Base on request of some friends lawyer and also students law related to global economy crisis, then following I write down some terms in International Bussiness Law:
Anstalt
An Anstalt is a
Articles of Association
Are the regulations for governing the rights and duties of the members of the company among themselves. Articles deal with internal matters such as general meetings, appointment of directors, issue and transfer of shares, dividends, accounts and audits.
Asset Protection Trust
A trust established offshore to protect settlors' assets against those who may attempt to make claims against them - creditors, former spouses and dependants on death.
Authorised Agent
A bank or trust company authorised by regulatory authorities to deal in foreign currency securities.
Back to back loan
A loan structure when 'A' deposits a sum of money with a bank in country 'X' on condition that a related branch, agency or bank located in country 'Y' will lend an equivalent sum to 'A' or a designee in country 'Y'.
Bare Trusts
Also known as dry, formal, naked, passive or simple trusts. These are trusts where the trustees have no duties to perform other than to convey the trust property to the beneficiary(s) when called upon to do so.
Bearer Share Certificate
A negotiable share certificated filled out in the name of the 'bearer' and not to a particular person or organisation.
Bearer Stocks/Shares
Securities for which no register of ownership is kept by the company. A bearer certificate has an intrinsic value. Dividends are not received automatically from the company but must be claimed by removing and returning 'coupons' attached to the certificate.
Beneficial Owner
The actual or economic owner of an offshore company as distinct to the registered or nominal owner.
Beneficiary
A beneficiary is a person for whose benefit the Trust is created. They may be named and identified in the Trust Instrument or described by reference to a class of beneficiaries, or in the case of discretionary trusts left to the Trustee's discretion.
Blue Chip
The most prestigious industrial shares. An American term derived from the colour of the highest value poker chip.
Bonus Issue
See Capitalisation Issue
Broker/Dealer
A London Stock Exchange member firm which provides advice and dealing services to the public and which can deal on its own account.
Call
The amount due to be paid to a company by the purchase of new or partly paid shares.
Call Account
A deposit account with a financial institution without a fixed maturity date. The deposit can be 'called' (withdrawn) at any time. Call account deposits are usually one to seven day placements, however, two parties can agree on different maturities.
Call Option
The right to buy stock or shares at an agreed price at a future date.
Capital Controls
Government restrictions on the acquisition of foreign assets or foreign liabilities by domestic citizens, or the acquisition of domestic assets or domestic liabilities by foreigners.
Capitalisation Issue
The process whereby money from a company's reserves is converted into issued capital and then distributed to shareholders as new shares, in proportion to their original holdings, also known as bonus or scrip issue.
Captive Insurance Company
A wholly owned or controlled subsidiary company established by a non-insurance parent for participation in the insurance risks of the parent and its other affiliates or associates.
Certificate of Incorporation
Proof of registration of a company with the Registry.
Company Limited by Guarantee
An incorporated entity without share capital.
Company Secretary
Officer of a company, statutory in most common law jurisdictions. The person or corporation responsible for acceptance of legal service and for complying with various statutory filing requirements.
Consideration
The money value of a transaction (number of shares multiplied by the price) before adding commission, stamp duty.
Copyright
The recognition by an appropriate governmental agency of the ownership of something, usually intellectual property. Designs, art, programs, literary works, music, logos, etc can be all copyrighted. Anyone wishing to use the intellectual property in any way will have to pay a fee to the copyright owner.
Corporate Director
Corporate entity appointed as director of a company. This means that a company is the director of the other company in question.
Credit Risk
The risk that a counter-party to a transaction will fail to perform according to the terms and conditions of the contract, thus causing the holder of the claim to suffer a loss.
Debenture
A loan raised by a company paying a fixed rate of interest and secured on the assets of the company.
Director
Person who conducts the affairs of a company and who may in certain circumstances be liable towards creditors and shareholders in case of failure.
Discretionary Trust
The form of trust which is usually established offshore. The 'discretions' are vested in the trustee who can usually decide which of the beneficiaries is to benefit, when and to what extent. Discretions are exercised under advice of, or suggestions from, the settlor/protector.
Dividend
That part of a company's post-tax profits distributed to shareholders, usually expressed in pence per share.
Domicile
Under English common law, domicile is the place of your permanent home and the means by which you are connected with a certain system of law for certain legal purposes such as marriage, divorce, succession of estate and taxation.
ECU
European Currency Unit
EMU
European Monetary Unit
Equity
The risk-sharing part of a company's capital, usually referred to as ordinary shares.
ESOP
Employee Share Option Plans can either be approved or unapproved for taxation purposes. A typical plan for a multi-national company may well be set up in an offshore centre and therefore be unapproved by any particular onshore taxation authority.
