Rights given by law which allow national shippers to carry all cargo (and passengers) transported within the country's territory (by land and sea).


Short for computer-aided design and computer aided manufacturing. These are software programs that assist in design and manufacturing, two business processes that have been dramatically changed by the introduction of computers.


A request made to company's investors for payment of what they still owe on shares that the company originally issued as partly paid.

Call Centre:

A place where a number of telephone operators are gathered together to take orders on behalf of a company or to answer customers' queries. Most call centres are part of a large corporation and are used exclusively by its customers and staff. But some work as independent organizations and have a number of different clients.

Call Option:

A contractual right to buy an asset (often shares) at a stated price (the strike price) within a specified period of time. If not exercised, a call option expires at the end of the period.


Usually used with reference to advertising. An advertising campaign is a concerted plan to use a number of media over given period of time to get a message – such as "this product or company is outstanding" or "don't drink and drive" – from the advertiser across to the general public. A public relations campaign is a planned effort to improve the image of something (a company, a product or a politician) in the public's eye.


Short for Common Agricultural Policy, the european union's scheme for protecting the incomes of farmers within EU.


An upper limit placed on the interest or capital repayments on a loan. Capping can only apply to interest payments whose rates are adjusted according to market conditions. Fixed interest payments are automatically capped.


The maximum that can be produced by a given unit of labour or capital in a given period of time.


The money that is invested in a business and that is raised by issuing shares or long-term bonds. People who invest money in businesses are known as capitalists, and an economic system that allows them to do this is called capitalism.

Capital Allowance:

A part (usually a percentage) of the cost of capital equipment that a company is allowed to set aginst its annual income for the purposes of calculating its tax bill. The rules on capital allowances are to be found in a country's tax legislation.

Capital Flows:

The movement of capital between countries. Inflows come in, outflows go out.

Capital Gain:

The profit from the sale of a capital asset (property, art, securities, and so on). In many countries capital gains are subject to special tax rules.

Capital Goods:

Goods that are used in the production of other goods: all industrial machinery and office buildings, as well as road diggers and computers.

Capital Intensive:

A business, or business process, that needs a large input of capital to operate. Capital-intensive businesses include those like steelmaking and vehicle manufacturing which need expensive chunks of plant and equipment in order to function.


The attribution of a capital value to a stream of income; the amount of money that someone is prepared to pay now in order to receive a stream due in the future.

A company' market capitalisation is the value that is put on it by a stockmarket, that is the market's value of one share multiplied by the number of shares that have been issued.

Capitalization Issue:

The process whereby money from a company's reserves is converted into capital and then distributed to shareholders as new shares, in proportion to their original holdings, also known as bonus or scrip issue.


To turn into capital. Companies sometimes capitalise expenditure and treat it as a balance sheet asset to be depreciated over a number of years rather than charge it all aginst the current year's income statement. For example, many companies capitalise expenditure on R&D.

Capital Market:

A market in which are traded the financial instruments (such as shares and bonds) which represent the capital of companies.


A service organisation (usually an insurance business) which is owned by a conglomerate and meets all the conglomerate's needs in its own specialist area. Some captive insurance companies also provide services for customers outside their own conglomerate.

Captive Bank:

An international bank owned by a company in a high tax country but located in a tax haven country where restrictions are absent. A captive bank allows its parent company to pool funds in a tax haven and make loans to affiliates and finance the import or export transactions of related companies, or in some cases, factor receivables.

Captive Insurance Company:

An insurance company especially established for its own use by a large corporation subject to widespread risk. Usually the parent company pays normal premium rates to the house insurer and sometimes obtains tax relief on its premiums. The parent builds a reserve which can be invested on a tax-free basis. A captive can provide coverage against risks not covered by common insurance companies. Because income from the insurance and reinsurance of United States, a captive insurance company is usually assigned to insure only foreign risks.

Captive Market:

A market over which a supplier has special control. For instance, the only newspaper shop in a community of elderly retired people could be said to have a captive market.


A way of making a living, used by some to refer only to certain ways of doing so; for example, lawyers have careers; electricians have jobs.

Career Path:

The planned direction of a person's career. Choosing a career path determines what trainingandfuture jobs a person should undertake to maintain that direction.

CARICOM (Caribbean Common Market):

Consists of 14 sister-member countries of the Caribbean community. Members include: Anigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kits and Nevis, St. Lucia, St. Vincent, Surinam, Trinidad and Tobago. Conspicuous by their absence are the Cayman Islands and the British Virgin Islands, two major players in international banking and finance.


A document authorising its holder to bring samples through customs and excise without incurring any duty (within prescribed limits).

Carry Forward/Carry Back:

The shifting of payments from one accounting period to another, usually to gain a financial advantage. Carrying a payment forward takes it into a future period; carrying it back takes it into a previous period.


