Business

Our Business Glossary:

 

The unconditional agreement to an offer

 

This is the purchase of one company by another without a merger occuring

 

This 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 payments.

Agent 

 

Someone who is appointed to act on behalf of another party, the principal

 

A company must hold a meeting of shareholders once each calendar year

 

A document which is required to incorporate a UK company

 

Shares which are available to be issued

 

A debtor who, either upon voluntary petition or one invoked by their creditors, is judged legally insolvent

 

The state of being bankrupt

 

This occurs when a party to a contract fails to abide by the agreed terms

 

Sole Traders and Partnerships can either trade under their own names or have a separate name, known as a Business Name

 

A document which is issued to back up an agreement but which does not have any contractual standing

 

This is a deal between an insolvent company and its creditors

 

Conditions form the basis of a contract - if one of them fails or is broken, the contract is breached

 

Something which must be given by either side in a contract

 

See Liquidation

 

This 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 territory

 

The profit of trading divided among the members in proportion to their shares and in accordance with their rights as shareholders

 

Clause in a contract which is intended to exclude one party from liability if a stated circumstance happens

 

Clause in a contract that attempts to restrict the liability of the party that writes it

 

Terms and provisions of a contract that are expressly written and on which the parties specifically agree

 

Any meeting of shareholders which is not an AGM

 

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

 

An event which cannot be foreseen (eg. lightning) - liability for which is often excluded from contracts

 

This 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 territory

 

An unexpected or unintentional event that makes fulfilment of a contract impossible

 

This is an accounting concept which assumes that a company will continue to operate in the foreseeable future

 

See Heads of Terms

 

These set out the terms of a commercial transaction which has been agreed in principle

 

Terms and clauses implied in a contract by law or custom and practice without actually being stated in the contract

 

Inclusion or adoption of some term or condition as part of a contract

 

The formal creation of a company

 

This refers to shares that have been allotted and issued and held by shareholders

 

This can be used where two or more existing businesses agree to co-operate and combine their resources with a view to profit

 

See Heads of Terms

 

This sets a maximum on the amount of damages a party may have to pay if there is a failure of some part of the contract

 

This generally refers to limited companies where the owners' liability to pay the debts of the company is limited to the value of their shares

 

A 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 partnership

 

This refers to the process by which a company (or part of a company) is brought to an end

 

See Heads of Terms

 

A document which is required to incorporate a UK company

Merger 

 

This is a combination of two companies to form a new company

 

This is where one party to a contract makes a false statement of fact to the other party which is relied upon

 

A director who does not participate in the day-to-day management of the firm

Notice 

 

Advance notification by either party that a contract is about to expire

Offer 

 

An offer to contract must be made with the intention to create a legal relationship upon accepance

 

A resolution passed by a simple majority of members at a company meeting

 

This 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 Customer)

 

A company which owns more than 50% voting rights in another company

 

A partnership consists of two or more people formed with the aim of carrying on a business with a view to profit
 
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