Term Dictionary

Accelerated Vesting: This is a form of vesting which takes place at a much faster rate – think of it as the Lamborghini of vesting. This allows the option holder to receive the monetary benefit from the option much sooner than usual.

Acceleration Clause: A contractual provision which stipulates that some or all obligations under a contract become due immediately or before the stipulated time of performance in the event of a default by one party.

Acceptance: Refers to an unconditional agreement to an offer. An offer can be withdrawn by the offering party before any acceptance, but a contract is formed upon an acceptance and will be binding on both parties.

Accord: An agreement by two or more parties to settle their differences or claims.

Accredited: Recognized as worthy and approved. An accredited law school is one approved by the licensing agencies of the various states.

Accredited Investor: In Malaysia, Accredited Investor means any of the following:

• Central Bank of Malaysia established under the Central Bank of Malaysia Act 2009.
• A holder of a Capital Markets Services Licence.
• An executive director or chief executive officer of a holder of a Capital Markets Services Licence.
• A unit trust scheme or a prescribed investment scheme.
• A closed-end fund approved by the Securities Commission of Malaysia.
• A licensed bank as defined in the Financial Services Act 2013 or a licensed Islamic bank as defined in the Islamic Financial Services Act 2013.
• A Labuan bank as defined in the Labuan Financial Services and Securities Act 2010.
• A licensed insurer as defined in the Financial Services Act 2013.
• An insurance licensee as defined in the Labuan Financial Services and Securities Act 2010.
• A takaful licensee as defined in the Labuan Islamic Financial Services and Securities Act 2010.
• A licensed takaful operator as defined in the Islamic Financial Services Act 2013.
• A private retirement scheme as defined in the Capital Market & Services Act 2007.

Accretion: The gradual accumulation of an increase in payment obligations at an agreed rate over a period of time.

Acquainted: Having knowledge of; familiar with.

Acquire: To buy or gain possession of property.

Acquisition: Something that one has purchased, been given as a gift, or has inherited.

Acquit: To declare not guilty; to set free.

Acquittance: A declaration that nothing is owed.

Adjournment: To conclude a meeting until another time.

Adjudge: To pass upon; to sentence; to render judgment.

Administrator: A court-appointed person to manage the estate of a person who died intestate (i.e. without leaving a valid will) or, if there is a valid will, one who failed to appoint an executor to manage the estate.

Advance payment: A payment made before it is due; a payment made early in anticipation of a future debt.

Adventure Capitalist: Similar to a venture capitalist, but more accessible. Adventure Capitalists invest in startups. They are less common than a traditional capitalist and they have less money. However, they tend to take more risk and invest in risky startups. Usually they also play a role in the management of the company.

Adverse interest: Interest that displaces one's own interest, partially or completely.

Adversely: Negatively affecting one's interest, right or position.

Advocate: An attorney; one who gives legal advice and pleads for a client in a lawsuit.

Affair: A lawsuit; a matter. Also, a love relationship, usually nonmarital.

Affiant: One who makes an affidavit; a deponent.

Affiants: One who makes an affidavit; a deponent.

Affidavit: A written statement of facts, sworn to and signed by a deponent before a notary public or some other authority having the power to witness an oath.

Affinity: The ties and relationship between a person and the blood relations of his or her spouse. (A judge is disqualified from a case if he is in any way related to, or has any affinity to, any one of the litigants.)

Affirm: To confirm or ratify; a Court Of Appeals affirms or disaffirms a decision of a lower court.

Affix: To attach to; to sign; to attach one's signature.

Agent: A person appointed to act for and on behalf of someone, i.e. a principal. The level of authority / power given to an agent is subject to the agreement between the agent and the principal.

However, in general practice, unless expressly told, a third party can assume the agent has full powers to act for the principal.

Agreement: A standalone document to set out the terms of the agreement between the contracting parties, prepared to include specific conditions tailored to suit the needs of the contracting parties. An agreement is sometimes referred to as a contract.

Alimony: The monetary support that one is entitled to from a spouse after a separation or divorce. The Court usually fixes the amount of such alimony.

Allegation: The contention of a party in a lawsuit, including what he intends to prove.

Alleged: Claimed; charged.

Allocate: To allot; to ration; to assign.

Allocation: The process of distribution to give an amount or share of a business to someone or some entity.

Allotment of Shares: The issuance of new shares to the existing shareholders or to third parties.

Alternate beneficiaries: Persons who are to receive a gift because the first choice (primary beneficiary) is dead.

Alternate Director: An individual who is appointed by a director of a company to attend a board meeting on his behalf where he (as the principal director) is unable to attend. The appointment is made pursuant to the constitution of the company.

Amalgamation: The process of combining two or more companies into a new entity as part of a merger between the companies.

Amendment: Making changes to an existing written agreement by virtue of adding new provisions and/or removing existing provisions.

Amortization: The paying off of an indebtedness through regular installments. (A mortgage on property is amortized over a period of years through regular payments.)

Ancestor: A person from whom one is descended; a progenitor. (Specifically, a parent, grandparent, great-grandparent, etc.)

Ancillary administration: A proceeding in a locality where a deceased person owned property, but which is a different locality from the one in which the estate is being administered.

Angel Financing: The money provided by an angel investor to invest it in a startup. That money comes from one’s personal earnings rather than from a common fund.

Angel Fund: A group of angel investors who collaborate together to invest in startups.

Angel Group: Thanks to this group, angel investors consolidate their funds, share their expertise and coordinate their investments.

Angel Investor: In Malaysia, Angel Investor refers to an investor who is a resident in Malaysia and meets one of the following qualifying criteria:

• a high-net-worth individual whose total net personal assets exceeds RM 3,000,000;
• a high-net-worth individual who has a gross total annual income exceeding RM 180,000 per annum in the preceding twelve (12) months; or
• a high-net-worth individual who, jointly with his or her spouse, has a gross total annual income exceeding RM 250,000 per annum in the preceding twelve (12) months.

Annex: To join; to attach.

Annual Return: A yearly statement which gives essential information about a company’s composition, activities, and financial position, and which must be filed by every active incorporated or registered company with the Companies Commission of Malaysia (SSM).

Annulled: Dissolved or voided.

Annulment: The act of canceling something; making it void. An annulment of marriage is a legal decision that the marriage never existed. (An annulment is not a divorce.)

Anti-Assignment Clause: A contractual provision which restricts the rights of a contracting party from delegating its contractual obligations to a third party without the consent of the other contracting party/parties.

Anti-Dilution Provision: Usually found in option, security, or merger contracts, this clause warrants and protects the position of equity holders (investors or shareholders) from events which would cause their equity in a company to become less valuable.

An example of how this is used is by giving equity holder the right to maintain his or her percentage of ownership in a company by buying a proportionate number of shares at a discounted rate in the event of any future issuance of shares.

Anti-Layering Provision: A provision in a subordinated debt agreement prohibiting the creation of additional debt that is senior to that subordinated debt but junior to the senior debt.

Appeal: The request for a review by a higher court of a verdict or decision made by a lower court.

Appellate court: A court with the authority to review the handling and decision of a case tried in a lower court.

Appraisal: An evaluation of the worth of property. When ordered by a court, such estimation of value may be carried out by one or more reputable, qualified, disinterested parties.

Arbitration: The submission by two contesting parties of their disagreement to an impartial arbitrator, usually agreeing that his ruling in the dispute will be binding and final.

Arbitrator: A disinterested person, chosen by the parties in a dispute, who will hear the details of the dispute and who will render a decision as to how the dispute shall be settled.

Armed force: A posse; a group of armed civilians authorized by the official peace officers of the community to aid in the capture of criminals and the prevention of crime.

Arm’s Length Basis: Used to describe business transactions between buyers and sellers who act independently and are not affiliated with each other. It is also the case that the transactions are free from collusion and third party pressure or influence.

Arrest: The taking of a person into custody by an officer of the law. To deny an individual his personal liberty by placing him under the jurisdiction of the law.

Articles of Incorporation: The document by which a corporation is formed and organized under the corporation laws of the state. (Each state has its own laws of incorporation.)

Articles of Organization: Document filed with a state's Secretary of State, used to form a limited liability company. Sometimes referred to as a "Certificate of Organization" or "Certificate of Formation", depending on state law.

Ascertain: To find out; to make certain, without doubt.

Assert: To declare; to maintain; to charge as true.

Assignment: The transfer of the rights and/or obligations under an existing contract by one party (an ‘assignor’) to another party who is a third party to the contract (an ‘assignee’).

Associate: An attorney practicing with another attorney, or with a firm of attorneys, but not as a partner or member of the firm.

Attest: To state to be true; to bear witness to.

Attorney general: The chief law officer of a state or of a nation.

Attorney-in-fact: An individual who is authorized by a written document to act for another. The individual need not be an attorney and the written document is often called a Power of Attorney.

Auction: A sale, open to the public, of items and property sold to the highest bidder.

Audit: A process which involves performing procedures in order to obtain audit evidence about the amounts and disclosures in the financial statements of a company.

Authorised Capital: The registered capital of a company in Malaysia. This is the maximum amount of the share capital in which a Sdn Bhd Company is allowed to issue to its shareholders.

Authority: 1. The power and right to do a certain act. 2. A person who has been given certain powers and rights.

Autopsy: Necropsy. The examination of a dead body by a pathologist for the purpose of finding the cause of death. Also known as a post-mortem examination.

Backup withholding: The IRS requires backup withholding for certain taxpayers, usually because of their past failure to pay taxes. Persons making certain payments to such taxpayers must withhold and pay to the IRS 31% of such payments.

Bad faith: Conduct in which there is a design of ill-will or an ulterior motive to commit deceit or fraud.

Balance of Probabilities: The burden of proof in a civil trial. It is also known as preponderance of evidence. The common distinction is made with the burden of proof in a criminal trial, which is beyond a reasonable doubt. In a civil trial, one party’s case is needed only be more probable than the other.

Balance Sheet: A statement of the assets, liabilities, and capital of a business or other organisation at a particular point in time, detailing the balance of income and expenditure over the preceding period.

Bankruptcy: This situation occurs when a company cannot pay its debts. Usually it lasts around one year. A company has the possibility to stay in business while it negotiates its debts with its creditors.

Bear interest: When making a loan, the lender usually asks that the money be augmented by the payment of interest. Thus, a loan of $1,000 may bear interest of six percent per annum, or sixty dollars per year.

Bearer: The person who has a document in his possession and who will receive any payment that is due on said document. As an example, when a check or note is payable to bearer, anyone who presents the check or note will receive the payment therefrom.

Benchmark: A process to measure the success of a startup. It is a goal that a startup needs to achieve. For instance, if a startup succeeds in reaching a certain amount of money for a certain period of time, the startup meets the benchmark. This tool allows the investors to determine if the startup needs more funds or not.

This is of the quality of a business’s policies, products, or strategies. They tend to be used as a comparison to weigh your business against peers.

Beneficial ownership: Also called “equitable ownership”. Refers to the indirect interest in a property. Agents, under a legal instrument such as a trust, are the registered owners of a property or asset on behalf of its principal. The principal would be the beneficial owner of such a property or asset.

Also refers to companies in a parent-subsidiary company relationship, where the parent company has a beneficial interest over its subsidiaries’ assets.

Beneficiary: A person whose benefit property (for e.g. shares in a company or real estate) is held under a trust, will, insurance policy etc.

Bequest: A gift given in a will.

Best Efforts: An underwriter, who is usually an investment bank, commits to distribute as much as it can in securities offering. The unsold securities are returned to the company which has issued the shares.

Beyond a Reasonable Doubt: The burden of proof in a criminal trial, the burden of which is only discharged where there is no other logical explanation which can be derived from the facts except that the defendant committed the crime, thereby overcoming the presumption that a person is innocent until proven guilty.

Blanket lien: A lien on all of a person’s existing and future assets, giving the lienholder the right to seize in the event of non-payment.

Blind Pool: A type of limited partnership which doesn’t specify its investment goals. Investors are ‘blind’ in a blind pool and don’t benefit from many safeguards.

Board Meeting: A board meeting is a formal meeting of the board of directors of a company which is held at regular intervals to discuss major problems and policy issues within the company.

Board of Directors: A group of individuals elected to represent the shareholders of a company. A board’s mandate is to establish policies for corporate management and oversight, making decisions on major company issues.

Board Resolution: A way of documenting a significant decision made by a company’s board of directors usually at a board meeting, on behalf of the company.