A group of suppliers who get toghether to control the supply or the price of their product. Some cartels, such as OPEC, operate overtly. Others are less easy to pin down. For example, if the prices for electrical goods are the same in most shops, is this because the makers have colluded in making retailers charge these prices? Or is it because the market forces retailers not to charge more than their competitors?

Cascade Tax:

A turnover tax that is applied on every stage of production cycle, frequently described as "economically"disadvantageous inducing unjustified vertical integration."

Case Study:

A formal written description of a business problem. Case studies are much used by business schools as a method of teaching management. Most case studies are of real issues that have been faced by real companies; a few are fiction.


Notes, coins are other assets that can be turned rapidly into notes and coins; for example, shortterm bank balances or highly liquid securities.

Cash and Carry:

A half-way house between wholesaling and retailing. An outlet that sells products to the general public at low prices but with a minimum of service. Cash-and-carry outlets frequently demand that customers buy in bulk.

Cash Book:

A company's record of its cash transactions, both receipts and payments.

Cash Cow:

A business within a group of businesses that generates a lot of cash which can be used (like the milk of a cow) to nourish other businesses.

Cash Discount:

A discount in the price of a product granted by a vendor in return for payment in cash. Credit card companies often stipulate that outlets which accept their cards may not offer cash discounts to customers.

Cash Flow:

The amount of cash flowing through an organisation in a given period. A company's cash flow is equal to its trading profit plus any depreciation, plus any new money raised through a share issue or a loan during the period.

Cash on Delivery:

Commonly known by the initials C.O.D. Goods that are shipped on C.O.D. terms to a customer must be paid for at the time they are delivered. In the United States the term used is collect on delivery.

Cash Register:

A machine which registers the cash received by vendors from their sales. Often known as the till.

Casting Vote:

When there is an equal number of votes in favour of and aginst a proposal, the voting procedures may lay down that somebody has a casting vote to end the deadlock. The chairman of a company's board of directors, for example, frequently has a casting vote. In effect a person with a casting vote votes twice on issues where the votes are equally divided.

Casual Labour:

Workers who do not have full-time employment and who move from one job to another. In many cases casual labour also moves from one place to another to find paid work. It is often used in agriculture.


Something which, when added to something else, creates a reaction which neither of the two things could have created on their own. In business, management consultants are often said to be catalysts, enabling firms by their mere presence to take action that they would not otherwise have done.

Caveat Emptor:

A Latin expression meaning buyer beware. The best legal advice for consumers in the days before legislation provided them with protection aginst the sale of shoddy or defective merchandise.


Committee on Disarmament.


Conseil de l'Europe.


National ID in Spanish speaking countries.

Central Bank:

An institution that acts as banker to a country's banking system and to its government. Central banks are also in charge of issuing notes and coins, and they act as a lender of last resort should there be a crisis within the financial system.


The process of concentrating control of a business's operations at its centre, usually its headquarters.


Short for chief executive officer, the person in charge of the day-to-day running of an organisation. He (or, more rarely, she) is answerable to the board of directors for the organisation's day-to-day performance.


Conseil Européen pour la Recherche Nucléaire.


= Computer Emergency Respons Team: Our information ranges from protecting your system against potential problems to reacting to current problems to predicting future problems. Our work involves handling computer security incidents and vulnerabilities, publishing security alerts, researching long-term changes in networked systems, and developing information and training to help you improve security at your site.

Certificate of Authority (U.S.):

The certificate of authority is a document issued by the secretary of state to a foreign corporation after approving its completed application to do business in the state.

Certificate of Deposit:

A document issued by a financial institution as proof of the ownership of a large deposit of money held with that institution. Certificates of deposit (know as CDs) are negotiable instruments and can be bought and sold in a secondary market.

Certificate of Incorporation:

The basic existence of a corporation usually derives from two documents: the Articles of Association and the Certificate of Incorporation.

Certificate of Inspection:

A document certifying that transported goods were in good condition when they began their journey.

Certificate of Origin:

A document signed by an exporter or by an official body (such as a chamber of commerce) establishing in which country the goods to which the document is attached originated.


Short for chief financial officer, the person in charge of a company's accounts and of its finances (raising loans or issuing new securities). The CFO is normally a director of the company and has a seat on the board.


A type of conglomerate peculiar to South Korea. A chaebol is similar to a Japanese keiretsu, but it is usually family-owned and has less close ties to its suppliers and distributors.


The function of leading a meeting, and also the office of the person who carries out that function. For example: "Today Mr. Jones will take the chair."


The person who takes the chair at a meeting. A company's chairman is the person who takes the chair at the company's board meetings.

Chamber of Commerce:

A local grouping of businessmen who set out to promote trade in their area by acting as a contact point and by providing information.

