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A Company Business Law Online Jargon Buster
By Thomas Choo
Company law is full of
confusing terms, and if you don't know what they mean then setting up a
company for making money at home can start to look genuine far more scary
than it really should be. Read through this jargon buster of business law
online and you should find it much easier to understand only what starting
up is all about.
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Capital. This is money that
is going to be invested in a business. Example: 'I am starting my
business with $5,000 capital, $2,000 of which is my own'.
Contract. When you sign a legal document, you are entering into a
contract. Starting a business lets you sign and enter into contracts
on behalf of the business -- the contract will be between the other
person and your company, not you.
Director. The people ultimately in charge of a company are its
directors. For a large company, there will be a boards of directors,
appointed by the shareholders. For a home business, though, you can
appoint yourself as the sole director since you are also the sole
shareholder (see 'shareholder'). |
Incorporation. This is the formal
name for the process of starting a company. Example: 'My business was
incorporated in March 2005'.
Insolvency. When a company cannot afford to pay its debts. The type of
company you have set up will affect what happens in this situation -- you
may be liable for all of the debt yourself, or for none.
Limited liability. A limited liability company is one where you agree
beforehand how much responsibility you will take if anything goes wrong.
This protects you from being destroyed financially if something bad
happens to your business.
Office. Your company's 'office' isn't just a place with computers -- it's
also a legal concept, meaning where your company is based. Your company
must have a registered office, which means that you can't start a company
unless you have an address which would be legal to use for this purpose.
Private. A home business will be private, which means that members of the
public cannot invest by buying shares. This does not stop individuals from
buying percentages of your company if you are willing to sell, though.
Starting your company as a private one also doesn't stop you from
converting it to a public one later on.
Proxy. Someone who acts as a proxy for you acts on your behalf -- you have
given them the legal right to speak for you. For example, if you get a
lawyer to handle the incorporation of your company, they will be
incorporating it for you by proxy.
Shareholders. The shareholders are the people who own the company. In your
company, you will be the only shareholder (and so own 100% of your
business), unless you've made a deal with someone else for them to own a
share.
Latin.
When you're dealing with business law, the amount of Latin involved can be
confusing. Here are some Latin terms you might come across when you're
setting up your company.
Bona fide: 'in good faith'. This is used to mean that someone says they
are telling the truth.
De facto: 'in fact'. Used when something has happened that makes the
'real' situation take precedence from the legal one.
De jure: 'in law'. The opposite of de facto.
Ex gratia, 'out of grace'. When something will be done for no fee.
Prima facie, 'at first sight'. Something that seems true but is wrong.
Quid pro quo, 'something for something'. When a fee will be charged for a
service (or services will be exchanged).
Be Careful with Jargon.
However much jargon you might begin to encounter as you start your
business, don't start to use it yourself. It will make it so that only
'insiders' will understand what you mean, and everyone else will feel
either a little silly or a little annoyed. By the same token, if you're
speaking to someone (your accountant, for example) and they use some
jargon you don't understand, there's nothing wrong with asking them to
explain what they mean -- it's their fault for using an overly technical
word, not yours for not knowing it.
If you're not sure, there's a simple rule: jargon is for communicating
very specific, technical meanings. It shouldn't be used to replace
everyday language, as it does nothing but cause confusion.
Reprint Permission: You have permission to publish this article
electronically, in print, in your ebook or on your website, as long as the
author biography is included, unaltered, and with live hyperlinks intact.
ABOUT THE AUTHOR:
Thomas Choo is the self-styled Internet Entrepreneur specializing in
Internet Home Based Business Opportunity. He owns several popular websites
in various niche markets. His flagship web site
http://www.officialhomebusiness.biz also features quick steps to
building niche web sites, as well as a special article series on work from
home businesses.
For more information about starting home-based businesses, home business
ideas, and work from home businesses in general, check the other articles
at the
work from home businesses index page.
Can you imagine yourself owning an empire of high-quality, content-rich
niche websites, generating passive income for you automatically? Care to
explore an opportunity in Internet based home business? Find out how at
our home page of Internet
Home Based Busines Opportunity.
Article Source:
http://EzineArticles.com/?expert=Thomas_Choo
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