Definitions for Legal, Financial, Tax, and Operational Jargon
Articles of Association Rules governing how a limited company is run, including shareholder rights.
Business License Legal permission required to operate certain businesses (e.g., food, childcare).
Certificate of Incorporation Official document proving a company’s legal existence, issued by Companies House.
Copyright Legal protection for original creative works (e.g., writing, music).
Director Person legally responsible for managing a limited company.
Franchise Business model where you buy rights to operate under an established brand.
Intellectual Property (IP) Ownership rights for creations like inventions, logos, or designs.
Limited Company (Ltd) A business structure where the company is legally separate from its owners.
LLP (Limited Liability Partnership) Partnership where members have limited liability for debts.
Memorandum of Association Legal document outlining a company’s purpose and shareholder agreements.
Non-Compete Clause Contract preventing someone from starting a rival business for a set period.
Non-Disclosure Agreement (NDA) Legally binding contract to protect confidential information.
Partnership Business owned by two or more people who share profits and liabilities.
Registered Office A company’s official address (publicly listed at Companies House).
Shareholder Owner of shares in a limited company.
Sole Trader Self-employed individual running a business without a separate legal entity.
Trademark Registered symbol, logo, or phrase that uniquely identifies a brand.
Annual Investment Allowance (AIA) Tax relief for purchasing business equipment (up to £1 million annually).
Capital Gains Tax Tax on profit from selling assets (e.g., property, shares).
CIS (Construction Industry Scheme) HMRC scheme for taxing payments to subcontractors in construction.
Corporation Tax Tax on limited company profits (19-25% in the UKat time of writing).
Dividend Tax Tax on dividends paid to shareholders (rates vary by income band).
Enterprise Investment Scheme (EIS) Tax incentives for investing in small, high-risk companies.
Flat Rate VAT Scheme Simplified VAT scheme for small businesses (fixed rate based on turnover).
HMRC (His Majesty’s Revenue and Customs) UK government body responsible for tax collection.
IR35 Tax rules determining if a contractor is effectively an employee for tax purposes.
Making Tax Digital (MTD) HMRC initiative requiring digital record-keeping and VAT submissions.
National Insurance Contributions (NICs) Payments toward state benefits (Class 2/4 for self-employed).
PAYE (Pay As You Earn) System for deducting income tax and NICs from employee wages.
Personal Allowance Annual tax-free income threshold (£12,570 in 2024/25).
Seed Enterprise Investment Scheme (SEIS) Tax relief for early-stage investors in startups.
Self-Assessment Tax Return Annual form for reporting income/tax owed by self-employed individuals.
Tax Deductible Expenses Legitimate business costs that reduce taxable profit (e.g., office supplies).
Tax-Free Threshold Income level below which no tax is owed (e.g., VAT threshold: £90,000).
Unique Taxpayer Reference (UTR) 10-digit number issued by HMRC for filing tax returns.
VAT (Value Added Tax) 20% tax added to goods/services; mandatory if turnover exceeds £90,000 (at time of writing)
VAT Registration Threshold Annual turnover limit requiring VAT registration. £90,000 at time of writing.
Accrual Accounting Recording income/expenses when incurred, not when cash is exchanged.
Angel Investor Individual providing capital to startups in exchange for equity.
Balance Sheet Financial statement showing assets, liabilities, and equity at a point in time.
Bootstrapping Funding a business without external investors (using personal savings/revenue).
Break-Even Analysis Calculating sales needed to cover costs (no profit/loss).
Business Credit Score Rating reflecting a company’s creditworthiness for loans/contracts.
Business Loan Borrowed money repaid with interest (secured or unsecured).
Cash Basis Accounting Recording income/expenses only when cash is received/paid.
Cash Flow Forecast Prediction of future cash inflows/outflows.
Cashbook Record of daily cash transactions.
Crowdfunding Raising funds from many people (equity, rewards, or donations).
Depreciation Spreading the cost of a tangible asset over its useful life.
Equity vs. Debt Financing Raising capital via selling shares (equity) or loans (debt).
Gross Profit Revenue minus direct costs of goods sold.
Invoice Financing Borrowing money against unpaid invoices.
Merchant Account Bank account allowing businesses to accept card payments.
Net Profit Final profit after deducting all expenses from revenue.
Overdraft Facility Short-term borrowing from a bank up to an agreed limit.
Overheads Ongoing business costs (e.g., rent, utilities).