Bodily injury: Any harm coming to the body as the result of external force. Such injury may come from a blow or it may come from malpractice of a physician, or as the result of rape or attempted rape.

Boilerplate Clauses: Such clauses usually appear towards the end of a contract and are incorporated as general or standard contract clauses. Some examples include entire agreement clause, force majeure clause, severability clause, assignment clause and etc.

Bona fide: True; honest; acting in good faith.

Bond: A long-term debt instrument used to raise capital. It is essentially a loan agreement between the issuer of a bond (a party who is seeking financing) and an investor. The investor will purchase the bond(s) from the issuer at a premium, while the bond issuer will be placed under an obligation to pay the investor a specified sum of money at specified future dates.

Bootstrap Startup: Ever heard the phrase ‘pulling yourself up by your bootstraps?’ This phrase defines what bootstrapping is. It basically means, starting a business with no money — or, at least, very little money.

Bovine: A Cow.

Breach: Failure to perform an obligation; a violation of the terms of an agreement.

Breach of Contract: The failure of one party to uphold the terms and/or conditions agreed in a contract.

In Malaysia, the usual remedy for breach of contract is an award of damages. Section 74 to 76 of the Contracts Act 1950 provide the innocent party three types of damages:

• Compensation for loss or damages caused by breach of contract;
• Compensation for failure to discharge obligations resembling those created by the contract; and
• Compensation for breach of contract where a penalty is stipulated for.

Bridge Financing: A short-term loan used until a person or company secures permanent financing or removes an existing obligation. This type of financing allows the user to meet current obligations by providing immediate cash flow.

Bridge Loan: A temporary short-term loan.

Bring suit: The initiation of legal proceedings; to start an action.

Broker Dealer: A broker is a third party that does transactions on securities or assets between buyers and sellers. When a transaction is done, the broker receives a commission.

Burden of Proof: The duty placed upon a party to prove or disprove a disputed fact.

Burn Rate: The rate at which the business is spending its investment before generating a positive cash flow.

Business Plan: A business plan is a written document that describes your business’s objectives, strategies, sales, marketing, and financial forecasts. A business plan helps you to clarify your business idea, spot potential problems (and find potential solutions), set out your goals and measure your progress.

Buy-out provision: A provision in a lease which allows the tenant to purchase the property being leased.

By virtue of: By authority of; because of. (Payments made to a public official by virtue of his rightful function, according to law.)

Bylaws: Rules and regulations adopted by corporations, associations, benefit societies, etcetera, to govern their ongoing activities. Such bylaws must be compatible with the charters of the various organizations and must be in conformity with their aims and goals.

Call on Shares: The demand made by the company on its shareholders holding partly paid shares to pay part or full unpaid amount on the shares.

Call Option: Financial contracts that give the option buyer the right, but not the obligation, to buy an asset or instrument at a specified price within a specific time period.

Call Protection: A contractual provision which prohibits or restricts the early redemption of a debt security.

Capacity: A contract is generally not enforceable if the parties do not meet the necessary capacity. Thus, “capacity” means the parties must be of legal age and sound mind and are not being coerced into the contract, and that the subject matter of the contract is legal.

Capital: Refers to the financial wealth of a company. Typically used to describe the amount of money represented by the shares subscribed by the shareholders. Also used to refer to the financial assets of the company such as funds held in deposit accounts, and also physical assets and facilities such as buildings and manufacturing equipment.

Capital gains: Profits from the sale of capital assets in excess of costs and values. Such gains are subject to special taxation, as specified by tax laws.

Capital investment: Moneys spent to increase the worth of an asset.

Capitalize: To estimate the value of a stock; to authorize the issuance of a certain number of stocks and bonds in the charter of a corporation; to supply with capital.

Cargo: The goods and merchandise carried by a merchant ship.

Cash surrender value: The value of an insurance policy at any specific time before the policy is due. This amount is calculated according to established rules. The insured who is canceling his insurance is entitled to a certain amount of money, determined by how much premium he has paid in during the life of the policy.

Cash value: The amount for which something can be sold in a free market. Also known as market value, fair market value, clear market value.

Certified check: The signing of a check by a bank officer showing that the depositor has adequate funds to cover the amount of the check.

Certified copy: A copy of a document signifying that it is a true copy. Such copy is certified by the officer to whose custody the original document is entrusted.

Chairman: The person presiding over an organised group such as a board or committee. Also used to refer to the appointed person presiding over a meeting.

Chambers: The private office of a judge.

Change of beneficiary: Switching a bequest or beneficial interest from one person to another.

Charge: A form of security as part of a debt payment, by way of mortgaging the assets of a company up until a period of which repayment is secured.

Charitable trust: A trust whose assets and income shall benefit the general public, or a significant segment of the public.

Charter: An act of a legislature creating a corporation and setting forth its franchise; also, a document defining the organization of a corporation.

Chattels: Any type of property other than real property

Choate: Complete; justifiable against other claims; the opposite of inchoate.

Chose: A case of action; chattel or personal property; a personal right; a chose in action.

Circumstantial Evidence: Evidence that tends to prove a fact by proving other events or circumstances which afford a basis for a reasonable inference of the occurrence of the fact at issue.

Civil liability: A sum of money assessed against a defendant. It may be single, double, or treble the original amount of the actual damages.

Clawback: The act of requiring a payment previously paid out to be returned.

Clear and convincing proof: Proof beyond a reasonable doubt; evidence that has convinced an unbiased jury, composed of competent, reasonable jurors.

Clear days: All the days in a stipulated time frame excluding the commencement date and the end date.

Codicil: An addition or supplement to a will. It may also delete or modify various provisions of a will. (Codicils must be witnessed and signed in the same manner as the original will.)

Codicils: An addition or supplement to a will. It may also delete or modify various provisions of a will. (Codicils must be witnessed and signed in the same manner as the original will.)

Co-executor: One of two or more people designated to administer someone's estate; joint executor.

Collateral: Property pledged to a creditor to secure a debt.

Collateral Contract: A secondary agreement added to the original contract that is meant to ensure that the pre-contract promises are met.

Columbarium: A structure, often adorned with stained glass or other decorations, containing chambers to hold urns for cremated remains.

Command: An order, usually implying that some action must be taken, as directed.

Commingle: To put together into one fund moneys from several different sources.

Commissioner of Oaths: A public official who is authorized to witness signatures on documents, to administer oaths, and to perform other tasks, such as attesting to the genuineness of various papers.

Common Seal: A metal stamp for stamping documents with the name of the company to show that they have been approved officially. It refers to the signature of the company to any document on which it is affixed and binds the company for all obligations undertaken in the document.

Company Limited by Guarantee: A public company incorporated with the principal liability of its members limited by the constitution to such amount as the members undertake to contribute to the assets of the company if the company is wound up.

Company Limited by Shares: A private company incorporated with the principal liability of its members limited by such an amount that is unpaid on their respectively held shares if the company is wound up.

Compounding: The concept of exponential growth in value from a principal sum, through the reinvestment of accrued interest or capital gained.

Accumulated interest or capital gained periodically (say weekly, monthly, or yearly) is added to the principal sum invested or owed, and the process is repeated as the principal sum gets bigger and bigger as time goes on, and so does the accumulated interest and capital gained from that sum.

Concur: To agree; to happen at the same time.

Condemn: To judge guilty; to declare a building unfit for occupancy and to therefore order its destruction; to pass judgment upon someone convicted of a crime.

Condition Precedent: A stipulation that defines certain conditions that must either occur or be met by either party to ensure progress or execution of a contract.

Conditional Contract: A contract agreement that only requires performance once the delineated conditions are met. It is also called a hypothetical contract.

Confidential Information: Any information or document that a business or an individual wishes not to make public.

Conflict of Interest: A conflict of interest occurs when an entity or individual becomes unreliable because of a clash between personal (or self-serving) interests and professional duties or responsibilities.

Conformity: Resemblance; agreement; correspondence in form or use.

Congress: 1. In America, Congress is composed of the two legislative bodies, the Senate and the House of Representatives. 2. In international law, a Congress is an assembly of representatives from different countries who meet to consider matters for their common good.

Connected person: Generally refers to a family member, or an associated body corporate, trustee of a trust, or partner to which the person relates.

Consensus: Meeting of the minds (also referred to as mutual agreement, mutual assent or consensus ad idem) is a phrase used to describe the intention of the parties forming the contract. In particular, it refers to a situation where there is a common understanding in the formation of the contract.

Consent: To voluntarily agree; to permit or approve.

Consequential damages: Loss or injury that results indirectly. As an example, a store owner who has a fire loses not only the goods and fixtures that have been burned, but he loses what he would have earned had there been no fire and he could have continued to sell his merchandise.

Conservator: An individual appointed by a court to have authority over anotherÃ?s affairs. Depending on the state, a conservator may have authority over property, business, or personal matters.

Consideration: Consideration is needed to form a legally enforceable contract. Usually this is the price paid by one party and the goods or services supplied by another party.

Consign: Delivery of goods from the owner to another party ("consignee") to be sold by the consignee for the benefit of the owner.

Consignment: Delivery of goods from the owner to another party ("consignee") to be sold by the consignee for the benefit of the owner.

Consolidated Financial Statements: The financial statements of an entity with multiple divisions or subsidiaries.

Constitution: A company constitution In Malaysia (previously referred to as Articles and Memorandum of Association) is a legal document recognised by the Companies Act 2016 . It generally specifies the rules governing the relationship and activities of the corporation, its shareholders and directors.

Constructive Dismissal: An act of an employee in terminating his employment due to a breach of contract committed by the employer. The breach committed must have been so severe that it had altered the essential terms of an employee’s employment contract, leaving the employee no choice but to resign.

Construe: To interpret; to ascertain the meaning of, especially the language of a document.

Construed: To interpret; to ascertain the meaning of, especially the language of a document.

Contemporaneous: Taking place at the same time as another occurrence.

Context: Those parts of a spoken or written passage that precede or follow a specific word, phrase, or sentence. Taking words out of context often alters the meaning of the entire passage or text.

Contingency: The possibility of happening; an event that may occur.

Contract for Services: Such a contract refers to a relationship akin to an agency. Generally, a person engaged via a contract for services is not an employee.

Contract of Service: An agreement (whether orally or in writing) binding on parties who are commonly referred to as “employer” and “employee”.

Contributory: In terms of a pension plan, a plan to which both the employer and the employee make contributions.

Contributory Negligence: A legal principle that an aggrieved or injured plaintiff may have contributed to his or her injury by being negligent of the obvious and known conditions. Careless driving and driving without using a seat belt are examples of contributory negligence.

Controversy: A suit or civil action; an issue appropriate for determination in a court of law. Controversies take place between plaintiffs and defendants.

Conversion Rights: A right by which preference shareholders may convert their shares into ordinary shares based on a pre-agreed conversion rate.

Convertible Loan: A loan which is structured in a way where it automatically converts into equity when a certain trigger event occurs or at maturity.

Corporate seal: An emblem or symbol of a corporation, often embossed on a corporation's stock or bond certificates, or on a contract of the corporation.

Corporate Veil: A legal concept that separates the personality of a corporation from the personalities of its shareholders and protects them from being personally liable for the company’s debts and other obligations.

Co-Signer: Someone who signs a document along with another person or persons, often assuming obligations to be shared with the other signers.

Co-Trustee: One of two or more people who jointly hold, manage and distribute property for the benefit of another under a trust; joint trustee.

Counsel: A lawyer; an attorney; a counselor. To counsel means to advise.

Counterparty: The other party to a contract. In a contract between A and B, A is the counterparty to B and vice versa.

Covenant: A written agreement, signed and notarized, between two or more people, in which one party or parties promises to perform certain acts and the other party or parties agree to recompense him or them for such performance. In other words, a covenant is a binding contract between two or more people. Suits for violation of a covenant are ex contractu, arising out of a written contract.

Credit bureau: A business that collects and sells information regarding the payment history and creditworthiness of persons and organizations.

Credit Facility: The provision on financing by a lender (usually a bank) to a borrower. Can be in the form of revolving loans, term loans etc.

Credit Rating: The rating given by a credit rating agency to a specific debt based on the creditworthiness of the debt issuer.

Credit report: A summary of a personÃ?s past performance and current ability to pay debts, usually prepared by a credit bureau.

Creditor: An entity (person or institution) that extends credit by giving another entity permission to borrow money which is to be repaid in the future.

