Business Glossary
Plain-English definitions for common business and legal terms. Bookmark this page for quick reference.
A
Annual Report
A yearly filing required by most states to update your business information and maintain good standing. Also called a biennial report in some states. Learn more
Articles of Incorporation
The document filed with the state to create a corporation. Some states call it a Certificate of Incorporation or Corporate Charter. Learn more
Articles of Organization
The document filed with the state to create an LLC. Some states call it a Certificate of Formation or Certificate of Organization. Learn more
Authorized Shares
The maximum number of shares a corporation is allowed to issue as specified in its articles of incorporation.
B
Board of Directors
A group of individuals elected by shareholders to oversee the management of a corporation.
Business Entity
A formal legal structure created to conduct business. Includes LLCs, corporations, partnerships, and more. Learn more
Bylaws
Internal rules that govern how a corporation operates. They cover things like meeting procedures, officer duties, and voting requirements.
C
C Corporation
A corporation that is taxed separately from its owners. Subject to double taxation because the company pays corporate tax and shareholders pay personal tax on dividends. Learn more
Certificate of Good Standing
An official document from the state confirming that a business is compliant with all state requirements. Learn more
D
DBA (Doing Business As)
A fictitious business name used instead of the legal entity name. Also called a trade name or assumed name.
Dissolution
The formal process of closing a business entity with the state. Requires filing paperwork and settling obligations. Learn more
Domestic Entity
A business entity operating in the state where it was formed.
E
EIN (Employer Identification Number)
A nine-digit federal tax identification number assigned by the IRS. Like a Social Security number for your business. Learn more
Entity Number
A unique identification number assigned by the state when you register your business. Used for all state filings. Learn more
F
Filing Fee
The fee charged by the state to process business filings such as formation documents, annual reports, and amendments. Learn more
Foreign Entity
A business operating in a state other than where it was formed. Must register through foreign qualification. Learn more
Foreign Qualification
The process of registering a business to operate in a state other than its formation state. Learn more
Franchise Tax
A tax levied by some states on businesses for the privilege of doing business in that state. Not the same as income tax.
G
Good Standing
A status indicating that a business has met all state requirements including filings and fees. Learn more
I
Incorporator
The person who signs and files the articles of incorporation to create a corporation.
L
LLC (Limited Liability Company)
A flexible business structure that offers personal liability protection and pass-through taxation. The most popular structure for small businesses. Learn more
Limited Partnership (LP)
A partnership with general partners (who manage) and limited partners (who invest but do not manage). Learn more
LLP (Limited Liability Partnership)
A partnership where each partner has limited liability for the actions of other partners. Common for professional firms. Learn more
M
Manager-Managed LLC
An LLC where designated managers run the business. Other members are passive investors.
Member
An owner of an LLC. Equivalent to a shareholder in a corporation.
Member-Managed LLC
An LLC where all members participate in running the business. The default structure in most states.
N
Nonprofit Corporation
A corporation formed for charitable, educational, religious, or scientific purposes. Can apply for tax-exempt status. Learn more
O
Operating Agreement
An internal document that outlines how an LLC will be managed. Covers ownership, voting, profit distribution, and procedures.
Organizer
The person who files the articles of organization to create an LLC.
R
Registered Agent
A person or company designated to receive legal and government documents on behalf of a business entity. Learn more
Reinstatement
The process of restoring a business that has been administratively dissolved or revoked. Usually requires paying back fees.
S
S Corporation
A tax election (not an entity type) that allows a corporation or LLC to pass income through to owners. Avoids double taxation but has restrictions. Learn more
Secretary of State
The state official responsible for business registrations and maintaining business records. Learn more
Service of Process
The legal procedure of delivering court documents (lawsuits, subpoenas) to a party. Typically served to the registered agent.
Shareholder
An owner of a corporation. Ownership is represented by shares of stock.
Sole Proprietorship
The simplest business structure where one person owns the business. No formal filing required. No liability protection. Learn more
Statutory Agent
Another term for registered agent, used in some states like Ohio and Arizona. Learn more