Duhaime's Law Dictionary

Duhaime's Company, Associations and Commercial Law Dictionary

All law and legal terms which relate to corporate law, company and association law are defined here. For law terms related strictly to rules of order and procedure at company or association meetings, don't miss the Parliamentary Law Dictionary.

Abuse of Dominant Position
Intentional anti-competitive acts by persons substantially in control of a market, that has had, is having, or is likely to have the effect of preventing or lessening competition.
Accardi Doctrine
An agency must abide by its own regulations.
Agency
A fiduciary relationship between one person (a principal) and another (an agent) that the agent shall act on the principal's behalf.
Amalgamation
The merging of two things together to form one, such as the amalgamation of different companies to form a single company.
Arm's Length
A transaction or relationship where there is an absence of control the one over the other.
Association
A form of organizational structure for a defined group of individuals, for a religious, scientific, social, literary, educational, recreational or benevolent or commercial purpose.
Auditor
A private person who examine, inspects or verifies the accounts of another.
Bank
A corporation empowered to deal with cash, domestic and foreign, and to receive the deposits of money and to loan those monies to third-parties.
Bitcoin
An electronic form of currency.
Board of Directors
The group of most senior managers, operators and administrators of a corporation or association.
Boycott
The enlisting of persons to withhold, patronage or services from a target.
Call For Tenders
A property owner's invitation, sometimes at large, sometimes to a select group, for bids to complete a particular project.
Cartel
An agreement between two or more merchants to create or control a monopoly, to lessen or prevent competition.
Check or Cheque
A form of bill of exchange where the order to pay is given to a bank which is holding the payor’s money.
Commodity
A fungible, tradeable thing, good, product, interest including money or negotiable instruments.
Common Share
The basic share in a corporation.
Company
A legal entity, allowed by legislation, which permits a group of people, as shareholders, to apply to the government for an independent organization to be created, which can then focus on pursuing set objectives, and empowered with legal rights which are usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money.
Competitive Injury
A price difference designed to harm competition.
Conflict of Interest
A personal interest that conflicts with a public or fidiciary interest.
Consolidation
The union of two or more corporations into one corporate body after which the constituent corporations cease to exist.
Corporate Secretary
Officer of a corporation responsible for the official documents of the corporation such as the official seal, records of shares issued, and minutes of all board or committee meetings.
Corporation
A legal entity, created under the authority of a statute, which permits a group of people, as shareholders, to apply to the government for an independent organization to be created, which then pursues set objectives, and is empowered with legal rights usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money.
Custom
The consensual regulation of human conduct and commerce by the community itself.
Deceptive Trade Practice
An intentional act or omission in the course of trade or commerce that has the tendency or capacity to mislead or create the likelihood of deception.
Delivered Pricing
A distribution arrangement which discriminates on the basis of geographic criteria.
Derivative Action
A class action brought for a wrong done to a corporation.
Director
Senior manager(s) selected by shareholders to manage a corporation.
Dividend
A proportionate distribution of profits made in the form of a money payment to shareholders, by a for-profit corporation. Dividends are declared by a company's board of directors.
Double Escrow
The secret use of escrow funds with those of another escrow fund, for the purposes of financial gain by the holder of the escrow funds, and without the knowledge of the owners of the two funds.
Dragnet Clause
A clause in a credit agreement which purports to secure future liabilities.
Drawee
The bank which has the drawer's checking account from which a check is to be paid.
Drawer
The person who signs a check to his or her bank ordering the latter to pay the face amount of the check to the payee.
Due Diligence
Reasonable verifications and precautions taken to identify or prevent foreseeable risks.
Duty of Care
An obligation to conform to a certain standard of conduct for the protection of another against an unreasonable risk of harm.
Economic Tort
Intentional tort wherein a defendant uses an unlawful means to cause a plaintiff some economic loss.
Exclusive Dealing
An arrangement designed to throttle or control legitimate trade by the selection and exclusive use of a particular supplier's product.
Fidelity Rebate
Offering loyalty rebate program to select customers.
Franchise
A licensing contract in which a holder of certain legal rights gives another to sell or package those rights.
Franchisee
The person who receives, for consideration, the license to right to sell a product or service and to operate a business along the lines developed by the franchisor and using the franchisor's trade name or other designation.
Franchisor
The legal rights holder who licenses, in whole or in part, those legal rights to another pursuant to a franchise agreement.
Functus Officio
Latin: an officer or agency whose mandate has expired either because of the arrival of an expiry date or because an agency has accomplished the purpose for which it was created.
Guarantor
A person who pledges payment or performance of a contract of another, but separately, as part of an independently contract with the obligee of the original contract.
Harassment
Unsolicited words or conduct which tend to annoy, alarm or abuse another person.
Horizontal Agreement
An agreement between two or more marketplace competitors which resolves some avenue of rivalry between them.
Insider Trading
Participation by corporate officers, directors or employees in the trade of a stock based on confidential or privileged corporate information, knowing that information to be confidential, and seeking thereby to acquire profits or avoid losses on the stock market.
