Triple A, the highest classification that an individual or company can receive from a credit-rating agency.

A and B Shares:

In countries such as the United States and the United Kingdom, Almost all shares in a public company have equal rights. But in some countries, such as Sweden and Denmark, companies can issue two different kinds of shares, A and B shares. B shares are frequently issued to members of a firm's founding family, and each one has the same voting rights as several A shares. A and B shares inevitably have a different market value, although it is surprising what a small value investors put on voting rights.


The financial records of a company's transactions kept according to the principles of double-entry bookkeeping. For every debit there is an equal and opposite credit. There are a number of different types of accounts.

Accrued Interest:

Interest that has been earned but not yet paid. If interest on a bank deposit is paid every six months, then five months after the last payment five-sixths of the next interest payment can be said to have accrued. None of it, however, will be paid for another month.


The purchase by one company of a controlling interest in another; an alternative to organic growth for any company in a hurry to become bigger. Acquisitions can be friendly - when both companies reach agreement about a deal and it is called a merger - or hostile, when some shareholders and/or the management resist the attempt to buy them.


A person who calculates the risk associated with various kinds of long-term insurance policies. In particular, an actuary calculates the probability that someone of a specific age and profile will die within a given period of time. Actuaries are disparagingly said to be people who find accounting too exciting.

Added Value:

The concept behind value added tax (VAT); the idea that value is added to goods and services at many discrete stages during their production. VAT seeks to tax that value at each of those stages.


Something that is added to a contract as an afterthought.


The brief postponement of a meeting in midstream. A board meeting, for example, might be adjourned for lunch. If an adjournement lasts longer than a few hours, the meeting has to be brought to a proper close and reconvened at another time.

Administrative Offices:

An administrative office is frequently located in a country other than that of the headquarters office, the parent company or a country of operation. The role of such an administrative office may be to co-ordinate international or regional activities, to provide particular services (such as management analysis, financial or other related services) or to perform a given function (such as marketing).

A number of otherwise high tax jurisdictions (such as the United Kingdom, France, Belgium and Greece) grant special tax treatment in order to attract the administrative offices of multinationals. In the case of Monaco, which has been particularly successful in this regard, not only may the administrative office benefit from favored tax treatment, but its employees resident in Monaco would not be subject to tax there.


Someone appointed by a court to run a company that is under administration. Also someone appointed by a court to handle a dead person's affairs when there is no will, or when the executors appointed by the will are unable to carry out their responsibilities.


Short for American Depositary Receipt, a certificate issued by an American bank to an American investor in lieu of a foreign surity. ADRs are traded in the United States as if they were domestic stock. In particular, the issuer (the bank) arranges for the dividends to be paid in dollars.


Asymmetric Digital Subscriber Line.

Ad Valorem:

Something (such as tax) that is based on the value of goods and not on their quantity. Thus VAT is an ad valorem tax; so too is sales tax in the United States. A fixed-sum tax levied on the owner of a car is not since it bears no relation to the value of the car or the use that it makes of the roads.

Adverse Trustee:

One who has a substantial beneficial interest in the trust assets as well as the income or benefits derived from the trust. Such a trustee could be related to the grantor by birth, marriage or in an employer/employee relationship.

Advisory Board of Directors:

An advisory board of directors are individuals appointed to advise the elected board of directors. An advisory board is not bound by the duties imposed upon elected board members, and the corporation is not required to follow the recommendations of the advisory board.


A sworn statement made in front of a person authorised by the courts to witness statements made under oath.


A company that is partly owned by another company. Non-corporate entities that have close links with each other are also sometimes said to be affiliates. Individual trade unions, for instance, are affiliated to their central organisation.


A written list of the items to be discussed at a meeting. An agenda is prepared before the meeting and is circulated in advance to all those who are attending. The last item is normally "any other business", which provides those attending with an opportunity to raise unanticipated issues.


An agent is anyone who is authorized to act on behalf of another. A corporation can only act through its agents; therefore, it is important to define what actions an agent is authorized to perform.

Air Waybill:

A document that lists goods that are to be transported internationally by a shipper. The air waybill constitutes an agreement between the shipper and the owner of the goods that the goods will be delivered to an agreed destination in the same condition in which they were received.

Akte Van Opricht:

Statutes of a Dutch company.

Aktiengesellschaft (AG):

German company limited by shares.


The amount of stock that is allocated to investors who have subscribed for a new issue of shares.

All Risk:

An insurance policy that covers all risks except for those specifically stated in the policy.

Alternate Director:

A person appointed to represent and vote on behalf of a director of a company when he is absent from a meeting of directors.


An alteration or an addition to a legal document that is signed by all the parties to the document. The amendment has the same legal status as the rest of the document.


American Stock Exchange. Also an abbreviation for American Express.


