An extended period of leave taken by an employee, often as a right under the terms of their contract of employment. University teachers, for instance, are often allowed to take a one-term sabbatical every seven years.

Safekeeping Receipt:

A document issued by a bank which requires the bank to hold specific funds (or securities, gold, etc.) unconditionally separate from other assets and return them when requested by the depositor. In this way, the funds (or securites, gold, etc.) are not an asset of the bank nor are they, directly or indirectly, subject to any of the bank's other obligations or debts.


Regular payment to an employee for his or her work. A salary is usually paid monthly. A weekly payment is generally called a wage.


There are two meanings:
  1. Any exchange of goods or services for money, commonly used in the plural. For example: "Last week's sales were extremely poor."
  2. A special reduction in prices designed to stimulate sales of the other kind. Retailers hold these sales in what are for them the quiet periods of the year.

Sale of Return:

A type of contract under which goods are supplied to retailer on the basis that if they are not sold within a given time they can be returned to the supplier without payment.

Sales Promotion:

A special short-term effort used to promote or launch a product or service. To be effective, a sales promotion needs to be conspicious and noticed, and it needs to bring in more revenue than it costs.

Sales Quota:

A target given by a company to its sales staff setting the volume or value of sales that they are expected to achieve within a given period.

Sales Tax:

Any tax based on the volume or value of sales.


A person whose main job it to sell goods or services. The word has come to symbolize the slick entrepreneur trying to pass on low products for high prices.


There are three business-related meanings:
  1. A number of items chosen from all those that exist. Samples are used to test the characteristics of the group as a whole.
  2. A product that is taken as a model for the subsequent mass production of that product; particularly common in the rag trade.
  3. A small example of a product that is given away to donsumers to persuade them to buy it in larger quantities.


An obstruction placed on a country's ability to trade freely. Sanctions are usually imposed as a penalty for behaviour disapproved of by the international community; for example, the sanctions imposed on South Africa for its policy of apartheid. Confusingly, the word sanction (as a verb) means to authorize. Hence South Africa sanctioned the plicy (of apartheid) that brought about sanctions.


To have such a generous supply of products in a market that it is difficult for a new entrant to gain a foothold.


To read electronically the bar code on the packaging of products in a retail outlet.

Scenario Planning:

A method of planning for the future that involves getting an organization's executives to focus on the changes that they think will be the most significant for their business in the future. They are then asked to imagine what such changes might lead to.

S Corporation (U.S.):

An S corporation is created under the Internal Revenue Code. A corporation may elect to be treated as an S corporation. Stringent rules exist with respect to how and when the election is made; the number and type of shareholders; and the means by which the election may be terminated. S corporations pay no income tax; all items of income, gain, credit, and losss pass through to the shareholders in proportion to their shareholdings.

Scheduled Territories:

Since June 1972, the United Kingdom, the Channel Islands, the Isle of Man, the Republic of Ireland and Gibraltar.

Schengen Treaty:

The name "Schengen" originates from a small town in Luxembourg. In March 1995, seven European Union countries signed a treaty to end internal border checkpoints and controls. More countries have joined the treaty over the past years. At present, there are 15 Schengen countries, all in Europe. The 15 Schengen coutries are: Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Italy, Greece, Luxembourg, Netherlands, Norway, Portugal, Spain and Sweden. All these countries except Norway and Iceland are European Union members.


An asset that is no longer of economic value to an organization. But this does not mean that it is of no value to anyone. Scrap can be sold and its value is called the scrap (or salvage value).

Scrip Issue:

A free distribution of shares to a company's existing shareholders in proportion to their shareholding. A scrip issue is little more than an accounting device; it does nothing to increase the value of the company or of any shareholder's stake in it. Also known as as bonus issue.

Screen Company:

A company incorporated in a country which charges a nil or low rate of tax on receipts or distributions of interest, dividends or royalties received from another country, taking advantage of a favorable double taxation agreement between two countries which reduces the tax withheld at source in the country in which the income arises.

Sealed Bid:

A bid for a contract that is presented in a sealed envelope. Nobody knows the details until the envelopes of all bidders for the contract have been handed in. They are then all opned at the same (prearranged) time, and the winning bid is announced.

Search Engine:

A software program that enables a computer to search its database and retrieve all references to a specified keyword.

Seasonally Adjusted:

The adjustment of statistics to take account of the fact that business activity varies with the seasons; for example, sales figures are distorted during the Christmas and summer holiday periods. Sesaonally adjusted data remove the exceptional influence and show the underlying trend.


Securities and Exchange Commission, United States federal organization which supervises information provided by companies whose shares are offered to or dealt in by the public.

Section 482 "Arms Lenght":

A section in the United States Internal Revenue Code that gives the Government authority to reallocate income to a domestic corporation where it is not dealing on an "arms lenght" with a controlled affiliate as if the affiliate were an independent enterprise.

