Vocabulary Topic Meaning Page

Caretaker Director 4 Directors who shortly to be removed from office 151

may be acting as caretaker director with no
authority to make major decisions
Confidential info 6 Info that would not otherwise be available to 214
director or employee
Convertible shares 9 Can be converted into shares according to the 318
terms of their issue
Corporate 6 When director use/steal opportunity that may 216
opportunity interest the company
Debt 9 S52(4)(a) pg. 52 341
Deed of Company 11 373
Arrangement
(DOCA)
Derivative action 7 Action brought by one shareholder on behalf of 267
the company for directors’ wrongdoing
Distribution 9 S2 pg. 25 340
Dividends 7 Represent the profits earned by companies and are 238
distributed among shareholders
Doctrine of capital 9 The old regime on distribution of shares by 321
maintenance company
Economic failure 11 Rate of return on capital employed is less than cost 367
of capital
Executive directors 4 Members of the board and manage day-to-day 159
basis
5 197
Fiduciary duty 5 Act in the interest of the person they represent 170
Financial failure 11 Liabilities exceed assets 367
Fraud on minority 8 Company permits majority use power to the 281
detriment of the minority shareholders
Golden handshakes 4 Payments made to directors for either loss of office 158
or damage for breach of separate employment
contract
Insolvency 11 Company’s debts exceed its assets, so that the 367
creditors will not be paid in full
Insolvency 11 A person who works advising and administering 370
Practitioner financially distressed or insolvent debtors
Interested directors 6 S139 208
Interim Injunction 8 Temporary injunction under s164(5), pending final 280
determination of the matter of which complaint is
made
Legal failure 11 Formal legal process such as liquidation follows as 367
a result of financial failure
Liability 9 S52(4)(b) pg. 52 341
Liquidator 11 External person who takes charge and closes down 379
the company and distributes its assets to those
entitled
Major transactions 3 An agreement to acquire/sell half the value of 120
company’s assets will, therefore, be a major
transaction
Mere conduit 10 Channel of communication 366
Moratorium 11 Legal authorization to debtors to postpone 373
payment 376
Mouth piece 10 Channel of communication 361
Non-executive 4 Members of the board but don’t have a day-to-day 159
directors role
5 197
Oppressive conduct 8 Page 283 283
Options 9 Entitle their holders to acquire shares from a 318
company on a future date, at a specified price
Pari passu 11 Equal sharing, meaning not all creditors get exactly 382
the same amount but that creditors of the same
class. Share available assets pro rata according to
the amount each creditor is owed
Phoenix directors 4 Directors of failed companies are not permitted to 164
be involved in new companies that have a name
the same/similar to the failed companies
Preemptive rights 7 Requires the share to first be offered to a specified 260
party, and can be sold to others only if such
specified party declines the offer
Prejudiced 8 Majority shareholders conducting the company’s 281
shareholders affairs in a way that benefits the majority group,
but harms the company and minority shareholders
Pro rata basis 6 Without discount for a minority interest 227
Prudent business 7 If I’m being prudent, would I bring the action? 272
person test
Quasi Partnership 8 Seemingly partnership 292
Quasi trustee 7 Almost trustee 273
Quorum 4 A quorum for a meeting of the board is a majority 152
of the directors
Receivers 11 A person that takes charge of company’s assets 376
from the company’s existing management
Relevant interest 6 S146 223
Representative 7 Collective personal action 266
action
Secured creditor 11 Creditor that has entered into a contract with the 370
debtor that gives the creditor a “property right”
Shadow Directors 4 People who are actually controlled the named 145
(Deemed Director) director
Share 7 Legal interest of shareholders in a company 238
Shareholder 7 person registered in the share register as the 238
holder of a specified number of shares
Shareholder buyout 8 Company must buy shares of a shareholder that 306
rights wish to leave the company
Shareholders’ 3 Private contract between the shareholders 101
Agreement
Sober assessment 5 Assessment of company’s likely future income and 191
prospects
Soft touch 6 Setup a company and come back to it when you 216
please
Special resolution 3 75% of votes of shareholders 103
Statutory trust 11 Company retains title to property, but in practice 380
this is administered by the liquidator for the
benefit of creditor
Unanimous assent 3 Get all shareholders to agree 133
Unsecured creditor 11 Creditors where their security doesn’t guarantee 371
payment
Voidable transaction 11 Contract that is valid and binding unless avoided or 383
declared void by a party
Voluntary 11 Directors can appoint an administrator if they 374
Administration believe the company is insolvent or likely to
become insolvent.