The preferred word in the United States for depreciation.

ANDIN: Asociación Latino-Americana de Intergración.

Annual Report:

The printed document that contains the annual accounts of a company. The annual report is posted to all shareholders every year. The quality of companies' annual reports varies greatly.


The benficiary or benficiaries (in a last-to-die arrangement) of an annuity who receives a stream of payments pursuant to the terms of the annuity contract.


An investment that yields a fixed annual income for the investor until his or her death. The payment of an annuity used to be annual, but it is now frequently more frequent.


Establishment, a legal entity without shares established in Liechtenstein , with some features of a trust but with corporate personality. Does not have shares.


Laws in the United States which make it illegal for firms to fix prices among themselves or to discriminate in the prices that they ask different buyers for the same goods. The same body of legislation makes it illegal for companies to form a monopoly. Anstalt: Establishment, a legal entity without shares established in Liechtenstein, with some features of a trust but with corporate personality. Does not have shares.

Anti-Avoidance Measures:

The object of anti-avoidance measures, insofar as they relate to tax havens, is to prevent the avoidance or reduction of tax through the displacement of one or more connecting factors (i.e. the basis of tax liability) from the taxing jurisdiction concerned to a tax haven jurisdiction.

Anti-avoidance measures may be of general application or may refer to specific tax havens. Any measures usually appear in domestic tax systems; they may however be imposed by tax treaties.


Certificate of Good Standing in connection with corporations according to the Convention of the Hague of October 05, 1961.


The buying and selling of goods or services on different markets to take advantage of variations in price. People who make their living by arbitrage are called arbitrageurs.


A procedure for solving commercial disputes that avoids going to court. The parties to the dispute turn to an independent third party whose judgment they agree in advance to accept. A number of industries have set up special international bodies for the purpose of arbitrating in disputes within their industry.


A person who acts as an intermediary in a case of arbitration; an independent third party whose opinion the disputing parties agree to be bound by. In some cases the arbitrator may consist of a panel of individuals.

Arm's Lenght:

A transaction between related companies at a price reflecting the cost of the manufacturing company or exporter plus a reasonable profit as deemed by Customs. "Reasonable profit" is determined by Customs based on a cost paid by the related company for a comparable transaction or goods. The "First Sale Rule" is recognized by United States Customs as an established method of valueing imported goods. It applies to transactions wherein a manufacturer or exporter sells a product destined for the United States to an intermediary distributor or trading company which in turn sells the product to an importing entity in the United States. In order to qualitfy, the First Sale invoice must reflect an arm's lenght transaction wherein the manufacturing company or exporter recovers its full manufacturing cost plus a "reasonable profit."

Arm's Length Relationship:

An arm's length relationship is a term used to describe a type of business relationship a corporation should have with a close associate to avoid a conflict of interest. For example, when you negotiate with your banker or your supplier, any agreement which results will likely reflect market value and commercially reasonable terms and conditions. When you loan money to your son or daughter, you may be inclined to provide much more favorable terms and conditions. The first example would be considered to be an arm's length relationship, while the second example would not. When your corporation does business with or makes loans to corporate officers and directors, the relationship must be at arm's length to avoid conflicts of interest.


The making of a regular payment (of rent or interest, for example) after the period to which it relates.

Articles of Association (also Bye-Laws or By-Laws):

The set of rules by which a company is run. They must contain: 1) the company's name; 2) its registered address; 3) its objects and aims; 4) its capitalization; 5) a statement that the company is a limited liability organization.

The articles state, for instance, what percentage of the shareholders are required to vote in favour of major changes before they can be put into effect.Such changes frequently require more than a simple majority. The articles of association are lodged with the relevant authority at the time when a company is first registered. As such, they become a part of the public record.

Articles of Incorporation (US style):

The articles of incorporation, along with the bylaws and corporate minutes, make up a corporation's charter documents and contain basic information about the corporation. Upon filing the articles with the secretary of state, the corporation comes into existence. Articles are a public record available for inspection ny anymore. Commonly, articles will provide the name of the corporation; the number of shares which the corporation is authorized to issue; and the classification of those shares, if any; the name and address of the registered agent; and the name and address of the incorporator. Additional information is also permitted.


Something that a company or individual owns to which can be ascribed a value, from plant to patents, and from property to products.

Asset Management:

The business of managing assets to make them produce maximum revenue over the longer term. The expression is generally used in the context of financial assets.

Asset Manager:

A person appointed by a written contract between a company or trust to direct the investment program of the company or trust. It can be a fully discretionary account or limitations can be imposed by the contract. Fees to the asset manager can be based on performance achieved, trading commissions or a percentage of the valuation of the estate under his or her management.

Asset Protection Trust (APT):

A new type of trust which places the trust's assets beyond the reach of potential foreign governments, litigious plaintiffs, creditors and contingent fee lawyers.

