Business Incorporation Terms to Know

Part of the Incorporating Your Business For Dummies Cheat Sheet

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 corporate charter.
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 corporation.
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 of authorization.
Domestic corporation A term applied to a corporation doing business in its state of incorporation.
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 agent.
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 holdings.
  • Add a Comment
  • Print
  • Share
blog comments powered by Disqus

SERIES
Incorporating Your Business For Dummies Cheat Sheet

Advertisement

Inside Dummies.com