Glossary - Definition of Business & Commercial Terms
Glossario - Definizione dei Termini Societari & Commerciali

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When shares are issued, the members may be allowed to pay for them by installments. Each installment is a call. 

Cash Flow

The movement of cash in and out of a business.

Cash is usually required to pay a company´s bills and commitments.

A company with negative cash flow has less cash coming in as receipts than going out in payments.

Negative cash flow can bankrupt a business that may actually be running profitably.

EU & UK Data Ltd calculates Cash Flow as the Pre-tax Profit of the company plus Depreciation charged against that Profit.

Certified Accountant

A member of the Association of Certified Accountants.

Certified accountants are authorised to audit the books of limited companies.

Members use the initials ACCA or FCCA.

Certificate of Incorporation

The company´s ´birth certificate´ as issued by Companies House on the day of incorporation.


The Director who presides over members´ meetings and board meetings.


A loan taken out by the company, usually against some form of security. When a company borrows money the lender may require security for the debt.

This is usually in the form of a legal document entitling the lender to take possession of certain of the company´s assets if the debt is not repaid.

This security is called a charge.

Thus, there might be a charge over the freehold property to secure a bank loan.

Chartered Accountant

A member of one of the Institutes of Chartered Accountants.

Chartered accountants are authorised to audit books of limited companies.

Members use the initials ACA, FCA, CA.

Chartered Secretary

A member of the Institute of Chartered Secretaries and Administrators - members´ initials are either ACIS or FCIS.

Close Company

Companies under the control of five or fewer persons.

Collection Period

How long, on average, a company takes to pay its´ debts.

Companies Act 2006

Formerly the Company Law Reform Bill, the Companies Act 2006 will effectively replace existing companies legislation with the exception of provisions relating to company investigations and community interest companies.

For more information please see ourCompanies Act 2006 help section.

Companies House

Where the Registrar of Companies works and where all company forms, returns and accounts are filed.

Companies House is an executive agency of the Department of Trade and Industry, and has five main functions:

  • the registration of new companies;
  • the registration of documents required to be delivered under companies; 
  • insolvency and related legislation; 
  • the provision of company information to the public; 
  • dissolution and striking off companies from the register; 
  • ensuring that companies comply with their obligations in connection with the above functions.

Company Agent

A Director is a company agent acting on its instructions.

Company Name

As registered at Companies House. Only one company can hold this name at any one time.

A company can change it´s name at any time, unlike it´s number which is permanent.

Company Seal

A company may execute deeds by affixing its seal to them.

There is no longer any requirement for a company to have a seal and it may execute deeds by either two directors or a Director and the company secretary signing the relevant document.

Confirmation Statement

A prescribed form which must be filed annually with Companies House by a limited company.

Summarises current directorships, shareholders, company´s activities and company/capital structure.

Confirmation Statement Date or CSD

The Confirmation Statement should be filed within 14 days of this date each year.

Convertible Shares or Stock

If the Articles allow, a company may, by resolution, convert one class of one type of its shares into another class or into stock or vice versa.


A company is a corporation or legal ´person´.

Cost of Sales

Cost components directly related to turnover.

County Court Judgement

A CCJ is an order from a County Court that the company must pay an outstanding debt. Generally related to non payment of a loan, mortgage etc debt in general. If the debt is paid off, the CCJ will be satisfied and recorded.

When settling debts companies often overlook notifying the court so a judgement may appear unsettled when the debt has actually been paid.

More information please see our help pages on County Court judgments.


An individual or organisation to which the company owes money - most commonly a supplier.

Credit Limit

An absolute measure of a company´s ability to settle potential credit transactions.

EU & UK Data Ltd currently gauges the ability by use of three values:

  • Cash Flow
  • Working Capital and
  • Net Worth.
The average of these 3 components is then taken as a guide for the credit capacity of the company.

The final figure calculated will depend on the previously derived Credit Score.

The % applied is directly proportional to credit score, the greater the score the higher the %.

Current Ratio

The Current Assets divided by Current Liabilities.

If greater than 1 then assets are greater than liabilities, less than 1 then liabilities are greater than assets.

A very useful indicator, especially of cash flow.

See also Liquidity Ratio.

AVVERTENZE D'UTILIZZO: Il presente glossario contiene una definizione dei termini più frequentemente utilizzati nell'attività d'impresa nel Regno Unito.
La spiegazione di ciascuno dei termini indicati in questo glossario è di carattere meramente orientativo e priva di valore legale; si raccomanda, quindi, di tenere conto del contesto e dell'evento in cui essi vanno applicati, in quanto il significato loro attribuito potrebbe differire rispetto a quello qui rappresentato.

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