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GLOSSARY

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Annual Maintenance - This is the fee that all (companies) have to pay annually. This includes annual renewal fees which are different depending upon the jurisdiction under which the company is registered. It includes government taxes, address registration, registered agent and administrator fees.

 

Apostille - An Apostille is a written authentication of a public document that has been issued in accordance with the Hague Convention of 1961. When documents are issued in a country that has signed the Hague Convention, and they are certified by an Apostille, they are recognized in all other convention countries and do not require any further authentication.

 

Articles of Association -These are the regulations governing the work relationships of the members of a company. Articles of Association are often simply referred to as the Articles. They help to govern the rights and duties ofthe shareholders and directors of the company. Also, the Articles of Association dealwith internal matters such as audits, appointment of directors, issuance and transfer of shares, dividends, accounts andgeneralmeetings.

 

 

Annual Maintenance - This is the fee that all (companies) have to pay annually. This includes annual renewal fees which are different depending upon the jurisdiction under which the company is registered. It includes government taxes, address registration, registered agent and administrator fees.

 

Apostille - An Apostille is a written authentication of a public document that has been issued in accordance with the Hague Convention of 1961. When documents are issued in a country that has signed the Hague Convention, and they are certified by an Apostille, they are recognized in all other convention countries and do not require any further authentication.

 

Articles of Association -These are the regulations governing the work relationships of the members of a company. Articles of Association are often simply referred to as the Articles. They help to govern the rights and duties ofthe shareholders and directors of the company. Also, the Articles of Association dealwith internal matters such as audits, appointment of directors, issuance and transfer of shares, dividends, accounts andgeneralmeetings.

 

Bank Secrecy

In most countries one of the terms of the relationship between banker and customer is that the banker will keep the customer's affairs in secret. Staff members are normally required to sign a declaration of secrecy as regards the business of the banks. A level of Bank Secrecy depends on local laws and signed Information Exchange Agreements and it also varies from country to country.

 

Bearer Share Certificate (Bearer Shares)

A share certificate is owned in the name of "bearer" and not to a particular person or organization. Bearer shares grant ownership rights to any person who is in actual physical possession of the certificates.However, it is usually required to be lodged in a registered depository. In most jurisdictions the owner of bearer shares has to be disclosed to the Registered Agent of the company.

 

By-Laws - The By-laws of a company (in certain jurisdictions) set out the internal laws by which the company is governed.

 

Certificate of Incorporation -This is a signed statement by the Registrarof Companies indicating that a given company is duly incorporated. It serves as evidence of incorporation and registration with the local Registrar of Companies in accordance to the jurisdiction. This statement includes basic information about the company (the name of the company, date and place of registration, the company’s registration number in the Registrar, etc).

 

Certificate of Good Standing - The official attestation by the companies registrar in accordance to the jurisdiction of incorporation, and it states that the company exists legally and that it is in compliance with the requirements of the local laws.

 

Certificate of Incumbency – This is an official document, issued by a registered agent or the authorities of the jurisdiction of incorporation, which states that the persons listed in it are the validly appointed directors of the company. It may also list shareholders if required.

 

Contribution

Anything of value which a person(s) or corporate body(bodies) contribute to the Company including cash, property or services rendered or a promissory note or other binding obligation to contribute cash or property or to perform a service.

 

Corporate Director - A Corporate Director is a person or corporate entity acting as a formal director of a company. The corporate director may sign contracts, negotiate loans, etc. for the company. The Director represents the company and manages its business and affairs.

 

Corporate Nominee Shareholder(s)

A corporate body(bodies) whose names in capacity of shareholders appear on public records and corporate documents other than the names of the beneficial owner of the Company. The purpose of this is to ensure the highest degree of security and confidentiality.

 

Corporate Nominee Member(s)

This is a corporate body(bodies) whose names in capacity of shareholders appear on public records and corporate documents other than the beneficial owner of the Company with the purpose to ensure the highest degree of security and confidentiality.

 

Corporate Redomicile – This is the process by which a company moves its legal domicile from one jurisdiction to another, and in the process of changing the country under whose laws it is registered or incorporated, the company maintains its same legal identity.

 

Custodian

A Custodian represents a bank, a financial services company, a registered agent or some other entity that has the responsibility to manage or administer the custody or other safekeeping of assets for other persons or institutions in return for ongoing fees.

 

Deed of Trust - The Deed of Trust is a document that creates a trust and lays down the ways of how the trusteesshould conduct administration and management of the trust, and also how they are to distributetrust assets among the beneficiaries. A Deed of Trust also embodies the agreement between a lender and a borrower to transfer an interest in the borrower's land to a neutral third party, a trustee, to secure the payment of a debt by the borrower.

