A Board of Directors is a group of individuals elected by the stockholders of a company to set corporate policies and appoint the chief executives and operating officers. They meet several times a year and are compensated for their services.
The Business Judgment Rule provides courts' deference to the good-faith operations and transactions of a corporation by its executives. It ensures that reasonable decisions, even if not the most profitable, are protected from legal challenges by disgruntled parties.
A buy-sell agreement is a legally binding pact among partners or stockholders that outlines the process for one party to buy the interests of another if certain events occur, such as the death of a partner.
A closely held corporation in the USA is a public corporation that has a limited number of stockholders, with relatively few of its shares actively traded.
The date on which a corporation uses its list of stockholders to mail a dividend check. It is usually two days after the ex-dividend date. Also called record date.
A distribution to owners represents the transfer of assets from a business to its shareholders or owners, often observed as dividends in the USA.
A tax concept that posits income earned by corporations is taxed at the corporate level and should not be subject to taxation again when distributed as dividends to stockholders, thereby avoiding double taxation of the same income.
Double Taxation refers to the process under federal tax law where earnings are taxed at the corporate level and then taxed again as dividends of stockholders.
Equity Share Capital refers to the portion of a company's capital that is raised in exchange for shares, representing ownership stakes in the company. This differs from non-equity shares which may include debt or preferred stock.
An insurance company, also referred to as an insurer, is an organization that underwrites insurance policies. There are two principal types of insurance companies: mutual and stock.
Outstanding capital stock refers to the total shares of a corporation that are currently held by all its shareholders, including retail investors, institutional investors, and company insiders. It is calculated by subtracting the number of treasury shares from the total issued shares.
Preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares generally have a dividend that must be paid out before dividends to common shareholders and the shares usually do not carry voting rights.
Voluntary reorganization by the stockholders themselves of a corporation facing financial difficulties; the voluntary restructuring of a corporation's debt and capital structure.
A stock certificate is a written instrument that provides evidence of shares owned in a corporation, signifying ownership in the company.
A Stock Insurance Company is a type of insurance company that is owned by stockholders. These stockholders receive earnings in the form of shareholder dividends. However, under state laws, the interests of policyholders take precedence over those of stockholders.
In the USA, individuals, businesses, and groups that own stocks in a corporation are known as stockholders. They hold a portion of the corporation's equity.