Section 367 Ruling:

Tax-free treatment as approved by the United States Internal Revenue Service for certain ordinary transactions, such as transfers of a wholly owned subsidiary into the parent corporation, and certain transactions qualifying as tax-free reorganizations, whereby a foreign corporation is part of the transaction. The ruling no longer need to be obtained in advance from the United States Internal Revenue Service stating that the transaction is not regarded as being in pursuance of a plan having as one of its principal purposes the avoidance of Federal income tax.

Section 936 Funds:

Dollar balances accumulated in Puerto Rico by United States mainland companies generated from operations under the Commonwealth of Puerto Rico's generous tax holidays (known as "Operation Bootstrap") adopted in 1947 and amended through subsequent Industrial Incentive Acts 1963, 1969, 1971, 1973. Under Section 936 of the United States Internal Revenue Code, these accumulated funds were not taxable to the mainland United States companies if they were used to finance development of the members of the Caribbean Basin Initiative. To qualify for any part of the $10 billion of accumulated funds, a recipient Central American nation was required to be a party with the United States to a Mutual Legal Assistance Treaty. However, under the 1996 United States tax amendment to the Internal Revenue Code, the tax credit granted to possessions corporations in Section 936, where tax-free accumulated funds in Puerto Rico are invested in qualifying Caribbean Initiative Countries thorugh tax exemption, is being phased out.

Secondary Market:

A market in goods or services which have already been sold to a consumer at least once (especially markets in financial instruments such as bonds and shares).


A temporary job taken by an employee with an organization other than the one with which they have a contract of employment. For example: "He normally works for Rolls-Royce, but he is on secondment this year to the Ministry of Defence."


A person who does the formal correspondence required by either an individual or an organization. Hence a company secretary is responsible for all the official correspondence between the company and the government or regulator. Company secretaires may also have personal secretaries who type their letters for them. From the French word secrétaire, meaning a writing table with drawers in which to keep paper and pens.


A group of companies with some sort of commercial activity in common. The transport sector, for instance, comprises companies involved in transport (airlines, train operators, and so on). The airline companies alone constitute the airline sector.

Secured Credit Card:

A credit card that is linked to a corresponding savings account or other form of collateral. Typically a sum of money equal to or larger than the line of credit is deposited in an interest-bearing savings account. This is used as security against a potential future loss against the card-holders liabilities. Here, there are two accounts: A frozen bank account - the funds in which act as a guarantee for the card - and the actual credit card account.

The advantages of a secured credit card are no-questions-asked privacy and the ease of approval of credit. Statements are mailed only in the months when something is charged to the account, unless the balance for the preceding month has yet to be paid off in full. But you are still obliged to make a minimum monthly payment of 10 percent of the outstanding balance within a couple of weeks from receiving your statement.

Secured Loan:

Any loan which gives the lender the right to take possession of assets belonging to the borrower should the loan not be repaid on schedule.


Securities can include notes, stock, treasury stock, preorganization subscriptions, voting trust certificates, partnership interests, investment contracts, and certificates of interest in oil, gas, or mineral rights. Both the offer and sale of securities are regulated by state and federal governments, and care must be taken to comply with applicable laws and regulations.


There are two business-related meanings:
  1. Something which is pledged by a borrower to a lender as collateral for a loan. Should the loan not be repaid, the lender has the right to take the security in place of the repayment. The security for a mortgage is the property that has been purchased with the mortgage loan.
  2. A document which demonstrates its holder's right to a share in a company's equity or to the ownership of one of its bonds. In this sense the word is generally used in the plural (that is, securites).

Seed Money:

The first (small) investment in a project. Seed money is usually designed to enable the project's backers to prepare a business plan and to do enough market research to persuade a sizeable financial institution to back the project more fully.


The breaking up of a market according to the characteristics of its consumers. This enables a product to be sold in different ways to different ways to different segments of its market. Selling pensions to university students requires a dramatically different approach from the way in which they are sold to middle-aged managers.


Someone who works for themselves and is not employed by an organization. Self-employed people have to handle their own tax affairs and have no perks.


The regulation of an industry done by the industry itself, as opposed to the regulation that is done by government. Industries have an interest in regulating themselves to ensure that no rogue in their midst blackens the reputation of all of them. Most of them prefer to set the rules by which they are judged themselves rather than have the government do it.

Seller's Market:

A market in which demand oustrips supply and in which sellers can get rid of as much product as they can lay their hands on.

Sem Fabrica:

Spanish for "without a factory", an expression used widely in Latin America to desribe elderly entrepreneurs who have sold their businesses and are now living comfortably on the proceeds.


A semi-efficient conductor of electricity, something that conducts less well than metal but better than an insulator (such as rubber). Semiconductors such as silicon are the bedrock of the computer industry.