Criminal Breach of Trust: A person may be charged with an offence for a criminal breach of trust (CBT) if he dishonestly misappropriates, takes, uses or disposes of any property which he has control over.

Crystallisation: The process in which a floating charge converts into a fixed charge when certain events occur.

Cross-Examination: The examination of a witness who has already testified in order to check or discredit the witness’s testimony, knowledge, or credibility.

Current Liability: Refers to liabilities of an organisation which would, in the ordinary course of events, be payable within 12 months after the end of the financial year to which accounts or consolidated accounts relate. 

Custodian: An individual employed to safeguard and watch over somebody's property.

Custody: The care and control of property, or of a person or persons. Custody does not necessarily imply ownership. A child may be given over to the custody of a parent or guardian; a prisoner may be held in custody by being placed in jail.

Customarily: According to the usual order or procedure; in accordance with the industry norm.

Damages: Compensation that the law awards to someone who has been injured or suffers a loss because of the action of another.

Data: A fact or facts from which conclusions are drawn; information, collected in order to reach a conclusion.

Deadlock: A situation, typically one involving opposing parties, in which no progress can be made.

Deal: A transaction between two or more people; a business arrangement to attain certain desired results.

Death: The end of life. Most states legally define death as either the irreversible cessation of (a) brain function (brain death), or (b) circulatory and respiratory function.

Death Benefit: Money that is paid by an insurance company or employer to a beneficiary when a person dies.

Debenture: A long-term security yielding a fixed rate of interest, issued by a company and secured against assets.

Debt: Money owed; money owed as the result of an agreement or contract, oral or written.

Debt Securities: Debentures, bonds, notes, loan stocks or any other instrument representing indebtedness, whether secured or not, and whether convertible or not.

Debtor: A person who owes money; someone liable by contract to pay a claim.

Deceased: A person who has died.

Decedent: A deceased person.

Declarant: The person who makes a statement, usually written, such as a Living Will.

Declaration: A formal statement intended fo legal significance; e.g., a "declaration of trusst" creates the trust.

Decree: The decision of a court of equity. A judgment is a decision of a court of law.

Deductible: The portion of a loss that an insured must pay before payment is made by an insurance company.

Deed: A written document transferring the ownership of land, and the buildings thereon, to another person or persons.

Deed of Adherence: A document by which a person or entity becomes a party to an existing shareholders’ agreement.

Deem: To determine; to consider; to judge.

Default: The failure of a person, persons, corporations, or municipalities to pay their debts; the failure to carry out an obligation.

Defend: To attempt to defeat a claim or charge; to represent a defendant.

Defendant: The party who refutes a claim made by a plaintiff; the person accused in a lawsuit.

Defense: The denial of charges, brought by a plaintiff against a defendant; an answer to a complaint.

Definitive Agreement: A document defining the final terms of an agreement between the concerned parties.

Deletion: The crossing out or removal of certain words, sentences, or clauses from a legal document.

Deliberate: 1. An act that has been thought out and considered. (The opposite of spontaneous or impromptu.) 2. To deliberate means to think about or consider, or to plan beforehand.

Delinquent: An individual who does not carry out that which is expected of him or that which he has promised to do; a debt that is due and has not been paid; neglectful of duty.

Demand: A legal obligation; a claim; to claim as one's right; to insist upon; a positive request that presupposes that there is no defense to the claim or right.

Demise: A deed; a lease; a transfer of property; a conveyance or creation of an estate to someone else for life. In medical jurisprudence, demise is a death.

Denial: A defense against a charge; a contradiction; a traverse. (When a defendant answers a plaintiff's charges, he or she often denies them. Even if it is stated that the defendant has insufficient information to respond to a complaint, this will constitute a denial.)

Deny: To issue a denial; to contradict; to protest.

Dependent: Someone who relies upon another for his partial or total support and maintenance. (A spouse or minor child is referred to as a dependent.)

Depose: To make a statement under oath.

Depreciation: The diminution of value of assets or property.

Derivative: A instrument creating an obligation to pay, with the value of which is dependent on a number of variable factors, making reference to external benchmarks, such as published interest rates, currency exchange rates, or trading prices.

Descendant: A child, grandchild, great-grandchild, and so forth, down through the generations.

Descent: Inheritance from one's parents, grandparents, etcetera.

Designate: To choose or select a person to serve in a specified role or capacity.

Designee: The chosen recipient of certain rights or obligations from another person.

Determination: The end of a lawsuit, terminated by a decision of the court. (A case is determined in favor of one or the other of the parties to the suit.)

Device: A deceit or plan to trick. A gambling device may be a machine specially designed to cheat those who gamble.

Devise: A gift originating from a clause in a will, usually a gift of real estate. However, a devise may refer to a gift of personal property.

Direct: 1. Immediate; proximate; the opposite of indirect and remote. 2. To order; to guide; to command; to control; to regulate.

Direct Dismissal: A situation where an employer decides to end the employment of an employee resulting in dismissal of the employee, usually by way of a formal letter of termination.

Director: A person appointed and authorized to manage and direct the affairs of a company.

Disability: 1. The state of being legally incapable to perform an act; a lack of competence or power to perform. 2. An injury or illness which incapacitates one from carrying out his usual duties. Such a disability may be physical or mental, total or partial, temporary or permanent.

Disabled:  1. The state of being legally incapable to perform an act; a lack of competence or power to perform. 2. An injury or illness which incapacitates one from carrying out his usual duties. Such a disability may be physical or mental, total or partial, temporary or permanent.

Disapprove: To disallow; to render an unfavorable judgment; to refuse to confirm a nomination or appointment of an official.

Discharge: 1. To satisfy a financial obligation. 2. To release; to terminate an individualÃ?s employment; to dismiss a healthcare provider. 3. To release a patient from a hospital.

Disclaim: To give up a legal claim.

Disclaimer: The refusal of a beneficiary to accept an inheritance.

Disclosure: The making known of something; a revelation; the uncovering of something that had been kept secret.

Discontinuance: The failure of a plaintiff to continue to press the suit. As a consequence, the case is dismissed.

Discrepancy: An inconsistency between the contentions of a party to a suit and the actual facts; a variance; a lack of conformity.

Discrimination: The denial of equal protection of the laws; the failure to treat all people alike despite differences in race, color, creed, sex, or social position.

Disposition: The final determination of a matter, arrangement. Method of handling the body of a deceased person, for example by cremation or burial.

Dispute: A controversy; an argument. In law, a dispute arises when one party presents an argument or a point of view that he contends is factual and such point of view or argument is denied by the other party.

Disqualify: To render unfit; to make someone ineligible; to revoke qualification. A judge may disqualify himself from trying a case because he may have an interest in its outcome, or he may believe that he cannot be completely impartial.

Dissolution: The cancellation of a contract or partnership; the act of revoking or canceling a legal proceeding, as when a court dissolves an injunction; the act of terminating a marriage; the dissolving of a corporation.

Dissolve: To cancel or terminate.

Distress: To take property away from a wrongdoer and to give it to the party he has injured, in order to give satisfaction for the wrong.

Distribution: The transfer of the assets of a deceased person's estate to the heirs, after all debts, claims, and taxes have been paid.

Distributions: The transmission of the assets of a deceased person's estate to the heirs, after all debts, claims, and taxes have been paid.

District court: A court of the federal government or of a state, having jurisdiction over a particular geographic area. Such area may be a whole state, several states, or only part of a state, depending upon the size of its population.

Dividend: A fund set aside by a corporation composed of profits that will be apportioned to its various stockholders. When a corporation is profitable, its board of directors will usually declare a dividend. When the corporation fails to make money for any prolonged period of time, it may skip or fail to declare dividends.

Divorce: A legal ending, by court order, of a marriage. The legal basis for divorce differs from state to state; there is no national divorce law.

Divorced: A legal ending, by court order, of a marriage. The legal basis for divorce differs from state to state; there is no national divorce law.

Divulge: To disclose information previously unknown.

Doctrine: A belief; a tenet; a government policy, such as the Doctrine that all people are created equal.

Domestic Inquiry: A part of an internal process conducted by an employer to investigate whether an employee has committed an act of misconduct.

Donee: Someone who receives a gift; a person who is granted with a power of appointment.

Donor: The giver; one who makes a gift or sets up a trust. In medical jurisprudence, one who gives blood or an organ to a recipient.

Dower: The right that a widow has to her dead husband's property. Dower rights vary from province to province in our country, as each province has its own laws on the subject.

Draft: A written instruction from one person to another, ordering the payment of a specified sum of money to a third person on a specified date in the future. Also known as a bill of exchange.

Drag-Along Rights: A right which allows a majority shareholder to force a minority shareholder to join in the sale of a company. The majority shareholder who is ‘dragging’ the other shareholders must offer the minority shareholders the same price, terms and conditions that the majority shareholder has been offered.

Drawdown: The actual funding of a loan or equity investment released by the bank or investing party, whichever the case may be, when all conditions precedent are satisfied.

Due care: The type of care that a sensible person exercises in a situation requiring carefulness. A good example would be when a person, prior to taking a long automobile trip, has his car checked out thoroughly before embarking upon the trip.

Due date: The date upon which a debt falls due; the date upon which taxes should be paid; the date upon which a promissory note is to be paid.

Due Diligence: A thorough examination conducted on the business or a portion thereof in relation to a proposed transaction, looking into amongst other things, its accounts, assets and liabilities

Due-on-sale: A loan provision requiring the loan to be repaid immediately if the underlying security for the loan is sold.

Duly: Suitably; according to legal requirements; properly executed; according to law.

Durable: Able to remain in existence for a long period of time regardless of the existence of obstacles, impediments or other adverse conditions. A power of attorney is said to be durable if it remains in effect even after the principal becomes incapacitated or incompetent.

Duress: Undue pressure by one person against another in order to get him to do something he does not want to do. This pressure might take the form of threats of bodily harm, or of exposure of information that the threatened person wants to keep secret, etcetera.

Duty of Care: The responsibility or the legal obligation of a person to avoid acts or omissions (which can be reasonably foreseen) to be likely to cause harm to another person(s).

Dwelling: A house or building in which people live.

Easement: The right of a non-owner to use land. Such a non-owner may be a next-door neighbor, the general public, or the government. An easement would be the right of an owner of property, who has no land on the street, to use another individual's property to reach the street. Easements must be negotiated and voluntarily agreed to by the owners of property.

Economic Duress: Wrongful or unlawful conduct that creates fear of economic hardship which prevents the exercise of free will in engaging in a business transaction.

Employee Share Option Scheme (ESOS): A scheme which may be implemented by a company by way of giving a share option to eligible employees. This, in effect, gives them the contractual right to acquire shares of the company in the future at a pre-determined preferential price, normally referred to as the “offer price” or “exercise price”.

Employees Provident Fund (EPF): A retirement plan for the private and public sectors in Malaysia, enacted by the Employees Provident Fund (EPF) Act of 1991, intended to help employees save a portion of their salary in the event of retirement, disability, sickness or unemployment.

Employment Contract: An agreement specifying the terms and conditions under which a person consents to perform certain duties as directed and controlled by an employer in return for an agreed wage or salary.

Employment Insurance System (EIS): A financial scheme in Malaysia aimed at helping employees who lost their jobs until they find new employment.

Encroachment: Extending one's property onto that of another; a trespass, such as building a fence that intrudes upon or obstructs a public highway.

Encumber: To burden property with debt, such as to mortgage or otherwise grant a security interest in property to another.

Encumbrance: A liability that lowers the value of a piece of property, such as a lien or a mortgage.

Engagement Letter: The agreement under which a professional or professional firm’s services are retained.

Entity: An organisation that is recognised as a legal person in the eyes of the law. This includes partnerships, corporations, and trusts.

Enumerated: Mentioned specifically; specified.

Enure: Come into operation; take effect

Enurement: To operate or to take effect upon something.

Equitable: Fair; just; according to the principles of justice. An equitable settlement of a dispute is fair to both sides.

Equity: Value of an ownership interest in a company, usually in the form of shares.

Escrow: The engagement of a third party to a transaction to act as an agent to hold important documents, money or property on behalf of the transacting parties in the interim whilst certain conditions precedent in the transaction are completed by the respective parties.

Eviction: The act of getting one to leave lands or quarters he has been occupying, such an act being authorized by a court of law.

Ex Turpi Causa Non Oritur Actio: Legal doctrine which states that a plaintiff will be unable to pursue legal remedy if it arises in connection with his own illegal act.