Change Management:

The business of managing changes that are out of the ordinary – a takeover or the re-engineering of a company, for example.

Chapter 11:

A legal status for corporations in the United States that are half-way to bankruptcy. Companies can seek legal protection from their creditors under Chapter 11 of the 1978 Bankruptcy Act. This gives them some time to work out an acceptable solution to their financial difficulties.


There are at least two meanings:
  1. The cost of certain goods and services. Bank charges, for example, are the price paid for receiving banking services.
  2. A legal document giving rights to property if certain prescribed conditions are met. Banks often take charges on a business's assets when they lend it money. The loan is then secured and the bank gets its money back – from the sale of the assets – in the event of the business failing.

Charge Card:

A plastic card issued to consumers which enables them to make cashless purchases at outlets which accept the card. Some charge cards have a credit facilitiy attached which enables cardholders to pay for their purchases over an extended period of time. Charge cards without a credit facility demand that payment be made in full at the end of the month in which the purchases were made.


Memorandum of Association. A document issued by a recognised authority setting up a corporation and establishing its right to carry on in business. In the UK, for instance, companies established by Royal Charter were set up on the authority of the king or queen of the time.

Charter is also used to refer to the hiring of a vehicle designed to carry a large number of passengers, such as an aircraft or a bus. It originally referred to space rented on a cargo ship.


A method of transferring funds from one party to another via the banking system. Technically, a check is a bill of exchange drawn on a bank and payable on demand.

Cherry Picking:

The practice of targeting (and obtaining) the best (that is, the most profitable) consumers in a market. Old-established firms in a market resent it greatly when new entrants start cherry picking among their customers.

Chinese Wall:

A barrier placed between two arms of a business so that they work independently of each other to avoid conflicts of interest. Chinese walls are often necessary in financial institutions – for example between the corporate finance and fund management sides of an investment bank, to ensure there is no risk of the fund managers benefiting from inside information or of helping their corporate finance colleagues out when a new issue of shares is going badly.


Comité International de la Croix-Rouge.


The practice by a broker of trading inappropriately on behalf of a client, purely to generate extra commission.


Custom ID card.


Short for cost, insurance and freight. When added to shipping documents, the letters CIF indicate that the agreed price includes the cost of the goods, their insurance in transit and the freight.


There are two business-related meanings:
  1. A demand; in particular, one made to an insurer for compensation for a loss suffered in accordance with the terms of an insurance contract.
  2. A right to exploit a piece of land, particularly for its minerals.


A group of people with something in common that enables them to take legal action as a group, in a class action. Shareholders, for instance, from whom vital information about their company is withheld, could sue as a class.

It is also a group of scurities with similar properties, as in Class A shares.

Classified Advertisement:

A small advertisements, usually in black and white, which is typically no more than one column wide and paid for on a per-line, per-centimeter or per-word basis. Such advertisements are often called small ads. They usually grouped together at the back of a newspaper or magazine.

Claw Back:

A clause in a contract that specifies circumstances in which the seller of goods may be entitled to share in unforeseen profits that are made by the buyer from those goods. Commonly used where state assets are sold off to developers.


The process of adding and subtracting a series of amounts owing between organisations so that they can settle their debts with a single payment. Clearing banks clear checks among themselves at the end of each working day.

Goods are said to have cleared customs when they have passed through customs procedures. They are then free to be traded inside the country into which they have been imported.

Clearance Sale:

A special sale designed to get rid of all of a retailer's stock, or a least all of a particular product line.

Clearing System:

A mechanism for calculation of mutual positions within a group of participants with a view to facilitating the settlement of their mutual obligations on a net basis.


Professional services firms, such as lawyers and accountants, have clients; everybody else has customers.

Close Company:

A company generally in the United Kingdom but also found in other sterling area or Commonwealth countries which are controlled by no more than five persons or by its directors and treated differently from normal companies for tax purposes in that all or part of its undistributed after-tax profits may be apportioned, with certain exemptions, among its participating members or shareholders according to the proportion or percentage of interest in the company whereby the income is taxed on personal income even though it is not actually distributed.

Close Corporation (U.S.):

A close coporation has less than 50 shareholders and elects in its artislec of incorporation to be treated as a close corporation. The state in which the close corporation is formed must have a close corporation statute. Close corporations can eliminate or limit the powers of the board of directors, and corporate formality requirements are relaxed.

Closed Shop:

A company where all the workers belong to one trade union, and where any job applicant has to be a member of that union before he or she can be employed. In many countries closed shops are illegal.

Closely held Corporation:

A closely held corporation is any corporation in which the stock is held by a relatively small group of people or entities. Stock of a closely held corporation is not publicly traded on any stock exchange.

