Glossary Flashcards
Acceptance.
An unqualified agreement to the terms of an offer.
An unqualified agreement to the terms of an offer.
Acceptance
Administration.
A process whereby a moratorium is imposed on creditors’ actions against the company while an insolvency practitioner attempts to rescue the business as a going concern.
A process whereby a moratorium is imposed on creditors’ actions against the company while an insolvency practitioner attempts to rescue the business as a going concern.
Administration.
Administrator.
A person appointed to carry out an administration.
A person appointed to carry out an administration.
Administrator.
Agent.
A person authorised to act for another (the principal) and bring that other into legal relations with a third party.
A person authorised to act for another (the principal) and bring that other into legal relations with a third party.
Agent.
Annual General Meeting (AGM).
Every public company is required to hold a meeting of each of its members each year at which it was usual, but not obligatory, to transact the ‘ordinary business’ of the company. Such business may include consideration of the accounts, declaration of a dividend and appointment of auditors.
Every public company is required to hold a meeting of each of its members each year at which it was usual, but not obligatory, to transact the ‘ordinary business’ of the company. Such business may include consideration of the accounts, declaration of a dividend and appointment of auditors.
Annual General Meeting (AGM).
Anticipatory breach.
Renunciation by a party to a contract of their contractual obligations before the date of performance.
Renunciation by a party to a contract of their contractual obligations before the date of performance.
Anticipatory breach.
Articles of association.
Rules governing the internal conduct of a company’s affairs, such as appointment, powers and proceedings of directors, alteration of capital structure, dividends and so on.
Rules governing the internal conduct of a company’s affairs, such as appointment, powers and proceedings of directors, alteration of capital structure, dividends and so on.
Articles of association.
Auditor
A person appointed by the company in a general meeting to report whether the accounts reflect a true and fair view of the company’s affairs.
A person appointed by the company in a general meeting to report whether the accounts reflect a true and fair view of the company’s affairs.
Auditor.
Breach of contract.
Where a party does not perform their contractual obligations sufficiently.
Where a party does not perform their contractual obligations sufficiently.
Breach of contract.
Bribery.
Giving or receiving money, goods or services to induce a party’s improper performance of an official duty.
Giving or receiving money, goods or services to induce a party’s improper performance of an official duty.
Bribery.
Business name.
A name used by a company other than the registered one.
A name used by a company other than the registered one.
Business name.
Capacity.
The ability or power of a person to enter into legal relationships or carry out legal acts.
The ability or power of a person to enter into legal relationships or carry out legal acts.
Capacity.
Care, duty of.
The care owed by one person to another which, if broken, may give rise to an action for negligence.
The care owed by one person to another which, if broken, may give rise to an action for negligence.
Care, duty of.
Claimant.
The party who brings a claim in a civil court. They were previously known as the plaintiff.
The party who brings a claim in a civil court. They were previously known as the plaintiff.
Claimant.
Company.
An entity registered under the Companies Act 2006 or any earlier Companies Act.
An entity registered under the Companies Act 2006 or any earlier Companies Act.
Company.
Compulsory liquidation.
A liquidation initiated when (usually a creditor) petitions the court.
A liquidation initiated when (usually a creditor) petitions the court.
Compulsory liquidation.
Confirmation statements.
Statements that confirm to the Registrar that there have been no changes to the information held by them about the company during the previous 12 months, or, if changes have been made, they record the changes that have occurred.
Statements that confirm to the Registrar that there have been no changes to the information held by them about the company during the previous 12 months, or, if changes have been made, they record the changes that have occurred.
Confirmation statements.
Conflict of interest.
Where the personal interests of an individual clash with another party’s interests that they have the power to control.
Where the personal interests of an individual clash with another party’s interests that they have the power to control.
Conflict of interest.
Consideration.
Consists either in some right, interest, profit or benefit accruing to one party to a contract, or some forbearance, detriment, loss or responsibility given, sufferred or undertaken by the other. Broadlly, the element of value that each party contributes to the contract.
Consists either in some right, interest, profit or benefit accruing to one party to a contract, or some forbearance, detriment, loss or responsibility given, sufferred or undertaken by the other. Broadlly, the element of value that each party contributes to the contract.
Consideration.
Constitution (company).