For example, a multi-national corporation with employees in, say 20-30 countries may well decide to set up an unapproved scheme offshore. However, in certain circumstances, case law can provide that contributions to the scheme, which are utilised to buy shares in the sponsored equity company, may be tax deductible expenses in the books of that company.
Eurobond
A bond issued in a currency of that other than that of the country or market in which it is issued. Interest is paid without the deduction of tax.
Exchange Control or Restrictions
Limits on free dealings in foreign exchange or on free transfers of funds into other currencies and other countries.
Expatriation
The removal of ones legal residence or citizenship from one country to another in anticipation of future restrictions on capital movements or to avoid estate taxes.
Fiduciary
A Fiduciary is someone who acts on behalf of another in a particular matter or transaction. A Fiduciary has power that is capable of being used to affect his Principal and who must exercise that power solely in the best interests of his Principal.
Fiduciary Account
An amount typically deposited with a Swiss Bank which will redeposit the sum with a third party bank outside
Fixed Interest
Loans issued by a company, the government (gilts or gilt-edged), or local authority, where the amount of interest to be paid each year is set on issue. Usually the date of repayment is also included in the title.
Flight Capital
The movement of large sums of money from our country to another to escape political or economic turmoil, aggressive taxation or to seek higher rates of interest.
Foreign Currency Account
An account maintained in a foreign bank in the currency of the country in which the bank is located. Foreign currency accounts are also maintained for depositors by banks in the
Gearing
A company's debts expressed as a percentage of its equity capital. High gearing means that debts are high in relation to assets.
GMBH (Ger, Gesellschaft mit Beschrankter Haftung)
In Germany,
Grantor Trust
Under
Hedge Funds
Speculative funds managing investments for private investors (in the
Hot Money
1 Large quantities of money that move quickly in international currency exchanges due to speculative activity.
2 Foreign funds temporarily transferred to a financial centre and subject to withdrawal at any moment.
Hybrid Companies
A hybrid company is a company having various classes of membership which typically can comprise registered stock, guaranteed membership and unlimited membership. The guarantor member being liable to contribute to the company a stated sum in the event of insolvency or liquidations, whilst an unlimited member, as the name implies, has no limit on his liability relating to the debts of the company in the event of an insolvency.
Insider Dealing
A criminal offence involving the purchase or sale of shares by someone who possesses 'inside' information about a company's performance and prospects which is not yet available to the market as a whole, and which if available might affect the share price.
International Business Company (IBC)
A term used to define a variety of offshore corporate structures. Common to all IBCs are its dedication to business use outside the incorporating jurisdiction, rapid formation, secrecy, broad powers, low cost, low to zero taxation and minimal filing and reporting requirements. An increasing number of offshore jurisdictions are permitting the use of bearer shares, nominee shareholders, directors and officers.
Laundering
Laundering is the process of cleaning illicitly gained money so that it appears to either have come from or to be going to a legitimate source.
Letter of Wishes/Memorandum of Wishes
A document prepared by the settlor of grantor of a trust providing guidance on how trustees should exercise their discretions.
License
Here you sell a person or company the right to use either a copyright or patent for a specific length of time, or in a restricted area.
Limited Partnership
A limited partnership is a partnership with at least one general partner who is fully liable for the engagements of the partnership, whilst the limited partners are only liable to the extent of their unpaid partnership capital. Limited partners may not be involved in the management of the partnership without jeopardising their limited status.
Limited Liability Partnership
A limited liability partnership is a vehicle intended for professional firms in which all partners may be involved in management but the partnership as a whole has a stated paid up capital, against which creditors may mount an action. It should be noted that in a limited liability partnership there is no limit in respect of claims of negligence against individual partnership members but the claim against the whole partnership would ipso facto be of a defined maximum amount.
Limited Liability Limited Partnership
This is a limited partnership which has been re-registered as a limited liability partnership. A limited liability limited partnership designation however indicates to third parties that the partnership commenced its activities as a limited partnership before converting to a limited liability partnership.
Managed Bank
An offshore bank also known as a Class "B" or cubicle bank. The managed bank is not required to maintain a physical presence in the licensing jurisdiction. Its presence in the licensing jurisdiction is passive with nominee directors and officers provided by a managing trust company with a physical presence. The managed bank is not permitted to transact business within the licensing jurisdiction but may maintain its books, records, etc there to assure secrecy of operations.
Memorandum of Association
The charter of a company which indicates nationality, the nature of its business and the share capital it is authorised to issue. It is a statutory document which effectively governs the company's relations with the outside world.
