Resources
Corporate glossary
The terms of corporate management, explained in one sentence. The vocabulary investors, lawyers and boards use, without the noise.
- Cap table (capitalization table)
- The record of who owns what in a company: partners, shares, percentages and classes. In Spain its official form is the shareholder registry (libro de socios).
- Shareholder registry (libro de socios)
- The official register of a limited company recording partners, their shares, numbering and transfers. In public limited companies, its equivalent is the registered shares book.
- Phantom shares
- Economic rights that mirror the value of a share without granting real equity. The beneficiary is paid in cash when an agreed liquidity event occurs.
- Stock options
- Options over shares: the right to buy them in the future at a price fixed today (strike). Used to incentivize employees and executives.
- Vesting
- The schedule by which a beneficiary consolidates their incentive over time or milestones. Unvested rights are lost on early departure.
- Cliff
- The minimum initial period of a vesting plan (typically one year) before which nothing vests.
- General meeting
- The meeting of partners to decide on company matters: accounts, directors, capital increases, bylaws. It can be ordinary or extraordinary.
- Quorum
- The minimum percentage of capital that must be present or represented for the meeting to be validly held and vote.
- Voting proxy
- A partner's authorization for another person to attend and vote on their behalf at a meeting.
- Board of directors
- The collegiate body that manages the company when there is no sole director. Its meetings, votes and minutes follow their own rules.
- Capital increase
- The operation by which the company issues new shares in exchange for contributions. It changes the cap table and usually dilutes those who do not participate.
- Convertible note
- A loan that converts into shares in a future round, usually with a discount or a valuation cap.
- Dilution
- The reduction of a partner's percentage when new shares are issued. Calculated on the fully diluted cap table (including options and convertibles).
- Secondary market
- The sale of already-issued shares between partners or authorized third parties, without the company issuing new ones.
- Tender offer
- An organized offer to buy shares from several partners at once, common to give liquidity to employees and early investors.
- Shareholders' agreement
- The private contract between partners regulating what bylaws do not cover: transfers, drag along, tag along, vetoes and commitments.
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