Company Law Flashcards
(152 cards)
1
Q
adjudication order/bankruptcy order
A
the court declares someone bankrupt
2
Q
administrative receiver
A
a qualified insolvency practioner who takes control of the assets
3
Q
administrator
A
qualified insolvency practioner appointed by an administration order in an attempt to save the company, rather than wind it up
4
Q
agent
A
can bind the company in contracts
5
Q
alternative director
A
a person appointed by the director to act in his place
6
Q
annual accounts
A
detailed record of the company’s financial situation; jaarrekening
7
Q
annual general meeting (AGM)
A
annual meeting of shareholders (jaarlijkse ava)
8
Q
application for registration
A
document in the UK system which must be registere in order to incorporate a company. It states the name, office and address, whether it is limited by shares and if it’s a public or private company. certain documents must accompany the application, such as a statement of capital and initial shareholding, a statement of the company’s proposed officers and a statement of compliance
9
Q
articles of association
A
constitutional document which regulates the company’s affairs (statuten)
10
Q
articles of incorporation
A
document filed in the US to incorporate a company.
11
Q
articles/deed of partnership
A
written agreement setting out the structure of a partnership (not legally required)
12
Q
assets
A
property owned by a person of company that has monetary value
13
Q
auditor
A
accountant who audits the company for the annual accounts
14
Q
authorised share capital
A
the amount of capital a company can raise by selling its shares. A company cannot issue more shares than is authorised by its constitution
15
Q
bankruptcy
A
an individual is unable to pay his debts
16
Q
board of directors
A
ultimate decision-making body of a company
17
Q
bond
A
certificate issued by the government/public company, promising to repay borrowed money at a fixed interest rate and at a certain time. In the UK they’re called debenture if they’re secured
18
Q
bylaws
A
US: statuten. do not have to be filed
19
Q
called up share capital
A
the sum that shareholders already paid in return for shares
20
Q
capital
A
the net worth of a company
21
Q
certificate of incorporation
A
is issued on incorporation and contains information about the company
22
Q
chairman
A
an appointed director who presides over meetings
23
Q
charge
A
a charge on a property means that it is not free but it has a certain liability attached to it (pandrecht/hypotheek)
24
Q
CIO (charitable incorporated organisation)
A
new UK legal structure for charities
25
class meeting
a class of shareholders meets to decide matters which affect their particular class of shares
26
class rights
rights attached to different classes of shares (eg voting rights)
27
close corporation
a US corporation consisting of a single person or very small group of persons, typically managed by stockholders themselves
28
company
UK: association of persons for the purpose of undertaking or business; legally incorporated and is a legal person
US: wide range of activities ('onderneming', 'bedrijf')
29
company constitution
in UK law this is governed by the articles of association
30
company secretary
in UK law, every public company must have a company secretary who is responsible for the administration of the company's affairs
31
conflict of interest
director's duty to avoid this. the interests of the company must prevail
32
contributory
someone who is liable to contribute to the assets of a company on a winding up
33
corporate governance
the way in which companies are directed and controlled
34
corporate veil
the legal recognition of the company's independence from its owners (the shareholders)
35
corporation
UK: a incorporated legal body, often a large company. in the US it also means an association of shareholders
36
creditor
one to whom a debt is owed
37
crystallise
a floating charge crystallises/is triggered when a debtor is in default
38
debenture
a document acknowledging a debt for a capital sum that is to be repaid on a certain date, with interest payable at a fixed rate. In the UK this is often a secured loan; in the US it is an unsecured loan
39
debenture holder
is a creditor of the company
40
debenture stock
credit certificates issued in a similar way to an issue of a share
41
debenture trust/indenture
a deed setting out the terms of the loan
42
defunct
a company that has ceased to trade
43
derivative action
an action by minority shareholders sueing on behalf of the company
44
director
any person occupying this position, by whatever name called
45
director's duties
- duty to act within powers
- duty to promote the success of the company
- duty to exercise independent judgment
- duty to exercise reasonable care, skill and judgment
- duty to avoid conflicts of interest
- duty to not accept benefits from third parties
- duty to declare interests in transactions
46
disclosure
to reveal information about an act or transaction. Companies must disclose certain information about their consitution and financial situation, directors must declare personal interests in transactions
47