Documents which set out the rules for governing a company and include the articles of association and member resolutions relevant to the constitution.
Documents which set out the rules for governing a company and include the articles of association and member resolutions relevant to the constitution.
Constitution (company).
Contract.
An agreement which legally binds the parties.
An agreement which legally binds the parties.
Contract.
Contract of service/employment.
A contract of employment is a contract of service or apprenticeship, whether express or implied, and (if it is express) whether it is oral or in writing.
A contract of employment is a contract of service or apprenticeship, whether express or implied, and (if it is express) whether it is oral or in writing.
Contract of service/employment.
Creditors’ voluntary liquidation.
A form of liquidation where a company does not provide a declaration of solvency. If no such declaration is made, the liquidation proceeds as a creditors’ voluntary winding up even if in the end the company pays its debts in full.
A form of liquidation where a company does not provide a declaration of solvency. If no such declaration is made, the liquidation proceeds as a creditors’ voluntary winding up even if in the end the company pays its debts in full.
Creditors’ voluntary liquidation.
Crystallisation.
The point at which certain events cause a floating charge to be converted into a fixed charge.
The point at which certain events cause a floating charge to be converted into a fixed charge.
Crystallisation.
Damages.
The sum claimed or awarded in a civil action in compensation for the loss or injury suffered by the claimant.
The sum claimed or awarded in a civil action in compensation for the loss or injury suffered by the claimant.
Damages.
Defendant.
The person against whom a civil action is brought or who is prosecuted for a criminal offence.
The person against whom a civil action is brought or who is prosecuted for a criminal offence.
Defendant.
Derivative claim.
A remedy available to a minority shareholder to redress a wrong done to the company. Such an action is brought where those who have committed the offence control the company, and thus, under Foss v Harbottle could have prevented it taking action. Any benefit obtained will accrue to the company since the claim is derived from and made on behalf of the company.
A remedy available to a minority shareholder to redress a wrong done to the company. Such an action is brought where those who have committed the offence control the company, and thus, under Foss v Harbottle could have prevented it taking action. Any benefit obtained will accrue to the company since the claim is derived from and made on behalf of the company.
Derivative claim.
Director.
A person who takes part in making decisions and managing a company’s affairs.
A person who takes part in making decisions and managing a company’s affairs.
Director.
Dividend.
A distribution of profits to members made in proportion to their shareholdings.
A distribution of profits to members made in proportion to their shareholdings.
Dividend.
Estoppel.
A party is prevented from retracting their words or conduct where another has relied upon and acted on them.
A party is prevented from retracting their words or conduct where another has relied upon and acted on them.
Estoppel.
Exclusion clause.
A clause in a contract purporting to exclude or restrict liability.
A clause in a contract purporting to exclude or restrict liability.
Exclusion clause.
Executed consideration.
A performed, or executed, act in return for a promise.
A performed, or executed, act in return for a promise.
Executed consideration.
Executory consideration.
A promise given for a promise, not a performed act.
A promise given for a promise, not a performed act.
Executory consideration.
Express term.
A term that is clearly agreed to by the parties in a contract to be a term of that contract. In examining a contract, the courts will look first at the terms expressly agreed by the parties.
A term that is clearly agreed to by the parties in a contract to be a term of that contract. In examining a contract, the courts will look first at the terms expressly agreed by the parties.
Express term.
Fiduciary duty.
A duty imposed upon certain persons because of the position of trust and confidence in which they stand in relation to another. This is particularly relevant to company directors.
A duty imposed upon certain persons because of the position of trust and confidence in which they stand in relation to another. This is particularly relevant to company directors.
Fiduciary duty.
Fixed charge.
A charge attaching to a particular asset on creation. The asset in question is usually a fixed asset, which the company is likely to retain for a long period. If the company defaults in payment of the debt the holder can realise the asset to meet the debt. Fixed charges rank first in order of priority in a liquidation.
A charge attaching to a particular asset on creation. The asset in question is usually a fixed asset, which the company is likely to retain for a long period. If the company defaults in payment of the debt the holder can realise the asset to meet the debt. Fixed charges rank first in order of priority in a liquidation.
Fixed charge.
Floating charge.
