Agency - A consensual, fiduciary relationship in which a party (the agent) acts for the benefit of

another (the principal) and binds the principal by words or deeds.

Agent - A person or party who has received the power to act on behalf of another (the principal),
binding the principal as if the principal himself was making the decision.

Allotment – The act of the company appropriating a specific number in the unissued capital of the
company to the allottee who will have the unconditional right to have the shares issued to him and
be included in the register of members.

Alter ego – Corporation, organization or other entity set up to provide a legal shield for the person
controlling the operation.

Board of directors – Governing body of a corporation who is elected by shareholders.

Fiduciary duty – An obligation to act in a trustworthy manner, good faith, and honesty in the best
interest of another party.

Holding company – A company that holds either the whole of the share capitals or a majority of
shares in one or more companies so as to have a controlling interest in such companies. The object
of such holding is to promote combination movement so that competition may be eliminated,
advantages of monopoly or near-monopoly may be enjoyed and economists in production and
management may be secured.

Incorporation – Where a company’s registration is completed, the registrar of the registration issues
a notice of registration, and the notice is the conclusive evidence of the company being incorporated.

Pre-incorporation contract- A contract entered on behalf of a company that is not yet incorporated.
The contract is typically entered into by the company’s promoters. These contracts must be ratified
by the company’s members after incorporation for the contracts to be binding on the company.

Stakeholders – Anyone that has a legal, financial, or social interest in a company such as
shareholders, managers, suppliers, government, employees, and the community.

Shareholders – People who own shares in the company.

Subsidiary company – A company which is under the control of a parent company.

Share capital – The amount of money the owners of the company has invested in the business as
represented common and/or preferred shares

Preference shares – Shares which confer a preferential right on the holders of them. The rights
usually relates to the preferential dividends which entitles the shareholder to be paid a fixed rate of
dividends in priority to other types of shareholders. These type of shares do not confer the right to
vote except in certain circumstances

Section 10(2) of CA 2016 provides that a company limited by shares is a company formed on the
principle of having the liability of its members limited to the amount unpaid on the shares held by
them

Unpaid shares- The members liabilities to contribute to the funds will be used to pay the debts of the
company