Senior Debt:

A loan which has first call on a company's assets in the event of a liquidation of the company. A secured loan is senior debt; an unsecured loan is known as junior debt.

Sensitivity Analysis:

Calculation of the extent to which one business variable is affected by changes in another. For instance, calculating the percentage increase in sales for each 1% reduction in the price of a product.


A computer that hosts information available to anyone accessing the Internet.

Service Company:

A company located in an offshore financial center to provide management, invoicing and other services for client companies located in other countries. Initially used to advantage double taxation treaties. Service Companies are now frequently used to facilitate flight capital outflow and are often involved in money laundering schemes.

Service Economy:

An economy in which service industries (those which supply services rather than finished goods or raw materials) predominate. Most rich countries are service economies today.


Non-tangible benefits supplied by businesses to consumers. Airplanes are products; flights on airplanes are services.


The attempt by one party to a contract to reduce its obligations under the contract by the amount of a counter-obligation arising elsewhere. Thus if A owes B $1m for one deal and B owes A $100,00 for a completely different deal, A might pay B $900,000 and call it quits. But what if B does not acknowledge the debt to A?


To create or establish an offshore trust. Done by the settlor (UK and Channel Island term) or the grantor (U.S. and IRS term).


Exchanging money or securities for securities.

Settlement Deed (/Declaration of Trust):

It specifies the property which is to be placed in trust, the way in which the trust funds are to be invested and administered, to whom the income is to be paid or whether it is to be accumulated, how long the trust is to continue and to whom the trust property will be ultimately contributed.


The person who creates a trust.

Several Liability:

The liability of group of people for which they can only be sued individually, and then only for that part of the overall liability incurred by each of them. Several liability thus creates several liabilities.

Severance Pay:

An amount of money to which employees are contractually entitled if their employment is brought to a premature end through no fault of their own. Severance pay is often related to the individual employee's length of service with the employer.

Shadow Director:

A person who is not a director of a company but under whose shadow the official directors operate. Shadow directors are often the founders of companies which have gone public. They have been removed from the board, but they will manage to exert considerable influence over it.


A portion of something, in particular of the equity of a company.

Share Certificate:

Documentary evidence of the holder's ownership of a share in the equity of a company.

Share Index:

An index, such as the FTSE 100, of the prices of leading shares quoted on a particular stockmarket. Their price movements act as a proxy for the market as a whole.

Share of Stock:

Represents ownership in a corporation. There exist several different types (common and preferred) and classes of shares with different privileges and rights, such as registered shares (with or without par value), preference shares, (non-)redeemable shares, shares with or without voting rights and bearer shares etc.

Share Option:

An option to purchase shares at a given price and within a specified period of time. Share options are frequently offered to senior managers as part of their remuneration packages. The prices at which the options can be exercised ensure that the managers make a sizeable capital gain if the company performs well while they are running it.

Share Premium:

The amount of money that a company raises from a share issue that is in excess of the nominal value of the shares.


Shareholders, who own the issued stock of a corporation and are thus its owners, elect directors and vote on fundamental matters, e.g., merger, sale, dissolution. Shareholders do not own specific corporate property; they merely own an interest in the corporation. Some state statutes use the term "shareholder"; others refer to "stockholders."

Shareholders' Funds:

The total value of the shareholders' stake in their company. Shareholders' funds are equivalent to the company's capital and reserves. Virtually the same as net worth.

Shelf Company:

A company that previously has been organized with designated capital and registration cost paid and is placed on an inactive basis, with annual registration, capital and stamp duty fees currently paid but shares held in bearer form and the directors and officers substituted at the time the company is taken off the shelf and becomes active.

Shelf Life:

The amount of time that a product can be left on the shelf in a retail outlet and still be in a fit condition for consumption. The expression is used particularly with respect to foodstuffs.

Shell Company:

A company that has no significant assets. Its purpose is to act either as a vehicle for legitimate borrowing, or as a way to launder money and/or keep it out of the eyes of the taxman. Shell companies also provide a way for businesses to get a listing on a stock exchange without having to go through the listing procedure.


A number of employees who work together for a fixed period of time. For example: "Today she's working on the night shift." Shift work occurs in manufacturing industries where equipment needs to be kept running for 24 hours a day, either because demand is exceptionally high or because it is expensive to shut the equipment down and restart it.


Owing to the innate mobility of the shipping industry it is common for ship owners and operators to have recourse to tax havens. Frequently the ownership, operation, administration and registration are situated in carefully chosen (and often different) jurisdictions in order to keep global tax burdens at a low level.

Shipping Agent:

An agent who handles the shipping of goods and raw materials for a manufacturer. In this context, the word shipping covers all forms of transport, not just ships.

Ship's Manifest:

A list, kept by a ship's captain, of all the different cargo carried on his ship.

