This thesis presents a formal business process modelling language called StAC. The distinctive feature of this language is the concept of compensation, which can be defined as the action taken to correct any errors or when there is a change of plan. The motivation for developing StAC came from a collaboration with IBM concerning the extension of existing notions of compensation for business transactions within the BPBeans enterprise technology. The StAC language supports sequential and concurrent processes, as well as compensation and early termination. A system specification has two components, the StAC processes that describe the system behaviour and compensation information, and the B specification that describes the system state and its basic operations. The language has two variants: the basic one that supports nested compensation; and an extended one where each process may have multiple compensations. Both StAC variants were applied to several examples and it emerged that both variants have features that make them useful to specify different types of systems. An operational semantics was defined for StAC extended with multiple compensation, and the interpretation of basic StAC was defined in terms of the extended language. An operational approach is also used to justify the integration of StAC processes with B operations. A strategy for the refinement of StAC specifications is explored in this thesis. This strategy proposes to explicitly embed the behavioural and compensation information into a B machine. The machine obtained is standard B, allowing the use of the B notion of system refinement to prove the refinement of StAC specifications. An extension to UML activity diagrams is defined as a way of making StAC more accessible to non-formal methods users. In UML a StAC specification is modelled by a class diagram that describes the data, and an activity diagram that describes the behaviour of the system. StAC has formalised the notion of compensation while extending the notion of transaction compensation in several ways. The most relevant extensions are: the non-atomicity of compensation that allows a compensation to be a complex process and that a compensation itself can be compensated; and multiple compensation that allows a process to have several independent compensations.