Asset Stripping:

A process in which a company or an individual buys an asset (frequently a quoted company) and then proceeds to sell it bit by bit. Asset stripping is most common when the stockmarket's valuation of the whole of a business is less than the sum of its parts.


To record the transfer of the ownerships of an asset from one person to another. Some contracts impose restrictions on the assignment of their benefits and obligations.


Company A is an associated company of company B if more than 20%, but less than 50%, of its equity is owned by company B. Associated companies have to be consolidated into the accounts of the company that owns the equity stake only if that company also controls the composition of the board of the associated company.

ATM (Automatic Teller Machine; Cash Dispenser; Cash Point; Cash Machine; Cash Withdrawer):

Used for cash withdrawals with your credit card or debit card at approximately 820,000 ATMs in over 120 countries.


The regular and systematic process of checking that a company's accounts are true and fair. The audit is carried out by an independent accountant from a firm that has an arm's length relationship with the company whose accounts it is auditing. The word comes from the Latin auditus, meaning hearing. In olden times it referred to the hearing that landowners gave to the manager of their land (urban or agricultural), while the manager accounted for his stewardship.


The last body needed in connection with a corporation: required to inspect the company's bookkeeping and verify the correctness of annual accounts. Usually not employees or directors of the corporation but an outside firm.


Anti-avoidance German law whereby German citizens remain subject to the principal German taxes for a period of ten years if they emigrate to a country designated in the legislation (as from time to time amended) as a low tax country.


The shares that a company is legally permitted to issue under its articles of association. A company may issue fewer shares if it wishes, but it may not issue more without first changing its articles.



Back Office:

A business's behind-the-scenes operations. In financial institutions it is the people who sort out the paperwork; in manufacturing operations it is the people who make the paperwork.

Back Pay:

A salary of wage that is unpaid from aprevious period. For weekly paid workers it is pay due from the week before last; for monthly paid workers it is pay due for work done in the month before last.


An importer that wishes to establish its creditworthiness with an exporter from another country can set up a bank account in the exporter's country and place funds in that account. Such funds act as collateral for goods that the importer subsequently buys from the exporter. They are referred to as a back-to-back facility.

Back-to-Back Loan:

Back-to-Back loans are matching deposit arrangements. They may be used in order to solve a financing or exchange control problem. However, in the case of certain tax havens, the function of back-to-back loans is to reduce the taxable base subject to withholding taxes on interest payments, by interposing an intermediary subsidiary company between the source of the income and the recipient. For example, an intermediary company located in the Netherlands or the Netherlands Antilles may be interposed so as to take advantage of a favorable tax treaty. In such cases the authorities usually require a certain spread or "turn" on the rates so as to create a small profit, which is subject to tax locally.

I.e., in this loan structure "A" deposits a sum of money with a bank in country "X" on condition that a related branch, agency, edge corporation or bank located in country "Y" will lend an equivalent sum to "A" or a designee in country "Y".

Bad Debt:

A bill of loan that is not paid within a reasonable period of time after its due-by date. Such late payments are described as doubtful debts for a while, but eventually they become bad debts. When that haappens they have to be written off in the business' accounts.

Badges of Fraud:

Conduct that raises a strong presumption that it was undertaken with the intent to delay, hinder or defraud a creditor.


The difference between the credit and debit items in an account. If the credit items exceed the debit ones, the account is said to have a credit balance. If they do not, the account is said to be overdrawn.

Balance of Payments:

The record of a country's transactions with the rest of the world. The current account of the balance of payments consists of visible trade in goods; invisible trade in services; private transfer payments, such as money sent home by nationals working abroad; and official transfers, such as payments to international organisations.

The capital account consists of long-term and short-term transactions relation to a country's assets and liabilities (for example, loans and borrowings). Adding the current to the capital account gives the overall balance, which should be mathced by net monetary movements and changes in reserves. In practice, the data recorded never add up as they should in theory, and the gap is filled by an item called "errors and omissions".

Balance of Trade:

A statement of a country's trading account with the rest of the world. This covers the import and export of goods and services.

Balance Sheet:

The part of a company's accounts which lists its assets and liabilities. Fundamental to all such accounts is the idea that assets and liabilities are in balance, that is, they are equal. The balance sheet is, of course, a snapshot of a company's position. A short time after it is compiled that position can, and sometimes does, change significantly.

Balloon Payment:

The final payment on a loan that is being repaid in instalments. A balloon payment exceeds by some considerable amount the preceding payments. The repayments balloon as the maturity of the loan draws nigh.


Measure (in kilobytes of data transferred) of the traffic on a web site.


