and often, for a particular reason. Chapter 9 and Chapter 15.

Call option A real option that permits a business to do something. A financial option that connotes the standard right sold by a person other than the corporation to purchase securities of the corporation from that person. Chapter 6.

Callable Stock that the corporation has the power to require the shareholder to return for a predetermined price. Chapter 6.

Capital For no-par value shares, capital is some portion of the consideration paid for those shares. For par-value shares, capital is, at minimum, the par value of the shares. Chapter 7.

Capital expense An expense for an asset that is expected to last longer than one year. Chapter 3.

Capital formation The method by which a corporation gets money into the corporation. Chapter 6.

Capital gain The gain that an equity holder realizes when he or she sells equity in a corporation. Chapter 6

Capital structure A corporation's choice of how much debt and equity it should have. It also refers to how much common stock and noncommon stock a corporation should issue. Chapter 6.

Caremark claim When the plaintiff alleges a failure to establish and monitor information systems within the corporation. Chapter 13.

Cede & Co. A partner of DTC that holds the actual shares of stock to facilitate transfer when necessary; the shareholder of record for shares traded under the book entry system. Chapter 15.

Charging order A court order seizing a partner's transferable interest for the benefit of a judgment creditor of that partner; similar to a lien. Chapter 18.

Charter limitation A provision in the articles of incorporation that caps or eliminates monetary liability of directors for breach of their duty of care. Chapter 13.

Check kiting A fraud in which the perpetrator, having control over checking accounts at different banks, deposits checks drawn on one bank in the other bank to create the appearance of an increase in the balance in the other bank account. Chapter 12.

Class of stock Common stock or preferred stock. Chapter 6.

Classified board A board in which the power to elect at least one director is vested in, or denied to, at least one class or series of stock. Chapter 9.

Close (or closely held) corporations A corporation owned by few shareholders, or even by one person. Chapter 6.

Collar A loan with a minimum and maximum variable rate. Chapter 6.

Commercial paper market Loans to corporations that are good credit risks and need to borrow large amounts of money on a regular cycle. Chapter 6.

Common stock Shares that have (1) one vote per share on any matter submitted to the shareholders, (2) the right to its proportionate amount of the corporation's assets on dissolution, and (3) the right to its proportionate amount of any dividend. Chapter 6.

Conflict of interest An incentive for a director or officer to act other than in the best interest of the corporation. Chapter 11.

Conglomeration A corporation's strategy of purchasing unrelated business that can stand alone. Chapter 17.

Constituent corporations Corporations that are parties to a merger. Chapter 17.

Continuity of enterprise exception An exception to the rule that a corporation is not liable for liabilities of a corporation from which it has purchased all assets. The transferee corporation is liable if the transferor's business itself is continued as a going concern even when there is no continuation of ownership between the transferor and transferee corporations. Chapter 8.

Control share acquisition acts Statutes that prohibit certain control transactions, such as mergers or sales of all assets, between a corporation and an entity controlling more than a certain amount (15% in Delaware) of shares. Chapter 17.

Convergence In corporate law scholarship, the theory that the forces of global competition will lead nations to adopt a single efficient form of corporate governance. Chapter 2.

Convertible Stock that may be exchanged for other securities of the corporation. Chapter 6.

Coping Efforts to manage specific demands (and conflicts between them) that are appraised as taxing or exceeding a person's resources. Chapter 3.

Corporate lawyer as conciliator A lawyer who is called upon to help resolve a conflict between the client and another, often regarding a potential transaction. Chapter 1.

Corporate lawyer as counselor A lawyer who gives advice to the client. Chapter 1.

Corporate lawyer as facilitator A lawyer who negotiates the substantive elements of a transaction such as price, quantity, and other essential points; ensures that the transaction complies with applicable regulations; or drafts writings that both accurately capture the agreed-upon terms and legally effect the anticipated transaction. Chapter 1.

Corporate lawyer as guardian A lawyer who protects the client and the public against some contemplated actions by persons acting on the client's behalf. Chapter 1.

Corporate opportunity A business opportunity presented to an officer or director that is so closely associated with the corporation's current business activities that the officer or director may not accept the opportunity for himself or herself in place of the corporation. Chapter 11.

Corporate social responsibility The corporate law theory that requires corporate managers and directors to take into account the needs not only of shareholders but of workers, consumers, and communities when making business decisions. Chapter 10.

Corporate survival statute Statutes designed to protect shareholders and corporate creditors when a solvent corporation dissolves. The statute permitting a soon-to-be dissolved corporation to notify its known creditors and to give notice to the public of the impending dissolution and thereby cut off future liability. Chapter 8.

Corporation by estoppel An equitable defense to individual liability predicated on defective incorporation. A third party can be estopped from denying the existence of the corporation when it reasonably believes it is dealing only with an existing corporation. Chapter 5.

Counterparty risk The possibility that the other side of a transaction will not perform, either because of unwillingness or inability. Chapter 3.

Coupled with an interest A form of agency relationship that is irrevocable because of the agent's heightened interest in the subject of the agency relationship. Chapter 4.

Credit rating agencies Agencies that rank corporations by their perceived credit worthiness. Chapter 14.

Cumulative Preferred stock as to which the dividends, if not declared and paid, accumulate. The corporation is prohibited from paying dividends on other stock until the accumulated dividends have been paid in full. Chapter 6.

Cumulative voting A method of voting for directors in which each shareholder has the number of votes equal to the number of shares owned multiplied by the number of director slots to be filled. The shareholder may cast those votes for one candidate or distribute them among several candidates. Chapter 16.

Currency risk The possibility that exchange rates may change during the course of a transaction resulting in more or less home currency than was anticipated. Chapter 3.

A B C D E F-H I J-L M N-O P Q-R S T U-Z