Shop Floor:

The physical location of a company's manufacturing processes; also the complete set of all such places. For example: "He was a shop-floor worker until he got promoted to head office."

Shop Front:

The most visible evidence of an organization's existence. For example: "The company's office in Manhattan is just a shop front. The real business goes on in Milwaukee."

Shop Steward:

The appointed representative of a trade union. Each significant business unit where a union is represented has its own shop steward. He or she acts as an intermediary between the union and the workers on the shop floor.


An investor is said to be short in a stock when his supply of it plus his commitments to buy it in the future amount to less than his commitments to sell it in the future. Shortfall: The amount by which an actual figure falls short of a targeted figure. For example: "The shortfall on the six-months profit figure was greater than expected."


A period of time of 12 months or less. In accounting, a liability is short-term if it is going to arise within the current accounting period, that is, in less than 12 months. A short-term loan is one with a maturity of 12 months or less.


Any stock in a retail outlet that is not exchanged for cash. Shrinkage may occur through theft, damage, or shoddy workmanship.


The closing down of a sizeable manufacturing operation because:
  1. There is a shortage or orders;
  2. The equipment needs retooling; or
  3. The workers have gone on strike.


Short for Standard Industrial Classification, a widely used system for classifying industrial products. It is based on a six-digit number in which the first two digits identify a broad industry sector, the second two define the sector more narrowly, and the third two define the individual product.


If something is payable on sight it means that it is payable on demand. A sight deposit, for example, is a deposit at a bank that the depositor can withdraw immediately and at any time.

Silicon Valley:

Popular name for the valley running between San Jose and San Francisco in California where many pioneering computer companies grew up. The computer industry relies heavily on silicon as a semiconductor.

SIM card:

The SIM (Subscriber Information Module) card - a.k.a. "smart card" - holds all of a subscriber's personal information and phone settings. In essence, it is the subscriber's authorization to use the network. It also holds the phone number, personal security key and other data necessary for the handset to function. The card can be switched from phone to phone, letting the new phone receive all calls to the subscriber's number.


An attempt to represent aspects of the real world (economic aspects in particular) by means of mathematical models. Simulation is heavily dependent on the use of advanced computer programs.

Sinking fund:

A fund into which money is transferred at regular intervals to meet an expected future liability.


Societe Internationale Telecommunications Aeronautiques Societe Cooperative. An international company owned by airlines that provides communication services.


Proficiency at a particular task. A skilled workforce is one whose members have special expertise at something or other. An unskilled workforce consists of people who have had no training or relevant experience since leaving school.


Stand-by Letter of Credit. A financial guarantee or performance bond issued by a bank on behalf of a customer and regulated by the ICC-500 rules.

Sleeping Partner:

A partner in a business who is not involved in the day-to-day running of the business. Although the expression originally applied only to individuals who worked in a partnership, now it applies to all forms of business, with the word partner being used loosely.


A memorable phrase or sentence about a product that helps to keep the product in consumers' minds.


A severe economic recession that falls short of a depression. A slump in sales is a short sharp drop in turnover.


Any product with some sort of embedded electronic intelligence is described as smart. A smart card is a credit card with an embedded microchip that enables it to manage a credit facility. Smart refrigerators would tell the milkman when you were running out of milk.


Short for small and medium-sized enterprises. In Europe it has become a general term for all small businesses. The SME sector is universally recognized as having special needs. Although it is innovative and nimble, it is hampered by not having access to economies of scale.


Breaking large sums of money into small deposits through anonymous bank accounts and offshore "shell" companies into order to dodge banks to report these transactions.


A serialized television drama that (originally) was sponsered by a single company for advertising purposes. The first soaps were sponsered by soap manufacturers.

Société Anonyme:

The French equivalent of a limited company, an indication to the general public that a company enjoys the benefit of limited liability. Usuallly abbreviated to SA.

Social Engeering:

Posing as someone else to obtain the information you need.

Sociedad Anonima:

A company established under Spanish Law. The important characteristic is that the liability of the shareholder is limited up to the amount of their capital contribution.

Societe Anonyme:

A company established under French Law. The important characteristic is that the liability of the shareholder is limited up to the amount of their capital contribution.

Sociedades Gestoras de Participatoes Sociais (SGPS):

Madeaira holding company specifically designed to take advantage of European Union Directive 90/435.

Soft Currency:

A currency that is expected to depreciate in value against other currencies. The opposite of hard currency.

Soft Loan:

A loan that is granted on terms that are more generous to the borrower than those that could be obtained in the open market.

Soft Market:

A market in which supply exceeds demand; one that favours buyers (who hold off in expectation of the price falling) rather than sellers.

Soft Sell:

A gentle attempt to sell something to a consumer, making no effort to hurry the consumer into making a decision. The opposite of a hard sell.


The electronic programs inside a computer's hardware that enable it to carry out different tasks.