A financial institution that carries out three basic functions:
  1. Collects deposits from savers;
  2. makes loans to borrowers; and
  3. enables money to be transmitted from one bank account to another by means of cheques, standing orders, direct debits, and so on.
There are a number of specialised banks that carry out particular functions. For example, a central bank acts as banker of last resort to the banking system; and investment bank acts as banker of last resort to the banking system; an investment bank is concerned with advising companies on how to raise money in the capital market; and a clearing bank is the core of a country's money transmission system. Bank Charges: The fees charged by banks for their services, such as money transmission (claring cheques and so on), currency conversion and arranging loans.

Bank Draft:

An order from a seller (or exporter) requesting the bank of the buyer (or importer) to pay to the seller a specified amount. A sight draft is payable on presentation; a time draft is payable at a named future date. A bank draft is also known as a bill of exchange.


A considerable volume of international banking takes place offshore and many of the world's major banks have banking and trust company operations in one or more tax havens.

Most tax haven jurisdictions have enacted legislative provisions and set up administrative authorities whose function it is to control banking and trust company activities. Banking and Financing Controlled Foreign Corporation: A foreign corporation which is a controlled foreign corporation conducting banking business, financing or similar business if it is primarily engaged in the active conduct of a business in which more than 50% of its gross income is derived from an activity consisting of one or more of the following services:

- receiving deposits of money from the public;

- making loans to the public;

- purchasing, or purchasing and discounting, accounts receivable, notes receivable, or installment contracts receivable; or

- Purchasing stock or debit obligations from the issuer or obligor (or from a person or persons controlling, controlled by, or under common control with, such issuer or obligor) thereof for the purpose of distributing such stock or obligations through resale to the public.

Banking and Financing Income Excluded from Subpart F Income: Certain income earned from related persons by foreign personal holding companies that is excluded from Subpart F, or "tainted" income if it consists of:

- dividends and interest received from a related person which is created or organized under the laws of the same foreign country in which the controlled foreign corporation is created;

- interest received in the conduct of a banking, financing, or similar business from a related person engaged in the conduct of a banking, financing or similar business if the business of the recipient and the payer are predominantly with persons other than related persons. Since the United States accumulated earnings tax does not apply to a foreign personal holding ocmpany, overseas banks and finance companies are not under pressure to remit funds to their parent banks. Banking Passport: A banking passport is simply that you create a 'new person' with another nationality and a full set of ID, separate 'legal entity' through a second passport (or third) in a name of your choice.

Bank of International Settlements (BIS):

Structured like America's Federal Reserve Bank, controlled by the Basel Committee of the G-10 nations' Central Banks, it sets standards for capital adequacy among the member central banks.


Being formally declared by a court unable to repay debts. A person who has been declared bankrupt is deprived of certain powers; for example, he or she cannot be a director of a company for a number of years. A bankrupt's assets are taken over by a trustee who distributes them among th unpaid creditors.

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 secret. Staff members are normally required to sign a declaration of secrecy as regards the business of the banks.

Where numbered accounts are used their purpose is to limit the number of persons who know the identity of the client. In certain countries (e.g. Switzerland and the Cayman Islands) specific legislation makes breaches of bank secrecy subject to criminal law sanctions. However, in all legal systems (including Switzerland) there are specific cases where the duty of secrecy of a banker is discharged, e.g. where fraud, money laundering and narcotics are involved.

The exchange of information clause contained in most tax treaties may enable the tax administration of one treaty country to obtain information concerning bank accounts, which its residents have in the other country.

Bar Chart:

A diagram consisting of a number of vertical bars placed next to each other. For example, a chart showing the number of cars sold by a dealer each month might have the number of cars plotted along the vertical axis and the months of the year along the horizontal axis.

Bar Code:

A rectangle of vertical black lines of varying thickness displayed on the side of consumer goods. The lines are read by a laser beam which records electronically the product's details, such as its price, size, model number and so on.

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.


There are two business-related meanings: - Used as a noun, a bargain is a deal done at a price below the acknowledged market price.

- Used as a verb, it refers to the process whereby a buyer and a seller reach agreement on a price.

Barrier to Entry:

The obstacles that a company entering a market for the first time has to surmount to thrive in that market. These include things like a shortage of suitable sites (for retailing), the absence of economies of scale (for mass market goods), and government regulations that protect domestic producers (for imports).

Barrier to Exit:

The obstacles that prevent a company leaving a market when it no longer sees a prospect of making money in that market. These include things like the cost of laying off staff and of severing long-term supply contracts.


Paying for goods and services with other goods and services: that is, transactions that do not involve and exchange of money. Barter can occur at a basic level (my eggs for your honey) and at a highly sophisticated level (Russian oil for American planes). The more sophisticated version is often referred to as countertrade.

Base Period:

A time in the past used as a yardstick against which to compare future performance of, for example, a business or an economy. It is easy to see how an economy has grown, for example, if its GDP is related to a base period in which it was assumed to be 100 units.