Closing Price:

The last price at which astock was traded during a period (usually a day) on a recognised stock exchange.

Code of Practice:

A list of standards drawn up by an industry or professional association that the members of that association agree to be bound by. They do so in rogue pracitioners. Those who break the code stand to be disciplined or, in extreme cases, expelled from the association.

Cold Calling:

The making of unannounced calls on customers (actual or potential). In the past these involved salesman knocking on doors. Nowadays most cold calling is done by telephone, much of it when the recipient has just sat down for a meal.


The simultaneous purchase of a cap and the sale of a floor with the aim of maintaining interest rates within a defined range. The premium income from the sale of the floor reduces or offsets the cost of buying the cap.


A contractual obligation that exists alongside ("collateral to") another obligation. Collateral may take the form of a charge on preperty as security for a loan, or it may be a guarantee. For example, parents often provide collateral for bank loans to their student offspring.

Collective Bargaining:

The process of negotiating pay increases and working conditions between an employer or groups of employers and representatives acting on behalf of a group of employees. Most public-sector pay awards are settled by collective bargaining.

Comfort Letter:

A letter written by an independent auditor stating that there has been no material change in a company's accounts between the preparation of a prospectus for anew share issue and the time that the prospectus is distributed to potential investors. Comfort letters are a requirement of US securities legislation.


There are two definitions:
  1. Of or to do with commerce; that is, trade between different people or organisations.
  2. An advertising message that is broadcast on television, on the radio or in the cinema.

Commercial Paper:

A short-term debt instrument (usually of 30-90 days maturity) issued by a large corporation. Commercial paper does not pay interest. It is sold at a discount to its face value and its reward comes from the capital gain on maturity.


Commingling is the sharing and pooling of personal and corporate assets. For example, rather than maintain separate corporate and personal bank accounts, you choose to use one account for personal and corporate purposes. This is considered commingling and an easy way to become personally liable for corporate acts.


A performance-related payment. Sales staff may be paid partly on a commission basis under which they receive a percentage of the amount of sales they make. Agents usually make their money entirely from commission.

Commitment Fee:

A payment made to a lender in return for the lender's commitment to make a loan available, up to a certain amount and for a prescribed period of time.

Commitment Holder:

A wealthy private party buying guarantees from the issuing banks, reselling them to other banks/brokers. Commitment holders are not allowed to trade or do business on their own behalf. Other designation: provider.


A group of people who meet on regular occasions to discuss a specified topic. A company's board often creates a number of subcommittees to which it delegates responsibility for different functions; for example, directors' remuneration, the appointment of auditors, and so on.


A product which is sold in bulk and is virtually indistinguishable between one producer and another. Some raw material commodities (such as metals and grains) are sold on the floor of an exchange – like securities.

Common Trust Fund:

A trust that operates by the process of pooling funds from a number of participants in the trust, who as beneficiaries under the trust, share in the income or other gains derived from the acquisition, holding, management or disposal of assets acquired for the trust.

Companies Act- or Ordinance:

Legislation enacted by a tax haven to facilitate and regulate for the incorporation, registration an operation of international business companies (IBC's). More commonly found in The Caribbean tax havens i.e. the Bahamas or the BVI.


A legal entity formed by a group of individuals for the purpose of doing business. A companny has a legal existence that is separate from the individuals who found it.

Company Secretary:

Called the corporate secretary in the United States, this is the person charged with seeing that a company fulfils its legal obligations: that it registers in the proper way; holds formal board meetings as and when it should; and keeps its shareholders properly informed.

Comparative Advantage:

An economic theory first put forward by David Ricardo in the early 19th century. The theory says that all countries will be better off if each of them concentrates on doing the things it does best, even if what it does second best is better than what another country does best.


There are two business-related meanings:
  1. The total package of rewards received by an employee, including salary, pension and non-monetary perks such as holiday entitlement.
  2. The award by a court or tribunal for damages caused to plaintiff.


The collection of skills, knowledge and personal qualities required to carry out a job. For example, call centre operators need to have adequate computer skills and be good with people.


The battle between individual firms to provide the best value for money to their customers. Competition encourages the most efficient firms to flourish. To maximise economic efficiency, national regulators attempt to create conditions in which competition is as fair as possible. Hence the anti-trust type of laws that exist in many countries across the world.

Competitive Advantage:

Something which gives one firm an edge in competing with others. Such an advantage could be the quality of its intellectual property or its ability to source high-quality, low-price raw materials or labour.


Any business that is chasing the same customers in the same market as you.


An integral part of another product that is required for its manufacture, such as a microchip in a computer or a headlamp in an automobile.

Compound Interest:

The interest that is earned during a period when calculated as a percentage of the capital sum plus any interest that has been earned in previous periods. Compound interest assumes that previous interest payments are added to the capital sum and thus increase it.