Sogo Shosha:

The unique trading companies that sit at the heart of all Japanese zaibatsu. Their role is to act as the group's agent in all its trading activities. They also serve as an intelligence-gathering operation for the group.


The acronym for small office, home office, a recently identified industrial sector consisting of home workers and of people who work in organizations with one or two others. Soho is a dynamic, fast-growing sector.

Sold as Seen:

When something being sold comes with no assurances at all from the seller. The buyer must beware – or caveat emptor.

Sole Trader:

A business that is not incorporated and that is run by its owner. The wole owner of the business has sole unlimited liability.


Having the ability to pay debts as and when they become due. The opposite of insolvent.

SOPARFI – The Luxembourg Societe de Participation Financiere:

Luxembourg has recently extended its participation exemption regime and SOPARFIs are now subject to the normal rate of national and municipal Luxembourg tax except that, subject to the fulfillment of certain conditions, dividends and capital gains are not taxed. Such companies are therefore able to take advantage of the EU parent/subsidiary directive 90/435. A SOPARFI is not excluded from the scope of the tax treaties concluded by Luxembourg, and this may make this type of company extremely attractive for certain tax planning exercises. Luxembourg has signed tax treaties with most EU countries, Canada, Czech Republic, Hungary, Japan, Korea, Morocco, Norway, Slovak Republic, Switzerland and the US.

Sources and Uses of Funds:

An accounting statement that shows all the cash that came in and out of a business during a fixed period (usually a year). In some countries such statements are required by law to be submitted as an integral part of the company's annual accounts.

Sovereign Risk:

The risk that a country will not pay its obligations as and when they fall due for polical, military or economic reasons.


The e-mail equivalent of junk (snail) mail.

Span of Control:

The extent of an individual manager's responsibility, as a measured (usually) by the number of people reporting to him. Some argue that this should be no more than six; others think that 20 is not too many.


An Austrian and German type of bank/building society account. Ownership is certified by a book and stamp - not by identification. They do still exist.

Special Resolution:

A resolution proposed at a company meeting that falls outside the company's normal business. For instance, a resolution that a director charged with fraud should stand down from the board would be a special resolution.


The process of focusing on a narrow range of things. Specialization by a company involves it in manufacturing a smaller and smaller product range, or in focusing on one narrow aspect of the manufacturing process. In the case of an individual, specialization means concentrating on a narrower range of skills, and mastering them to a greater degree.


The detailed description of what a customer wants done (and, sometimes, of the way in which it is to be done) that is given to a supplier; for example, to the printer of this book. The supplier then quotes a price on the basis of the "spec".


Someone who buys something with the aim of making a quick (and substantial) profit from selling it soon after. In particular, investors in the stockmarket whose interest is in making a quick turn, not in owning corporate assets.


An automated program which searches the Internet.


A corporate division or subsidiary that is established as a separate corporate entity. Traditionally, the shares in a spin-off are allocated pro-rata to the shareholders of the parent company out of the which it has been spun.

Split Commission:

The sharing of a commission between an agent who carries out a particular piece of business (a broker who handles a stock transaction, for instance) and the person who introduced the business to the agent.

Split Shift:

A shift that is broken up into two spells of work separated by a period of time for which the worker is unpaid. Split shifts are suitable for school bus drivers, for example. They need to work in the morning when children go to school and in the afternoon when they come back, but not in between.


A person who speaks on behalf of a company, or on behalf of its products. Usually someone is employed specially for the task, a person skilled in making muck smell of musk. Occasionally, well-known personalities are adopted to act as spokesmen, such as fashion models and athletes.


There are two business-related meanings:
  1. A big investor whose declared support for a particular issue of securities encourages others to buy the securities.
  2. The subsidising of an event by a company for the purposes of advertising. The event may be sporting (as in the Whitbread round-the-world yacht race) or it may be a television program.


The practice of faking the return address of a spam e-mail, so you won't be able to trace who sent it, or the subject line, so you will open it.

Spot Check:

An unannounced random check to see if work is being done correctly. Spot checks can be used as part of a program of quality control.

Spot Market:

A market in which the prices quoted for goods and services are for immediate payment and for immediate delivery. The original commodity and currency markets are examples of spot markets.

Spot Price:

The price of something if it is bought on the spot, and for cash.


The difference between one item and another, most frequently the difference between a buying price and a selling price. A bid-offer spread, for example, is the difference between the price that a buyer is prepared to bid for a security and the price for which a seller is prepared to offer the same security.


A computer program consisting of the relationships between a number of mathematical variables (like prices and costs). A change in one of the variables can be fed into the program and its effect on all the others calculated immediately.


A time when the supply of something is scarce. In particular, the supply of money, which leads to a credit squeeze.