                                                                                                                              

Dividend – This is part of a company's post-tax profits distributed to shareholders, usually expressed as an amount per share.The amount of earnings distributed as dividends is usually determined by the board of directors and divided by the number of shares.

 

Distribution

Distribution is a direct or indirect transfer of money or other property to or for the benefit of beneficiaries, members or shareholders in respect of their interests. A Distribution may be in form of a declaration or payment of profits, a purchase, retirement or other acquisition of interests, a distribution of indebtedness, or otherwise.

 

Domicile – A domicile is a place where company or trust has its legal permanent home, or to which an individual intends to return, or in some cases his country of origin. In other jurisdictions a domicile is a place where an individual has a long established residence or, in relation to a company, where it is incorporated.

 

Domiciliary

A person who is domiciled in a particular jurisdiction (as a country).

 

Dormant Company - A company that is not actively currently trading in any way. It has a registered name, directors, articles of association, and so on but has no sales turnover.

 

Double Taxation Agreement (or Double Tax Treaty) – This is a mutual agreement between two countries, and it is intended to relieve persons who would otherwise be subject to tax in both countries from being taxed twice in respect of the same earnings, transactions or events.

 

Due Diligence – This is a detailed and professional research and analysis of a company or organization; it is done in preparation for a business transaction.It may include an analysis of the business' structure, an examination of the business' financial health, the identity and credibility of the business'owners, directors, the future potential, an assessment of the risk involved in a company's business, a company's business plan, etc.

 

Exempt Company – An Exempt Company is a company exempted from certain taxes or from compliance with specified regulations of the country in which it isincorporated.

 

Holding Company

A Holding Company is a company whose activity is limited to holding and managing investments or property, but not having ordinary commercial or trading activities. The requirements to achieve a holding company status vary in different countries (in particular Liechtenstein, Luxembourg, Nauru and the Netherlands).

 

Limited Liability Company (LLC)

This is a type of corporate body which combines the more favorable characteristics of a corporation and a partnership. It allows a complete pass-through of tax advantages of a partnership, but at the same time providing limited liability of its owners. LLC is owned by Members, not shareholders and normally management is vested in the Members.

 

Limited Liability Partnership (LLP)

LLP is a type of corporate body which combines the more favorable characteristics of a corporation and a partnership. It allows a complete pass-through of tax advantages of a partnership, but providing limited liability of its owners. LLP is owned by Members, not shareholders and normally management is vested in the Members.

 

LLP/LLC Agreement

This is a written agreement concerning the affairs of the company and the conduct of its business that is binding upon all of the Members.

 

Memorandum of Association (or Company Charter) – This is the first constitutional document of a company, which, together with the Articles of Association, must be submitted to the Registrar of Companies. This document contains the company’s name, the address of its registered office, its objectives and rights, authorised share capital, and its statement of limited liability. The Memorandum of Association can sometimes be combined with the Articles to form the "Memorandum and Articles of Association", or "M&A".

 

Minutes – This is an official summary of proceedings of a meeting, an assembly, or a committee. It recounts what has been covered during the gathering.

 

Money Laundering - Money-laundering occurs when organised criminals or terrorists seek to make illegally obtained funds look legitimate by funneling them through a string of banks and businesses until the money's origin is entirely obscured and it is "clean".

 

Mutual Fund

A Mutual Fund is an Investment company issuing shares to the public and invests in wide range of companies or assets. The investors share the profits and any capital appreciation of the fund, but they are not liable for any debts of the fund or underlying companies.

 

Nominee
A nominee is a person (or persons) or corporate body(or bodies) whose names in capacity of directors and/or shareholders or any other position appear on public records and corporate documents other than the beneficial owner of the Company with the purpose to ensure the highest degree of security and confidentiality.

 

Nominee Director(s)

A person(s) or corporate body(bodies) whose names in capacity of directors appear on public records and corporate documents other than the beneficial owner of the Company. This is done in order to ensure the highest degree of security and confidentiality. Nominee Directors have no control over the company and are not entitled to manage.

 

Nominee Member(s)

A nominee member(s) is a person(s) or corporate body(bodies) whose names in capacity of member(s) appear on public records and corporate documents other than the names of the beneficial owner of the Company. The purpose of doing this is to ensure the highest degree of security and confidentiality

 

Nominee Secretary

A Nominee Secretary is a person or corporate body whose name in the capacity of secretary appears on public records and corporate documents other than those of the beneficial owner of the Company. This is done in order to ensure the highest degree of security and confidentiality.