A charge on a class of assets of a company, present and future which changes in the ordinary course of the company’s business. Until the holders enforce the charge the company may carry on business and deal with the assets charged. It attaches to the assets only on crystallisation.
A charge on a class of assets of a company, present and future which changes in the ordinary course of the company’s business. Until the holders enforce the charge the company may carry on business and deal with the assets charged. It attaches to the assets only on crystallisation.
Floating charge.
Fraud.
Using misrepresentation to obtain an unjust advantage.
Using misrepresentation to obtain an unjust advantage.
Fraud.
Fraud on the minority.
Discrimination by the majority shareholders against the minority. The minority may have a remedy at common law.
Discrimination by the majority shareholders against the minority. The minority may have a remedy at common law.
Fraud on the minority.
Fraudulent trading.
Carrying on business and incurring debts when there is to the knowledge of the directors no reasonable prospect that these debts will be repaid, ie, with intent to defraud the creditors. Persons so acting may be liable for the debts of the company as the court may decide.
Carrying on business and incurring debts when there is to the knowledge of the directors no reasonable prospect that these debts will be repaid, ie, with intent to defraud the creditors. Persons so acting may be liable for the debts of the company as the court may decide.
Fraudulent trading.
Freedom of contract.
The principle that parties may contract on any terms which they choose.
The principle that parties may contract on any terms which they choose.
Freedom of contract.
Gagging clause.
A term in an employment contract or severance agreement that restricts the ability of a party to make disclosures about their employment.
A term in an employment contract or severance agreement that restricts the ability of a party to make disclosures about their employment.
Gagging clause.
Gazette.
An official publication in which certain notices must be inserted as prescribed by statute, for example the appointment of a liquidator.
An official publication in which certain notices must be inserted as prescribed by statute, for example the appointment of a liquidator.
Gazette.
Good faith.
Fair and open action without any attempt to deceive or take advantage of knowledge of which the other party is unaware.
Fair and open action without any attempt to deceive or take advantage of knowledge of which the other party is unaware.
Good faith.
Implied term.
A term deemed to form part of a contract even though not expressly mentioned by the parties.
A term deemed to form part of a contract even though not expressly mentioned by the parties.
Implied term.
Injunction.
An equitable remedy in which the court orders the other party to a contract to observe contractual terms.
An equitable remedy in which the court orders the other party to a contract to observe contractual terms.
Injunction.
Insider.
A person has information as an insider if it is (and they know it is) inside information, and if they have (and know they have) it from an inside source through being a director, employee or shareholder of a company or by having access to it because of their employment, office or profession (eg, as auditor), or through a source within either category.
A person has information as an insider if it is (and they know it is) inside information, and if they have (and know they have) it from an inside source through being a director, employee or shareholder of a company or by having access to it because of their employment, office or profession (eg, as auditor), or through a source within either category.
Insider.
Intellectual property.
A form of intangible asset that a company creates through the application of skill and knowledge of its employees.
A form of intangible asset that a company creates through the application of skill and knowledge of its employees.
Intellectual property.
Intention to create legal relations.
An element (in addition to consideration) necessary for an agreement to become a legally binding contract.
An element (in addition to consideration) necessary for an agreement to become a legally binding contract.
Intention to create legal relations.
Insolvency.
The inability to pay creditors in full after realising all the assets of a business.
The inability to pay creditors in full after realising all the assets of a business.
Insolvency.
Insolvency practitioner.
Persons acting as a liquidator, administrative receiver or administrator must be insolvency practitioners, authorised by the professional body to which they belong or the relevant government department.
Persons acting as a liquidator, administrative receiver or administrator must be insolvency practitioners, authorised by the professional body to which they belong or the relevant government department.
Insolvency practitioner.
Invitation to treat.
Indication that someone is prepared to receive offers with a view to forming a binding contract. It is not an offer in itself.
Indication that someone is prepared to receive offers with a view to forming a binding contract. It is not an offer in itself.
Invitation to treat.
Lifting the veil (of incorporation).
A company is normally to be treated as a separate legal person from its members. ‘Lifting the veil’ means that the company is identified with its members or directors or that a group of companies is to be treated as a single commercial entity. An example of this is to prevent fraud.
