Company Law | Professional English in Use - Finance Vocabulary Exercises

Company Law Exercises

These exercises focus on Company law

Vocabulary List for Company Law

1. Partnership (noun)

Definition: A business structure where two or more individuals share ownership and responsibilities.
Example: The law firm operates as a partnership between three attorneys.
Explanation: Partnerships are a common structure for small businesses and professional firms.

2. Partner (noun)

Definition: An individual who shares ownership, responsibilities, and profits in a partnership.
Example: Each partner contributed an equal amount of capital to the business.
Explanation: Understanding the roles of partners is vital for discussing shared liabilities and decision-making.

3. Sole Trader (noun)

Definition: A business owned and operated by a single individual.
Example: She started her bakery as a sole trader.
Explanation: This term is important for understanding small-scale business structures.

4. Legal Entity (noun)

Definition: An organization recognized by law as having its own rights and responsibilities.
Example: The company became a legal entity upon incorporation.
Explanation: A legal entity can enter contracts, own property, and sue or be sued.

5. Separate (adjective)

Definition: Distinct or independent, especially in terms of legal identity.
Example: A company is a separate entity from its shareholders.
Explanation: The separation of a business and its owners protects personal assets.

6. Liable (adjective)

Definition: Legally responsible for something.
Example: Partners in a general partnership are personally liable for debts.
Explanation: Liability defines the extent of an individual's or entity’s legal obligations.

7. Limited Liability (noun)

Definition: A legal structure where owners are only responsible for business debts up to their investment.
Example: A limited liability company protects shareholders from personal losses.
Explanation: This concept is crucial for understanding risk in corporate structures.

8. Share Capital (noun)

Definition: The funds raised by a company through the issuance of shares.
Example: The company increased its share capital by issuing new shares to investors.
Explanation: Share capital is essential for funding company growth.

9. Director (noun)

Definition: A person appointed to manage a company’s activities and make strategic decisions.
Example: The director proposed a new marketing strategy to boost sales.
Explanation: Directors are responsible for overseeing a company’s operations.

10. Executive (noun)

Definition: A senior manager responsible for making decisions and managing the company.
Example: The chief executive announced the company's new expansion plans.
Explanation: Executives play key roles in strategic planning and corporate governance.

11. Corporate Governance (noun)

Definition: The system of rules and practices by which a company is directed and controlled.
Example: The company improved its corporate governance by forming an ethics committee.
Explanation: Strong corporate governance ensures transparency and accountability.

12. Chairman (noun)

Definition: The leader of a company’s board of directors.
Example: The chairman presided over the annual general meeting.
Explanation: The chairman ensures the board operates effectively.

13. Board of Directors (noun)

Definition: A group of individuals elected to represent shareholders and oversee a company.
Example: The board of directors approved the merger with a competing firm.
Explanation: The board sets the company’s direction and monitors management.

14. Objective (noun)

Definition: A specific goal or target a company aims to achieve.
Example: The company’s main objective is to increase market share.
Explanation: Objectives provide focus and direction for company strategies.

15. Committee (noun)

Definition: A group of people appointed to handle specific tasks or make decisions within an organization.
Example: The audit committee reviewed the financial statements for accuracy.
Explanation: Committees ensure specialized oversight and decision-making.

16. Articles of Association (noun)

Definition: A document outlining the rules for the governance of a company.
Example: The articles of association specify how directors are appointed.
Explanation: This document defines the company's internal regulations and management structure.

17. Found (verb)

Definition: To establish or create an organization or company.
Example: The entrepreneur founded the company in 2005.
Explanation: Founding a company is the first step in its legal and operational journey.

18. Purpose (noun)

Definition: The reason or intent behind the formation of a company.
Example: The company’s purpose is to develop sustainable energy solutions.
Explanation: Defining a purpose helps guide a company’s mission and activities.

19. Registered Office (noun)

Definition: The official address of a company where legal documents are sent.
Example: The registered office is located in downtown London.
Explanation: This address is required for legal recognition and correspondence.

20. Authorized Share Capital (noun)

Definition: The maximum amount of share capital a company is allowed to issue.
Example: The company’s authorized share capital was increased to attract more investors.
Explanation: This term relates to the company's ability to raise funds through shares.

