corporations

Divestment

Definition

The partial or full removal of an asset or investment from a business' books. Businesses can divest through sale, closure or bankruptcy. May also refer to a change in corporate strategy or a withdrawal from certain investment goals.

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Dividend

Dividends are the payment of a corporation's profits to the shareholders. Payment of dividends are generally not mandatory; rather, the board of directors may use its discretion to decide whether to invest the company's profits...

Domestic Corporation

Definition

A U.S. corporation that does business in the state in which it is incorporated. Compare to a Foreign Corporation.

Double Taxation

Definition

Refers to the imposition of taxes on the same income, assets or financial transaction at two different points of time. A common example is the taxing of shareholder dividends after taxation as corporate earnings. Another common example is...

Dump-buyback

Definition from Nolo’s Plain-English Law DictionaryA plan by which the owners of a failing business form a new legal entity which then purchases some or all of the assets of the first business for their liquidation value. This can be done informally with...

Duty of Care

Definition

The duty of care stands for the principle that directors and officers of a corporation in making all decisions in their capacities as corporate fiduciaries, must act in the same manner as a reasonably prudent person in their position would....

Duty of Good Faith

Definition

The duty of good faith stands for the principle that directors and officers of a corporation in making all decisions in their capacities as corporate fiduciaries, must act with a conscious regard for their responsibilities as fiduciaries. A...

Duty of Loyalty

Definition

The duty of loyalty stands for the principle that directors and officers of a corporation in making all decisions in their capacities as corporate fiduciaries, must act without personal economic conflict. The duty of loyalty can be breached...

Enhanced Scrutiny Test

1. In the law of corporations, a test established in Unocal Corp. v. Mesa Petroleum, 493 A.2d 946 (Del. 1985), also known as the UNOCAL test. In this case, the Delaware Supreme Court established the enhanced scrutiny test, which is applied to a...

Entity

Definition

A person or organization possessing separate and distinct legal rights, such as an individual, partnership, or corporation. An entity can, among other things, own property, engage in business, enter into contracts, pay taxes, sue and be sued...

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