Business Communication · Common Business Terminologies

Corporate and Organisational Terminology for CSEET

Updated 11 October 2026 · Fact-checked

Corporate and organisational terminology is the set of standard words used to describe how a company is run and governed, such as stakeholder, board, AGM, quorum, proxy, resolution, merger, acquisition and chain of command. Learn each term as a short definition plus one example, then use it correctly in a sentence.

Understand Corporate and Organisational Terminology

A company is a legal entity. It cannot think or act by itself, so people run it and take decisions on its behalf. Corporate terms are the common vocabulary for this. In Business Communication you are tested on whether you know the meaning and can use the word correctly.

Start with the people. A stakeholder is any person or group affected by a company or with an interest in it. Shareholders, employees, customers, lenders, suppliers, the government and the local community are all stakeholders. The board (board of directors) is the group of directors who guide and oversee the company and take major decisions. Shareholders own the company. The board manages it on their behalf.

Next, the meetings and decisions. An AGM (Annual General Meeting) is the yearly meeting of a company's members, where matters such as accounts, dividend and appointment of auditors are usually taken up. Quorum is the minimum number of members or directors who must be present for a meeting to be valid. Without it, decisions taken are not valid. A proxy is a person you appoint to attend a meeting and vote for you when you cannot go yourself. A resolution is a formal decision passed at a meeting by voting. Resolutions are commonly grouped as ordinary and special, depending on the majority needed.

Then, changes in structure. In a merger, two or more companies combine to form one, usually by mutual agreement. In an acquisition, one company takes over another and gains control of it. The acquired company may continue to exist. Merger is often a joining of equals. Acquisition is a takeover.

Finally, the internal structure. Chain of command is the line of authority from top management to the lowest level, showing who reports to whom. Orders flow down this line and reports flow up. It keeps responsibility clear and avoids confusion.

Key rules to remember

Stakeholder: Stakeholder = any person or group affected by, or interested in, the company; Wider than shareholder. Every shareholder is a stakeholder, but not every stakeholder is a shareholder.
Quorum: Quorum = minimum number present for a meeting to be valid; The exact number depends on the law and the company's articles. Do not quote a number unless the question gives it.
Proxy: Proxy = person appointed to attend and vote on behalf of a member; The term is used for the person appointed and also for the authority given.
Merger vs acquisition: Merger = companies combine into one | Acquisition = one company takes control of another; Use 'takeover' as a clue for acquisition and 'combine' as a clue for merger.
Chain of command: Top management → middle management → supervisors → workers; Authority flows downward. Reporting flows upward.

How to solve Corporate and Organisational Terminology questions

Use this method for any question that asks you to define, differentiate or use a corporate term.

1Read the question and identify the term and what is asked: meaning, difference, example or use in a sentence.
2Write a one-line definition in plain words. Put the key term in the first line.
3Add the purpose: why does the company need this term or body?
4Give one short Indian example, such as a company holding its AGM or a director appointing a proxy.
5For difference questions, compare on two or three points such as meaning, control and survival of the company.
6For sentence or fill-in tasks, check that the word fits the meaning and the grammar.
7Re-read your answer and remove any number or rule you are not sure of.

Quickest way: Term, role, example

When to use it: Use when you have a few minutes for a short-answer or a vocabulary-style question.

Write the term and a definition in one sentence.
Add a second sentence on what it does or why it matters.
End with a short example.
For merger vs acquisition, remember: merger = combine, acquisition = take over.
For quorum and proxy, remember: quorum = minimum present, proxy = someone attending for you.

Common mistakes in Corporate and Organisational Terminology

Treating stakeholder and shareholder as the same.
Both words look alike and both relate to a company.
Fix: Shareholders own shares. Stakeholders include shareholders plus employees, customers, lenders, suppliers and others affected.
Defining quorum as the majority needed to pass a decision.
Students mix up attendance with voting.
Fix: Quorum is the minimum attendance for a valid meeting. The majority needed to pass a resolution is a separate matter.
Saying a proxy is the voting right itself or a member.
The word is used loosely in everyday talk.
Fix: Say a proxy is a person appointed to attend and vote for a member who cannot attend.
Using merger and acquisition as exact synonyms.
Newspapers often write 'M&A' together.
Fix: State the difference: in a merger companies combine, in an acquisition one takes control of another.
Confusing the board with the AGM.
Both involve decisions about the company.
Fix: The board is a group of directors. The AGM is a yearly meeting of members.
Showing the chain of command as a chart of friendships or departments.
Students ignore the idea of authority and reporting.
Fix: Describe it as a line of authority from top to bottom, with clear reporting at each level.

Worked examples

Example 1

Differentiate between a merger and an acquisition. Give one point on meaning, one on control and one on the existence of the companies.

Show the solution

Meaning: in a merger, two or more companies agree to combine and become one. In an acquisition, one company buys enough of another to take it over.
Control: in a merger, the combined company is run as one body, often by mutual agreement. In an acquisition, the buying company gains control of the target.
Existence: after a merger, the original companies usually cease to exist separately. After an acquisition, the acquired company may continue to exist as a subsidiary.
Add a closing line: a merger is often seen as a joining of equals and an acquisition as a takeover.

Answer: A merger combines companies into one by agreement. An acquisition is a takeover in which one company gains control of another, which may continue to exist.

Example 2

Mr Sharma holds shares in an Indian company but cannot attend its AGM. Explain, using the terms quorum, proxy and resolution, what he can do and why the meeting still stays valid.

Show the solution

The AGM is the yearly meeting of members of the company.
Mr Sharma can appoint a proxy, a person who attends and votes on his behalf.
The meeting is valid only if the quorum, the minimum number of members required to be present, is met. A proxy can help in voting, but the quorum rules of the law and the company's articles must still be satisfied.
At the meeting, matters are decided by voting. A resolution is the formal decision passed, such as approving accounts or declaring a dividend.
So Mr Sharma's views are still counted through his proxy, and the decisions are valid if quorum is present.

Answer: Mr Sharma can appoint a proxy to attend and vote for him. The AGM stays valid if the required quorum is present, and the resolutions passed by voting bind the company.

Exam tips

Learn each term as a definition plus one short example. Examiners reward clear meaning more than long answers.
For 'differentiate' questions, use two or three comparison points and keep each one to a single line.
Do not quote a quorum number or a majority percentage unless the question gives it.
Practise using each term in a sentence, since vocabulary and usage questions are common in this paper.
Use the 15 minutes of reading time to mark the questions where you know the terms well and answer those first.

Practice questions from Common Business Terminologies

Corporate and Organisational Terminology: frequently asked questions

What is the meaning of quorum and proxy?

Quorum is the minimum number of members or directors who must be present for a meeting to be valid. A proxy is a person appointed by a member to attend a meeting and vote on his or her behalf.

What is the difference between merger and acquisition?

In a merger, two or more companies combine to form one, usually by mutual agreement. In an acquisition, one company takes control of another, and the acquired company may continue to exist.

Who are stakeholders in a business?

Stakeholders are all those affected by or interested in a company. They include shareholders, employees, customers, suppliers, lenders, the government and the community.

What is the difference between the board and the AGM?

The board is the group of directors who guide and oversee the company. The AGM is a yearly meeting of the company's members, where matters such as accounts and dividend are taken up.

What is a chain of command?

It is the line of authority from top management down to the lowest level. It shows who gives orders and who reports to whom, so responsibility stays clear.