Compound Yield:

The total return on investment, consisting of the distribution (dividend, interest) and the capital gain or loss, in % of the investment amount.


A trade-off of points of equal value in an attempt to reach agreement with another party. The essence of any process of negotiation is a willingness to compromise.

Compulsory Retirement:

The enforced retirement of an employee because of company rules or national legislation; for example, that directors or judges retire at 70.


The extent to which a market is supplied by a small number of organisations. For example, the market for jet aircraft is highly concentrated while the market for chocolate bars is not.

Concert Party:

A small number of investors who act together in an attempt to control a company in which they hold shares. This is usually achieved by the investors between them obtaining over 50% of the voting rights in the company.


A special right given to someone in return (usually) for a monetary consideration. For example, the right to mine a certain piece of land or to sell goods on a particular area of floorspace within a department store.


The process of attempting to bring together negotiationg parties who have ceased to talk to each other, such as management and a trade union.

Conditional SWIFT:

A funds transfer method which uses Society for Worldwide Interbank Financial Telecommunications protocols to transfer funds conditionally between banks, subject to the performance of a specified party.


There are two business-related meanings:,
  1. A formal gathering of people for the purpose of discussing a particular business issue.
  2. An agreement between a group of international shippers about the routes that they will sail and the rates that they will charge; an oligopoly.

onference Call:

A telephone call involving more than two people in more than two places. Conference calls enable managers in different offices of the same corporations to have extended discussions without having to travel long distances. Conference calls need to be carefully scheduled in much the same way as face-to-face meetings.

A clash between the best interests of a person or firm in one guise and their best interests in another; for example, as suppliers of services to two different clients who are competitors.


A large group of businesses that are held toegher in a single corporate structure by cross-share-holdings. The businesses within a conglomerate cover a wide range of unrelated industries.


In general, any agreement. Also generally known as the OECD Censensus or Arrangement, this is an unsigned agreement of February, 1976 between Canada, France, West Germany, Italy, Japan, the United Kingdom and the United States establishing guidelines for minimum cash down payment and interest rates, maximum repayment terms and procedures for notification when these guidelines are exceeded. The Consensus Arrangement was superseded by the Arrangement on Guidelines for Officially Supported Export Credits in April, 1978, which was subsequently accepted by 22 members of the OECD Export Credit Group.

Consent Resolution:

A consent resolution is any resolution signed by all of the directors or shareholders, which authorizes a particular action. This act eliminates the need for face-to-face meetings of directors and shareholders.


The money value of a transaction (number of shares multiplied by the price), before adding commission, stamp duty, etc.


The supply of goods to a vendor on the understanding that the vendor will pay for whatever goods he or she is able to sell, and will return the rest to the supplier.


The individual or company named in shipping documents as being the original shipper of the goods.


To bring together into a single set of accounts the separate sets of all the companies within a single group. In effect, this nets out from the accounts those transactions that have been made between companies within the group.

Also, a number of shipments of freight can be consolidated into one in order to save costs – the larger the shipment, the lower (in theory) is the cost of freight. Moreover, small shipments are often subject to minimum charges.


A group of companies that come together in some shape for a specific purpose. Most commonly, the members of a consortium take shares in a new entity that is formed expressly for the purpose.

Constructive Dismissal:

When there are sufficient ground for an employee to leave his or her employment, even though he or she has not actually been formally dismissed from that employment. Someone who has been constructively dismissed may be entitled to compensation for unfair dismissal.


An individual (or a firm) that provides professional advice to an organisation for a fee.


Any individual that manufacturers target as a market for their output.

Consumer Credit:

Loans given to consumers to enable them to buy the output of producers.

Consumer Durable:

A large product sold to the general public and designed to last for a length of time, such as a washing machine.

Consumer Goods:

Products which consumers buy regularly to satisfy basic household demands. Contrast with luxury goods.

Consumer Price Index:

An index that measures increases in the prices of goods and services that are sold to the general public.


A standardised unit in which goods are transported by road, rail or sea.


A financial or commercial possibility. Thus contingency planning is the forming of a plan to seize a commercial opportunity or deal with setbacks in the future.

A contingency fee is a fee that is paid to a lawyer only if the outcome of the case is favourable; it is usually a percentage of the damages or compensation awarded in the case.

Contingent Liability:

Something that might become a liability if something else happens. If a company is involved in a lawsuit for damages, for instance, there is a liability contingent on the company losing the case.

Continuous Improvement:

A translation of the Japanese word kaizen, the management idea that by making small improvements to all processes all the time, a company can quite quickly make a dramatic change in its competitiveness.