21. Private (adjective)

Definition: Refers to a company whose shares are not available to the public.
Example: The family-owned business remained a private company.
Explanation: Private companies have more control over ownership and decision-making.

22. Public (adjective)

Definition: Refers to a company whose shares are traded on a stock exchange.
Example: The company went public to raise additional capital.
Explanation: Public companies are subject to stricter regulations and greater transparency.

23. Corporation (noun)

Definition: A legal entity separate from its owners, with rights and liabilities.
Example: The multinational corporation operates in over 50 countries.
Explanation: Corporations are the dominant business structure for large-scale operations.

24. Stock Exchange (noun)

Definition: A market where shares of public companies are traded.
Example: The company’s shares were listed on the New York Stock Exchange.
Explanation: Stock exchanges provide a platform for raising capital and trading ownership.

25. Quarterly (adjective)

Definition: Occurring every three months.
Example: The company reports its earnings on a quarterly basis.
Explanation: Quarterly reporting ensures regular updates on financial performance.

26. Turnover (noun)

Definition: The total revenue generated by a company over a specific period.
Example: The company’s annual turnover exceeded $1 billion.
Explanation: Turnover is a key metric for measuring business performance.

27. Gross Profit (noun)

Definition: Revenue minus the cost of goods sold.
Example: The company’s gross profit improved due to reduced manufacturing costs.
Explanation: Gross profit reflects the efficiency of production and sales.

28. Net Profit (noun)

Definition: The profit remaining after all expenses and taxes are deducted.
Example: The company’s net profit grew by 15% this year.
Explanation: Net profit indicates the overall profitability of a business.

29. Interim (adjective)

Definition: Temporary or occurring in the meantime.
Example: The interim report showed a decline in revenue.
Explanation: Interim measures or reports are important for tracking progress between periods.

30. Quote (noun)

Definition: A formal statement of the price or cost of goods or services.
Example: The contractor provided a quote for the renovation project.
Explanation: Quotes are essential for cost estimation and contract negotiations.

31. Misconduct (noun)

Definition: Improper or illegal behavior by someone in a position of authority.
Example: The executive was dismissed for financial misconduct.
Explanation: Misconduct undermines trust and can lead to legal consequences.

32. Illegal (adjective)

Definition: Forbidden by law.
Example: The company faced penalties for engaging in illegal trade practices.
Explanation: Understanding what constitutes illegal actions helps ensure compliance with laws.

33. Claim (noun)

Definition: A formal demand for compensation or repayment.
Example: The shareholders filed a claim against the company for breach of contract.
Explanation: Claims arise from disputes or breaches of agreements.

34. Request (noun)

Definition: An act of asking for something formally.
Example: The auditor submitted a request for additional documentation.
Explanation: Formal requests are crucial in corporate communication and compliance.