disqualification order
order by which a person is not allowed to act as a company director on the grounds of
- conviction for an indictable offence
- breaches of company law
- fraud
- unfitness to manage a company (in the case of insolvency)
48
dissolution
bringing business to an end
49
dividend
sum paid to shareholders by a company when in profit
50
duty of care
US: business judgment rule. A director must not be negligent but cannot be held liable for mere errors of judgment, when he makes an informed decision after a reasonable investigation
51
duty of loyalty
US term: director's fiduciary duties
52
enlightened shareholder value
UK principle: taking into account all the stakeholders, such as employees, the environment, suppliers and customers, etc
53
event of default
an event either specified by statute or specified in a debenture document, that means a charge on property secured by the debenture is activated
54
executive director
full time officer employed by the company as a manager
55
extraordinary general meeting
where shareholders vote on special business if required
56
fiduciary duties
US term. a director must exercise his powers for the benefit of the company and not for his own. he owes a general duty of trust, honesty and integrity towards the company
57
filing
US: documents are filed rather than registered
58
firm
UK: partnerships (never a company)
US: synonym for company (as a broad term)
59
fixed charge
a charge on a particular asset or property
60
fixed interest securities
such as a bond
61
floating charge
US may also call this a floating lien. This is a charge attached to a class of assets, which in the ordinary course of a company's business would be changing from time to time. The company doesn't need the holder's permission to deal with these assets. The charge is triggered/crystallised by an event
62
flotation/IPO
initial public offering of shares for the first time, in an offer document called a prospectus
63
fraudulent trading
a person continued trading even though he knew the company could not pay its debts and the business is carried on with the intent to defraud creditors. a dishonest intent on the part of that person must be proved
64
group accounts
in a parent/subsidiary relationship; geconsolideerde jaarrekening
65
hire purchase agreement
a form of credit agreement where the payment is in instalments
66
holding company
this company mainly holds shares or securities in one or more subsidiaries
67
incorporation
the creation of a legal person
68
insider dealing/trading
using confidential information about a company in order to buy or sell its securities at a profit
69
insolvency practitioner
someone qualified to conduct the affairs of companies that are in default or insolvent
70
insolvent
a company cannot pay its debts
71
issued capital
the part of a company's authorised share capital that has actually been issued to the shareholders
72
lien
a charge upon the property of another until the debts associated with that property have been paid off
73
lifting the veil
the company is no longer treated as a separate legal entity
74
limited liability company
UK: registered company where the shareholders' liability in the event of a winding up is limited to any amount that has not yet been paid for their shares.
75
limited liability partnership
a separate legal entity with limited liability and the structure of a partnership
76
limited partnership
has a distinction between general partners and limited partners. Limited partners have no active function but have invested in the company, and cannot be held personally liable for the debts of the partnership beyond the capital they have invested already (stille vennoot in commanditaire vennootschap)
77
liquidation
company is brought to an end
78
liquidator
one appointed to supervise the winding up of a company. A receiver may become the provisional liquidator until a permanent liquidator is installed
79
listed/quoted company
listed on the stock exchange
80
listing particulars
document offering shares or debentures to the public where the company is listed already
81
loan capital
capital that has been obtained on credit
82
majority shareholder
one who holds sufficient shares to influence the decision-making
83
members
the members of a company are called the shareholders
84
membership contract
special contract which binds the company to the members and regulates the relationship between the members
85
memorandum of association
legal documents which records the fact of incorporation
86
minority action
an action brought by a (small number of) minority shareholder(s)
87
minority shareholder
doesn't hold sufficient shares to influence decisions
88
minutes
official written record of meetings (notulen)
89
moratorium
a suspension of payments (surseance van betaling)
90
negative pledge clause
prohibits the company from using any assets as security in the future if that would be disadvantageous to the existing debenture holder's security
91
negotiable
a document, such as shares and debentures, may be transferred to another
92
nominal value
the fixed face value of a share rather than its market value.
