Glossary of most frequent business formation terms

A B C D E F G H I J L M N O P Q R S T U V W

-B-

Bearer instrument

Blue Sky Laws

Board of directors

Bond

Book Value

Business Judgment Rule

Business corporation act

Business Name

Bylaws

 

-B-

 

Bearer instrument

An negotiable instrument which is payable to a bearer or the order of a bearer; a specified person or bearer; or "cash" or the order "cash," or any other indication that does not purport to designate a specific payee.

 

Blue Sky Laws

State laws and regulations governing the issuance and sale of securities and mutual funds, designed to protect investors from being lured into fraudulent or unscrupulous deals, offering nothing more than “blue sky.”

 

Board of directors

Individuals elected by a corporation’s shareholders to oversee the management of the corporation. The members of a Board of Directors are paid in cash and/or stock, meet several times each year, and assume legal responsibility for corporate activities. A board of directors decides, among other issues, if and when dividends will be paid to stockholders. Also called Directorate.

 

Bond

A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. A bond is generally a written promise to repay loan at a specified interest rate. Bonds are considered less risky investments than stocks. A bond's rating is like a person's credit rating. It gives you an idea of whether the company that issued the bond will be able to make its loan payments. When interest rates rise, bond prices fall; when rates are falling, bond prices raise.

 

Book Value

A company's common stock equity or net asset value as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as goodwill. Book value often differs substantially from market price, especially in highly skilled industries such as technology.

 

Business Judgment Rule

A rule of law, which prevents directors of a corporation from being held personally liable for unwise business decisions if the decision was informed and not tainted by self-interest.

 

Business corporation act

A business corporation act is the collection of laws in each state that governs corporations.

 

Business Name

The name used by a business to identify itself to the general public.  A corporation's Business Name may differ from its registered corporate name if the required government registrations are completed.

 

Bylaws

Bylaws are the rules and regulations adopted by a corporation for its internal governance. It usually contains provisions relating to shareholders, directors, officers and general corporate business. They are usually adopted at the first shareholders’ meeting. Bylaws are a private document not filed with any state authority. Bylaws are more flexible than the articles of incorporation because they are easier to amend.