In general, the employees of an organization. The origins of the word lie in military history when staff carried out the centralized administrative functions and the line consisted of the troops who actually engaged in battle.


An investor who speculates that a new issue of securities will be oversubscribed. Stags buy more securities than they really want in the belief that the heavy demand will cause the issue's share price to rise sharply as soon as it starts trading.


Any substantial holding of shares in a company. The term comes from pioneering farmers who would put stakes in the ground around land that they laid claim to.


Anyone who has a "stake" in a company, including employees, suppliers and customers as well as shareholders. Some spread the stakeholder net even wider to include the local community.

Stamp Duty:

A tax whose payment is acknowledged by the affixing of stamps to an official document.


A business process, or a computer workstation, that is independent of any other. In other words, a computer that is not networked to others, or a production process that is not dependent on inputs from elsewhere within the organization of which it is a part.

Stand-by Facility:

A loan that is available to a borrower for a certain period of time if certain conditions are met. In particular, a loan from the IMF to a member country which is made available, usually for up to three years, for as long as the country meets certain economic and financial criteria.


A measure of something that acts as the basis for judging other things of the same type. For example, the time that it takes a car to accelerate from stationary to 60mph is a standard measure of acceleration.

Standard Deviation:

A statistical measure of the extent to which a sample of data spread out from a central core figure (usually the average of the sample). The extent, for example, to which daily sales figures for cornflakes deviate from the average daily figure.

Standard & Poor's:

One of the world's most influential credit-rating agencies.


The process of reducing variety in manufacturing or services to gain economic benefit. The term refers in particular to the process of introducing common specifications for the production of equipment, especially electronic equipment, so that consumers can use any type of software on any type of hardware.

Standing Order:

An instruction to a financial institution to make a fixed payment to a named creditor at regular intervals, usually monthly.


A business that is just beginning. Its start-up cost is the money that it needed for it to open its doors: to install telephones, to buy equipment and to hire staff.


A written summary of financial transactions. They may be transactions that take place in and out of a bank account over a given period, or they may be the transactions carried out by a corporation during a given period.

Statute of Elizabeth:

The statute under English Common Law governing fraudulent conveyances to avoid creditors. The Statute was incorporated into the English Law of Property Act 1925 and has been replaced by the Insolvency Act 1986 in the United Kingdom. Under the Statute, a transfer of property to a trust can be voided by creditors based on the subjective intent of the grantor. The Statute has been adopted in all common law countries, but has been replaced by specific legislation with more objective criteria in countries implementing asset protection trust legislation. More recently, the Statute has been replaced in the Cook Islands by the International Trusts Acts 1984, in the Cayman Islands by the Fraudulent Dispositions Law 1989, in Gibraltar by way of amendments to the Bankruptcy Ordinance 1934 and in the Bahamas by the Fraudulent Dispositions Act 1991. Originally the penalty for a violation under the Statute of Elizabeth was the forfeiture of one half of the property or assets to the Government and one-half to the injured creditor, along with six months' imprisonment "without bail or mainprise." While most common law jurisdictions practice the Statute of Elizabeth concepts with modifications, each State of the United States has adopted either (1) a variation of the Statute or the Statute as part of the common law, or (2) the Uniform Fraudulent Conveyance Act or the Uniform Fraudulent Transfer Act, with adjustments as seen fit.


Statutes are laws passed by the state legislature or U.S. Congress. Business corporation laws are statutes. Statutes often authorize an administrative agency to declare regulations which are used to supplement the statute. In the event of a conflict, statutes control over regulations.

Statutory Audit:

The audit of a business that is required by the laws of the country in which the business is registered.

/Statutory Notice:

The amount of time decreed by law that must be allowed to pass between the announcement of an intention to end a contract and the actual ending of the contract.

Stepping-Stone Country:

A country in which a screen company is incorporated.

Sterling Area:

The area in which the pound sterling is legal tender, namely the Scheduled Territories. In general, the United Kingdom does not impose restrictions on exchange transactions or payments and receipts between residents of the United Kingdom and residents of the Scheduled Territories. Exchange control applies mainly to transactions with residents of countries outside the Scheduled Territories.


Originally, a person who managed the domestic affairs of a family, looking after their estates and so on. Hence a person who manages a business on behalf of its owners, or one who manages the affairs of passengers on trains, boats or planes. A company's directors can be said to be stewards of the company on behalf of its shareholders.


Foundation, a legal entity established in Liechtenstein with corporate personality and founded in order to receive a permanent transfer of assets by way of settlement. Do not have shares.


Stock represents ownership in the corporation and is often evidenced by a stock certificate. Stock can be common or preferred, voting or nonvoting, convertible, redeemable, and so on. The articles of incorporation will determine the designations and classifications of stock.

Stock Exchange:

A place where securities are traded.


See Shareholders/Stockholders.

