Business Law GLOSSARY

Glossary of Business Law Terms

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Par Value: The issued price of a security that bears no relation to the market price.

Parent Corporation: A corporation that either owns outright or controls a subsidiary.

Participate: To invest and then receive a part or share, as in business profits, payments on a promissory note, title to land, or as one of the beneficiaries of the estate of a person who has died.

Partner: One of the co-owners and investors in a "partnership" which is an ongoing business enterprise entered into for profit.

Partnership: A business enterprise entered into for profit which is owned by more than one person, each of whom is a "partner." A partnership may be created by a formal written agreement, but may be based on an oral agreement or just a handshake; coming together to operate a business for profit. Partnerships do not enjoy limited liability, except in the case of limited partnerships.

Patent Ambiguity: An obvious inconsistency in the language of a written document.

Peremptory Challenge: A challenge to a particular juror that requires no reason. Normally an attorney has a limited number of these challenges.

Personal Property: Defined by the law as "things movable." This is distinguished from the term "real property," which includes things such as trees, buildings and land.

Petition: A formal request that the court take some action; a complaint.

Pierce the Veil: Doctrine that attaches liability to corporate shareholders in cases of commingling of assets and failure to observe corporate formalities.

Plaintiff: The party bringing the case against another.

Pleading: A pleading is the process of making formal, written statements by the litigants. All papers filed with the court are collectively referred to as "pleadings."

Precedent: The value that a completed case has on deciding future cases.

Preemptive Right: The right of a shareholder in a corporation to have the first opportunity to purchase a new issue of stock of that corporation in proportion to the amount of stock already owned by the shareholder.

Preemptive Rights: Rights enjoyed by existing shareholders to purchase additional shares of stock in the same proportion to their existing holdings.

Preferred Stock: A separate and/or secondary class of stock issued by some corporations. Preferred stock typically has limited or no voting rights, but its holders are paid dividends or receive repayment priority in the event the corporation is liquidated.

Principal Place of Business: Location for the head office of a business where the books and records are kept and/or management works. In most states corporations must report their principal place of business to the Secretary of State.

Principal: 1) Main person in a business. 2) Employer, the person hiring and directing employees (agents) to perform his/her/its business.

Pro Se: On one's own behalf; not using an attorney.

Process Serving: The method by which a defendant in a lawsuit is notified that a plaintiff has filed a suit against him.

Product Liability: A type of strict liability in which the manufacturer or seller is strictly liable for injuries caused by defective products.

Professional Corporation: A corporation whose members are all licensed professionals, such as doctors, lawyers, accountants and architects.

Promoter: A person who puts together a business, particularly a corporation, including the financing. Usually the promoter is the principal shareholder or one of the management team and has a contract with the incorporators or makes a claim for shares of stock.

Proxy: An authorization by one shareholder giving another person the right to vote the shareholder's shares. Proxy also refers to the document granting such authority.

Public Benefit Corporation: A term used in some states for a nonprofit community service corporation. Typical examples are clubs like Kiwanis, Rotary, and Lions.

Public Corporation: A corporation created to perform a governmental function or to operate under government control, such as a municipal water company or hospital.

Puffing: Puffing is the exaggeration of the good points of a product, business, or real property. Puffing may also include the exaggeration of the prospects for future rise in value, profits and growth.

Punitive Damages: Damages given for the purpose of punishing the defendant.