Exclusion: Shutting out; denying participation. Allowing or including only strictly-defined members of a group or category, with the implication that those not specifically named are not included.

Exempt Private Company: A private company in the shares of which no beneficial interest is held directly or indirectly by any corporation and which has not more than 20 members none of whom is a corporation.

Execution: The signing of the contract by the required parties, finalising the contractual process.

Exemption Clause: A contractual term by which a party attempts to cut down the scope of its contractual duties or regulates the other parties’ right to damages or other possible remedies for breach of contract.

Exhibit: An attachment to a contract which is usually in the form of another agreement or a document.

Exonerated: Absolved of a charge; declared not responsible; not guilty; released from liability; exculpated.

Expert witness: A witness with special knowledge in a particular sphere, such as a scientist, an engineer, etcetera. Such a witness gives expert testimony.

Express Terms: Terms that have been specifically mentioned and agreed by the parties at the time a contract is made.

Express warranty: 1. A warranty that is bound by the explicit statements of the seller. 2. A statement by an insured person, expressed in the insurance policy, that certain facts are true.

Facsimile: An exact copy.

Fair market value: The price that a willing buyer and a willing seller would agree to.

Fair Value: Estimated price at which an asset can be sold or a liability settled in an orderly transaction to a third party under current market conditions.

False pretenses: A premeditated, calculated, thought-out misrepresentation of fact or situation, frequently entered into to defraud someone of property or money.

Fed: Abbreviation for the Federal Reserve System, the central United States Bank that controls the nation's monetary supply (usually referred to as the Fed).

Fictitious: Pretended; false; imaginary; counterfeit; not genuine.

Fiduciary: A person or organization who is given authority and responsibility over assets not owned by that fiduciary, such as an executor or personal representative in an estate, a trustee for a trust, or a conservator in a conservatorship.

Fiduciary Duty: A legal obligation of one party to act in the best interest of another.

Financial Statements: Written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes. Financial statements may include balance sheet, income statement and cash flow statement.

Financial Year: A period of twelve months, used by government, business and any other organisation in order to calculate their budgets, profits, and losses.

Fiscal: An adjective referring to financial matters in general. (Fiscal affairs are financial affairs.)

Fiscal Year: A repeating twelve-month period chosen by a business for accounting purposes. A fiscal year can, but need not, end on December 31—the "calendar year."

Fixed Charge: A security interest over an identifiable real asset of a company that can be ascertained when the charge is/was created.

Fixed-Term Employment Contracts: Contracts of service for a specified period of time. Case law has interpreted a genuine fixed term contract to be one where “both parties recognize there is no understanding that the contract will be renewed on expiry”.

Floating Charge: Also known as a floating lien, it is a security interest or lien over a group of non-constant assets.

For value received: An expression denoting that a bill has been paid, acknowledging having received full value.

Force majeure: In contracts, a clause excusing non-performance of the contract if non-performance is due to unforeseen events beyond the control of the parties, such as acts of God.

Foreclosure: The legal process in which a lender attempts to recover monies owed to him by a defaulting borrower by selling the collateral property as part of the loan, and the proceeds of sale of which is used to satisfy the owed debt.

Foreign Company: A company doing business outside the jurisdiction it is incorporated.

Foreign trade: Import and export trade between countries.

Forfeit: To lose the right to do something, especially because of defaulting an obligation or because of an offense.

Forfeited: To lose the right to do something, especially because of defaulting an obligation or because of an offense.

Fraudulent: In bad faith; dishonest.

Fraudulent Misrepresentation: A type of misrepresentation where a false statement of fact was made by a person, who was aware that it was false, and such statement caused or induced someone to enter into a contract.

Free and clear: A "clean" title; a title to property that is free of liens or other possible hindrances.

Free on Board: The term, or its abbreviation "f.o.b.", is used in a quotation or in a contract between a seller and a buyer of goods to be delivered. The term, which is usually followed by a defined location—often either the sellerÃ?s or the buyerÃ?s place of business, means that the seller is responsible for delivering the goods to that defined location and assuming the risk of loss until then.

Fringe benefits: Benefits received by employees in addition to their wages. Health insurance, life insurance, disability insurance, and pension benefits are all classified as fringe benefits.

Frustration: A doctrine which sets aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party’s principal purpose for entering into the contract.

Full disclosure: The telling of all that one knows, not hiding or concealing anything that might be pertinent to the case.

Garnishment: A legal proceeding in which a creditor seeks to obtain payment from a debtor out of money, salary, or property of the debtor. The procedure takes place after a judgment against the debtor has already been handed down.

General instruction: An instruction by a judge to a jury, setting down the salient points in the case that must be considered before bringing in a verdict. In this instruction, the judge will state that the merits of the case must be decided only on the evidence. The judge will also state the limitations of the issues to be decided.

General Meeting: A meeting of a company’s shareholders.

Generally Accepted Accounting Principles: Self-explanatory really. This refers to the rules of accounting employed by certified public accountants. Also abbreviated as “GAAP”.

General partners: Owners of a partnership who are responsible for the management of the partnership, receive a share of the partnership's profits and losses, and who are personally liable for the actions of the other partners and the debts of the business.

General partnership: An unincorporated business owned by more than one person, where all of the partners share equally in the management, profits and losses.

General Power of Attorney: A document in which a person authorizes another person or entity to act on his or her behalf in a variety of situations.

Gift tax: A tax on the transfer of property from one living person to another. The tax is levied on the transfer, not on the property transferred.

Give notice: To inform someone that a legal suit is about to take place. Such notice is usually served legally, although it may be informal notification.

Governing Law Provision: A contractual provision which stipulates which jurisdiction’s law governs the interpretation and enforcement of the said contract, for the avoidance of any doubt.

Grace Period: A period of time during which a party can cure a breach before it gives rise to a remedy. Also referred to as a “cure period”.

Grant: 1. A transfer of property by deed. 2. To give; to bestow. 3. A gift.

Grantee: The recipient of property from a grantor. For example, using a Quitclaim Deed, a grantor can transfer property ownership to a grantee.

Grantor: A person who sets up, and transfers property to, a trust.

Gross negligence: 1. Failure to act where duty demands that one act. 2. Acting in such a manner that one ignores the safety of others. 3. Willful neglect.

Gross Revenue: Total receipts of a business.

Guarantee / Guaranty: An agreement under which a guarantor agrees to be liable for the payment or performance of the obligations of another.

Guarantor: A person or organisation, whether in the capacity as an individual or a corporation, who provides a guarantee.

Guardian: A person who has been given the legal right and duty to take care of another individual and/or that individual's property. Guardianships are granted when a person does not have certain legal rights, such as a minor, to take care of himself and his affairs, or a mentally ill or debilitated person not being capable of managing himself and his affairs.

Hearsay: Information gathered by one person from another person concerning some event, condition or thing of which the first had no direct experience. When submitted as evidence, such statements are called hearsay evidence. Hearsay evidence is generally not accepted in court.

Hedging / Hedge Agreement: A derivative agreement or instrument that protects against financial risks. Common examples are credit swaps and interest rate swaps.

Heir: A person who inherits money or property, or who will naturally inherit property if someone dies without making a will.

Heirs-at-law: People who inherit money or property, or who will naturally inherit property if someone dies without making a will.

Held in trust: Property held by someone other than the owner, such as a trustee or an agent. Such trustee or agent is responsible to the owner and, for a fee, may manage the property and turn over to him any moneys earned by the property.

Herein: An adverb referring to a certain phrase, sentence, clause, paragraph, or page in a document.

Hire Purchase: An arrangement for buying expensive consumer goods, where the purchaser makes an initial down payment and pays the balance in instalments (usually with interest incurred).

Hoc: This (Latin).

Holding Company: A company established for controlling and managing another company’s investment policies and assets. A holding company in Malaysia is a type of company that does not offer any services, nor produce any goods on its own.

Hold harmless: An agreement in which one party agrees to protect the other party from liability for any damage that may occur in connection with a particular transaction, such as a lease.

Homestead: The house and land upon which a person or family makes their permanent residence. A personÃ?s homestead is generally exempt from debt collection (except by the lender who financed the homestead). The extent and definition of the homestead exemption varies by state.

Homicide: Murder; the killing of a human being by another human being. There are many types of homicide.

Honorable: A vague title of respect, given to various public officials, judges, etcetera, as the honorable justice.

House of Representatives: Legislative body of the United States government to which members are elected every two years from various congressional districts, such districts being determined by population. Various states also have legislative bodies known as houses of representatives.

Imperative: Commanding; something that must be done; mandatory.

Implied Terms: Words or provisions that a court assumes were intended to be included in a contract.

Impose: To tax; to levy; to place a burden upon someone, as in imposing a heavy fine.

Imprison: To place a person in jail; to restrain a person's liberty, against his will.

In arrears: Refers to the payment accrued over time that is due and payable at the end of such a period.

In lieu of: Instead of.

In person: An individual who acts as his own attorney in a case is said to appear in person.

In re: In the matter of; concerning (Latin).

In trust: The status of property given over and entrusted to someone to guard and take care of. Money or property of an estate is held in custody, or in trust, by a trustee until it is turned over to an heir.

In witness whereof: An expression making it clear that someone signing a legal document is signing as a witness.

Incapacitated: Unable to perform one's usual functions or duties, due to a physical or mental disability.

Inception: The beginning; the commencement, as the start of an agreement or contract.

Inchoate: Unfinished; incomplete, as an agreement that has not been put into final form. Inchoate lien. A lien that has not yet been put into effect, as a tax lien prior to the time when a tax assessment has been made.

Inchoate interest: Ownership of an unfinished and/or undetermined claim or agreement.

Incompetent: Incapable; inefficient; lacking the qualities necessary to discharge one's obligations and duties.

Incorporation: The successful registration of a body corporate with the relevant authorisation body. In Malaysia, a company is incorporated upon the issue of a Notice of Registration (‘NOR’) by the Registrar of Companies, in which a unique registration number is assigned to the body corporate. An incorporated body exists from the date of the NOR and has the capacity to sue and be sued and carry out functions as a separate legal entity.

Indebtedness: Also more commonly known simply as “debt”. Refers to the liability of owing money and arrears, which include borrowings, all debt instruments, and even letters of credit.

Indemnification: An agreement to financially protect or reimburse a person if the protected person suffers loss arising out of defined circumstances.

Indemnify: To financially protect or reimburse a person if the protected person suffers loss arising out of defined circumstances.

Indemnity: Insurance against a possible loss; security with compensation for damages or loss.

Independent Contractor: A person or entity contracted to perform work for, or provide services to, another entity as a non-employee.

Industriously: Hard working; to be diligent about a task.

Ineligible: Not qualified; legally disqualified from holding a public office or trust.

Inevitable accident: An accident that is unavoidable, such as an accident due to an act of god (floods, lightning, earthquakes, tornadoes, etcetera); an accident that could not have been prevented no matter what precautions one had taken.

Informed consent: Assent given only after all the facts have been fully explained. Before undergoing surgery a patient should have all the possibilities explained to him/her. Then, informed consent can be given, or withheld.

Infringement of trademark: Deceiving the public by copying, or devising an almost identical copy of, a trademark.

Initial Public Offering (IPO): A process of a company (which is not yet listed on the stock exchange) seeking to offer its shares to the general public, and have its shares listed on a stock exchange. Such a process is highly regulated by the Securities Commission of Malaysia and Bursa Malaysia Securities Berhad.

Injunction: A judicial order restraining a person from beginning or continuing an action threatening or invading the legal right of another or compelling a person to carry out a certain act.

Innocent Misrepresentation: A misrepresentation made by someone who had reasonable grounds for believing that his false statement was true.

Inscription: 1. The registration or recording of a deed, a mortgage, or other document in a public record or registry. 2. A writing on a substance of permanency such as stone or metal.

Insolvency: A situation in which an individual or a company is not able to pay off his or its bills and debts.

Insured: The person who is entitled to the protection under an insurance policy.

Intestate: Dying without leaving a valid will.

Integration Clause: A contractual provision which states that the agreement represents the entire agreement between the parties and its purpose is to supersede prior and contemporaneous agreements thereby not included in the written contract.

Intellectual Property: Some examples of intellectual property include patents, trademarks, copyright, industrial designs and other similar rights. The rights are “intellectual” in the sense that they protect intangible subjects, usually arising out of some form of human creativity. These rights are “property” in the sense that they are based on the legal right to exclude others from using the property and the exclusive legal right to transfer ownership.

