Tool: Legal Literacy
A glossary of legal terms to assist you in understanding the legal terminology in relation to the development space.
Asset: an item of property owned by a person or entity, regarded as having value and available to meet debts, commitments, or legacies.
Beneficiary: a person or group who derives advantage from something.
Board of Directors: a group of individuals that are elected to act as representatives of a company’s shareholders to establish management policies and to make decisions on major company issues.
Board of Trustees: similar to a Board of Directors, a Board of Trustees is appointed to act as an entity’s representatives to establish management policies and to make decisions on major issues.
Charitable Purpose: advances the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community (s5 Charities Act 2005).
Company: a separate legal entity comprised of a share or shares held by a shareholder or shareholders and governed by a director or directors.
Constitution: a document that generally specifies the rules governing the relationship between and activities of an entity and its participants. See also Rules.
Contract: an agreement between two or more parties that is intended to be enforceable by law.
Cooperative: an organisation which is owned and run jointly by its members who share the profits or benefits.
Co-creation: where end users and/or third parties work with management [of what - the project?] to develop a mutually beneficial outcome.
Co-ownership: where more than one person or entity has ownership rights over an asset.
Director: a member of a board of directors [hyperlink to definition of a Board of Directors]
Employee: a person employed by an entity for wages or salary.
Employer: a person or organisation that employs people.
Equity: the difference between an organisation’s assets and liabilities
Governance: the establishment and monitoring of strategic policies to enhance the viability of an organisation by its governing body.
Incorporated Society: a legally registered group or organisation of at least fifteen people formed for reasons other than financial gain.
Letter of Intent: a non-binding expression of an entity’s intentions in writing.
Liability: a monetary debt or obligation.
Liquidation: an event that occurs when a company cannot pay its obligations as and when they fall due. The company’s operations end and its assets are divided between creditors and shareholders.
Memorandum of Understanding: a non-binding agreement between two or more parties outlining the terms and details of an understanding, including each parties’ requirements and responsibilities. Usually followed by a legally binding formal contract.
Offer of Services: a formal proposal outlining which services a person or entity can offer.
Partnership: an association of two or more persons for a common purpose. Not a separate legal entity.
Quorum: the minimum number of members of an entity that must be present at a meeting to make a decision valid.
Receivership: a process whereby a receiver manages the business of a company (including realising assets) for the benefit of security holders.
Rules: a document that generally specifies the rules governing the relationship between and activities of an entity and its participants. See also Constitution.
Share: a legally recognised interest in a company’s equity and decision making.
Shareholder: an individual who holds a share or shares in a company.
Social Enterprise: an organisation that applies commercial strategies to enhance social and/or environmental well-being and that sees social and/or environmental well-being as important as pecuniary gain.
Transacting Shareholder: a shareholder who supplies or provides goods or services to the company; and/or purchases or acquires goods or services from the company; and/or enters into other commercial transactions with the company. This includes those shareholders who are likely to resume doing so or who have incurred an obligation to do so (s4 Co-operative Companies Act 1996).
Trustee: a member of a board of trustees [hyperlink to definition of a Board of Trustees] who can administer property on behalf of a beneficiary or for a specified purpose.