Commercial Law Key Terms

Insolvency

The financial state in which an individual or company cannot pay its debts as they fall due, or its liabilities exceed its assets.

Restructuring

The process of reorganising a company's finances, debts, or operations to restore financial stability, avoid insolvency where possible, or maximise value for creditors if insolvency cannot be avoided.

Acquisition

When one company buys another company and gains control over it

Debt Capital Markets

Raise money by issuing debt securities (such as bonds) to investors, rather than borrowing through traditional bank loans.

Equity finance

Selling ownership in a companyDeb

Debt finance (outline 2 types)

Borrowing money.
1. Senior debt - Repaid first, more secure, lower interest.
2. Mezzanine debt - Repaid last, less secure, higher interest. Option to convert debt into equity. TSF

FTSE 100 Clients

Largest 100 companies on the London stock exchange

Due Diligence

Investigation into all the financial, operational and legal aspects of a company, its assets and liabilities.

TOR

Terms of reference - Document outlining what a committee is responsible for.

Buybacks

When a company buys back some of its shares from its shareholders.

Dividend

The profit that a company pays to its shareholders from its projects.

Why we need competition law (4 points)

1. To maintain low prices

2. To maintain high quality

3. To promote innovation

4. To give customers choice

Cartel

When a group of businesses secretly cooperate, instead of competing i.e 2 supermarkets agreeing to offer the same super high prices. idB

Bid Rigging

Getting another company to present a façade of competition, when in reality this doesn’t exist.

Predatory Pricing

Charging lower prices to wipe out a smaller business, then raising prices again when the competitor crumbles.

Claimant

The party who starts the proceedings with a legal claim against another party.

Defendant

The party that the claimant has a claim against.

Witness of fact

Provides a first-hand account of the facts in a case.

Expert witness

A neutral person with specialised knowledge who provides independent analysis and opinion to help the court understand complex issues.