Intention to Create Legal Relations: The intention of the parties to enter into a legally binding arrangement in which the rights and obligations of the agreement are enforceable.

Interest Rate:The rate of interest to be paid on top of the outstanding principal amount (which can be a loan or any debt obligation) as part of repayment of the said loan or financing. The rates can be fixed, which don’t change over time, or it can be floating, which will depend on the prescribed market rates as agreed.

Inure: 1. To become effective; to come to one's benefit. 2. To become accustomed to.

Invitation to Treat: A mere declaration of willingness to enter into negotiations. It is not an offer and cannot be accepted so as to form a binding contract.

Involuntary Dissolution: A forced dissolution of the legal existence of a company pursuant to administrative or judicial proceeding rather than being voluntarily decided by the company.

Irrevocable: Unable to be canceled or nullified.

Issued Share Capital: The number of authorised shares that a company has issued to its shareholders. The shares to be issued shall not exceed the number of authorised share capital.

Issuer: A party that issues debt or equity securities.

Joinder: Joining another person in a common suit; the acceptance by a party to an action of an issue tendered (formally presented).

Joint and Several Liability: A contractual arrangement whereby two or more parties are each responsible for the same obligation under the contract.

Joint Venture: A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Judgment creditor: A person who has won his case against a debtor but who has not yet collected his debt.

Judgment debtor: A person who has lost his case to a creditor but has not yet paid his debt.

Judicial: Anything related to the administration of justice; anything that has to do with a court of justice.

Judicial Management: A method of debt restructuring where an independent judicial manager is appointed to manage the affairs, business and property of a company under financial distress. The company is also temporarily shielded from legal proceedings by third parties, giving it the opportunity to rehabilitate.

Judicial Notice: A doctrine which enables a judge to accept a fact without the need of a party to prove it through evidence.

Judicial Precedent: A process whereby judges follow previously decided cases where the facts are of sufficient similarity.

Jurisdiction: The power and right to administer justice; the geographic area in which a judge or a court has the right to try and decide a case.

Jury: A specified number of men and/or women who are chosen and sworn to look into matters of fact and, therefore, to determine and render a decision upon the evidence presented to them. Juries may be of different sizes in various jurisdictions and in various categories. A grand jury may have anywhere from 12 to 24 jurors.

Knowingly: In general, a person acts knowingly when they are reasonably certain a result will come from a specific action.

Last will and testament: The will that is valid and in force at the time of death.

Lease: The agreement by which the rightful and legal owner of a property (the ‘lessor’) grants the right of use and/or possession of the said property to another party (the ‘lessee’).

Leases are usually held in the longer term (more than 3 years in Malaysia), while tenancies, operating under the same concept, are for short-term ownership (less than 3 years in Malaysia).

Legal Due Diligence: The process of collecting, understanding and assessing all the legal risks associated during a merger and acquisition process. During this process, the acquirer often reviews all the documents pertaining to a target company for the purpose of understanding whether there will be any future legal problems.

Legal right: Any privilege or right which, if challenged, would be supported in court.

Legatee: The recipient of a legacy; an individual who inherits something.

Lemon law: A law enacted to protect purchasers of new and/or used automobiles when the vehicle requires frequent repairs and does not operate properly. The purchaser is usually given the right to a refund if certain conditions are met.

Lessee: Someone who leases or rents something, such as an apartment or an automobile.

Lessor: The person who grants a lease to a lessee.

Letter of Credit: Commonly used in international trade, or large construction projects which involves advance payment of large sums of money to protect the seller’s or buyer’s interest.

This involves at least three (3) parties: the issuing bank, the account party (holding an account with the issuing bank), and the creditor of the accounting party (usually another bank, and also usually one that is overseas).

In certain prescribed conditions, where the account party is unable to directly pay its creditor, a Letter of Credit is authorised and issued by the issuing bank on behalf of the account party to guarantee payment in favour of the creditor.

Letter of Intent: A document to facilitate the start of a business deal or project between the parties involved by identifying the key business and contractual understandings that will form the basis of the final contract.

Levy: 1. A tax; an assessment. 2. To tax; to assess; to collect upon; to impose, such as a fine.

License: An official document that gives you permission to own, do or use something, usually after you have paid a fee and/or taken a certain test.

Licensee: One who is granted a license.

Licensor: Someone who grants a license.

Lien: A claim on another's property.

Lieu: Instead of (French).

Limited Company: The most common type of private companies. It is a company incorporated which is limited by shares or by guarantee. The shareholders or members of the company has limited liability, restricted to the value of the paid-up share capital of the company.

Limited Liability Partnership: An alternative business vehicle to carry out business which combines the characteristics of a private company and a conventional partnership. LLP provides limited liability status to its partners and offers the flexibility of internal arrangement through an agreement between the partners.

Line of credit: The maximum amount of credit a bank or businessman will give to a customer.

Liquidated: Paid, settled; wound up, as a company that has gone out of business.

Liquidated Damages: Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. Such damages are meant as a fair representation of losses in situations where actual damages are difficult to ascertain. A liquidated damages clause must represent a genuine estimate of the damages.

Liquidation: The conversion of an asset into cash.

Liquidator: A person appointed to wind up the affairs of a company.

Lis Pendens: An official notice to the public that a lawsuit involving a claim on a property has been filed.

Listed Company: A company whose shares are listed (quoted) on a stock exchange for public trading.

Litigation: A lawsuit; a legal action; a suit.

Living trust: A trust that is in effect while the maker of the trust is still alive, as opposed to a trust set up by a will. Also known as an inter vivos trust.

Living Will: A document which authorizes a person's healthcare provider to withdraw or withhold life-sustaining procedures if the person has a terminal condition with no reasonable hope of survival.

Local law: Law whose application is limited to certain restricted areas, such as municipal ordinances.

Lockout: An employer's dismissal of employees because of a labor dispute, such lockout resulting in the closing of the plant.

Loss of use: In compensation law, the loss of use of an organ or part of the body such as a finger, hand, leg, etcetera. Such loss may be partial or total.

Majority Shareholder: A shareholder in a company who holds more than fifty per cent. of the company’s shares and has the voting control of the company.

Mala Fide: Means “in bad faith” in Latin.

Mandate: An order or command (oral or written) that must be obeyed; a judicial command directing enforcement of the court's decision.

Mandatory: Compulsory; something one must do; not a matter to be acted upon only if one wishes to; obligatory.

Marital deduction: The amount of money a wife or husband can inherit without paying estate taxes. For federal tax purposes, such deduction is equal to no more than one-half of the gross estate.

Material Adverse Clause / Effect: A term used to modify contract provisions in the event that a particular scenario, act, or circumstance occurs, and causes both material and adverse effects to a party or parties’ position under a contract.

A situation which is material and adverse basically means one which puts a party at a major disadvantage not initially intended under the contract, or one which renders the original purpose of the contract to be impossible or not worthwhile to carry out.

Maturity: Refers to the final payment date of a loan or other financial instrument in which all that owed (the principal amount including any interest payable) becomes due to be paid.

Maxim: Principles and rules generally recognized and accepted because they have been in use and have proved to be fair and reasonable over long periods of time.

Medallion Guaranteed: A method of authenticating the identiy of a person signing a document, similar to, but of a higher level than, a notary public

Mediation: A form of alternative dispute resolution (ADR) in which the parties to a lawsuit meet with a neutral third-party in an effort to settle the case.

Medical records: Written material about the patient, including office and hospital charts, X rays, laboratory data, etcetera, detailing a patient's medical history and past and present illnesses. Medical records are the property of the physician or hospital, not the patient. However, medical records are subject to subpoena in cases involving medicolegal matters.

Member: Owner of a company. It is also referred to as a “shareholder”.

Memorandum of Understanding: An agreement between two or more parties outlined in a formal document. It is not a legally binding document but indicates the intention of the concerned parties to move forward with a contract.

Menace: To threaten harm.

Mental competence: A state in which one is in possession of one's mental faculties and capable of the usual normal ability to express oneself. A mentally competent person recognizes right from wrong, is well-oriented, and is able to stand trial or to serve as a witness.

Merger & Acquisition (M&A): The acts of consolidating companies or assets for the aim of stimulating growth, gaining competitive advantages, increasing market share or influencing supply chains. A merger describes two companies uniting, where one of the companies ceases to exist after becoming absorbed by the other. An acquisition occurs when one company obtains a majority stake in the target firm, which retains its name and legal structure.

Minutes: Minutes are the written records of transactions taken or authorised by the board of directors or shareholders of a company.

Misrepresentation: A false statement of a material fact made by one party which affects the other party’s decision in agreeing to a contract. If the misrepresentation is discovered, the contract can be declared void and, depending on the situation, the adversely impacted party may seek damages.

Mitigate: To lessen, as in reducing the punishment of a convicted person or decreasing the amount of damages a plaintiff may have been awarded. Also, to reduce the charges, such as from first-degree murder to manslaughter, because of extenuating circumstances.

Moratorium: A temporary prohibition of an activity for an agreed amount of time.

Mortgage: The putting up of land or a building, or both, as security against a loan of money. Should the person who obtains the mortgage fail to pay off the loan as prescribed in the mortgage contract, the lender will take title and possession to the property.

Municipal: Pertaining to the local government of a city or town.

Mutatis Mutandis: In simple terms, making the necessary alterations and/or modifications whilst preserving the original meaning of a phrase or provision adopted from another source.

Commonly used in contracts where a provision from another contract is being incorporated by reference, this phrase is used to indicate that the provision is modified as necessary to fit the context in which it is being used.

Native: A natural-born citizen; one who was born in the country of which he is a citizen.

Natural Person: An individual, and not a legal entity, body or organisation.

Nee: A word added after a married woman's name, to indicate the name of her family before she was married. For example, Mrs. Mary Jones, nee Smith (French).

Negative Covenant: As the name indicates, a covenant is the promise of taking a certain action or inaction. Negative refers to the opposite of doing that. Therefore, this is a contractual promise not to do something.

Negative Pledge: A type of negative covenant, a negative pledge usually is the agreement by a borrower not to pledge (i.e. charge) any of its assets to other parties in view of protecting its lender’s security.

Negligence: Failure to do what a reasonable, careful, conscientious person is expected to do; doing something that a reasonable, careful conscientious person would not do.

Negotiate: Discussions leading to the conclusion of a business transaction or agreement. (Management and labor undergo negotiations in order to reach an agreement on labor contracts.)

Negligent Misrepresentation: A type of misrepresentation in which someone makes a statement without regard to the true facts.

Net: The balance sum remaining after deducting other amounts. The amount before any such deduction is called the “gross amount”.

Next of kin: The closest relatives. The term is frequently used to describe the closest blood relations who will inherit property from a person who dies without making a will.

No-fault: A common type of divorce in which neither party presents evidence of wrongdoing. It's important to note that no-fault divorces are not necessarily uncontested, as uncontested divorce means that both spouses have agreed upon issues such as alimony and child custody.

Nominate: The act of proposing an individual for a position, office, or appointment.

Non Est Factum: A plea that a written agreement is invalid because a party was mistaken about its character when signing it.

Nonpayment: Failure to pay a debt, according to an agreement. Nonpayment may serve as the basis for a suit to recover.

Notary public: A public official who is authorized to witness signatures on documents, to administer oaths, and to perform other tasks, such as attesting to the genuineness of various papers.

Notice of Demand: A formal notice demanding a party to perform an alleged legal obligation such as rectifying an issue, paying a sum of money or acting on a contractual commitment.

Notify: To give notice; to make facts and circumstances known to someone.

Novation Agreement: A legal instrument that formalises an arrangement to substitute one party for another in a contract 

Nul: No; no one (Latin).

Oath: A pledge to tell the truth; a sworn promise to perform a duty; a calling on god to witness a statement.

Object: To disagree; to pose an objection; to protest. Attorneys in trials frequently object to testimony or procedures.

Obligated: Required by law or contract.

Obligation: Something a person is bound to do or bound not to do; a moral or legal duty. Penalties may be imposed upon people who fail in their obligations.

Obligor / Obligee: A person who owes a certain payment or performance (the ‘obligor’) to another party (the ‘obligee’)

Obliterate: To cancel out or erase written material in a legal document.

Occupant: A tenant; a person who takes possession of property that belongs to no one.

Occupation: 1. A situation in which someone takes possession and control over land, such as when a country is victorious in war and takes over the defeated enemy's land. 2. A person's profession or line of business.