A company is normally to be treated as a separate legal person from its members. ‘Lifting the veil’ means that the company is identified with its members or directors or that a group of companies is to be treated as a single commercial entity. An example of this is to prevent fraud.
Lifting the veil (of incorporation).
Limited liability.
Limitation of the liability of members to contribute to the assets of a buisiness in the event of a winding up. Liability is limited to any amounts outstanding on members’ shares including any premium.
Limitation of the liability of members to contribute to the assets of a buisiness in the event of a winding up. Liability is limited to any amounts outstanding on members’ shares including any premium.
Limited liability.
Liquidated damages.
A fixed sum agreed to parties to a contract and payable in the event of a breach.
A fixed sum agreed to parties to a contract and payable in the event of a breach.
Liquidated damages.
Liquidation.
A process by which a company ceases to exist, otherwise known as a winding up. May take the form of a compulsory liquidation, a members’ voluntary liquidation or a creditors’ voluntary liquidation.
A process by which a company ceases to exist, otherwise known as a winding up. May take the form of a compulsory liquidation, a members’ voluntary liquidation or a creditors’ voluntary liquidation.
Liquidation.
Liquidator.
A person who organises a company’s liquidation or winding up. Their task is to take control of the company’s assets with a view to their realisation and the payments of all debts of the company and distribution of any surplus to members.
A person who organises a company’s liquidation or winding up. Their task is to take control of the company’s assets with a view to their realisation and the payments of all debts of the company and distribution of any surplus to members.
Liquidator.
Listed company.
A company whose shares are quoted on a recognised stock exchange.
A company whose shares are quoted on a recognised stock exchange.
Listed company.
Managing director.
One of the directors of the company appointed to carry out overall day-to-day management functions.
One of the directors of the company appointed to carry out overall day-to-day management functions.
Managing director.
Members’ voluntary winding up.
A form of liquidation where the directors have made a declaration of solvency and the members have passed a resolution that the company be wound up.
A form of liquidation where the directors have made a declaration of solvency and the members have passed a resolution that the company be wound up.
Members’ voluntary winding up.
Memorandum of association.
A memorandum in the prescribed form stating that the subscribers wish to form a company and agree to become members of the company and, in the case of a company with a share capital, agree to take at least one share each. It must be authenticated by each subscriber.
A memorandum in the prescribed form stating that the subscribers wish to form a company and agree to become members of the company and, in the case of a company with a share capital, agree to take at least one share each. It must be authenticated by each subscriber.
Memorandum of association.
Minutes.
A written, indexed record of the business transacted and decisions taken at a meeting. Company law requires minutes to be kept of all company meetings. Minutes of general meetings should be available for inspection by members.
A written, indexed record of the business transacted and decisions taken at a meeting. Company law requires minutes to be kept of all company meetings. Minutes of general meetings should be available for inspection by members.
Minutes.
Misrepresentation.
A false statement made with the object of inducing the other party to enter into a contract.
A false statement made with the object of inducing the other party to enter into a contract.
Misrepresentation.
Mitigation.
An action by an injured party to limit the effect of any loss or damage caused by a defendant.
An action by an injured party to limit the effect of any loss or damage caused by a defendant.
Mitigation.
Negligence.
This may refer to the way in which an act is carried out, that is carelessly, or to the tort which arises when a person breaches a legal duty of care that is owed to another, thereby causing loss to that other.
This may refer to the way in which an act is carried out, that is carelessly, or to the tort which arises when a person breaches a legal duty of care that is owed to another, thereby causing loss to that other.
Negligence.
Objects.
The aims and purposes of a company.
The aims and purposes of a company.
Objects.
Off-the-shelf company.
A company that has been ‘ready-made’ and available to purchase by those wishing to incorporate their business quickly.
A company that has been ‘ready-made’ and available to purchase by those wishing to incorporate their business quickly.
Off-the-shelf company.
Offer.
A definite promise to be bound on specific terms.
A definite promise to be bound on specific terms.
Offer.
Ordinary resolution.
A resolution carried by a simple majority of votes cast.
A resolution carried by a simple majority of votes cast.
Ordinary resolution.
Ordinary share.
A share which gives the holder the right to particpate in the company’s surplus profit and capital. The dividend is payable only when preference dividends, including arrears, have been paid.
