4-s Business Glossary 4-s
AgentAn agent is a person who acts for another person in business. An agent is authorized to sign a contract, buy or sell merchandise, or represent another person at a conference or business meeting.
ArbitrationAn arbitration is the settlement of a dispute by bringing in another person (an arbitrator) to help in the settlement. An arbitrator can help when there is a dispute between management and labor (the bosses and the workers) to prevent a strike. An arbitrator can also help settle a dispute between partners when the business is partnership is being dissolved (they decide to quit running the business). In general, arbitration is less expensive and more satisfying than having to go to court to settle a distpute.
AssetsThe assets of a business are its buildings, equipment, trucks, inventory, cash, good name, loyalty of good employees, and anything else that is of value that is owned by the business.
AssignTo assign something in business is to transfer property or rights to another person, allowing them to sell or keep the property as their own or assume the rights of the owner of the business.
Assumed nameAn assumed name is not the real name. It is a fictitious or false name. In business most businesses have a billboard or company name. When a sole-proprietor or partnership operates under an assumed name, they are obligated by law to publically identify the real owners. Most governmental agencies have a process for this. Some require the owner to place an advertisement in a local newspaper that tells the name of the business and who the real owner(s). Sometimes a person will advertise his name and then add the letters dba before the name of the company or business; dba stands for doing business as.
BindTo bind an agreement (such as a partnership) is to sign or consent to the contract and make it legal. A person who is "bound" to a contract is required to do whatever he/she agreed to do when the contract was signed or otherwise created.
BylawA law or rule governing the internal affairs of an organization. Since bylaw is singular, when used in the context of constitution and bylaws, it follows that the bylaws are a set (system) of rules that govern, but are subordinate or inferior to the language of the constution.
Capital Capital in a common business sense means money. Capital resources are those resources that are necessary for production or goods of services. But for the most part capital means cash or money. Sometimes US treasury bonds and bills are considered capital. This is only because they are very easy to turn into cash. Also look at line of credit.
ConstitutionThe system of fundamental laws and principles that prescribes the nature, functions, and limits of a government or another institution (organization). See Bylaw. b. The document on which such a system is recorded.
ContinuityContinuity of a business means that the business continues to operate as usual, even when there is some unusual event that happens. For example, if a business partner becomes unable to work or dies, business continuity means that the other partner(s) are able to continue to run the business as usual. This is technically impossible for a sole-proprietorship if the proprietor becomes deceased. Others must continue the business if continuity is to be maintained.
ContractA contract is an agreement between two or more persons that is intended to be enforceable by law. It can be a written or a spoken agreement. The courts have rules about what is and what is not a contract. There are certain parts that are required for a legal contract. Simply stated: There must be a date, identification of the persons (parties), conditions of agreement between the parties, which are sometimes called mutual promises, and a consideration (reward for performance). Most often the consideration is money. There are many different types of contracts, but the necessary parts must always be there. There have been many situations, because of the actions of the parties (persons) that a contract was created when none was actually intended. The settlement of this kind of difficult situation is one of the many things that our court system is all about.
ContraventionContravention in a business is an act that goes against what the business partners had agreed upon, infringing on the rights of the other person(s) as partner(s).
A corporation is a business enity in its own right. This means it can act as a person in the eyes of the law. It is formed under a charter issued by any state in the United States. It is owned by stockholders whose liability is only for the value of the stock they purchased. They are governed by a board of directors who are elected by vote of the stockholders. The board of directors hires managers who actually run the day to day operations of the corporation.
A corporate charter is a right issued by any state of the the United States for a corporation to do business in that state. Most all states honor the charters of each other. The charter establishes the rules under which the corporation can do business. The rules are much the same from state to state, but some states are less strict than others. Deleware, for example, is probably the most lenient state and many large corporations are chartered there even though the corporation may have its operations and corporate headquarters in some state other than Deleware.
DefaultDefault is something that happens automatically. It is usually what happens when something that could have other alternatives happen, but the other alternatives are not taken or called for so instead the default happens . . . automatically, in the absense of other instructions.
DefraudTo defraud is to cheat someone by deceiving, tricking, or otherwise fooling them into doing something that will hurt them financially. Some words that are used to say someone has been defrauded are: flimflammed, fleeced, bilked, taken for a ride, duped, swindled, and cheated.
Fine printFine print is a term that comes from the law of contracts. It refers to language in the text of the contract that is in a very small print font and difficult to locate or read. It implies that text and meaning of the "fine print" is something that author of the contract is trying to hide and by putting it in fine print, the reader might skip over it and not read it. Many times the fine print of a warranty or guarantee, which is actually a type of contract, is placed there to strongly benefit only one of the parties of a contract and/or not beneficial or maybe detrimental to the other party. Many feel that fine print is unethical and borderline illegal. It is a practice that is to be generally discouraged.
Good willIn business, good will refers to the reputation or good name of the business. The good will of a business is considered to be an asset of the business. Although it is intangible (something you cannot see or touch), it has value and can increase the amount of money that an owner can ask a buyer to pay if the business is being sold.
HeirAn heir is a person who will inherit the property, rank, or title of another person.
InsolventInsolvent is a term applied to the condition that a business cannot pay its debts or meet its obligations. It is based on the idea that the business should have sufficient assets to dissolve its liabilities. When a business is insolvent, someone who is owed will not collect on the obligation because the liabilities are greater than the assets. In certain situations the courts will distribute the assets of the insolvent business, whatever they are, proportionately. All who are owed will lose the same percentage and no debtor will suffer a single great loss so that others can collect in full.
JudgementA judgement is a result of a court process and the ruling of a judge. Most often a judgement is based on a dispute between two parties that they cannot resolve by themselves. Each party, with or without counsel (a lawyer) will argue their case in front of a judge. The judge will hear both arguments and then decide which is right. This decision is called a judgement.