Occurrence: An event; an incident; something that takes place without prior planning.

Of record: Entered on the record; duly recorded.

Offer: An attempt to conclude an agreement through making specific proposals; a tender.

Office: 1. A place where business is transacted; a place where someone practices a profession. 2. A position held by an officer. (The presidential office is held by the President.)

Official: 1. An officer. 2. Pertaining to an office, such as the official duties of a mayor, a judge, a governor, etcetera.

Official Receiver: The Official Receiver of Malaysia acts as the default liquidator in any liquidation where a private liquidator is not appointed and is ultimately responsible for supervising all private liquidators.

Officer: In relation to a corporation, under the Companies Act 2016, an officer generally refers to and includes the director, secretary, manager, or any other person appointed by a corporation to hold executive functions and capacity.

Offset: A claim made by an opposing party in a suit, such offset tending to cancel out the original claim of the plaintiff; a counterclaim.

Ombudsman: A person appointed by a local, state, or federal government to hear complaints from private citizens against their governments (Swedish). Such complaints are frequently transmitted to the appropriate governmental authority.

Omission: Failure to act; failure to do something one should do; failure to perform what the law requires one to do.

On account: A part payment, as distinguished from payment in full; to be charged to one's credit.

On call: A debt payable whenever demanded; a debt to be paid immediately; on demand.

On demand: An existing debt, payable when requested by the creditor.

Open account: An account that has not been settled because continuing transactions are in progress or will take place in the future.

Operation of law: A term referring to the determination of rights and obligations merely through application of the existing laws covering a situation. As an example, if a person dies without having made a will, the heirs automatically inherit the property through the operation of law governing inheritance.

Opinion: 1. The reasons given for a court's judgment, frequently pointing out the law that governed the court's conclusions. 2. A belief; a judge's or court's reasoning in a particular matter.

Oral Agreement: A type of contract that is outlined and agreed upon by way of spoken communication, but not put into writing. Although it can be difficult to prove the terms of an oral contract in the event of a breach, this type of contract is legally binding.

Oral contract: A spoken contract; a written contract that. Is incomplete but has been completed by oral (spoken) agreements.

Ordinance: A local law; a law passed by a legislative body of a city or township or other local government; a statute; a rule.

Ordinary: Usual; normal, as opposed to extraordinary.

Ordinary Shares: Generally shares which give the shareholder a right to attend, participate and speak at a shareholders’ meeting, a right to vote on shareholders’ resolutions, and to participate equally in any dividends or surplus profits/assets (after preference shareholders are paid).

Organize: 1. To establish; to make something functional. 2. To form a union out of unorganized, nonunion working people.

Out-of-pocket expenses: Money that one must pay to defray expenses while carrying out the usual duties and obligations in the performance of a job.

Overdue: Past due; unpaid.

Owing: An unpaid debt; an obligation that is due; due; unpaid.

Owner: A person who has the legal title to property; a proprietor.

Paid-Up Capital: The actual amount of funds/capital injected into a company by the shareholder(s), usually in exchange for shares in the Company. The said funds may then be utilised for the day to day operations of the company to pay salaries, debts and other expenses.

Par: Equal; average; normal.

Par value: An arbitrary minimum price at which each share of corporate stock can initially be sold by a corporation.

Parent Company: A company that has a controlling interest in another company, giving it control of its operations.

Parri Passu: A term that indicates that two or more claims against a single obligor has the same level of priority.

Partnership: A relation which subsists between persons or entities carrying on business in common with a view of profit.

Payment in Kind: A feature of a security whereby dividends (for equity investments) or interest payable (in debt instruments) to the creditor is paid in the form of additional securities of the same type (i.e. shares or bonds) rather than in cash. Also commonly abbreviated as ‘PIK’.

Payee: The person to whom a bill is to be paid.

Peculation: The unlawful taking over of government property or funds for personal use by an individual who has had such property or funds entrusted to his care.

Per Annum: Per year. A common term used to denote rates of interest. For example, let’s say the interest rate of a loan facility is 5% per annum, which basically means that the amount of interest payable at the end of every year is the 5% of the loan facility amount.

Per se: By itself (Latin); taken alone; simply stated.

Perfection: The steps taken to comply with legal and regulatory requirements (for example the filing of forms, or the lodgement of certain documents) to render an agreement or contract entered into enforceable in the eyes of the law.

Performance Bond: A bond issued by one party to another party as a guarantee against the failure to meet obligations specified in the contract. It is also referred to as a contract bond.

Perjury: False testimony; the telling of an untruth when acting as a witness in a court proceeding; the making of a false statement in an affidavit; the willful swearing to a falsehood in a matter before a court. Perjury occurs when someone has taken an oath to tell the truth and then knowingly tells an untruth; lying under oath. Perjury is punishable by severe fines and/or imprisonment.

Perpetual Succession: Continuation of a company’s existence, unaffected by the death of any of its members or the transfer of its shares to a new entity.

Pertain: To relate to; to belong to.

Pertinent: Relevant; directed toward the issue being discussed; apropos; related; germane.

Petition: A written, formal request for a particular thing to be done or a certain act to be carried out. In equity proceedings, a petition is in actuality a complaint.

Plaint: A complaint; the presentation of a plaintiff's claim in a lawsuit.

Plaintiff: The party who is bringing a lawsuit against a defendant; the person or persons who are suing.

Plea: The response by one who is accused of a crime; the answer the law requires of a defendant who is accused.

Pledge: The granting of physical possession of goods or personal property to a person to whom one owes a debt. The creditor holds such property as security until the debt is paid.

Poll: To question each juror to hear whether he agrees with the verdict.

Pour-over will: A specialized will that simply "pours over" the testator's remaining assets into the testator's Living Trust or Joint Living Trust.

Power of attorney: 1. A written document stating that one appoints another to act in his behalf as an agent, giving him the authority to carry out certain specified acts. 2. A written document giving an attorney the authority to appear in court on someone's behalf.

Precedence: The right to precede or to go before; to take precedence means the privilege of going ahead of, rather than after; to consider first.

Precedent: An existing document (can be a form or an agreement) which is used as reference and as the starting point of drafting a new form or agreement.

Preclude: 1. To make impossible; to stop; to prevent. 2. To exclude; to rule out.

Predecease: To die before another person dies.

Predecessor: A person who precedes, or goes before, another person. (President Ford was President Carter's predecessor in office.)

Pre-Emptive Rights: A right which allows the shareholders of a company to buy additional shares in any future issue of the company’s shares before the shares are offered to any third party. Such right is sometimes called an “anti-dilution provision.” It gives the shareholders the option of maintaining a certain percentage of ownership of the company as it grows.

Preference Shares: Shares which do not entitle the holder to a right to vote or to participate beyond a specific amount in distribution of dividend, redemption or winding up. Preference shares can have both equity and debt characteristics, favoured by investors who have different priorities and interests to safeguard.

Premarital agreement: An agreement made between a man and woman prior to their marriage. It often includes provisions for the disposal of property should separation, divorce, or death ensue; an antenuptial settlement; a prenuptial agreement; an antenuptial contract.

Premium: The price of an item or interest which is higher than its face value.

Prepayment: The payment of all or part of a loan or debt security before the maturity date where such repayment is due. Can be optional or mandatory depending on what was stipulated in the contract, and whether there was any event of default.

Prescription: 1. A means of acquiring a right through continued possession and use over a prolonged period of time. As an example, a person who has used a right of way across another person's land for the past ten to twenty years may be said to have become entitled to that right of way through prescription. 2. A written order by a physician, given to a patient for presentation to a pharmacist. Such prescription orders a medication or medications that the pharmacist will prepare and contains information on dosages and use.

Presence of the testator: A signing of a will within the sight of the testator. This implies that witnesses are present and that the testator is conscious and knows what he is signing.

Presume: To believe; to accept as true, even before conclusive evidence has been presented; to assume.

Pretenses: Acts of pretending or making believe; a false pretense is a calculated, thought-out misrepresentation of facts.

Principal: 1. An amount of debt or loan, excluding any accumulated interest. 2. Primary, most important, main. 3. In a Principal-Agent relationship, the Principal authorizes the Agent to act for the Principal.

Principle: A doctrine; a fundamental belief; a clear truth, universally accepted, such as the principle of law that one should be punished for committing a crime.

Priority: The status of one security or one creditor having a claim against a common obligor that ranks higher in preference and superiority over other securities or creditors.

Private Limited Company: A private limited company by shareholding is known as Sendirian Berhad (Sdn Bhd) Company in Malaysia. This type of company is a separate legal entity from its owners, which means such company is considered as a legal ‘person’ that can buy or sell property, present into legal contracts, sue or get sued in courts of law.

Privity of Contract: A relationship between the parties to a contract which allows them to sue each other but prevents a third party from doing so. The purpose of this doctrine is to prevent any person from seeking the enforcement of a contract, or suing on its terms, unless they are a party to that contract.

Probable consequences: Those results or consequences that have a good likelihood of taking place following a particular act or event; outcomes that a reasonable person could have foreseen.

Probate: The legal process of recording a WILL in the appropriate place, generally a probate court, and proving that it is valid.

Process server: A person who hands a summons or subpoena upon a witness or defendant.

Profess: To declare publicly; to acknowledge openly.

Pro Forma: A financial statement that is so adjusted to reflect an event or transaction that was otherwise not taken into account.

Prognosis: The probability of recovery from an illness.

Projection: A calculated estimate of the financial condition and performance of a company or business at a future time or date.

Promissory note: A written document stating that a certain debt will be paid at a specified time or within a specified period of time. The note will bear the signature of the debtor and will state to whom and when the money will be paid.

Promoter: A company promoter is a person who does the preliminary work incidental to the formation of a company including its incorporation and soliciting people to invest in the company.

Proprietary Information: Information that the owner has a right to protect.

Proprietary rights: Rights and privileges of an owner of property.

Pro Rata: The apportionment based on relative amounts. Other words used to express this are, ‘ratably’ and ‘ratable’.

Prosecute: To proceed and to maintain a legal action, such as a prosecuting attorney who tries in court to prove an accused person to be guilty; to attempt to enforce by legal action.

Prosecution: Following an established procedural process.

Prospectus: A formal document that provides details about an investment offering for sale to the public.

Protest: 1. Dissent; disapproval; a written statement, by someone making a payment, that he thinks the payment is illegal, exorbitant, unwarranted, etc. , thus reserving the right to get the money back. 2. An objection to a legal rule or judgment.

Protocol: 1. Accepted methods of procedure among diplomats, heads of state, etcetera; ceremonial rules and procedures. 2. A rough draft of an agreement or contract, or of a treaty between nations.

Proxies: 1. An individual authorized to act for another. A Proxy acts as a substitute or a representative. A Proxy can be authorized to vote for a shareholder of a corporation. In some states, a Proxy can be authorized to make health care decisions for another. 2. The document which authorizes an individual to act for another.

Proximate: Direct, as opposed to indirect; immediate, as opposed to delayed.

Proxy: 1. An individual authorized to act for another. A Proxy acts as a substitute or a representative. A Proxy can be authorized to vote for a shareholder of a corporation. In some states, a Proxy can be authorized to make health care decisions for another. 2. The document which authorizes an individual to act for another.

Proviso: A clause that contains an exception to the concept it follows. The words ‘provided that’ are commonly used to reflect this.

Psychiatrist: A physician who specializes in and treats disorders of the mind and mental disease.

Public Company: A company whose ownership is distributed amongst general public shareholders where its shares are traded freely on a public stock exchange.

Punitive damages: An award to a plaintiff beyond actual possible loss. Such damages are by way of punishing the defendant for his act.

Purport: To imply; to claim; to mean; to convey law; the full scope of an enacted statute.

Pursuant to: Conforming to; done in consequence of; following; according to.

Pursue: To follow through, as to pursue a claim until it is finally established; to continue actively a cause of action until its final conclusion.

Put Option: A contract which gives a person the right, but not the obligation, to sell a specified amount of an underlying security at a pre-determined price within a specified time frame.

Quantum Meruit: A doctrine which determines the amount to be paid for services when no contract exists or when there is doubt as to the amount due for the work performed but done under circumstances when payment could be expected.

Quittance: Exoneration; a release.

Quorum: A majority; the number of people who must be present to permit an organization, a group, a body, etcetera, to conduct its business and reach valid decisions.

