ICSAN CL key terms

The minimum number of members or directors whose presence is required before a meeting can validly transact business. If it is not met, decisions taken are generally void unless the articles allow otherwise.

A person appointed by a member to attend and vote at a company meeting on that member's behalf. Appointment is usually made in writing and lodged before a stated deadline.

The formal communication informing members and directors of the date, time, place and business of a meeting. Statutory minimum notice periods apply, and short notice requires the consent of the required majority.

A decision passed by a qualified majority, commonly at least 75 per cent of votes cast, for matters such as altering the articles or changing the company name. Higher thresholds may be set in the constitution.

A decision approved by a simple majority of votes cast at a properly constituted meeting. It covers routine matters such as appointing directors or approving accounts.

The body of persons appointed to direct and supervise the company's affairs collectively. It exercises management powers delegated by the members, subject to the constitution and statutory duties.

The legal obligation of directors and officers to act honestly, in good faith and in the best interests of the company rather than for personal gain. Breach can lead to personal liability or disqualification.

A situation where a director's personal interest, or that of a connected person, may influence company decisions. Directors must disclose it and generally abstain from voting on the affected matter.

Latin for 'beyond the powers'. It describes an act outside the authority conferred on the company or its officers by law or the constitution, which may be unenforceable or a breach of duty.

The foundational constitutional document by which a company is incorporated, stating its name, objects, liability and share capital. Many jurisdictions now merge it with the articles into a single constitution.

The internal rulebook governing a company's operation, covering share transfers, board proceedings and member rights. It binds the company and its members as a contract.

A dealing between the company and a director, substantial shareholder or their associates. Such transactions typically require disclosure, independent approval and sometimes member ratification to protect minority interests.

A mandatory record a company must keep, such as registers of members, directors, secretaries and charges. Registers must be updated promptly and made available for inspection as prescribed by law.

A periodic statutory filing confirming a company's current particulars, including directors, shareholders and registered office. It is usually filed with the corporate registry and attracts a filing fee and late penalties.

An officer responsible for statutory compliance, board support, record-keeping and shareholder communication. The role carries legal duties, and in some jurisdictions the officer must hold a recognised professional qualification.

The system of rules, practices and processes by which a company is directed and controlled. It allocates rights and responsibilities among shareholders, directors and managers and sets decision-making rules.

The state of a director being free from relationships or interests that could materially affect objective judgement. Regulators set criteria, and independent directors often chair key committees.

A board committee, usually composed of independent non-executive directors, that oversees financial reporting, internal controls and the external audit relationship. It reports to the board and meets auditors privately.

The policies and procedures designed to safeguard assets, ensure reliable reporting and support compliance with laws. Effective controls rely on segregation of duties and periodic review.

The structured process of identifying, assessing, prioritising and mitigating threats to an organisation's objectives. It includes setting risk appetite, monitoring exposures and maintaining a risk register.

A recording system in which every transaction produces equal debits and credits, keeping the accounting equation in balance. It underpins the trial balance and reliable financial statements.

Accounting that recognises revenue when earned and expenses when incurred, regardless of cash timing. It gives a truer view of performance than cash accounting and requires adjusting entries.

The systematic allocation of an asset's depreciable cost over its useful life to reflect consumption of economic benefits. Common methods include straight-line and reducing balance.

A reduction in the carrying amount of an asset when its recoverable amount falls below book value. The loss is recognised in profit or loss, and reversals may be permitted in limited cases.

A listing of all ledger account balances at a point in time to check that total debits equal total credits. It detects arithmetic errors but not errors of principle or omission.

Current assets minus current liabilities, measuring short-term liquidity. Positive working capital supports daily operations, while persistent deficits may signal insolvency risk.

A financial statement classifying cash movements into operating, investing and financing activities. It explains changes in cash and aids assessment of liquidity and solvency.

The level of sales at which total revenue equals total cost, producing neither profit nor loss. It is calculated by dividing fixed costs by contribution per unit.

Sales revenue less variable costs, representing the amount available to cover fixed costs and generate profit. It is often expressed per unit or as a ratio.

The sum of a project's future cash flows discounted to present value, less the initial investment. A positive result indicates the project adds value at the chosen discount rate.

The weighted average return a company must earn to satisfy its debt and equity providers. It is commonly used as the discount rate in investment appraisal.

Something of value exchanged between contracting parties that makes a promise enforceable. It may be money, goods, services or a promise, but must not be past.

The core elements of contract formation: a definite proposal by one party and unqualified agreement to it by another. Acceptance must generally be communicated unless waived.

A legally binding agreement between two or more parties that creates enforceable rights and obligations. It requires offer, acceptance, consideration, intention and capacity.

A relationship in which one person is authorised to act on behalf of another and bind that principal. Authority may be actual, implied or apparent, and duties of loyalty apply.

Tax deducted at source by a payer from certain payments, such as dividends, interest or royalties, and remitted to the revenue authority. It is often a credit against final tax liability.

An indirect tax charged on the supply of goods and services at each stage of production, with businesses recovering input tax. Registration and filing thresholds vary by jurisdiction.

Arranging affairs lawfully to reduce tax liability, as distinct from illegal evasion. Aggressive schemes may be challenged under general anti-avoidance rules or disclosure regimes.

The legal and organisational measures safeguarding personal information against misuse, loss or unauthorised access. It involves lawful processing, consent, security and breach notification obligations.

The practices and controls protecting systems, networks and data from digital attack or unauthorised access. Governance requires board oversight, incident response plans and regular testing.

Any individual or group affected by or able to affect an organisation's actions, including shareholders, employees, customers, suppliers, regulators and communities. Engagement helps align strategy with expectations.

A company's voluntary commitment to manage its economic, social and environmental impacts beyond legal minimums. It is increasingly reported alongside financial performance and linked to reputational risk.

The protected disclosure by an employee or insider of wrongdoing within an organisation. Effective frameworks provide confidential reporting channels and protect reporters from retaliation.