Stockholders' Annual Meeting:

"The parliament"/"ultimate authority": 1) approves annual accounts of both profit and loss and the company's assets and liabilities; 2) makes policy decisions on future business actions; 3) personnel decisions (president, secretary and treasurer - to be retained or replaced - the same goes for whether to retain or replace the auditors and directors; 4) constitutional issues: should the Articles of Association be modified or changed? should quorum requirements be changed? - etc.

Stock Option:

Another term for share option.

Stock Purchase Agreement:

A stock purchase agreement is an agreement between the shareholders and the corporation. It provides a mechanism to regulate the transfer and sale of corporate stock. Often, a stock purchase agreement will provide a right of first refusal in favor of the corporation or remaining shareholders in the event of a proposed sale of stock by a shareholders. A stock purchase agreement can also provide for a purchase upon the death, disability, retirement, discharge, resignation, or bankruptcy of a shareholder.

Stock Split:

The dividing up of a company's shares into a larger number. Each shareholder in, for example, a three-for-one split gets three shares for each one that they hold. Each of the new shares is worth one-third of the old one. No new value is created. A stock split makes shares with a high denomination more marketable. It is easier to sell three $35 shares than one $105 share.


A person or firm that acts as an agent for investors in buying and selling securities on a stock exchange.


An organized market in financial instruments which signify the ownership of capital – that is, in bonds, stocks and shares.


To hold on to unnecessarily large quantities of something in order to benefit later from price changes or from shortages supply.


The place where an organization stores its inventory.

Straight Line:

The depreciation of an asset by an equal amount each year over the full economic life of the asset.

Strategic Alliance:An alliance formed between two or more organizations with a specific strategic goal in mind.

Strategic Planning:

The process of drawing up a strategy.


A policy designed to achieve a number of specific objectives. The term originates from a Greek work meaning generalship, the art of mastering the battlefield.


The pressure on individuals to perform. Stress in the right amount is essential to good performance, on the sports field as much as in the boardroom. Too much stress, however, causes physical illness and absenteeism.


The deliberate withholding of their wages or an improvement in their working conditions.


The deliberate withholding of their labour by a group of workers as a means of persuading an organization to take a particular course of action. The action usually involves an increase in their wages or an improvement in their working conditions.

Strike Price:

The price at which an option states that a security can be bought or sold in the future.


The process of separating (for trading purposes) the interest payments due on a bond from the capital payments. Bonds that have been so separated are called strips, an acronym for Separate Trading of the Registered Interest and Principal of Securities.


Any building, and hence the way in which an organization builds its lines of command and communication among its various employees.


The intangible qualities of an organization which uniquely differentiate the way in which it does things. The style of an organization remains the same even when all its employees change.

Sub-Account (Segregated Account):

When a bank acts on behalf of an intermediary, a sub-account is opened for each of the intermediary's clients, to hold funds in their name. The account can only be operated, and the funds can only be used, by the terms of a written agreement (Power of Attorney) that is given to, and approved by, the bank. The deposited funds are not considered intermediary assets nor bank assets if a safekeeping receipt is issued by the bank.


Any individual or firm to whom a person who has a contract to do a piece of work passes on some of that work. A subcontractor remains legally responsible for the work being done according to the original contract.


A contract to lease something from someone who is already leasing it from someone else.

Subliminal Advertising:

The presentation of advertising in such a way that the recipient is not aware that it has been presented, as, for instance, on a single frame of a film. Subliminal advertising was once considered to be dangerously subversive and was made illegal in the US. Nowadays most people are sceptical about its effects.

Subordinate Debt:

Any debt that can be settled only after other debts have been paid. Such a debt is subordinate (or junior) to the other (senior) debt.

Subpart F Income (U.S.):

The section of the American tax law of 1962 containing anti-tax haven measures in relation to specified companies known as "controlled foreign corporations".

Subscription Price:

There are two business-related meanings:
  1. The cost of buying products or services that are to be supplied at regular intervals in the future, commonly newspapers or magazines. Subscriptions are usually sold at a large discount to the face value of the products.
  2. The price at which a new issue of securities is offered to existing shareholders in a rights issue.


A company that is more than 50% owned and controlled by another company.

Subsidiary Company:

A subsidiary company is a company under the control of another company through stock ownership.


An economic benefit bestowed on a group of individuals or corporations by a government to encourage a particular form of economic behaviour. Governments often give subsidies to their country's exporters and to companies that invest in under-developed regions.

Substantial Holding Company:

A particular type of holding company established in the Netherlands exempted from tax on income from investments under specified conditions.

Substantial Transformation of Property:

Purchases of personal property by a foreign subsidiary of a United States parent corporation in which the goods are substantially transformed prior to sale and thus are treated as having been manufactured, produced or constructed by the selling corporation. Generally when the conversion costs representing direct labor and factor burden are 20% or more of the cost of goods sold, these will constitute the manufacture, production, or construction of property needed in order to qualify for non-Subpart F income (that is not taxed currently inthe United States) and the sale of the product is treated as manufacturing income since it passes the "substantial manufacture" test.