A legally binding agreement between two or more people in which each promises to do (or not to do) something. Nobody can be bound by a contract to do something which is itself illegal. Contracts in business are usually made in writing, although verbal contracts can be just as binding. The terms of a contract can be express or implied. Express terms have been explicitly stated. Implied terms are those that it is reasonable to imply that the parties agreed to even though they did not "express" them.

Contract Exit for Non-performance:

A condition in a financial agreement that enables the investor to take back his funds if the result represented is not achieved.

Contract Note:

The day that a transaction takes place, the broker sends the client a document detailing the transaction, including full title of the stock, price, consideration and stamp duty (if applicable).


The amount by which a business's revenue exceeds its variable costs. This amount is a contribution to the business's fixed costs. Only if the contribution exceeds the fixed costs will the business make a profit. The contribution after variable costs is sometimes referred to as the gross contribution, with the term net contribution being used to refer to the contribution after both variable and fixed costs; that is, the profit.


An investor is said to control a company when the investor owns 51% or more of the company's share capital.

In marketing, a control is a standard response to a marketing effort against which other efforts can be measured.

Control System:

A method of ensuring that production or management processes are carried out correctly. Control systems may be embedded into computer programs, or they may be mechanical systems that are built into production lines to ensure that the right parts arrive at the right time.

Controlled Foreign Corporation (CFC):

An offshore company, which, because of ownership or voting control of U.S. persons, is treated by the IRS as a U.S. tax reporting entity. The company is incorporated outside the United States but under control of a United States resident and therefore subject to the anti-tax haven measures contained in Subpart F. IRC 951 and 957 collectively define the CFC as one in which a U.S. person owns 10 percent or more of a foreign corporation or in which 50 percent or more of the total voting stock is owned by U.S. shareholders collectively or 10 percent or more of the voting control is owned by U.S. persons.

Convenience Store:

A retail outlet whose unique appeal is its convenience for customers. To be successful it needs to:
  1. be open for long hours;
  2. be located near to its regular customers, and
  3. sell proucts that those customers particularly need.


A security that can be changed from one form to another when certain circumstances occur. For instance, a bond that can be converted into equity after a certain date, or an ordinary share that can be converted into a preference share.


A transfer of the title to property from one person to another.


Short for chief operating officer, the person who has hands-on responsibility for the day-to-day operation of a business.


Persistent Client-State HTTP Cookies are files containing information about visitors to a web site (e.g., user name and preferences). This information is provided by the user during the first visit to a web server. The server records this information in a text file and stores this file on the visitor's hard drive. When the visitor accesses the same web site again, the server looks for the cookie and configures itself based on the information provided.

Cooling-off Period:

A period of time that is required to pass between the signing and the full coming into force of a contract. In particular, it applies to the time between the filing of a prospectus for a new issue of securities in the United States and the offering of those securities to the public. Cooling-off periods are designed to protect consumers from over-zealous sales techniques.


A type of business organisation that is owned collectively by its members. Members run the business for their own mutual benefit rather than for profit. Co-operatives have been particularly popular in the agricultural industry and among savings banks.


An intellectual property right, copyright is the ownership of words or other things that can be written down or portrayed graphically.

Core Competence:

The set of skills and knowledge that sit at the heart of an organisation.


To control so much of the market for a product that you control the price. For example: "Toghether, the two companies were able to corner the silver market."

Corporate Bond:

A debt instrument issued by a private corporation.

Corporate Charter:

See Articles of Incorporation.

Corporate Finance:

The process of raising capital (equity or long-term debt) on behalf of corporations and governments. Corporate finance has traditionally been a speciality of merchant banks in London and of investment banks in New York.

Corporate Identity:

The collection of characteristics that uniquely identify an organisation; for example, the arches in the "M" of McDonald's, the colour of the pumps at a Shell filling station, or the environmentally friendly ethos of the Body Shop.

Corporation Tax:

The tax that is charged on a company's profit. Rates of corporation tax vary around the world and multinational companies organize themselves to minimise the amount that they have to pay.

Corporate Officers:

Another "cabinet like" institution, sometime part of the Board of Directors: president, secretary and treasurer etc. These individuals have the right to represent the company to third parties, to negotiate and make commitments in its name.

Corporation (Corp.):

The basic existence of a corporation usually derives from two documents: the Articles of Association and the Certificate of Incorporation.

Corporation Tax Company:

A company incorporated in Jersey but not trading in Jersey and thereby designated as non-resident for tax purposes; liable only to low fixed annual rate of tax.


A sudden reversal in the movement of a market. For example, a stockmarket that has been rising strongly all day might have a correction at the end of the day as investors have second thoughts about the market's optimism.


The amount of money paid to purchase something (See also average, current, direct, fixed, historic, indirect, marginal, opportunity, replacement, transfer,unit and variable cost.)

Cost Accounting:

A detailed breakdown of the cost of producing goods or services to help calculate a price at which to sell them.