Ratify: Confirm, republish, redeclare. To approve, to confirm, to reconfirm. A legal expression denoting absolute ratification.

Recitals: The introductory paragraphs of an agreement which usually describes the parties and the circumstances leading up to the transaction. Also known as the ‘whereas’ clause, or the ‘preamble’.

Record Date: This is the cut-off date established by a company to determine which shareholders are eligible to vote at a meeting, receive dividends or participate in any corporate action.

Recourse: 1. The seeking of assistance and help. 2. The right of a person to get his just due by taking legal actions toward that end.

Redeemable Shares: Shares that are issued by the company on the terms that the shares may be redeemed in some future date at the company’s option or subject to the terms of issue.

Redemption: The act of redeeming; turning in something, such as a bond, for cash.

Reference: 1. The act of sending a matter to a referee for his consideration and decision. 2. An agreement between two parties to place their dispute before an arbitrator or referee for his consideration and decision.

Refinancing: To finance something (i.e. to take a loan or mortgage) again, but with new terms at lower rates of interest. The proceeds of this financing is used to satisfy or terminate an existing financing. The benefit of this is two-fold, you repay the loan or mortgage at a lower rate of interest, and potentially even extend the period of which you are servicing that loan or mortgage.

Refusal: 1. The denial of a demand or a request. 2. A negative response to comply with an order of a court.

Registered agent: The designated corporate contact person in a given state.

Registered Office: Every company in Malaysia needs to have a registered office in Malaysia where all communications and notices may be addressed and to store the company’s statutory documents and statutory books and files.

Registrar: The Chief Executive Officer of the Company Commission of Malaysia shall be the Registrar and the Registrars’ powers are laid down in Section 20A Companies Commission of Malaysia Act 2001.

Regulations: Regulations are administrative rules made and maintained by the authority which have the force and effect of laws. According to Section 613 (2) of the Companies Act 2016, any act or omission in contravention of the regulations will result in a penalty of fine not exceeding five hundred thousand ringgit or imprisonment for a term not exceeding three years or to both.

Reimburse: To pay back; to restore moneys that have been taken.

Reinstatement: Returning a company that has its name struck off, to the register.

In accordance to Section 555 of the Companies Act 2016, any aggrieved person may apply to the Court within seven (7) years after the name of the company has been struck off, to reinstate the name of the company into the register.

Related Corporation: Under Section 7 of the Companies Act 2016, related corporation means:-

• it is a holding company of another corporation;
• it is a subsidiary of another corporation; or
• it is a subsidiary of the holding company of another corporation.

Relinquish: To abandon; to give up; to renounce a claim or right.

Remedies: The means employed by the law to correct injuries or to enforce legal rights.

Remission: A pardon; a release from a debt or obligation; an exoneration; the act of remittance (payment).

Remittance: The transfer of funds to by a party to another.

Remuneration: Payment for services rendered; salary; reward; recompense.

Render: To perform, such as to render a service; to deliver; to yield; to give up.

Reparation: The act of making amends for an injury or for damages that have been committed; the making good of a wrong.

Repeal: The annulment of an existing statute or law; to revoke a law and to substitute a new one in its place.

Representation: In contractual terms, it refers to the statements of fact made by one party to another party, inducing that other party to rely on that statement and act upon it.

Residuary assets: What is left in an estate or trust after paying debts, expenses and specific bequests and distributions.

Residuary estate: The remaining assets of an estate after payment of debts, expenses, and specific bequests.

Resolution: A document that documents the actions and decisions made by the company’s board of directors.

Retained Earnings: Retained earnings are accumulated net income retained by the company that is not distributed to the shareholders after it has paid out dividends to its shareholders. Retained earnings are used either in reinvesting in the business or kept as a reserve for a specific objective of the corporation.

Retrenchment: It is a form of dismissal that is justified on the basis that the roles of employees have appeared redundant. Hence, the proof of redundancy is required for retrenchment exercise to be valid and carried out.

Revenue: The income that is generated from the sale of goods or services related to the corporation’s primary operations before any costs or expenses deduction.

Reverse Takeover/Back Door Listing: An acquisition of a public company by a private company by transferring over 50 percent of its shares to the private company. The objective of a reverse takeover is that the private company can bypass the complex IPO process.

Revocable: The voiding, annulling or revoking of a thing.

Revocable Living Trust: A trust established while the maker (grantor) is still alive and which can be changed or cancelled by the grantor.

Revocable Trust: A cancelable arrangement created by a person ("Grantor"), whereby the Grantor transfers property to a trustee to be held for the benefit of the Grantor while alive, then distributed to named beneficiaries.

Revocation: The voiding, annulling or revoking of a thing.

Revoke: The voiding, annulling or revoking of a thing.

Revolving Loan: A type of loan facility granted by financial institutions (i.e. banks) which enables the borrower to borrow, repay, and reborrow sums of money up to the prescribed limit.

Right of first refusal: The priority right to purchase property simply by meeting a competing offer.

Right of representation: Per stirpes. The method of determining how a gift will be distributed, especially if a beneficiary is dead, namely, in equal shares to the deceased beneficiary's surviving children, with the share of a deceased child distributed, in turn, in equal shares to that deceased child's children, etcetera.

Royalty: A payment made by a licensee to the licensor as part of a license agreement. Commonly used in franchise agreements. Royalties are usually part of the profits of the franchisee’s business as sort of a repayment for the use of the franchisor’s brand, product or system.

Sane: The state of having mental competence and soundness of mind; knowing right from wrong, being capable of intelligent reasoning, and generally acting in a normal, socially acceptable manner. The opposite of insane or mentally incompetent.

Scope of authority: The powers of an agent given to him by the principal, including not only the authority specifically designated but implied or inferred authority, too. In such instances in which there is doubt, the agent may claim that the scope of his authority to act for and in his principal's behalf is greater than that which is written down and recorded.

Second-Tier Subsidiary: A subsidiary of a subsidiary.

Secured creditor: A creditor with collateral; a person owed money who has the right to take and sell specific property of the debtor if the debt is not paid.

Securities: It has the meaning assigned to it in the Capital Markets and Services Act 2007:-

• debentures, stocks or bonds issued or proposed to be issued by any government;
• shares in or debentures of, a body corporate or an unincorporated body;
• units in a unit trust scheme or prescribed investments; or
• any right, option or interest in respect thereof.

Securities Commission: A statutory body entrusted with the responsibility of regulating and systematically developing the capital markets in Malaysia.

Security Deposit: Money paid to a landlord at the beginning of a lease to ensure the tenantÆs compliance with the terms of the lease. The money is held in trust by the landlord and may be used to cover costs resulting from any breach of the lease terms by the tenant, including damage to the property. If there are no such breaches, the money is refundable to the tenant at the end of the lease term.

Security Interest: A conditional interest in the personal property of a debtor who grants/charges it in favour of a creditor to secure repayment of a debt obligation. In the event of a default by the debtor, depending on what was agreed, the creditor usually has the right to sell the property and use the proceeds to satisfy the debt.

Segregation: The act of separating, such as segregating the races in a school. Segregation of races in public places of all kinds is illegal in the United States and violates federal laws.

Seizure: To take forcible possession of a thing; to arrest and take a prisoner into custody.

Senate: The upper chamber of the Congress of the United States, numbering two selected representatives from each state. At present there are one hundred senators.

Senator: A member of the U. S. Senate, or of a state senate. There are two senators elected from each state to the U. S. Senate. States each have their own rules concerning the election of state senators. U.S. senators serve for a term of six years.

Separate maintenance: Money paid by a married person for the support of a spouse from whom one is separated.

Separate property: Property owned and controlled by a married person, the spouse having no rights concerning it at all. The owner of such property can dispose of it at will, without the consent of the spouse.

Set aside: To cancel, to annul; to revoke. The expression is used frequently when a higher court overrules a decision or judgment of a lower court, or when an indictment is dropped.

Set-off: A provision allowing debts and obligations to be cancelled out against each other. For example, Ali is owed a certain amount of money by Bob, but at the same time owes Bob some money as well. This provision allows the difference between the amounts owed to each other to be “set-off”.

This provision is usually used in loan agreements where the Banks reserve the right recover debts owed to it by a borrower from a deposit account placed by the borrower at an earlier date.

Severable: The quality of being able to exist independently. A severable law is one that continues to hold even if one clause or provision is held not to be valid.

Severance: 1. The act of separating and dividing. 2. When there are two or more defendants in the same case, one may wish to defend himself alone and not join with the others. This is termed severance.

Severance Agreement: An agreement entered between an employer seeking to terminate the contract of an employee on a no-fault basis. This agreement usually provides for benefits and a healthy compensation to the employee. Often referred to as a “golden parachute”.

Share: The unit into which the ownership interest in a corporation is divided.

Shareholder: An individual or institution or company that owns at least one share in a corporation.

Share Purchase Agreement: A share purchase agreement is an agreement between the shareholders and the corporation to regulate the terms of the transfer and sale of corporate shares.

Sheriff: A law officer whose duties include the keeping of the peace, the serving of summonses, subpoenas, and other legal documents, the calling of jurors and the carrying out of judgments issued by the courts. Sheriffs serve one county, to which their authority is limited.

Side Letter/Agreement: An agreement that is intended to modify or supplement a main agreement that is entered into at the same time. This is a separate agreement. The terms in this side letter/agreement is unenforceable if the main agreement contains an integration clause (see above).

Silent partner: A partner not generally known as a co-owner of a firm or business, yet is entitled to the rights of partnership; a dormant partner; a secret partner.

Small claims court: Courts set up for the express purpose of settling small claims. Decisions in such litigations are made by a judge within a short period of time, thereby avoiding a prolonged trial.

Social Security Act: A federal law providing for the establishment of universal federal and state insurance benefits, unemployment insurance, and other benefits for citizens who are in their later years.

Sole Proprietorship: It is a business wholly owned by a single individual using personal name as per his/her identity name or trade name.

Solicit: 1. To seek, to plead; to entreat; to implore; to ask for.

Solvency: Having sufficient funds so as to pay one's debts; the opposite of insolvency.

Special Power of Attorney: A document in which a person authorizes another person or organization to act on his or her behalf in specific situations.

Special Purpose Entity/Vehicle: An entity, usually a corporation, which is set up to conduct specific activities. It is usually limited by contract or its constitution to conduct other business/activities except for the specified activity.

Special Resolution: A resolution passed by a majority of not less than 75% of the members entitled to vote at a general meeting, whether in person, or through proxies where required and allowed.

Specific bequest: A gift of cash, a specific item, or a category of items, to a named person, as detailed in a will. For example, a wedding ring, $1000, or a car.

Specific distribution: A gift of cash, a specific item, or a category of items, to a named person, as detailed in a trust before the bulk of the trust is distributed. For example, a wedding ring, $1000, or a car.

Specific intent: Premeditated, conscious intention to perform a certain act. The term is used frequently to describe the intentions of a person to carry out a particular crime or prohibited act.

Statute: A law passed by the legislative branch of a government.

Statute of limitations: A law establishing a specified period of time during which a litigation (lawsuit) can take place, after that period, the suit can no longer be brought.

Statutes: A law passed by the legislative branch of a government.

Statutory: Created by the enactment of a law, relating to a statute or law; existing as the result of a statute.

Stepchild: A child of one's wife or husband by a former marriage.

Stock broker: A person who buys and sells stocks for his clients.

Stock Exchange / Market: An organised and regulated financial market where securities are bought and sold.

Stockholder: Someone who owns shares in a stock corporation. He is not responsible, merely by owning stock, for the actions of the corporate entity.

Strike: 1. To strike a word or passage, means to delete it. 2. A work stoppage by employees for the purpose of obtaining better wages, working conditions, or fringe benefits from an employer.

Sub-chapter S: An Internal Revenue Service election made by a qualifying corporation, to be taxed similar to that of a partnership or sole proprietorship.

Subcontract: An agreement between a contractor and a third party to perform certain duties that the contractor has been hired to perform. As an example, a contractor, hired to build a building, may engage a subcontractor to dig the site and put in the foundation for the building.

Subject matter: The matter in dispute; the material over which there is litigation.

Subject to: Governed by; subordinate to; provided that; contingent upon.

Subjection: The obligation of an individual to behave or act according to the will or judgment of another individual.

Sublease: The privilege of a person who has leased a premise to lease it to another person. In leases, the privilege to sublease must be stated specifically or the lessee will not be permitted to sublease.