Base Rate:

A declared rate of interest that is used in the UK as a reference point for other rates. Thus a bank might say that its lending rate to a customer is base rate plus three (percentage points).


Basis, a tax and accounting term, is the measuring rod against which gain or loss is measured. With stock, basis is what you pay for stock or the fair market value of property you contribute in exchange for the stock.

Basis Point:

The smallest unit in a measure of interest rates. Thus one basis point in 9.7% is 0.1; one basis point in 9.76% is 0.01.

Basle Practices:

A committee of central banks setting standards for conducting their business resulting in minimum standards, preventative money laundering measures etc.

Bean Counter:

An unflattering name for an accountant. It implies that accountants spend their time sitting around counting beans – beans once having been used as a primitive form of money to store and exchange value.


An investor who thinks that the price of a security is going to fall. A bear sells securities in the expectation of being able to buy them back in future at a lower price.

Bearer Bond:

A bond issued in bearer form rather than being registered in a specific owner's name. Ownership is d determined by possession.

Bearer Security:

A bond of share that gives the rights of ownership (such as voting rights or the right to receive dividends) to whoever holds (or bears) them. This is in contrast to registred securities, which belong to the person or organisation in whose name they are registered.

Bearer Share Certificate:

A negotiable share certificate made out in the name of the bearer and not in the name of a particular person or organization. This is a tremendously powerful feature for preserving anonymity and privacy, but can be very dangerous if the certificate falls into the wrong hands. Possession of the certificate constitutes ownership of the asset(s).

Bearer Shares:

A negotiable share made out in the name of the bearer and not in the name of a particular person or organization. The shares in the capital of a company, which are transferable by delivery of the certificate. Unlike registered shares, which are transferred by an instrument of transfer, the name of the holder is not registered in the books of the company.

Bearer Stocks/Shares:

A negotiable share certificate made out in the name of the bearer and not in the name of a particular person or organization.


Items in a profit and loss account that appear below the net profit figure; that is, items that are taken into account after the figure for net profit has been calculated. Contrast with above the line.

Below the Line:

Items in a profit and loss account that appear below the net profit figure; that is, items that are taken into account after the figure for net profit has been calculated. Contrast with above the line.


The measure of a business function or process that is considered to be best practice for a particular industry. The number of cars produced per month by the most efficient up-to-date car factory will be a benchmark for all car manufacturers. So will the lowest percentage of quality defects that any factory achieves.

Beneficial Owner:

The actual or economic owner of an offshore company, as distinct from the registered (or nominal) owner.


A person to whom a trust's proceeds are distributed.


An advantage gained by the addition of something extra. For example, customers gain a benefit when companies add extra staff to handle their enquiries; products benefit from the addition of new machinery that improves their quality. The addition of these extras bears a cost, however, and needs to be subjected to a cost benefit analysis.


The countries of Belgium, the Netherlands, and Luxembourg, and the economic union between them. This exists within the rules and structure of the European Union, all three countries being EU members.

Berne Convention:

An international agreement on the protection of copyright. Signatory countries agree to treat artistic works from all member countries equally.

Berne Union:

An association of national export-credit agencies based in Berne, Switzerland. The agencies meet at the Berne Union to discuss issues of common concern.

Besloten Vennootschap met Beperkte aansprakelijkheid (BV): Dutch limited company for small commercial enterprise, not required to publish accounts; used as a Substantial Holding Company.

Best Effort:

A designation that a certain financial result is not guaranteed but that a good faith effort will be made to provide the result that is represented.


Bank Identifier Code . Related: IBAN and S.W.I.F.T.

Big Brother:

Your (un)friendly local government watching over your shoulder. (Recommended reading: George Orwell 's book Nineteen Eighty-Four , published 1948. Famous quote from the book: Big Brother is watching you! ). Also visit Echelon 's web site and CIA's ' The World Factbook 2003 '.

Big-Ticket Item:

Consumer goods that are of such a high price, such as cars or cookers, that customers often buy them on credit.


There are at least two business meanings:
  1. A written claim in respect of a debt.
  2. An advertisement of goods or services for sale, as in bill of fare, or billboard.


Boards to which are attached bills; that is, advertisements. Billboards (also known as hoardings) are usually found close to major transport arteries. In some countries they are strictly controlled by law; in others less so.

Bill of Lading:

The documents giving title to goods in transit. They describe the goods, their condition and their destination. They are particularly important as backing for a letter of credit. A clean bill is a bill of lading that is attached by a shipping company to goods that are delivered in perfect condition. Hence the expression "a clean bill of health". If the goods are not as they should be, then the bill contains a clause to that effect, and it is said to be a dirty bill.


