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At Dickson Minto, we are corporate lawyers. Some think that restricts the range of our activities. On the contrary. There is hardly an area of life which is not affected by some degree of commercial activity. That's one of the factors that makes life as a corporate lawyer so interesting. The (alphabetical) list of some basic corporate terms (below) is not meant to be exhaustive. Far from it. But it may provide a useful guide for potential graduate trainees to some of the terminology encountered in our field of activity.
Click on a tab to open the corporate terms, then click on an individual term for its definition. Click again to close.
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SecuritiesGenerally, securities mean financial assets, for example, shares, government stocks, bonds, debentures unit trusts, et al. SecuritisationA means of raising money (or lending it), securitisation is basically another form of debt finance, though more complex than many other variations. Packages of income-generating assets are bundled into debt securities backed up by these assets. (Such assets can include mortgages, financial receivables, corporate loans, or even future cashflows). This might be designated discovery capital. It is provided by specialist investors, occasionally venture capitalists, and comprises very early stage finance for companies with a business idea that has yet to come to life. Seed capital is designed to enable development so that an early stage company emerges. SharesShares mean what the word says. A share provides the owner of it with a share of a company. When you buy shares you are issued with a share certificate. This tells you how many shares in the company you own. Shares usually entitle the owner to a proportion of the company profits, usually via dividend payments. If you own more than 50 per cent of the voting shares of a company, then you effectively control the company. Shares in public companies can be traded on stock exchanges. They come in a variety of forms. The most common ones are ordinary shares and preference shares (see below). Shares (ordinary)Generally, ordinary shares carry voting rights but no guaranteed amount of dividend payment. They do usually carry the right to receive most of the profits/capital growth if things go well, however they can quickly become worthless if things go badly. Shares (preference)Generally, preference shares carry no voting rights but do have fixed dividend rights and take preference over ordinary shares on a repayment of capital. In other words they are 'preferred' to a certain specified extent over ordinary shares. Share OptionsThe options are the important thing here, providing the right to buy shares at a pre-agreed price usually within a specified period of time. If the option is not exercised within the time period, it lapses. United Kingdom Listing Authority (UKLA)The UKLA is effectively a division of the FSA (see above) and is the body responsible for all company listing matters in the UK. It is responsible for maintaining the Official List (see above) and has three primary objectives as defined by the Treasury: to provide an appropriate level of protection for investors in listed securities, to facilitate access to listed markets for a broad range of enterprises, and to seek to maintain the integrity and competitiveness of UK markets for listed securities. WarrantsWhile warrants sound like warranties, which are a form of guarantee, in the stock market the holders of warrant certificates are able to buy pre-determined numbers of shares within a specified period at a pre-agreed price. Warrants are thus a type of share option (see above). |