93
non-executive director
not a salaried employee, not actively involved in daily management
94
novation
a new party to a contract is substituted for an original party with the agreement of the remaining party (contractsovername)
95
objects clause
statutair doel
96
officer
one invested with authority for a particular position
97
official receiver
a government official appointed by the court to act as an interim receiver or a provisional receiver
98
order of priority
the liquidator must pay creditors according to a list of priorities
99
ordinary course of business
a partnership will be bound by contracts entered into by an individual partner if covering the usual type of business conducted by the firm
100
ordinary resolution
a simple majority vote by shareholders
101
ordinary share/equity share
holders of these are entitled to dividend depending on how well the company is doing, and can vote in general meetings
102
owners
shareholders
103
partnership
the relationship between persons carrying on a business in common with a view to profit. Not a separate legal person.
104
partnership property
property that is jointly owned by the partners
105
personal liability
an individual is held liable for the debts of the business
106
petition
certain actions are commenced by petition, for example, a winding up petition is presented to the court
107
pre-emption rights
the right to purchase (shares) before others
108
preference share
a share that pays a dividend at a fixed rate, before ordinary shareholders are paid
109
preferential creditor
paid out before others in a winding up
110
pre-incorporation contract
a person enters into a contract on behalf of a company which has not yet been formed
111
premium
shares that are issued above their nominal value, the whole of the premium is placed in a share premium account
112
private company
a company that may not offer its shares and debentures to the public
113
promoter
person who organises setting up a new company
114
prospectus
document in which shares or debentures are offered to the public for the first time
115
proxy
a person appointed by a shareholder to vote in his place
116
public company
company must have a minimum subscribed share capital and may offer shares and debentures to the public. US: publicly held corporation
117
quasi loans
the company pays a sum to another on behalf of a director but the director repays the company
118
ratify
to approve officially
119
receiver
when the company has failed to repay a debt, a receiver will take control of the property in question. He cannot wind up a company (goed wordt geveild)
120
register
to be noted on an official list
121
Registrar
the Registrar of Companies keeps an official record of all incorporated businesses
122
relief
a remedy or assistance provided by the court
123
reserve capital
a part of the uncalled share capital set aside as a fund for paying unsecured creditors, should the company be wound up
124
resolution
a formal proposal
125
retention of title clause (Romalpa clause)
the seller remains the legal owner of the goods until the buyer has paid in full
126
self-dealing rule
if a director has an interest in a contract between the company and a third party he must disclose this to the company
127
shadow director
one who controls the other director even if he is not a director himself. He can be liable as a director in certain circumstances
128
share capital
the total amount which a company's shareholders have contributed as payment for their shares
129
shareholder
one who holds shares; also called member, owner or stockholder
130
shares
interest held by a shareholder in a company, measured by a sum of money for the purposes of liability and dividend.
131
sole proprietorship
US term for sole trader
132
sole trader
zzp'er, unincorporated one-man business
133
special resolution
a company resolution which is only valid if 75% of the votes approve
134
stock
a member's holding expressed in money rather than the number of shares held
135
stockholders
US: shareholders are often called stockholders
136
subscriber shares
the first shares issued when a new company is formed
137
subsidiary
held by a holding company (dochtervennootschap).
138
substantial non-cash asset
a wide range of property, tangible or intangible. Substantial refers to a value exceeding a certain percentage of the company's net assets
139
supervisory board
RvC. US and UK don't have a two-tier board, in NL it's optional
140
trading certificate
once registered, a public limited company has to wait on this certificate in order to start business
141
trustee in bankruptcy
this trustee manages the assets of a bankrupt and pays off the creditors according to their property
142
ultra vires
acting in a way which exceeds legal powers or authority
143
uncalled share capital
the unpaid capital for shares if the shareholders did not pay for them in full
144
underwriter
a person or institution who takes up shares or debentures not taken up by the public
145
undischarged bankrupt
a person subject to a bankruptcy order that is still in force
146
unincorporated
the business is not a separate legal person
147
unissued share capital
the difference between the nominal value of a company's authorised share capital and the nominal value of the issued share capital, minus any amounts of issued capital that have not been called up
148
unsecured trade creditor
a category of general creditors without security that come last at a winding up
149
voluntary arrangement
rather than a winding up, a company can make a voluntary arrangement with its creditors for repayment, if supervised by a qualified insolvency practitioner
150
winding up
a company is dissolved in this process. It can be compulsory (court order) or voluntary (members' winding up or creditors' winding up)
151
written resolution
no need for a meeting, it is passed when the required majority of shareholders has signed the document
152
wrongful trading
a person went on trading even though he knew the company could not have paid its debts -> negligence