A share which gives the holder the right to particpate in the company’s surplus profit and capital. The dividend is payable only when preference dividends, including arrears, have been paid.
Ordinary share.
Partnership.
The relation which subsists between two or more persons carrying on a business in common with a view of profit.
The relation which subsists between two or more persons carrying on a business in common with a view of profit.
Partnership.
Past consideration.
Something already done at the time that a contractual promise is made.
Something already done at the time that a contractual promise is made.
Past consideration.
Penalty clause.
A term in a contract that fixes a specific sum to be payable to the injured party in the event of breach of contract. The objective is to penalise the party in breach rather than to recover actual losses.
A term in a contract that fixes a specific sum to be payable to the injured party in the event of breach of contract. The objective is to penalise the party in breach rather than to recover actual losses.
Penalty clause.
Perpetual succession.
A company continues to exist despite the death, insolvency, or insanity of any member or director, any change in membership or any transfer of shares.
A company continues to exist despite the death, insolvency, or insanity of any member or director, any change in membership or any transfer of shares.
Perpetual succession.
Poll.
Where shareholders vote on company resolutions and the number of votes they may cast is related to the size of their shareholding.
Where shareholders vote on company resolutions and the number of votes they may cast is related to the size of their shareholding.
Poll.
Preference shares.
Company shares which entitle the holder to a fixed rate of dividend and priority of repayment ahead of ordinary shareholders.
Company shares which entitle the holder to a fixed rate of dividend and priority of repayment ahead of ordinary shareholders.
Preference shares.
Pre-incorporation contract.
A contract purported to be made by a company or its agent before the company has received its certificate of incorporation. An agent may be made personally liable on such a contract which will be unenforceable against the company.
A contract purported to be made by a company or its agent before the company has received its certificate of incorporation. An agent may be made personally liable on such a contract which will be unenforceable against the company.
Pre-incorporation contract.
Private company.
A company which may not offer shares to the public, and which has not been registered as a public company.
A company which may not offer shares to the public, and which has not been registered as a public company.
Public company.
Privity of contract.
A principle of contract law that states only parties to a contract may sue on it.
A principle of contract law that states only parties to a contract may sue on it.
Privity of contract.
Promoter.
The person who undertakes to form a company by making the appropriate business preparations.
The person who undertakes to form a company by making the appropriate business preparations.
Promoter.
Proxy.
A person appointed to vote on company resolutions by a shareholder.
A person appointed to vote on company resolutions by a shareholder.
Proxy.
Public company.
A company registered as such under the Companies Act. The principal distinction between public and private copmanies is that only the former may offer shares to the public.
A company registered as such under the Companies Act. The principal distinction between public and private copmanies is that only the former may offer shares to the public.
Public company.
Quasi-loan.
An agreement between to parties where one pays the other’s debts on the condition that the second party agrees to reimburse them at some later date.
An agreement between to parties where one pays the other’s debts on the condition that the second party agrees to reimburse them at some later date.
Quasi-loan.
Quantum meruit.
As much as they have deserved. A restitutory award that may be granted in cases of breach of contract to reflect the value of the work done.
As much as they have deserved. A restitutory award that may be granted in cases of breach of contract to reflect the value of the work done.
Quantum meruit.
Quorum.
The minimum number required to be present for a valid meeting to take place.
The minimum number required to be present for a valid meeting to take place.
Quorum.
Ratification.
Occurs in agency law where an agent acts on behalf of a principal before the agency agreement is created. The principal agrees to be bound by those acts once the agency agreement is formed.
Occurs in agency law where an agent acts on behalf of a principal before the agency agreement is created. The principal agrees to be bound by those acts once the agency agreement is formed.
Ratification.
Re.
In the mater of. Seen in some case names.
In the mater of. Seen in some case names.
Re.
Registered office.
A business address to which communications with a company may be sent.
A business address to which communications with a company may be sent.
Registered office.
Registration.
Process by which a company comes into being, which involves the fililng of documents with the relevant authority and the issuance of a certificate of registration.
Process by which a company comes into being, which involves the fililng of documents with the relevant authority and the issuance of a certificate of registration.
Registration.
Remoteness of damage.
The relationship between a wrongful act and the resulting damage which determines whether or not compensation may be recovered. Different principles apply in contract and tort.