Cost-benefit Analysis:

A type of analysis that tries to measure the benefit to be gained from an extra cost. For example, what would be the cost of providing a same-day mail service within a major city centre, and how much would customers pay for it?

Cost Centre:

A business unit which costs can be specifically allocated. A cost centre can be as small as a single machine or as large as a major subsidiary.

Cost Effective:

Something that produces enough benefit to justify its cost is said to be cost effective.

Cost of Capital:

The average cost to a company of servicing its capital: its equity (through dividend payments) and its loans (through interest payments).

Cost of Living:

The average cost to a company of servicing its capital: its equity (through dividend payments) and its loans (through interest payments).

Cost Overrun:

The amount by which a project exceeds its budget.


A method of calculating the price at which something is to be sold based on the cost of manufacturing it. Cost-plus starts with this cost and then adds a percentage for profit and for any other hidden costs.


Something that occurs contrary to the normal business cycle. For example, when an economy is depressed the business of bankruptcy lawyers booms. Their business is said to be countercyclical.


To imitate the goods or services produced by another manufacturer so closely that they are mistaken for the goods of the other manufacturer. Luxury goods (like Rolex watches and Louis Vuitton bags) are particualrly susceptible to counterfeit. Some say it is mankind's second-oldest profession – and no more likely to be stamped out than the oldest.

Counter offer:

An offer made in response to another offer. A counter offer has to be more generous than the original offer for it to stand a chance of being accepted.


Similar to barter, countertrade is a form of exchange in which an exporter in one country accepts raw materials, equipment and technology from an importer in another country as payment for finished products. This type of trading is practiced especially by Communist countries but is gaining in use by China and in developing countries of South America and Africa. Countertrade also is a way to avoid reliance on tax haven operations for trading companies established in no-tax or low-tax countries so as to reduce burdensome taxes on profits. Countertrade arrangements may consist of counter purchase, reverse countertrade, buyback arrangements, switch transactions or swap deals.

Countervailing Duty:

A duty that is imposed by a country on imported goods to counting a subsidy that has been granted to the goods by the exporting country.

Country of Origin:

The country from which goods originate. Where quotas are in operation it is important that goods are marked clearly with their country of origin to keep imports within their quota.


A detachable part of a bearer bond. The coupon gives its holder the right to the interest payments that are due on the bond.


Tax charged on distributions of certain Liechtenstein legal entities (AG and Anstalt with share capital).


A contractual promise to do (or not to do) some sort of business or financial activity. Someone working for a firm in a sensitive industry, such as defence, might covenant not to work for any of the firm's rivals for a certain period of time after their employment has ended.


There are two business-related meanings:
  1. Protection against financial loss, as provided by insurance or by buying assets that reduce the risk of future loss.
  2. The number of times that a company.


Short for cost per mille (that is, cost per thousand), a basis for comparing the costs of advertising in different media. The CPM is the cost of reaching an audience of 1,000. It does not take into account how many of the 1,000 are awake when the message is conveyed.

Creative Accounting:

Since many of the things that accountants measure are subject to interpretation, it is possible to put a more (or less) favourable tint on a company's accounts by being creative with that interpretation.

Creator, Settolo or Grantor:

A person who creates/settles a trust.


A sum of money made available for a person's (or a company's) use. "His credit is good" means that a person has access to funds which enable him to pay his bills as and when they fall due. "She bought it on credit" means that the purchaser will have a sum of money available in future that will enable her to pay for the goods.

Credit Card Validation Codes (CVC/CVV):

Credit card companies are now using an extra three or four digit code on the back of your credit card to authorize credit card charges: American Express (AMEX) has placed a four-digit number on the front of the credit card above the credit card number. VISA's Card Verification Value (CVV) is a three-digit number on the back of your card. The full credit card number is reprinted in the signature box and at the end of the number is the CVV. MasterCard Validation Code (CVC) is a three-digit number on the back of your card. The full credit card number is reprinted in the signature box and at the end of the number is the CVC.

Credit, Credit Card:

A rectangular plastic card issued to a consumer by a financial institution. Credit cards empower their holders to buy goods or services on credit from organizations, which accept such cards as a method of payment. With an old-fashioned credit card, you charge to your heart's content and receive a bill at the end of the month. The credit card company hopes that you will eventually pay off the balance. In other words, the card company trusts you pay.

Credit Control:

The process of controlling the total amount of credit granted by either a firm or an economy. Governments or central banks can control credit by raising the interest rate; firms can control credit by calling in overdue debts.

Credit Equivalent:

Value amount representing the credit risk exposure in off-balance sheet transactions. In the case of derivatives, credit equivalent value represents the potential cost at current market prices of replacing the contract's cash flows in the case of default by the counter-party.