Personal Guarantee Pledging personal assets as collateral for a business loan.
Profit and Loss Statement (P&L) Report showing revenue, costs, and profit over a period.
Seed Funding Early-stage investment to develop a business idea.
Start-Up Loan Government-backed loan for new businesses (up to £25,000).
Turnover (Revenue) Total income from sales before expenses.
Venture Capital (VC) Investment from firms in exchange for equity, typically for high-growth startups.
Working Capital Funds available for day-to-day operations (current assets minus liabilities).
Business Contents Insurance Covers damage/theft of equipment, stock, or furniture.
Business Interruption Insurance Compensates for lost income during unexpected disruptions (e.g., fire).
Cyber Insurance Protects against losses from data breaches or cyberattacks.
Employers’ Liability Insurance Legally required coverage for employee injuries/illnesses.
Key Person Insurance Payout if a critical team member (e.g., founder) dies or becomes ill.
Professional Indemnity Insurance Covers legal costs from client claims of negligence/mistakes.
Public Liability Insurance Protects against claims of injury/property damage by third parties.
Affiliate Marketing Earning commission by promoting others’ products/services.
B2B (Business-to-Business) Companies selling to other businesses (e.g., wholesalers).
B2C (Business-to-Consumer) Companies selling directly to individual customers.
Chargeback Reversal of a payment after a customer disputes a transaction.
Cookie Policy Legal requirement to disclose website tracking practices.
CRM (Customer Relationship Management) Software/tools for managing customer interactions and data.
Domain Name Web address for a website (e.g., QuidSavvy.uk).
Dropshipping Retail model where suppliers ship products directly to customers.
GDPR (General Data Protection Regulation) EU/UK law governing data privacy and consumer rights.
Hosting Service storing website files on a server for online access.
Merchant Fees Charges for processing card payments (e.g., 1.5% per transaction).
Payment Gateway Technology enabling online card payments (e.g., Stripe, PayPal).
PPC (Pay-Per-Click Advertising) Online ads where you pay everytime a reader clicks your link (e.g., Google Ads).
SEO (Search Engine Optimization) Techniques to improve website visibility in search engines.
SSL Certificate Encryption protocol securing data between a website and users.
USP (Unique Selling Proposition) Distinctive feature that sets a business apart from competitors.
Contractor Self-employed individual hired for specific projects.
Freelancer Self-employed professional offering services to multiple clients.
Freelance Platform Websites like Upwork or Fiverr connecting freelancers with clients.
Gig Economy Labour market focused on short-term/flexible work (e.g., Uber).
National Living Wage Minimum hourly pay for workers aged 23+ (£11.44 in 2024/25).
P45/P60 Forms Tax documents issued when leaving a job (P45) or summarizing annual pay (P60).
Statutory Sick Pay (SSP) Legal minimum sick pay for eligible employees (£116.75/week in 2024).
Workplace Pension (Auto-Enrolment) Mandatory employer pension contributions for eligible staff.
Zero-Hours Contract Employment with no guaranteed hours (common in hospitality/retail).
Burn Rate Rate at which a startup spends cash before generating profit.
Business Plan Document outlining goals, strategies, and financial projections.
Green Business Company prioritizing sustainability and eco-friendly practices.
KPI (Key Performance Indicator) Metric used to evaluate business success (e.g., conversion rate).
Lean Startup Methodology emphasizing rapid experimentation and customer feedback.
Minimum Viable Product (MVP) Basic version of a product to test market demand.
Proof of Concept Demonstration that a business idea is feasible.
Scalability Ability to grow without being hampered by existing structures.
Supply Chain Network of people/companies involved in producing and delivering goods.
SWOT Analysis Framework evaluating Strengths, Weaknesses, Opportunities, Threats.
Wholesale vs. Retail Selling bulk goods to businesses (wholesale) or directly to consumers (retail).
Etsy Seller Independent creator/seller on the Etsy crafts marketplace.
FBA (Fulfilment by Amazon) Amazon handles storage, packing, and shipping for sellers.
Microbusiness Very small enterprise, often with fewer than 10 employees.
Passive Income Earnings requiring little ongoing effort (e.g., royalties, rental income).
Print-on-Demand Products created and shipped only after a customer orders.
Reseller Permit License allowing the purchase of goods tax-free for resale.
Side Hustle Secondary income-generating project alongside a main job.
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