 

Nominee Services – These are services whose purpose is asset protection and privacy of the UBO. They protect the real identity of theUltimate Beneficial Owner (UBO) by ensuring discretion and anonymity. Names of the nominee person(s)appear in the corporate documents instead ofthe names of the beneficial owner of the Company.

 

Nominee Shareholder(s)

A person(s) or corporate body(bodies) whose names in capacity shareholders appear on public records and corporate documents other than the beneficial owner of the Company with the purpose to ensure the highest degree of security and confidentiality.

 

Non-Resident Company -This refers to a company treatedas non-residentby the jurisdiction. This is done for tax purposes, or for the purpose of exchange control,if not both.

 

Offshore Trust: An OffshoreTrust is one that is formed in an offshore jurisdiction.

 

Ordinary Shares

Ordinary Shares denote the most common form of shares. Each ordinary share gives its holder an identical volume of rights. Holders have the right to vote at the meetings and receive dividends which vary in accordance with the profitability of the company. The holders of the ordinary shares are the owners of the company.

 

Permanent Establishment

Permanent Establishment is a legal concept applied by a country in order to tax commercial activities realised on its territory by a company or person incorporated or resident outside the local jurisdiction. The expression is commonly used in double taxation agreements although in practice there is no consistent definition adopted either in double taxation agreements or in jurisdictions which recognise the concept under their general tax laws.

 

Power of Attorney – This is a document which authorises a person to act on behalf of another or on behalf of a company.

 

Registered Agent - A Registered Agent is an individual, or company, designated in the articles of incorporation to represent a company in the jurisdiction of incorporation. A Registered Agent normally provides a Registered Office address, provides liaison with local authorities and receives all legal and tax papers and/or notices addressed to the company. He also handles the renewal of the business license, the provision of duplicate documents, apostilles, etc.

 

Registered Office -A registered Office is the official address of a company to which authorities, courts, and suitors send their notices, letters and reminders. It must always be an effective address for delivering documents to the company, and it is usually provided by a Registered Agent.

 

Registered Share -This is a share which is transferred by an instrument of transfer. The name of the holder is registered in the books of the company and the shareholder's name is displayed on the actual share certificate.

 

Registrar - The Registrar of Companies is a governmental body controlling the formation and renewal of companies created under the local company acts.

 

Resident Company - A Resident Company is one that is treated by the jurisdiction in which it is incorporated or in which it conducts commercial activities as resident for tax purposes or for the purpose of exchange control, or for the purpose of both.

 

Royalty

Royalty stands for all amounts received for the privilege of using intangibles such as patents, copyrights, secret processes and formulae, as well as amounts received for the privilege of exploiting mineral, oil and gas deposits.

 

Secrecy Laws

Offshore jurisdictions have laws that forbid financial institutions (banks, brokerages, insurance companies, etc.) and advisors (brokers, accountants, attorneys, investment advisors, etc.) from divulging information about clients or accounts to any third party. These laws apply whether the third party is a person, company or government.

 

Settlor (Creator or Grantor)

A Settlor is a person who actually creates a trust by donating property or assets to be managed and administered by a trustee. However, all benefits and profits will go to a beneficiary.

 

Shelf Company (Ready-Made Company) - A Shelf Company is one that has already been organized and registered and is placed on an inactive basis until its further sale to a client.Sometimes it is referred to as an Aged Corporation

 

Subsidiary Company - A subsidiary company is a company under the control of another

company through stock ownership. Often more than half of its stock is owned by another company.

 

Trust

A Trust is an entity created for the purpose of protecting and conserving assets for the benefit of a third party, the beneficiary. A Trust is governed by a Trust Deed which is a contract affecting three parties - the settlor, the trustee and the beneficiary. In the Trust, the Settlor transfers asset ownership to the trustee on behalf of the beneficiaries.

 

Trustee

A Trustee is a person or corporate body to whom assets are transferred when trust is created. The trustee also administers and manages the property transferred into a Trust.The trustee becomes the legal owner and is responsible for management of the assets and their distribution to the beneficiaries of the trust.

 

Trust Protector

A Trust Protector is a person appointed by the settlor to oversee the trust on behalf of the beneficiaries. In many jurisdictions, local trust laws define the concept of the trust protector. He has veto power over the trustee with respect to discretionary matters, but has no say with respect to issues unequivocally covered in the trust deed. Trust decisions are the trustee's alone. The Protector has the power to remove the trustee and appoint trustees. He consults with the settlor, but the final decisions must be the protector’s. The extent of the protector's powers in each separate case is defined by the settlor.

 

Ultimate Beneficial Owner (UBO) – An Ultimate Beneficial Owner is the real owner of the company,but his name is (only) disclosed before a registered agent, and an operational bank according to due diligence procedures.

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