Subordination: A lien or claim that is weaker than another lien or claim, and admittedly will be honored only after the stronger lien or claim has been satisfied.

Subpoena: A document ordering an individual to appear in court and give testimony. Failure to appear, without good reason, may lead to the imposing of a penalty.

Subrogation: 1. The act of substituting a claim against one person for a claim against another person. 2. The substitution of one individual for another in claiming a debt or right.

Subscribers: Persons who agree under specific conditions to purchase shares in a corporation.

Subscribing witness: A person who sees a document signed and affixes his name to the document, thus testifying in writing that the event has taken place.

Subscription Agreement: It is an agreement executed between a subscriber and the company to subscribe to the company’s shares. It usually details all the information about the transaction, such as the number of shares and the price, and confidentiality provisions.

Subsidiary: Under Section 4 of the Companies Act 2016, a corporation that is either wholly owned or controlled by another company through the ownership of a majority of its shares (i.e. more than half of the issued share capital) by the holding company or the holding company controls the composition of the board of directors of the corporation.

Substantial Shareholder: A person who has a substantial shareholding in a company is someone who has an interest or interests in one or more voting shares in the company and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is not less than 5% of the aggregate of the nominal amount of all the voting shares in the company.

Succession: 1. The act of following another, or succeeding to the rights of another. 2. The acquiring of property after the former owner dies and leaves it to a successor.

Successor: One who succeeds or follows another in a particular role or office.

Superior court: A higher court than an inferior court, but one which has less authority than an appeals court. The exact status of a superior court differs from state to state.

Supersede: To replace; to annul; to take the place of; to render void; to set aside.

Suppress: To prohibit or to forbid; to put an end to something that already exists; to keep evidence from being presented by showing it to be irrelevant or gathered illegally.

Supreme Court: 1. A high court, in some states, the highest court; in other states the state supreme court is inferior to the court of appeals. 2. The United States Supreme Court is the highest in the land.

Surrogate: One who acts for another. In some states, an individual can designate a Surrogate to make health care decisions in a power of attorney document. The judge presiding over probate matters is called a Surrogate in some states.

Sworn: Having taken an oath; verified; attested to as being true.

Syndication / Syndicated Loan: The process of which a loan or investment is taken part by a group of lending institutions or investors (a ‘syndicate’). A syndicated loan, usually involving big sums of money, is where a group of lending banks provide financing to the lender on an agreed pro rated basis.

Tag-along Rights: Tag-along rights are contractual obligations that protect the minority shareholder. In the event the majority shareholder sells his portion of shares, the minority shareholders may exercise their tag-along rights to sell their minority portion of shares in the company.

Takeover: A merger, acquisition or other change in the controlling interest of a corporation.

Tangible personal property: All property, except land and buildings, that can be physically touched, such as furniture, jewelry, cars and clothing. Property such as stocks and bank accounts are not included because what can be touched in connection with these items is merely a piece of paper that represents the actual property. In summary of all property types, "real property" is land and buildings; "personal property" is everything else; "tangible personal property" is an item that can be touched.

Target Company: A company that is the subject of an attempted acquisition by a potential buyer.

Temporary custody: The awarding of custody of a child to a parent temporarily, pending the outcome of a separation or divorce suit.

Tenancy in common: The possession of property by two or more people wherein each party possesses an undivided interest in the entire property. This is different from a situation in which each party owns a designated portion of the property, such as land.

Tenant in Common: An individual who owns an undivided interest in real or personal property with one or more people, with no right of survivorship.

Term Sheet: A summary of the terms outlining a proposed transaction, usually attached to a letter of intent (see above) or commitment letter.

Testament: A will disposing of property of a deceased person.

Testate: A person who dies leaving a will; the opposite of intestate.

Testator: Someone who has made or is making a will (testament).

Teste: To bear witness; a declaration at the conclusion of a court order (writ) bearing witness to the official character of the document (Latin).

Testify: To give evidence as a witness, under oath. False testimony, given under oath, is a serious offense known as perjury.

Ticking Fee: Fee paid for a financing commitment usually accrued at a rate per annum prior to finalisation of the deal.

Time of the essence: Means that the performance of a term or condition of the contract in the time period specified is important, and that the failure to perform on time will lead to a breach of the contract.

Title Search: A search being conducted on a piece of real estate against governmental records, which displays information pertaining to that piece of real estate, and includes, among other things, the name of its owners, the size of the property, and any encumbrances or adverse claims lodged against it.

To take title: To gain and hold possession of property legally.

To wit: Namely; that is to say.

Toll: 1. To postpone the effect of a statute of limitations, thus permitting a legal action to be undertaken after a longer than normal period of time. 2. A fee paid for use of a bridge, tunnel, etcetera.

Tort: A wrong committed by one person against another; a civil not a criminal wrong; a wrong not arising out of a contract; a violation of a legal duty that one person has toward another. (Negligence and libel are torts.) Every tort is composed of a legal obligation, a breach of that obligation, and damage as the result of the breach of the obligation.

Total disability: Complete inability to work or to carry out any of the duties of one's job or profession, even though one's body may not be totally disabled. A person who has been blinded is totally disabled if he is engaged in riveting or other kinds of work requiring him to function high up on the steelworks of a construction job.

Total loss: 1. The complete loss of property, as in an explosion that has totally demolished a building. 2. In medicine, the complete loss of a part of the body, such as in amputation.

Trade secret: A process or compound known only to its owner and manufacturer, although the process or compound is not patented.

Trademark: A name, marking, sign, or motto that a company can, by law, use exclusively in identifying and selling its product.

Tranche: Used to refer to a portion of a loan, usually used to distinguish different loan facilities under the same loan agreement.

Transmission: In a non-legal context, this refers to the passing of an item from one hand to another.

In the legal context, this includes the transfer of legal title that comes along with that ‘item’ that is passed on, which includes real property, rights and shares.

Traveler's check: In actuality, a cashier's check of the issuing bank. Upon its issue, the person receiving the check signs it; when he cashes it, he signs it again in the presence of the person who will cash it or give merchandise in exchange for it. Traveler's checks are particularly valuable as they are not negotiable when lost. The person obtaining traveler's checks from his bank usually pays a small fee to the issuing bank for the service.

Treasury Shares: The shares in which a company keeps in its own treasury, under the name of the company and not held by individual or corporate shareholders. These treasury stock may have come from the repurchase or buyback for its shareholders.

These shares do not pay dividends, have no voting rights prescribed to them, and are not included in shares outstanding calculations.

Trover: 1. A suit to regain property that was lost, the suit being against the person who found and has held on to the property. 2. A suit for damages against a person who found property and wrongfully converted it to his own use.

Trust: An arrangement created by one person (the "grantor") where assets of the grantor are transferred to another person (the "trustee") to be held for the benefit of a third person (the "beneficiary"). The grantor may also be the trustee and/or the beneficiary of the trust.

Trustee: A person who holds, manages, and distributes property for the benefit of another; a fiduciary.

Uberrimae Fidei: A Latin word which means ‘of utmost good faith’.

Ultra Vires: Refers to an act which is performed outside the authorised powers conferred upon an officer of a relevant body, a corporation or an organisation. These powers can be conferred either through statutory provision, authorisation by the Board of Directors or relevant authority, or listed in a company’s constitution.

Uncontested: A type of divorce where both spouses have agreed on terms, such as alimony payments and child custody. Uncontested divorces are often the least expensive.

Underwrite: To bind oneself to support a project, usually by investing money; to insure; to sign one's name to a document, thereby assuming an obligation.

Underwriter: Underwriter is a company that helps corporations to introduce their new securities to the stock market.

Undischarged Bankrupt: A person who is a bankrupt under bankruptcy laws and provision, and is yet to be discharged and remains a bankrupt.

Undue influence: An improper amount of pressure which influences someone to do something he would not do if left to his own devices. As an example, if it can be proved that someone persuaded a maker of a will to leave him money that he would not have received except for his undue influence, then the will might be set aside and nullified.

Unlimited Company: A company that is founded and incorporated on the basis that there would be no limit as to the liabilities of its members/shareholders.

Unliquidated claim: A disputed claim; an unsettled dispute.

Unprofessional conduct: Dishonorable or immoral behavior; conduct that violates the code of ethics of one's position or profession.

Unregistered Company: In the Malaysian context, refers to a company or corporate body which is not registered under the Companies Act 1965 or Companies Act 2016. This includes foreign companies or partnerships. 

Unsecured creditor: A creditor without collateral; a person owed money who has no rights in specific property as security for the debt.

Usury: The act of charging an exorbitant, excessive, illegal rate of interest for a loan; an unlawful contract for the loan of money.

Utter: 1. Total; absolute; complete. 2. To say; to speak words.

Valuable consideration: A matter of contract in which one party agrees to do something in return for something the other party agrees to give him, usually money or property. The term implies that the person promised something has the right to enforce the promisor to pay him.

Valuation: The estimated worth of something; the price placed upon something.

Value received: A term frequently used in a promissory note, meaning that a lawful consideration (a situation wherein one party agrees to do something in return for something the other party agrees to give him) has been given for the note.

Vendor: The seller in a business transaction involving goods.

Vertical Market: It means a market for a good or service which is confined to a specific demographic, generally do not serve the broader market.

Venture: A new business enterprise, embarked upon to make a profit. It is implicit that a venture carries with it the possibility of losing money, as well as making money.

Verbal agreement: An agreement reached orally, not committed to writing; a parol contract.

Vested: Something not subject to being taken away, such as vested rights; complete; settled; absolute; not dependent upon conditions, such as the complete, vested ownership of property.

Viability: The ability to sustain life, such as the ability of an unborn child to live if it were not in its mother's womb; capable of working out, such as the viability of an enterprise; being able to survive; practicable.

Vice: 1. Instead of; in place of, as a vice president. 2. Immoral or sinful conduct. 3. A defect or fault; an imperfection.

Visitation: The act of visiting and investigating the premises of an institution or business by an official agency. Such visitation is usually carried out to determine if an institution is being managed properly. Prisons, state hospitals, and other institutions are often visited by specially appointed committees of observers or overseers.

Vital statistics: Information on births, deaths, longevity, marriages, divorces, matters of health, etcetera, kept by the public authorities. Such data is kept in a hall of records.

Void: Having no legal or binding effect; null; ineffectual.

Voting Share: Voting shares are shares that give the shareholders the right to vote on the corporate policy making as well as those who will compose the members of the board of directors in the corporation.

Waive: To relinquish or give up a right, privilege, or benefit. A waiver implies that the person knows what he is doing when renouncing his right, privilege, or benefit.

Waiver: The agreement by a party to give up his/her contractual right of enforcement on a matter pertaining to a contract or agreement.

Ward: 1. A child placed by a court under the care of a guardian.

Warrant: 1. A court order giving authority to a sheriff or police officer to arrest a person, to search a house, etcetera. 2. To state that something is true.

Warranties: 1. A statement that certain facts are true, made by one party to a contract and accepted by the other party as true. 2. An agreement to make up for any damages that result from a false representation of facts.

Warranty: 1. A statement that certain facts are true, made by one party to a contract and accepted by the other party as true. 2. An agreement to make up for any damages that result from a false representation of facts.

Wholly: Completely; entirely; exclusively; the opposite of partially.

Wholly-owned subsidiary: Under Section 6 of the Companies Act 2016, a wholly-owned subsidiary means its only shareholder is a corporation or it is a wholly-owned subsidiary of another corporation.

Widow: A married woman whose husband has died and who has not remarried.

Will: 1. A document made in anticipation of eventual death, in which a person states what he wants done with his property after he dies. Such a document must be made according to law, and is recorded and filed in a probate court after the person has died. 2. Desire or wish. 3. Determination. 4. The mental capacity to carry out a conscious act.

Winding Up: Winding up is the process of dissolving a company. The winding up of a company can be effected either by way of an order made by the Court or by way of a voluntary winding up.

Witness: 1. An individual who testifies under oath at a trial, a hearing, or before a legislative body. 2. To see or hear something take place. 3. To be present, and often to sign, a legal document, such as a will or deed. Having a witness sign lends authenticity to a document.

Writ: A formal order of a court, in writing, ordering someone who is out of court to do something.

Writ of execution: An order of the court that its judgment (decision) be carried out.

Written consent: Consent given in writing in lieu of a meeting to approve certain actions.

Zoning: The division of certain areas in a community into various categories for permission to build, or not to build, certain types of structures. For example, a certain area may be zoned for residential structures only, while another area permits business structures only.