Most judgements result from disputes over debts (money that is owed for some reason). In a partnership, if one of the partners causes a judgement to happen against the partnership, about something prohibited by the terms of the partnership agreement and/or clearly against the normal way of doing business of the partnership, then the guilty partner may be judged to be personally liable and the other partners and the partnership will not be liable. If a judgement is being appealed to a higher court (judge), one of the partners may not agree or confess to the stregnth or validity of the judgement without the consent of the other partner(s).
Legal entityAn entity is something that exists. This in contrast to something imaginary that doesn't actually exist. In the eyes of the law some things are considered legal entities and others are not. If something is not a legal entity, as far as the law is concerned it does not exist.
LiabilityA liability in a legal sense is a debt or obligation. Something that is owed to another. It can be money, property or a duty to be performed as the result of a promise or contract or all combined. Liabilities can be very complicated.
Line of creditA line of credit is generally issued by a bank. It is not a loan, but an pre-agreement to lend. If assets are pledged the line of credit amount is considered a contractual obligation of the bank. Some consider a line of credit as capital, because it is a quick access to cash. A line of credit is also called un borrowed money. It is there in the bank reserved for you waiting to be borrowed. The advantage is that because it is not yet borrowed, no interest is due or payable, yet, the business or person enjoys the security of it being available, anytime, without any hassle.
A name, symbol, or trademark designed for easy and definite recognition, especially one that is located on a single printing plate, piece of type or computer graphic. Short for logogram and logotype. This would also include the same image, marks or words located on billboards, business signs, and business products or any general advertising media.
A body of rules governing procedure in legislative and deliberative assemblies. Simply stated, these rules are followed by the groups leader(s) and involve the order of business and the control of speakers. The intent is to maintain an orderly, disciplined process for conducting the business of the organization. These rules, sometimes a matter of law such as applied to the United State Legislature or a state legislature, can become complex and complicated. The most accepted authority on parlimantary law is "Roberts Rules of Order". It is a small book or manual indexing and detailing parlimentary rules and is available at most libraries. Most organizations do not strickly adhere or obey the very strict Roberts Rules.
PartnershipA partnership is a business that is owned by two or more people. In a business partnership the partners share the profits and expenses of running the business. The partnership contract should clearly state how the profits and expenses will be shared, especially if one partner gets a bigger share than the other(s).
PersonOf course we all know what a person is, but a legal person is not necessarily a live human being. A business corporation can have all the legal rights of a person. Although this may seem strange, a legal person can: Own property, have a bank account, be a partner, enter into a contract, borrow money, sue for damages or be sued for damages, and still not be a living person. Another way of looking at it is that a legal person can do anything that a living person can do except for those things that require a person who is actually alive.
Sole-proprietorA sole-proprietor is a person who is the sole owner of a business. This person is the only person who is entitled to receive the profits from the business and is the only person who is responsible for paying the cost of running the business.
StockStock is a ownership right. It represents a fraction of ownership of a corporation. It has the right to vote and it has a right to share in the corporation's profits or losses. A stock certificate is issued by the corporation to the stockholder as evidence of the ownership. Stock may be purchased, sold, given away and pledged as security for a loan to the stockholder. If for some reason the corporation fails, then the stock becomes worthless. If the corporation grows and is very successful, the stock can become worth many times more than the stockholder paid for it.
StockholderA stock holder is a person or organization that owns the stock and has the rights of ownership. Most often the stockholder is the person or organization that actually has possession of the stock certificates...hence the term stockholder. In large corporations, the rights of stockholders to CONTROL OF THE CORPORATON is very limited. The stockholder usually has only the right to vote the shares of stock. Generally there is one vote per share of stock. Most corporate charters and/or bylaws describe those things that must be voted on by all the stockholders. This is usually the election of major corporate officers and the board of directors and any major change in the way the corportion does business. They have no authority in the day-to-day operation of the corporation. Stockholders are paid as investors by cash or stock dividends based on the number of shares owned. The amount and type of dividends is usually determined by the board of directors. Most stockholders gain by holding the stock until the value per share increases and then they sell the stock. The buying and selling of stock is very tricky business.
Stock dividendA stock dividend is created (paid by issuing additional stock) by a corporation to increase the holdings of the shareholders. It is usually issued at the end of a business cycle and usually paid instead of a cash dividend as an effort to distrubute earnings, but to conserve the corporations cash. It is paid based on the number of shares a stockholder has and has the effect of increasing the number of shares the corporation has outstanding. If the stockholder wants cash rather than more stock, the shareholder can sell the stock dividend(stock).
SystemA system has many meanings. For business students its simplest meanings, number 1 and number 4, below are best. The remainder are presented to give the reader more information about this valuable, versatile word.
1. A group of interacting, interrelated, or interdependent elements forming a whole thing that together makes up the whole thing. The whole generally cannot function with any of the elements missing or operating improperly.
2. A functionally related group of elements, especially:
3. An organized set of interrelated ideas or principles.
- The human body regarded as a functional physiological unit.
- An organism as a whole, especially with regard to its vital processes or functions.
- A group of physiologically or anatomically complementary organs or parts: the nervous system; the skeletal system.
- A group of interacting mechanical or electrical components.
- A network of structures and channels, as for communication, travel, or distribution.
4. A social, economic, or political organizational form (format or structure).
5. A naturally occurring group of objects or phenomena: the solar system.
6. A set of objects or phenomena grouped together for classification or analysis.
7. A condition of harmonious, orderly interaction.
8. An organized and coordinated method; a procedure or method.
9. The prevailing social order; the establishment. Used with the: You can't beat the system.