GLOSSARY OF LEGAL TERMS FOR SMALL BUSINESSES
A document that sets out the rules for how a company operates — including powers of directors, shareholder rights, and meeting procedures.
A business name is a registered trading name of a business. A company is a legal entity with its own rights and liabilities, separate from its owners.
Cap Table (Capitalization Table)
A table that shows who owns what percentage of a company including founders, investors, and employees.
A type of loan that turns into company shares in the future, often used by startups raising money from early-stage investors.
The rules and processes used to run a company responsibly and fairly, especially by directors and boards.
The legal responsibility directors have for decisions made while running a company, especially if they act carelessly or dishonestly.
An investigation done before signing a major deal, where the parties review financial, legal, and business information to understand any risks.
A legal obligation by Directors to act in the best interest of a company.
An agreement between co-founders of a business that sets out roles, ownership, and what happens if one person leaves the company.
A legal agreement that allows someone to use an existing business's brand and systems, in exchange for payment or royalties.
Legal protection for original ideas, brands, inventions, logos, software, and creative work. Examples include trademarks, copyrights, and patents.
How prepared a business is to raise funding including legal documents, structure, compliance, and growth strategy.
When a company sells shares to the public for the first time and becomes listed on a stock exchange.
A process where businesses verify the identity of clients to help prevent fraud, money laundering, or criminal activity.
Non-Disclosure Agreement (NDA)
A contract that stops someone from sharing confidential information. Often used when discussing partnerships or deals.
Public-Private Partnership (PPP)
A long-term agreement between a government and a private company to deliver a public service or infrastructure project.
Following the laws and rules that apply to your type of business, such as licenses, taxes, labour laws, and safety standards.
SAFE (Simple Agreement for Future Equity)
A contract where an investor gives money to a startup in exchange for the right to receive shares in the future, usually during a later funding round.
A private agreement between a company’s owners that explains how the company will be run and how decisions, disputes, and share transfers will be handled.
A short document that outlines the key terms of an investment deal before the final legal contracts are signed. It’s usually not legally binding.