Short for the Bank for International Settlements, a Basle-based financial institution that acts as a central bank for central banks. Through it they can clear funds among themselves. The BIS also acts as a talking-shop for bank regulators from around the world.

Black List:

A list of individuals, companies or countries from which certain privileges are withheld. For example, companies that disobey a government-imposed boycott may find themselves blacklisted and unable to bid for future government contracts.

Black Economy:

The value of all the black market transactions that take place in an economy. By definition these are immeasurable, but many estimates are made nevertheless. In the United States, the black economy is reckoned to be worth less than 5% of GDP. In Italy some estimates put it as high as 25%; and in many low-income developing countries it is undoubtledly much higher.

Black Market:

A market that operates outside the law and government regulation. Black-market transactions are largely untaxed and unrecorded. They may involve the sale of smuggled goods, stolen goods, or illegally copied goods (watches, for instance).

Blank Cheque:

A cheque that is signed by the payer but is left blank as to the payee and/or the amount of money to be paid.

Blind Trust:

A trust in which the trustees are not allowed to provide any information to the beneficiaries about the administration of the assets of the trust.

Blister Packaging:

A form of packaging that allows a potential purchaser to see a wrapped-up product before purchasing it.

Blocked Account:

A bank account which a court or a government has blocked, thus preventing funds from being withdrawn from it.

Blocked Funds:

Term for "reserving" funds by one bank for the benefit of another bank. Blocking of funds is an often used banking procedure to ensure that the same funds are not used twice. Often more beneficial to an investor than a bank guarantee.

Block Trading:

Trading in big blocks of shares, an activity carried out more often by financial institutions than by individuals. It is the wholesale end of the equity market.

Blue Chip:

A quoted company that has a long record of steadily rising profits and uninterrupted dividend payments.

Blue Collar:

Employees who work in a factory are sometimes referred to as blue-collar workers to distinguish them from their managers (who work in offices and are known as white-collar workers). It was once customary for factory workers to wear blue overalls.


Originally the rough outline of a drawing executed on blue paper and used by printers for guidance. More generally, it is a model of a business plan or process.


Bluetooth is a global de facto standard for wireless connectivity. Based on a low-cost, short-range radio link, Bluetooth cuts the cords that used to tie up digital devices. When two Bluetooth equipped devices come within 10 meters range of each other, they can establish a connection together. And because Bluetooth utilizes a radio-based link, it doesn't require a line-of-sight connection in order to communicate. Your laptop could send information to a printer in the next room, or your microwave could send a message to your mobile phone telling you that your meal is ready. In the future, Bluetooth is likely to be standard in tens of millions of mobile phones, PCs, laptops and a whole range of other electronic devices. As a result, the market is going to demand new innovative applications, value-added services, end-to-end solutions and much more. The possibilities opened up really are limitless, and because the radio frequency used is globally available, Bluetooth can offer fast and secure access to wireless connectivity all over the world. With potential like that, it's no wonder that Bluetooth is set to become the fastest adopted technology in history.


A group of people (called directors) who are appointed by the shareholders of a company to look after their interests. A board will usually have a number of executive directors, who are also fulltime managers of the business; a number of non-executive directors, who may represent particular groups of shareholders; and a secretary, who keeps the minutes.

Board Meeting:

A meeting of the board. Board meetings usually occur once a month and they follow a prescribed agenda and formal rules (which are often laid down by law).

Board of Directors:

The company's "cabinet" - as specified in the Articles of Association - is supposed to make decisions on the issues that are too specific for the general meeting to discuss but which are beyond the day-to-day responsibility of the company management. They appoint officers, and they are elected by the shareholders of the corporation. Board members owe the corporation duties of ordinary care, good faith, and loyalty.

Board of Trustees:

A board acting as trustees to a trust. This board is in full control of the trust affairs. The board of trustees will manage the trust affairs based on the rights and responsibilities granted to them by the settlor's trust deed.


An iou issued by a company or a government in return for an interest-bearing long-term loan. These ious can be ought and sold by investorts ina secondary market.


When imported goods are held (duty-free) ind a secure depot, called a bonded warehouse, in their country of destination. The goods are removed from the warehouse as and when they are needed, and only then does any duty on them become due.


A bond certificate is simply an IOU. It certifies that you have loaned money to a government or corporation and describes the terms of the loan. Only corporations can issue stocks, but bonds can be issued by corporations or governments.


A payment to shareholders or employees that is over and above what they can contractually expect. In some companies, employees receive an annual bonus that is dependent on the company's performance.


The business of maintaining a financial record of a company's day-to-day transactions. This record forms the basis of the company's annual accounts.


A company's basic accounting records in which are recorded the financial details of all transactions undertaken by the company.

Book Value:

The value of an asset as it is recorded in a company's books. This value may be different from the asset's market value because, for example, accounting convention may dictate that the asset be valued in the books at its purchase price. The purchase price may be well above or well below the asset's current market value.