Wordlist for Company Law, Professional English in Use - Finance Vocabulary

Word	Definition	Example
partnership	a legal arrangement in which two or more individuals or entities agree to work together and share the profits, losses, and responsibilities of a business	Companies can form partnerships to penetrate overseas markets or gain a competitive lead
partner	an individual or entity that is part of a partnership and shares in the profits, losses, and management of a business	Johann is my business partner
sole trader	an individual who owns and operates a business on their own, and is personally liable for all debts and obligations of the business	The bank has over one million business accounts, from sole traders to the largest corporations
legal entity	a distinct and separate organization, such as a corporation or limited liability company	Please indicate the date when the company was registered as a legal entity
separate	to divide or split into different parts, or to make something do this	Are they divorced? No, but they plan to separate for a while
liable	legally responsible or obligated to pay debts or fulfill obligations	Faced with prolonged and uncomfortable silences, your opponent is liable to make another concession
limited liability	a legal concept that limits the liability of owners or shareholders of a business to the amount of their investment in the business, protecting their personal assets from business debts or liabilities	Corporations may also have limited liability, whereby investors will only be liable for the amount they have intentionally put at risk in the enterprise
share capital	the total amount of capital or equity invested by shareholders in a company, represented by the total value of shares issued by the company	Share capital refers to the funds that a company raises from selling shares to investors
director	an individual who is elected or appointed to serve on the board of directors of a company and participates in making decisions on behalf of the company	He is the Director of the company
executive	an individual who is responsible for managing and implementing the decisions and policies of a company or organization, typically at a senior level	As the chief executive, he is the most powerful person in the company
corporate governance	the system of rules, practices, and processes by which a company is directed, controlled, and managed to achieve its objectives and protect the interests of shareholders and stakeholders	Corporate governance is the system by which corporations are directed and controlled
chairman	the highest-ranking officer of the board of directors of a company	I was chairman
board of directors	a group of individuals elected or appointed to represent the shareholders of a company and make decisions on behalf of the company	Board of Directors is a group of individuals who run a company on behalf of the shareholders
objective	a goal or target that a company or organization aims to achieve	Creating a good business strategy is all about defining your objectives and being very clear about what you want to achieve
committee	a group of individuals appointed or elected to perform specific tasks, make decisions, or provide recommendations on behalf of a larger organization	It's great to meet you. This is our committee
articles of association	a legal document that outlines the internal rules, regulations, and governance structure of a company, including its objectives, rights, and responsibilities of shareholders	The articles of association lays out how tasks are to be accomplished within the organization
found	to establish or create a new company, organization, or institution	Eton College was founded by Henry VI in 1440
purpose	the reason or goal for which a company or organization exists, typically stated in its mission or vision statement	A: Can I ask the purpose of your call? B: Yes, it's about an invoice
registered office	the reason or goal for which a company or organization exists, typically stated in its mission or vision statement	A registered office is the official address of an incorporated company, association or any other legal entity
authorized share capital	the maximum amount of share capital that a company is allowed to issue, as stated in its articles of association or legal documents	Authorized share capital is the maximum value of share capital that can be raised by a company by issue of shares as specified by the its charter documents
private	belonging to or associated with an individual, group, or organization that is not publicly traded or owned by the general public	He apologized for intrusion in her private busines
public	relating to or involving the general population or community, open or accessible to everyone	He never uses public transport
corporation	a legal entity that is separate from its owners, typically formed to conduct business and having its own legal rights, liabilities, and obligations	A corporation is a legal entity that is separate and distinct from its owners
stock exchange	a regulated marketplace where shares of publicly traded companies are bought and sold by investors	A market where company shares are traded is a stock exchange
quarterly	occurring or calculated every three months, typically used to refer to financial reporting or performance	A quarterly newsletter is distributed to members
turnover	the total amount of money or assets that a company generates or replaces through its business operations within a given period of time	Annual turnover rose to around $80 million
gross profit	the difference between a company's total sales or revenues and its cost of goods sold, before deducting other operating expenses	Sacombank targets a 5.6 percent rise in its gross profit this year
net profit	the amount of money a company has left after deducting all of its expenses from its total revenues or sales	Annual net profit fell 20% in the wake of tough competition
interim	temporary or provisional, typically used to refer to financial statements or reports that are prepared between regular reporting periods	An interim committee will meet to appoint a successor to the vice-president
quote	the price at which a security, such as a stock or bond, is currently being offered or traded on an exchange	A law firm in Washington D.C. quoted me a fee of $25,000 to get the paperwork done
misconduct	behavior that violates rules, regulations, or standards of conduct, typically used in reference to unethical or inappropriate behavior by individuals or organizations	These two had also both been found guilty of serious professional misconduct
illegal	prohibited by law, not authorized or sanctioned by law	CCTV are used to film illegal behaviour
claim	a demand or request for payment, compensation, or other rights or benefits, typically made by an individual or organization	All claims should be made in writing
request	an act of asking or demanding something, typically made formally or politely, often used to refer to a solicitation for information, services, or assistance	Can I make a request?

FAQ

What is the difference between a private and public company?

A private company does not trade its shares on a stock exchange, while a public company offers shares to the public and is subject to stricter regulations.

What is corporate governance?

Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled to ensure transparency and accountability.

Why are articles of association important?

The articles of association set the framework for a company’s management and operations, outlining rules for decision-making and governance.

What is limited liability?

Limited liability means that shareholders or owners are not personally responsible for the company’s debts beyond their investment in the business.

How is gross profit different from net profit?

Gross profit is calculated by subtracting the cost of goods sold from revenue, while net profit is the remaining income after all expenses, including taxes, are deducted.