Business

• AcceptanceThe unconditional agreement to an...
• AcquisitionThis is the purchase of one company by another without a merger...
• Agency AgreementThis is an agreement which allows one party (the Agent) to sell products (goods or services) on behalf of another (the Principal) in return for commission...
• AgentSomeone who is appointed to act on behalf of another party, the...
• Annual General Meeting (AGM) A company must hold a meeting of shareholders once each calendar...
• Articles of AssociationA document which is required to incorporate a UK...
• Authorised Share Capital Shares which are available to be...
• BankruptA debtor who, either upon voluntary petition or one invoked by their creditors, is judged legally...
• BankruptcyThe state of being...
• Breach of ContractThis occurs when a party to a contract fails to abide by the agreed...
• Business NameSole Traders and Partnerships can either trade under their own names or have a separate name, known as a Business...
• Comfort LetterA document which is issued to back up an agreement but which does not have any contractual...
• Company Voluntary Agreement (CVA)This is a deal between an insolvent company and its...
• ConditionsConditions form the basis of a contract - if one of them fails or is broken, the contract is...
• ConsiderationSomething which must be given by either side in a...
• Dissolution See Liquidation...
• Distribution AgreementThis is an agreement which regulates the commercial terms whereby one party, the Supplier supplies goods and/or services to another party, the Distributor, for resale in a specified...
• DividendThe profit of trading divided among the members in proportion to their shares and in accordance with their rights as...
• Exclusion ClauseClause in a contract which is intended to exclude one party from liability if a stated circumstance...
• Exemption Clause Clause in a contract that attempts to restrict the liability of the party that writes...
• Express Terms Terms and provisions of a contract that are expressly written and on which the parties specifically...
• Extraordinary General Meeting Any meeting of shareholders which is not an AGM...
• Extraordinary Resolution Company resolution that usually does not require any notice of its proposal, but must be passed by a majority of at least three quarters of votes...
• Force MajeureAn event which cannot be foreseen (eg. lightning) - liability for which is often excluded from...
• Franchise AgreementThis is an agreement for a person or organisation (the Franchisor) who wishes to grant the right to another person or organisation (the Franchisee) to operate an outlet of the Franchise business within a particular...
• FrustrationAn unexpected or unintentional event that makes fulfilment of a contract...
• General Data Protection Regulation (GDPR) The EU General Data Protection Regulation (GDPR) comes into effect on 28 May 2018. Some of the changes, in particular the requirement for accountability, leave many businesses with a lot to do if they are to be sure of compliance. The GDPR introduces a...
• Going ConcernThis is an accounting concept which assumes that a company will continue to operate in the foreseeable...
• Heads of Agreement See Heads of Terms...
• Heads of TermsThese set out the terms of a commercial transaction which has been agreed in...
• Implied TermsTerms and clauses implied in a contract by law or custom and practice without actually being stated in the...
• IncorporateInclusion or adoption of some term or condition as part of a...
• IncorporationThe formal creation of a...
• Issued SharesThis refers to shares that have been allotted and issued and held by...
• Joint Venture AgreementThis can be used where two or more existing businesses agree to co-operate and combine their resources with a view to...
• Letter of intent See Heads of Terms...
• Limitation ClauseThis sets a maximum on the amount of damages a party may have to pay if there is a failure of some part of the...
• Limited LiabilityThis generally refers to limited companies where the owners' liability to pay the debts of the company is limited to the value of their...
• Limited Liability PatnershipA Limited Liability Partnership (LLP) is a recognised legal entity by virtue of the Limited Liability Partnerships Act 2000, which has some features of a limited company and some of a...
• LiquidationThis refers to the process by which a company (or part of a company) is brought to an...
• Memoranda of Understanding See Heads of Terms...
• Memorandum of Association A document which is required to incorporate a UK company...
• MergerThis is a combination of two companies to form a new...
• MisrepresentationThis is where one party to a contract makes a false statement of fact to the other party which is relied...
• Non-Executive DirectorA director who does not participate in the day-to-day management of the...
• NoticeAdvance notification by either party that a contract is about to...
• OfferAn offer to contract must be made with the intention to create a legal relationship upon...
• Ordinary ResolutionA resolution passed by a simple majority of members at a company...
• Outsourcing AgreementThis is an agreement designed for a person or organisation (the Service Provider) who intends to take over the provision or production of non-core operations for another person or organisation (the...
• Parent CompanyA company which owns more than 50% voting rights in another...
• PartnershipA partnership consists of two or more people formed with the aim of carrying on a business with a view to...
• Private Limited CompanyAn entity incorporated by registration whose members have a limited liability towards their...
• ProxyThis is a person who acts on behalf of another for a specific...
• Public Limited CompanyA company whose constitution must state it is a public company and which must satisfy requirements as to the minimum amount of its share...
• QuorumThe minimum number of people required at a business meeting for decisions to be...
• RatificationThis is the acceptance or confirmation of an act or agreement that has already been...
• ReceivershipThis is a type of bankruptcy a company enters when a receiver is appointed to run the...
• Registered OfficeThe official address of a company as stated on the register at Companies...
• Repudiation of ContractWhere one party to a contract refuses to comply, amounting to a breach of contract. Also, where a contract was made by a minor (person under the age of 18) who then repudiates it at or shortly after the age of...
• RescissionThe possibility to end a contract if it is entered into as a result of a...
• ShareA unit of economic value of a company to which are attached rights to vote and to participate in dividends and capital distributions of the...
• Share CertificateThis is issued by a company when a person is entered onto the register of members as the holder of the shares in the...
• Shareholders AgreementAn agreement which can be used where two or more parties wish to carry on business together as a limited company and wish to regulate the relationship between shareholders and determine actions in the event of...
• Sole TraderA sole trader operates as an individual without the use of a company structure or partners and has sole responsibility for the actions of the...
• Subject to ContractWords used on documents exchanged by parties during contract negotiations, denoting that the document is not an offer or acceptance and negotiations have not...
• Subsidiary CompanyA company which owns less than 50% of its own voting...
• UCTAUnfair Contract Terms Act...
• Unfair TermsContract terms which are deemed unfair by legislation and will not be enforced by the...
• VoidA contract which cannot be performed or completed at...
• WarrantiesPromises made in a contract, but which are less important than...