Corporate & Business Law

Monday, May 28, 2018

Word or Phrase Description
ABN Australian 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“).
ACN Australia Company Number which is a unique nine digit number issued to a company by the Australian Securities and Investments Commission (“ASIC“).
Acquisition The purchase of an asset.
ASIC (Australian Securities & Investment Commission) Independent Australian government body that acts as Australia’s corporate regulator.
Bare Trust A 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 Name A business’ registered trading name registered with ASIC.
Buy Sell Options An 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).
Charge To grant a security interest over the assets of a company.
Constitution Rules of a company.
Contract A formal, legally binding document between two or more parties.
Discretionary Trust A 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 Diligence Investigation of a business or company prior to purchase.
Fiscal Year An accounting period of 12 months (normally 1 July to 30 June).
Franchise A right to carry on a business using another’s business model under an agreement.
Franchise Agreement An agreement setting out the terms of conditions between a franchisor and franchisee for business operations.
Franchisee An individual or company that is granted a licence to conduct operations under a franchisor’s business model.
Franchisor A company that allows an individual (franchisee) to operate at a location under their business name and model.
Going Concern A business that will continue to operate after the sale from a seller to a buyer.
Guarantee To provide a promise or assurance that obligations will be fulfilled.
Guarantor A person who provides a guarantee.
Hybrid Trust A 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.
Indemnity An agreement where one person indemnifies another for certain acts or omissions.
Joint Venture An agreement for two or more parties to undertake a project.
Lease The right to occupy premises with exclusive possession.
Liquidation The process of collecting and converting assets to money to pay debts, while in the process of closing the business down.
Loan Agreement A contract between a borrower and a lender which sets out the terms of conditions agreed by both parties.
Mortgage An agreement that creates a charge over land between a lender and borrower.
Partnership An agreement between parties to carry on a business in common with a view to make a profit.
Security An asset that is pledged to secure a promise or obligation.
Shares A fractional part into which the capital stock of a company is divided.
Shareholder The owner of shares in a company.
Shareholders Agreement Agreement between shareholders in a company.
Stakeholder A person, group or organisation that has an interest in an organisation such as clients, employees and shareholders.
Turnover Monies received by a business within a certain time-frame.
Unit Trust A 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.
Vendor A person or company offering something for sale.
Walk in walk out An arrangement where a buyer of a business takes over all existing stock and all debtors and creditors on the settlement day.
Warranty A written promise that a state of affairs exists.
Winding Up See “Liquidation”.

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