De facto action is an action taken without strict legal authority to do so, but recognized as legally valid nonetheless. The action is considered something that acquires validity based on the fact of its existence and tradition.
[Last reviewed in January of 2022 by the Wex Definitions Team]
De facto corporation refers to the legal recognition of a corporation, even if the articles of incorporation for a corporation are not properly filed.
A de jure corporation is a corporation whose legal right to exist cannot be questioned even by the state.
Debentures refer essentially to unsecured bonds within the United States. Corporations and governments use debentures as long term funding options, usually for major expansions and projects in the case of corporations. Debentures have set interest rates, payback periods, and regular interest payments as most other bonds do.
The debt-to-income (DTI) ratio measures the amount of income a person or organization generates in order to service a debt. As explained by the Consumer Financial Protection Bureau, your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income.
A debtor is someone who owes a debt or obligation to someone else. Most commonly, this is the obligation to pay money.
Debtor-creditor law governs situations where one party, known as the debtor, is unable to pay a monetary debt to another, known as the creditor. Debtor-creditor law typically plays out through bankruptcy proceedings.
Deductible business expense is a very broad category of deductions allowed for businesses because the Internal Revenue Service (IRS) tries to tax business profits, not revenue. Deductible business expenses has been given a broad definition with courts allowing any expense that is “ordinary and necessary” for the producing income.
A default is a failure to fulfill an obligation. Defaulting is most common in regards to debtor-creditor law and contract law. Typically, a default leads to judicial proceedings or triggers the application of a separate contract provision.
In a corporation, a director is a person, appointed or elected by the shareholders to sit on the board of directors. Directors have the authority to implement corporate policy, and act by voting to pass board resolutions.
