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Category Archives: Terminology

Real Estate

Land and permanent attachments to the land, including buildings, fences, and all the permanent attachments to the buildings, including heating, plumbing, lighting, masonry, and other fixtures.

Vested Interest

A fixed right to receive an interest in property, whether now or in the future, which cannot be taken away and is not contingent upon the happening of any other event. This should be contrasted with a contingent interest, which may or may not vest upon the happening or occurrence of any particular event.

Winding Up

The liquidation of a partnership or corporation by finishing current business, settling accounts, turning property into cash, and splitting up the assets.

Sole Proprietorship

A business owned by one person, as distinguished from a partnership or corporation. This type of business is not incorporated and does not provide liability protection for its owner.

S-Corporation

A form of corporation, allowed by the IRS for most companies with 75 or fewer shareholders, which enables the company to enjoy the benefits of incorporation but be taxed as if it were a partnership. The name derives from subchapter S of the Internal Revenue Code which governs the taxation of this type of corporation. S corporations’ profits are passed through to shareholders and taxed at the personal rates of the shareholders. S corporations have limits on the numbers and types of shareholders.

Professional Corporation

Type of a Missouri corporations formed under Chapter 356 RSMo. Only persons licensed in certain professions are eligible to be shareholders in this type of corporate entity. These professions include: accountants; architects; attorneys; chiropractors; dentists; engineers; optometrists; physicians, surgeons, doctors of medicine; doctors of osteopathy; psychologists; veterinarians; registered nurses; realtors; and physical therapists.

Piercing the Corporate Veil

Phrase referring to a court’s refusal to grant immunity to corporate shareholder, officers or entities for their wrongful acts. Courts will do so when, among other instances, the corporation is engaged in fraud, or has not operated with the requisite corporate formalities (such as not commingling funds of the corporation and its shareholders, directors or officers).

Partnership

A business enterprise entered into for profit which is owned by more than one individual, corporation or other entity under a verbal or written partnership agreement. The law does not recognize the partnership as a separate distinct entity; rather, it considers the partnership to be all of the partners acting together.

Operating Agreement

A contract among members of a limited liability company governing the membership, management, rights, duties, operation, capital contributions, voting rights, transfer of interest, dissolution and distribution of income of the company. All LLC’s should have an operating agreement, including single member LLCs, for the preservation of the corporate form and formalities.

Membership Interest

A member’s rights or ownership in a limited liability company. This interest may include the member’s share of the profits and losses of the LLC, the right to receive distributions of the LLC’s assets, and rights to vote or participate in management or operation of the LLC.

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