The process of starting up a computer, running the small programs that enable the computer to run larger ones.

Bottom Line:

The net profit or loss figure in a company's accounts. More generally, it is the final result of a series of actions or statements. "The bottom line is that the company is bankrupt."


If a cheque is returned to the payee by the payer's bank because of a lack of funds it is said to bounce. The payee is asked to represent the cheque in the hope that funds have appeared in the meantime and it can be cleared. If not, it might be returned to the payee yet again, like a rubber ball.


French for stock exchange, widely used in the non-English-speaking world.


A deliberate decision not to do business with somebody.


Short for business process re-engineering, what happens when business processes are radically re-designed to achieve a dramativ improvement in a caompany's performance.


An unstructured meeting in which the participants attempt to come up with original solutions to corporate problems. The first step is usually an attempt to gather as many ideas as possible. Only later are the ideas evaluated.


The retail outlet of a financial institution. In many countries bank branches occupy the most prestigious (and expensive) sites on the high streets of towns and cities.

Branch Rule:

A controlled foreign corporation carrying on purchasing or selling activities by or through a branch or similar establishment located outside the country of incorporation is subject to regulation known as the "branch rule." The branch or similar establishment is treated as a separate corporation in determining foreign base company income when its use for such activities has "substantially the same effect" means the difference in taxes paid to the country where the branch is located and those that would be payable if the income of the branch were allocated to a permanent establishment where the subsidiary is located.


The set of values that are signified by a company's name or symbol and that differentiate it from its competitors. The marketing potential of brands has received much attention in recent years as companies such as Nike, Virgin and Levi have gained great benefit from developing their brands so that they represent more a lifestyle than a product.

Brand Extension:

Extending a brand's name to new products or services. For example, the Swatch car extends the use of the Swatch watch brand to a Mercedes car.


The killing of a brand by over-extension. When many different products carry one brand name there is a danger that the failure of oneof the products will reflect badly on all of them.One rotten apple in the barrel can cause the lot to rot.

Brand Management:

The process of nurturing and marketing brands so that their value to the busines increases.


The non-performance of something that has been agreed between the parties to a contract. A breach of contract by one party entitles the other to certain remedies prescribed in law.

Break-even Point:

The point in the life of a business where its revenue exceeds its costs. Any new venture's business plan should contain a clear analysis of when its break-even point will be achieved, and how much it will cost to get there.

Break-up Value:

The value of a company when broken up into individual businesses or business units. This may be more or less than the value of the company as a whole. If the value is more and it is a quoted company, it is highly vulnerable to asset stripping.

Bretton Woods:

A conference held in the US town of Bretton Woods towards the end of the second world war. At the conference a design for the post-war international financial system was drawn up. This included the creation the world bank and the IMF.

Bridging Loan:

A short-term loan designed to act as a bridge between an item of expenditure and the revenue to meet that expenditure. Frequently used in housing finance to fund the purchase of a new home untill the borrowers are able to sell their old one.

British Commonwealth of Nations

The 54 member states, with year of admission: Antigua and Barbuda (1981), Australia (1931) (1), Bahamas (1973), Bangladesh (1972), Barbados (1966), Belize (1981), Botswana (1966), Brunei (1984) (2), Britain (1931), Cameroon (1995), Canada (1931) (1), Cyprus (1961), Dominica (1978), Fiji Islands (1997) (3), Gambia (1965), Ghana (1957), Grenada (1974), Guyana (1966), India (1947), Jamaica (1962), Kenya (1963), Kiribati (1979), Lesotho (1966, Malawi (1964), Malaysia (1957), Maldives (1982), Malta (1964), Mauritius (1968), Mozambique (1995), Namibia (1990), Nauru (1968) (4), New Zealand (1931) (1), Nigeria (1960) (5), Pakistan (1989) (6), Papua New Guinea (1975), St Kitts and Nevis (1983), St Lucia (1979), St Vincent and Grenadines (1979), Samoa (1970), Seychelles (1976), Sierra Leone (1961), Singapore (1965), Solomon Islands (1978), South Africa (1994) (7), Sri Lanka (1948), Swaziland (1968), Tanzania (1961), Tonga (1970) (2), Trinidad and Tobago (1962), Tuvalu (1978), Uganda (1982), Vanuatu (1980), Zambia (1964) and Zimbabwe (1980).

(1): Independence given legal effect by the Statute of Westminster 1931. (2): Brunei and Tonga had been sovereign states in treaty relationship with Britain. (3): Fiji left 1987; but rejoined in 1997. It changed its name to 'Fiji Islands' in 1998. (4): Nauru was first a Mandate, then a Trust territory. (5): Membership suspended 1995. (6): Left 1992, rejoined 1989. (7): Left 1961, rejoined 1994.


