Business Incorporation Terms to Know
If you’re considering incorporating your business, do your research (there’s a bunch of information about the process) and become familiar with these terms associated with business incorporation:
|Term||What It Means|
|Articles||The title of the document filed in many states to create a
corporation. Also known as the certificate of incorporation or
|Bylaws||The regulations of a corporation that, subject to statutory law
and the articles of incorporation, provide the basic rules for the
conduct of the corporation’s business and affairs.
|Certificate of authority||Formal evidence of qualification issued by a state to a foreign
|Certificate of good standing||A certificate issued by a state official as evidence that a
corporation is in existence or authorized to transact business in
the state. Also known as a certificate of existence or certificate
|Domestic corporation||A term applied to a corporation doing business in its state of
|Foreign corporation||A term applied to a corporation doing business in a state other
than its state of incorporation.
|Franchise taxes||A tax or fee usually levied annually upon a corporation,
limited liability company, or similar business entity for the right
to exist or do business in a particular state.
|LLC (limited liability company)||An artificial entity created under and governed by the laws of
the jurisdiction in which it was formed. Limited liability
companies are generally able to provide the limited personal
liability of corporations and the pass-through taxation of
partnerships or S corporations.
|Minutes||A written record of meetings of or actions by the board of
directors or shareholders.
|Par value||A minimum price of a share below which the share cannot be
issued, as designated in the articles of incorporation.
|Registered agent||A person or entity designated to receive important tax and
legal documents on behalf of the corporation. The registered agent
must be located and available at a legal address within the
specified jurisdiction at all times. Also known as a resident
|SubChapter S corporation||A corporation granted a special tax status as specified under
the Internal Revenue Code (IRC). Since this type of corporation
pays no income tax, all gains and losses of the corporation pass
through to the individual shareholders in proportion to their