An omitted cumulative dividend must be made up in a later year before any dividend may be paid on the common shares in that later year. Cumulative Voting A method of voting that allows substantial minority shareholders to obtain representation on the board of directors by allowing a shareholder to cast all of his or her available votes in an election in favor of a single candidate. De Facto Corporation At common law, a partially formed corporation that provides a shield against personal liability of shareholders for corporate obligations. De Jure Corporation At common law, a corporation that is sufficiently formed to be recognized as a corporation for all purposes. Directors Directors are elected by the shareholders and manage the affairs of the corporation.
Directors typically elect the officers and only participate in major business decisions.
The termination of a corporation's legal existence. Dividend Payment to shareholders from or out of current or past earnings. A corporation is domestic to the state where it was incorporated. Double taxation Refers to the structure of taxation under the Internal Revenue Code which subjects income earned by a C corporation to an income tax at the corporate level and a second tax at the shareholder level if the previously taxed income is distributed to the shareholders as dividends. Note that S corporations and Limited Liability Companies are not subject to double taxation.