An agent who buys and sells assets (usually financial assets) on behalf of others, and who is rewarded by a commission related to the value of the transactions undertaken. A broker can be an individual or a firm.

Brownfield Site:

A site made available for industrial development which has already been used for commercial purposes. Contrast with Greenfield site.

Brown Goods:

Electrical consumer goods that used to be encased in brown veneer, such as radios and televisions.


A program used to locate and view HTML documents (Microsoft Explorer, Netscape, Linux, for example).


An artificially inflated financial market. The most famous bubble in history was the South Sea Bubbl of 1720 in which the shares of the UK's South Sea Company increased tenfold before collapsing to next to nothing.

Bucket Shop:

A firm of brokers that deals in securities (or airline tickets) of dubious provenance.


An estimate of future revenue and costs over a specific period. Budgets are usually prepared on an annual or a monthly basis. They are drawn up for the finances of large countries and of tiny business units alike.

Buffer Stock:

A stock of materials held in reserve. Large commodity markets retain buffer stocks to smooth out the flow of supply and demand. Businesses aim to keep their buffer stocks as low as possible so that they minimise the cost of retaining materials unneccessarily.


An investor who expects the price of a security (or of a securities market) to rise. Bulls buy securities now in the expectation of being able to sell them in the future for profit. Bulls who are changing their minds are known as stale bulls. Contrast with bear.

Bullet Loan:

A loan on which the borrower pays only interest during the life of the loan. The capital is repaid all at once (in a single bullet) at the end of the term of the loan.


Silver or gold that has not been turned into coins. Gold bullion is usually kept in the form of ingots of a standard shape and weight.


The practice of accelerating payments (and bringing them closer together) to take advantage of tax rules.


The practice of offering other products or services that are related to the product that is being sold at a special price. Software packages, for example, are often bundled with the purchase of hardware.


The collection of officials (either within government or within corporate management) who see that the rules of an organization (or of a country) are obeyed. Such officials are the cause of much frustation and the butt of many jokes.


There are three overlapping meanings:
  1. An organization run for profit, be it a company, partnership or sole trader;
  2. The collection of all such organizations;
  3. The main activity of all of the above.

Business Class:

A class of service on airlines that is usually situated between first class and coach and offers amenities as larger seats, free cocktails, and early check-in.

Business Cycle:

The economies of most countries move in a cycle of recession followed by recovery, followed by another recession. This cycle is known as the business cycle, and it can vary greatly in duration.

Business Ethics:

The moral code by which businessmen and women conduct their professional relationships with shareholders, employees, suppliers, customers, and so on. Typical issues in business ethics today are:
  1. Is it acceptable to pay bribes in countries where this is standard practice?
  2. To what extent should businesses be held responsible for clearing up industrial sites that they abandon?

Business Plan:

An outline proposal of a new business venture which contains details of costs and revenues and an outline of proposed activity over the next 3-5 years. The plan is designed to persuade potential investors, or those in an organization with the power of decision over it, that the venture is going to make a handsome return.

Business Reply Card:

A prepaid postcard designed to elicit a response from a consumer. Consumers are often asked to reply to questions on the card relating to a product that they have just purchased.

Business School:

An educational institution that teaches courses on business and often provides customised management development programmes for companies. Most business education used to be done at postgraduate level or on the job. But a growing number of universities now offer undergraduate business courses.

Business-to-business Advertising:

Advertising which a business aims at other businesses. A supplier of metal hardness testers, for example, does not want to advertise directly to all consumers but only to companies that need to test metal, such as aircraft manufacturers. Business-to-business advertising generally uses written copy (which can sometimes be hightly technical) rather than eye-catching images.


A clause in a purchasing contract whereby a vendor agrees to buy back goods in certain circumstances. For example, a builder might agree to buy back a property at a prearranged price should the purchaser be relocated by his emplyer withing a prescribed period of time.


A person or organization that has decided to make a purchase.

Buyer's Market:

A market in which the buyer has the upper hand, where there is more supply than demand. In such a market competition should bring prices down. This in turn should eliminate some suppliers (who are no longer able to make a profit) thus restoring the balance between buyers and sellers.

Bylaws - Bye-Laws (see also Articles of Association):

The bylaws are the rules and procedures which govern the corporation. Such things as director and shareholder meetings and procedures are described in the bylaws. In the event of a conflict between the articles of incorporation and the bylaws, the articles control. Bylaws can't be inconsistent with the business corporation act as well.


Something sellable that is produced as an accidental side-effect of manufacturing something else. Sawdust, for example, is a by-product of carpentry, and gas is often a by-product of the oil industry.


A unit for measuring the capacity of a computer. A byte is equal to eight bits (BI…nary digi…TS).