Learning Corporate Language? 12 Business Legal Terms & Definitions.

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Learning Corporate Language? 12 Business Legal Terms & Definitions.

Back in 2014, I went for an interview to start my pupillage. One of the firm’s partners asked me, “What is due diligence”? Heck, I never heard of this vocabulary during my school. I came all prepared with the Contract Law and Islamic Banking terms, but what is due diligence?  – The outcome, I apologize for not having the answer to that.

Business language skills are critical needs in this modern era of globalization and cut-throat competition. This language can be alien to non-business person. So, I thought of sharing some here. For those who already fluent, congratulations.

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Stakeholder

A person, group or organization that has interest or concern in an organization. Some examples of key stakeholders are creditors, directors, employees, government, owners (shareholders), suppliers, unions, and the community from which the business draws its resources.

Without Prejudice

Without implying an admission of liability.
When used in a document or letter, without prejudice means that (a) cannot be used as evidence in a court case, (b) cannot be taken as the signatory’s last word on the subject matter, and (c) cannot be used as a precedent.

Procurement

The act of buying goods and services.

Shareholder Agreement

A contract that determines the rights of shareholders and defines when and how they can exercise their rights.

Testify

Giving evidence or proof that something exists or is the case.

Liability

Liability is the legal responsibility for one’s actions. Strict liability means a party can still be found guilty of an offense, even without any intent to harm.

Conflict of Interest

Refers to a situation when someone has competing professional or personal obligations or personal or financial interests that would make it difficult to fulfill his duties fairly.

Partnership  

A partnership is one of the primary business entities in Malaysia. In a partnership, there are at least two partners or owners and a maximum of 20 owners. They also will have joint responsibility for the partnership’s debts and other liabilities.

Legal Entity

An association, corporation, partnership, proprietorship, trust, or individual that has legal standing in the eyes of law. A legal entity has the legal capacity to enter into agreements or contracts, assume obligations, incur and pay debts, sue and be sued in its own right, and to be held responsible for its actions.

Legal Due Diligence

Legal due diligence is the process of collecting, understanding and assessing all the legal risks associated with legal entity before any joint venture related activities.

Payment Terms

The conditions under which a seller will complete a sale. Typically, these terms specify the period allowed to a buyer to pay off the amount due and may demand cash in advance, cash on delivery, a deferred payment period of 30 days or more, or other similar provisions.

Third-Party

 A person who is not a party to a contract or a transaction,  but has an involvement. The third-party normally has no legal rights in the matter, unless the contract was made for the third party’s benefit.

Reference:

  1. https://legal-dictionary.thefreedictionary.com/Third-party
  2. https://www.northeastern.edu/graduate/blog/legal-terms-for-non-lawyers/
  3. https://www.investopedia.com/
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