Law Merchant
International commercial law; the law as it relates to merchant
Lay on the Table
Also “to table”; a term of parliamentary law and procedure which refers to a motion in regards to another motion being actively debated, but intended to defer a final disposition of the pending motion.
Lifting the Corporate Veil
Disregarding the general rule a corporation is a legal entity distinct from its shareholders by regarding the company as a mere agent or puppet of a controlling shareholder or parent corporation.
Liquidation
The converting of the the assets of a person into cash.
Merchant
A person engaged in the making, buying or selling of goods or services.
Merchantable Quality
A product which is undamaged and usable and of sufficient quality to merit purchase at the requested price by a reasonable buyer.
Merger
The absorption of one thing or legal right into another.
Misleading Advertising
Materially false or misleading representations concerning a product or service.
Money Laundering
The conversion or transfer of money obtained by crime for the purposes of frustrating law enforcement.
Monopoly
A commercial advantage enjoyed by only one or a select few companies in which only those companies can trade in a certain area.
Monopsony
Market conditions in which there exists only one buyer for a commodity or service.
Moratorium
The temporary suspension of legal action against a person.
Mortmain
French: dead hand. Property taken out of circulation.
Nerve Center Test
A judicial analysis used to determine a corporation's real place of business where activities are decentralized; the focus is locating where the corporation's overall policy originates.
Nondisclosure Agreement
A contract between the holder of confidential information and another person to whom that information is disclosed, prohibiting that other person from disclosing the confidential information to any other party.
Nordenfelt Test
A legal test against which restrictive covenants are judged as either acceptable or not.
Officer
A management-level employee of a corporation entrusted with discretion in the exercise of some portion of corporate powers.
Oligopoly
A market condition in which there are but a few sellers of a specific product or service.
Oppressive
Harsh, dishonest or wrongful conduct and a visible departure from the standards of fair-dealing.
Par Value Shares
Shares of equal value; issued by a company which have a common stated price.
Payee
The person to whom payment is addressed or given.
Per Se Doctrine
A rule of antitrust law: that interference with the setting of prices by free market forces is unlawful per se, prima facie.
Person
An entity recognized by the law as separate and independent, with legal rights and existence including the ability to sue and be sued, to sign contracts, to receive gifts, to appear in court either by themselves or by lawyer and, generally, other powers incidental to the full expression of the entity in law.
Piercing the Corporate Veil
To hold a corporate entity liable for the acts of a separate, related entity.
Place of Operations Test
A judicial analysis used to determine a corporation's real place of business which prioritizes the venue of corporate activities.
Poison Pill Plan
An anti-takeovers scheme by which financial disadvantages are triggered and targeted to discourage potential takeover acquirers.
Predatory Pricing
The pricing of products in an unfair manner with an object to eliminate or retard competition and thereby gain and exercise control over prices in the relevant market.
Preferred Shares
A share in a company that has some kind of special right or privilege attached to it, such as that it is distinguished from the company’s common shares.
President
The appointed or elected head of a group of individuals, such as of a company or of a state.
Principal
An agent’s master.
Promissory Note
An unconditional, written and signed promise to pay a certain amount of money, on demand or at a certain defined date in the future.
Pro Socio
Latin: on behalf of a partnership.
Prospectus
A document in which a corporation sets out the material details of a share or bond issue and inviting the public to invest by purchasing these financial instruments.
Ratification
The act by a principal, after the agent has acted, confirming that what the agent may have done without authority, is binding on the principal.
Rule in Foss v Harbottle
A rule of corporations law: shareholders have no separate cause of action in law for any wrongs which may have been inflicted upon a corporation.
Share
A portion of a for-profit corporation bought by cash.
Shareholder agreement
A contract between the shareholders of the company and the company itself, in which certain things which would otherwise be the purview of the board of directors, are predetermined.
Sherman Antitrust Act
American federal statutes that defines and prohibits contracts or conspiracies which are designed to restrain trade.
Socialism
A form or system of government which champions the equal sharing of land and equal return of the product of the land and industry to all citizens.
Society
A group of people formed as a separate organization and which has as a stated purpose some charitable or benevolent purpose either in regards to the public at-large or in regards to the common interests of the members, and which operates as nearly as possible at cost.
Standard
The technical or performance specifications in regards to a product.
Storm Warning
Data available to an ordinary investor that would give rise to a suspicion of fraud.
Subsidiary
A corporation subordinate to a dominant company which is able, through share ownership, to exert influence or control over its affairs.
Successor
A person who takes over the rights of another.
Syndicate
A formal, informal or secret group of individuals or, more usually, corporations, formed to carry on a specified purpose.
Tax
A payment to a public authority, required by statute, for a public purpose.
Tied Selling
Where a supplier sells on condition that the buyer to the purchase of another associated or "tied" product.
Ultra Vires
Latin: beyond the powers.
Vertical Restraint
Special condition or term offered to select distributors by a supplier in order to manipulate trade.
Watered Stock
Shares in a corporation which is stated to be, or issued as fully paid but which in fact, has not been paid for.

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