Corporate & Business Law

Monday, May 28, 2018

Word or PhraseDescription
ABNAustralian Business Number which is a unique identifier issued to a person or an entity carrying on an enterprise by the Australian Business Register (“ABR“) operated by the Australian Taxation Office (“ATO“).
ACNAustralia Company Number which is a unique nine digit number issued to a company by the Australian Securities and Investments Commission (“ASIC“).
AcquisitionThe purchase of an asset.
ASIC (Australian Securities & Investment Commission)Independent Australian government body that acts as Australia’s corporate regulator.
Bare TrustA basic trust in which the beneficiary has a right to both income and capital and may call for both to be remitted into his own name. Often used for self managed superfund borrowings.
Business NameA business’ registered trading name registered with ASIC.
Buy Sell OptionsAn agreement between co-owners of a business granting each other options to buy or sell their respective interests upon the occurrence of specified event (often death or incapacity).
ChargeTo grant a security interest over the assets of a company.
ConstitutionRules of a company.
ContractA formal, legally binding document between two or more parties.
Discretionary TrustA trust where the trustee determines to whom income and capital are distributed pursuant to the terms of the trust deed. Also referred to as a family trust.
Due DiligenceInvestigation of a business or company prior to purchase.
Fiscal YearAn accounting period of 12 months (normally 1 July to 30 June).
FranchiseA right to carry on a business using another’s business model under an agreement.
Franchise AgreementAn agreement setting out the terms of conditions between a franchisor and franchisee for business operations.
FranchiseeAn individual or company that is granted a licence to conduct operations under a franchisor’s business model.
FranchisorA company that allows an individual (franchisee) to operate at a location under their business name and model.
Going ConcernA business that will continue to operate after the sale from a seller to a buyer.
GuaranteeTo provide a promise or assurance that obligations will be fulfilled.
GuarantorA person who provides a guarantee.
Hybrid TrustA trust which mixes elements of a discretionary trust and a unit trust so that a beneficiary has a fixed entitlement to some part of the income or capital of the trust but the trustee has discretion to distribute some part of the income or capital.
IndemnityAn agreement where one person indemnifies another for certain acts or omissions.
Joint VentureAn agreement for two or more parties to undertake a project.
LeaseThe right to occupy premises with exclusive possession.
LiquidationThe process of collecting and converting assets to money to pay debts, while in the process of closing the business down.
Loan AgreementA contract between a borrower and a lender which sets out the terms of conditions agreed by both parties.
MortgageAn agreement that creates a charge over land between a lender and borrower.
PartnershipAn agreement between parties to carry on a business in common with a view to make a profit.
SecurityAn asset that is pledged to secure a promise or obligation.
SharesA fractional part into which the capital stock of a company is divided.
ShareholderThe owner of shares in a company.
Shareholders AgreementAgreement between shareholders in a company.
StakeholderA person, group or organisation that has an interest in an organisation such as clients, employees and shareholders.
TurnoverMonies received by a business within a certain time-frame.
Unit TrustA unit trust is a trust structure that allows persons to hold assets and provide profits that go straight to individual unit owners instead of reinvesting them back into the general trust fund.
VendorA person or company offering something for sale.
Walk in walk outAn arrangement where a buyer of a business takes over all existing stock and all debtors and creditors on the settlement day.
WarrantyA written promise that a state of affairs exists.
Winding UpSee “Liquidation”.

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