Succession Planning:

The process of preparing for another person to succeed the incumbent in a senior position. It has been suggested, rather extremely, that succession planning is the most important task of any CEO. Succession planning has traditionally proved to be particularly difficult in a family firm.


The name/abbreviation of letters after the company name to denote limited liability, for example: Limited, Corporation, Incorporated, Société Anonyme (France), Société par actions (France), Sociedad Anonima, Sociedade Anonima, Stiftung (Liechtenstein), Limitada, Aktiengesellschaft (Germany), Naamloze Vennootschap (The Netherlands), Aktieselskab (Denmark), Sociedad Berhad Anonima (Western Samoa), Berhad (Labuan), Sociedad Anónima de Inversión (Uruguay), AG (Germany), ApS, A/S (Denmark), BV (The Netherlands), Corp., Est. (Liechtenstein), GmbH (Germany), Inc., KFT (Hungary), LDA, LLC, Ltd., PLC (United Kingdom), RT (Hungary), S.A., S.A.R.L. (France), S.A.F.I. (Uruguay).

Suffix (Internet Domain Name):

The three digit suffix of a domain can be used to identity the type of organization. Possible "Suffixes" are: .com=Commercial, .edu=Educational, .int=International, .gov=Government, .mil=Military, .net=Network, .org=Organization.

Suggestions Box:

A sealed place where the employees of an organization can put suggestions (anonymously if they wish) about ways in which the organization can be improved.

Sunrise Industry:

An industry that is at the beginning of its economic life and is growing fast. Such industries today would include biotechnology and electronic commerce.

Sunset Industry:

An industry that is near the end of its economic life, such as the car-phone industry, which is being made extinct by the spread of mobile phone.

Super Captives:

These are offshore excess captive insurance companies formed by United States corporations banding together, usually in associations but sometimes in product or manufacturing groups, to cover their larger liability claims in response to the increasing shortage of available risk liability insurance. Because of the worsening world reinsurance capacity, in recent years there has been a change in composition from single parent captive companies to group or association-type domestic and offshore insurance companies, with one out of two new captive formations of the association structure.

Supervisory Board:

A second board required in certain countries, such as Germany. The supervisory board consists of a number of non-executive directors and is charged with keeping an eye on the management board (which consists of executive directors). In particular, it watches to see that the interests of shareholders and creditors are not compromised in management's pursuit of its own interests.


Someone who supplies an organization with needed goods or services.

Supplier Credit:

A loan to an exporter enabling it to finance an order from a buyer in another country. The loan may be guaranteed by the export credit agency of the exporting company's country.


The other fundamental concept in economics. The extent to which producers are prepared to manufacture goods and services at different prices.

Supply Chain:

The flow of materials in and out of an organization, their movement through the organization during the production process, and their final delivery (as a product) to a point of sale.

Suspense Account:

A bank account that is set up to hold funds temporarily until they can be transferred to their rightful home. Their rightful ownership may be in question, or the funds may be arriving in small amounts that are being collected until they can be transferred more economically as a single item.


Disciplinary action taken against an employee that falls short of dismissal. Suspension involves the employee in not turning up to work for a while, usually without pay.

Sustainable Development:

Economic development that does not exhaust in the short term those resources that will enable the development to continue in the long term.


A transaction in which assets change hands without the intermediation of money. The assets may be financial. For example, western central banks have an agreement to swap currencies among themselves should they need to support each other's exchange rates.


A small manufacturing plant in which cheap labour is made to work long hours at exhausting task. Sweatshops are associated in particular with the garment industry.


Society for Worldwide Interbank Financial Telecommunications.

Swing Producer:

The most dominant member of a cartel, and the one which is expected to support the weaker members when they have difficulty in living within the cartel's terms. The swing producer either boosts supply by adding extra production at short notice, or reduces it by withholding production. Within OPEC, the oil-producers' cartel, Saudi Arabia plays the role of swing producer.


A group of companies or individuals who get together to carry out an activity that each of them would not be prepared to carry out on their own. Financial institutions, for example, get together to give syndicated loans to borrowers whose financial requirements are far greater than any one of the institutions would be prepared to shoulder alone.


The French word for trade union.


The idea that companies can make 2+2=5 by combining operations in imaginative and cost-saving ways. Hence if one computer manufacturer buys another and makes savings by combining overheads (while keeping the combined sales figure of the two firms constant) it is said to have created synergy.


The orderly arrangement of parts into a single whole; generally, a single whole that has a single purpose. Hence the human central nervous system is an arrangement of body parts designed to gather and transmit messages to and from the nerves. Likewise, a computer system.