Credit Line:

An amount of credit that a bank agrees, in principle, to a customer's account. The customer is then able to draw funds from the account at any time, and up to that limit. In some cases the bank lays down the purposes for which the money may be used.

Credit Note:

Formal notice that a customer's account with a supplier has been credited with a specific amount. The credit may have arisen because the customer has returned faulty goods, or was supplied less than the amount invoiced for.

Credit Rating:

The contentious practice of ranking the debt instruments of corporations and governments according to an independent analyst's assesment of the debtor's ability to repay them on time.

Credit-rating Agency:

An organisation that assesses the ability of borrowers to repay their debts on time, and that ranks their ability along the lines of old-fashioned exam results: A+, B-, and so on.


An individual or organisation to whom money is owed. The opposite of debtor.

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.

Crisis Management:

The process of managing a crisis, an event or a series of events that are out of the ordinary.


A condition in a loan contract that says that if the borrower defaults on any of its other loans or securities it may be deemed to have defaulted on this one. The lender is then free to seek repayment of the loan as if it were in default.


The exchange rate between two currencies calculated via a third rate. For example, if there are 2 dollars to 1 pound and 1,000 lira to 1 dollar, the pound/lira cross-rate is 2,000 lira to the pound.


The practice of placing products that are linked together in the consumer's mind next to each other on a retailer's shelves; for example, the bacon next to the eggs, or the ties next to the shirts. Also, the attempt to sell one product to a customer who has already bought something completely different from the same seller – when a bank that gave you a loan attempts to sell you insurance as well.


Purposely selling one product at a loss in the knowledge that is being subsidised by another; for example, a café selling coffee at a low price to entice customers in to buy its cakes at a high price.

Cuba Clause:

The so-called "Cuba Clause" allows the situs and proper law of a trust to be transferred from one jurisdiction to another.


The unique ways of doing things and of thinking about things that differentiate one organisation from another. These are influenced by the organisation's history (by notorious disasters, for example),by its more powerful managers ("Remember P.J.?") and by its habits (who gets access to the corporate car park).

Cum Dividend:

A share that is being sold together with the rights to a dividend that has been announced by the company but not yet paid.

Cumulative Voting (U.S.):

Cumulative voting is a voting right which, when applicable, is intended to preserve the voting strength of minority shareholders. For example, if John has 25 voting shares and there are three directors to be elected, John has 75 votes which he may allocate in any manner chooses. In some states, cumulative voting exists unless the articles reject it. In other states, cumulative voting does not exist unless the artciles permit it.


The donomination of the notes and coins in circulation in an economy. The UK currency is the pound sterling; the US currency is the dollar; the new European currency is the euro.

Currency Swaps:

A transaction involving the exchange of cash flows and principal in one currency for those in another with an agreement to reverse the principal swap at a future date.

Current Account:

A bank account, known in the United States as a checking account, the funds of which are used mainly for the purposes of money transmission. Checks are drawn on current accounts, and standing orders are debited against them. Current accounts rarely pay significant rates of interest on credit balances.

Current Asset:

Assets on a company's balance sheet that are likely to be sold or transferred (if they are financial assets) during the next accounting period. Current assets include things like cash, stock and accounts receivable.

Current Cost:

The present market value of an asset.

Current Exposure Method:

Term used in the Basle Capital Accord to denote a method of assessing credit risk in off-balance sheet transactions, consisting of adding the market to market replacement cost of all contracts and an amount for potential credit exposure arising from future rice- or volatility changes.

Current Ratio:

The ratio of a firm's current assets to its current liabilities (that is, its short-term loans and trade debts). The ratio is used as an indicator of a company's ability to pay its debts on time, and thus of its liquidity.


A bank, financial institution or other entity that has the responsibility to manage or administer the custody or other safekeeping of assets for other persons or institution.

Custodian Trustee:

A trustee that holds the trusts assets in his or her name. I.e. under common law it is the norm for a trustee to hold the trust assets in his or her name. In the civil law countries i.e. Liechtenstein the trust holds the underlying assets in it's own right.


A person or organisation who buys finished goods or services, and at whom, therefore, all industrial activity is directed.

Customer Care:

A systematic attempt by an organisation to take greater care of its customers, and to teach its employees the value of so doing.


A product or service that is adapted specially to suit an individual customer.

Customs duty:

A tax imposed on imported goods.

Customs Union:

An alliance of a number of countries that agree to remove customs and excise controls on goods and services that pass among them.


Short for curriculum vitae, a summary of a person's career and educational achievements. (Course of career.) CVs (or résumé) are invariably required when looking for a new job.


The occurrence of events in accordance with a cycle, in particular, the business cycle. A cyclical stock is one that rises and falls in line with the rhythms of the business cycle.