Naamloze Vennootschap (NV)
In Dutch Company Law, the NV is the form of incorporation favoured by larger companies. It can be compared to the American corporation.
Nominee
Company or private individual used to act as owner or director of a company on behalf of another party. This is who you say owns or runs the company.
Nominee Company
A company formed for the express purpose of holding securities and other assets in its name or to provide nominee directors and/or officers on behalf of clients of its parent bank or trust company.
Nominee Director
A director whose function is passive in nature. The director receives a fee for lending his or her name to the organisation. Nominee directors are subject to director responsibilities.
Nominee Name
Name in which security is registered and held in trust on behalf of the beneficial owner.
Offshore Company
See International Business Company.
Offshore Dollars
Same as Eurodollars but encompassing such deposits held in banks and branches anywhere outside the
Offshore Financial Centres
A country or jurisdiction where an international attempt has been made to attract foreign business by deliberate government policy, such as the enactment of secrecy laws and tax incentives.
Offshore Limited Partnership
A partnership, the general partner of which is an offshore company but the limited partners may be onshore entities.
Offshore Profit Centres
Branches of major international banks and multinational corporations located in a low tax financial centre, which are established for the purpose of lowering taxes.
Offshore Trust
The quality that differentiates an offshore trust from an onshore trust is portability. The offshore trust can be transferred to alternative jurisdictions to maintain confidentiality and to advantage desirable facets of the new jurisdiction's laws.
Patent
The recognition by an appropriate governmental agency of the ownership of an idea, process, development, etc. (See Copyright).
Private Company
A company which does not have a listing on the Exchange and is debarred from offering its shares to the general public.
Private Trustee Company
A company incorporated in certain offshore jurisdictions, such as
Protected Cell Company (PCC)
A protected cell company may be viewed as a doughnut, the centre of which is the ordinary share capital of the company around which clusters a number of cells, which are individually capitalised with preference capital. The company may contract for individual cells to carry out certain activities on behalf of the company. However, it should be noted that under the PCC Legislation a cell is capable of going bankrupt in certain circumstances, leaving the core share capital untouched. A PCC is similar to a divisionalised entity, save that each division or cell can go bankrupt without the entire company being placed in jeopardy.
Protector
A person appointed by the settlor/grantor of a trust, who has limited powers to control the trustee and usually has the right to change trustees.
Proxy
A person empowered by a shareholder to vote on his behalf at meetings.
Public Limited Company (Plc)
A public company limited by shares or by guarantee and having share capital, which may offer shares for purchase by the general public. Only Plcs may qualify for listing on the London Stock Exchange.
Purpose Trust
A trust created for an express purpose without any individually ascertained or ascertainable beneficiaries. A purpose trust is typically used in circumstances where the trust would not be exclusively charitable but wholly philanthropic.
Re-domiciliation Corporations
Some offshore jurisdictions allow corporations incorporated in other jurisdictions to re-incorporate in their own at will.
Re-invoicing
Service offered to offshore trading companies so that legal title to trade goods passes to an offshore company at some intermediate point in a transaction.
Resident Company
A bank, trust company or holding company permitted to deal only in local currency. Foreign currency transactions must be approved by the appropriate regulatory authority.
Restricted Bank and/or Trust Licence
Permits the holder to carry on business with certain specified persons whose names are usually listed in the licence.
Securities
General name for all stocks and shares of all types. In common usage, stocks are fixed interest securities and shares are the rest, although strictly speaking the distinction is that stock is denominated in money terms.
Securitisation
This is a method by which entities can raise capital. It involves them converting some of their assets into securities rather than selling them, for example, a Bank could convert its loans into Mortgage Bonds and sell them as such.
Service Company
A company located in an offshore financial centre to provide management, invoicing and other services for client companies located in other countries. Initially used to advantage double taxation treaties. Service companies are now frequently used to facilitate flight capital outflow, and are often involved in money laundering schemes.
Settlor
The Settlor is the person who establishes the Trust. He is the person who transfers money or other property to the Trustees for them to hold upon the terms of the Trust.
Shelf Company
Companies incorporated and held in stock for later use. This is often the fastest way to obtain offshore companies since they are fully formed and available instantly.
SRO (Self Regulating Organisation)
An organisation recognised by the SIB and responsible for monitoring the conduct of business and capital adequacy of investment firms.
Stamp Duty
A UK tax currently levied on the purchase of shares.
Stiftung
The Stiftung is a private establishment and this legal form is unique to
Trust
A trust is a common law legal structure used to legally separate the owner from his assets by handing over control to a third party, known as a trustee.