The relationship between a wrongful act and the resulting damage which determines whether or not compensation may be recovered. Different principles apply in contract and tort.
Remoteness of damage.
Repudiation.
A breach of contract which is caused by the party in breach rejecting or renouncing the terms of the contract.
A breach of contract which is caused by the party in breach rejecting or renouncing the terms of the contract.
Repudiation.
Sale of goods.
A contract whereby the seller transfers or agrees to transfer the property in goods for a money consideration called the price.
A contract whereby the seller transfers or agrees to transfer the property in goods for a money consideration called the price.
Sale of goods.
Secretary (company).
An officer of a company appointed to carry out general administrative duties. Every public company must have a secretary.
An officer of a company appointed to carry out general administrative duties. Every public company must have a secretary.
Secretary (company).
Shadow director.
A person in accordance with whose instructions other directors are accustomed to act.
A person in accordance with whose instructions other directors are accustomed to act.
Shadow director.
Share.
A member’s stake in a company’s share capital.
A member’s stake in a company’s share capital.
Share.
Sole trader.
A business vehicle that involves a single individual who contributes capital to start the enterprise, runs it with or without employees, and personally earns the profits or stands the losses of the venture.
A business vehicle that involves a single individual who contributes capital to start the enterprise, runs it with or without employees, and personally earns the profits or stands the losses of the venture.
Sole trader.
Specfic performance.
An equitable remedy in which the court orders the defendant to perform their side of a contract.
An equitable remedy in which the court orders the defendant to perform their side of a contract.
Specific performance.
Standard form contract.
A standard document prepared by many large organisations which sets out the terms upon which they contract with their customers.
A standard document prepared by many large organisations which sets out the terms upon which they contract with their customers.
Standard form contract.
Subsidiary company.
A company under the control of another company, its holding company.
A company under the control of another company, its holding company.
Subsidiary company.
Third party.
A party that does not have a legal connection with a contract but who might be affected by it.
A party that does not have a legal connection with a contract but who might be affected by it.
Third party.
Tort.
A wrongful (but not necessarily criminal) act by one person to another. No contractual relationship is needed between the parties for a liability to be created.
A wrongful (but not necessarily criminal) act by one person to another. No contractual relationship is needed between the parties for a liability to be created.
Tort.
Unenforceable contract.
A contract that will not be enforced by the court in the event of its breach.
A contract that will not be enforced by the court in the event of its breach.
Unenforceable contract.
Unlimited company.
A company whose members do not have limited liability and so in the event of liquidation are required to contribute as much as is needed to repay the company’s debts in full.
A company whose members do not have limited liability and so in the event of liquidation are required to contribute as much as is needed to repay the company’s debts in full.
Unlimited company.
Void contract.
Not a contract at all. The parties are not bound by it and if they transfer property under it they can sometimes recover their goods even from a third party.
Not a contract at all. The parties are not bound by it and if they transfer property under it they can sometimes recover their goods even from a third party.
Void contract.
Voidable contract.
A contract which one party may avoid, that is, terminate at their option. Property transferred before avoidance is usually irrecoverable from a third party.
A contract which one party may avoid, that is, terminate at their option. Property transferred before avoidance is usually irrecoverable from a third party.
Voidable contract.
Whistleblowing.
Where an individual makes disclosures about an organisation that they are employed by, usually related to illegal or unethical actions occurring.
Where an individual makes disclosures about an organisation that they are employed by, usually related to illegal or unethical actions occurring.
Whistleblowing.
Winding up.
A process by which a company ceases to exist, otherwise known as a liquidation. May take the form of a compulsory winding up, a members’ voluntary winding up or a creditors’ voluntary winding up.
A process by which a company ceases to exist, otherwise known as a liquidation. May take the form of a compulsory winding up, a members’ voluntary winding up or a creditors’ voluntary winding up.
Winding up.
Wrongful trading.
The term used where directors of an insolvent company knew or should have known that there was no reasonable prospect that the company could have avoided insolvency and did not take sufficient steps to minimise the potential loss to creditors.
The term used where directors of an insolvent company knew or should have known that there was no reasonable prospect that the company could have avoided insolvency and did not take sufficient steps to minimise the potential loss to creditors.
Wrongful trading.
