Administrative Dissolution This is when the state dissolves your business because you have failed to timely file your Uniform Business Report. (See Uniform Business report.)
Amendment This is a change of your corporate records, such as changing your corporate name or officers and directors.
Annual Shareholders’ and Directors’ meetings To maintain the protection the corporation provides for the corporate owners the aforementioned meetings should take place annually and the election of Directors or officers or re-elected directors and officers should be documented.
Arbitration The process for resolution of dispute by one or more private, unofficial (non-governmental) persons who's selection is agreed to by the parties to the dispute, and which is outside of the judiciary processes (the courts). As used in the book, and as typically used, the word implies the use of the rules and regulations of the American Arbitration Association.
Assignment The act by an Assigner for transferring the Assignor’s title of ownership, interest or right in real or personal property to another. The Assignor relinquishes his rights to, and his liabilities and responsibilities for, the property. The recipient of this transfer is called the Assignee.
Articles of Incorporation This is the generic name for corporate documents that are filed with the state to form a corporation.
Articles of Organization This is the generic name for Limited Liability documents that are filed with the state to organize a Limited Liability Company.
Beneficiary One who has or will receive a benefit, such as a person for whose benefit a trust has been created; any person entitled to all or any part of the estate of a deceased person under the terms of a will.
Breach An intentional or unintentional violation of an obligation, contract or promise.
By-Laws The rules and regulations establishing the governing structure of a corporation or association.
Corporation An artificial entity created or recognized by a state, acknowledging an association of one or more people, which is separate and distinct from those people. Generally, individual shareholders enjoy the protection of limited liability in that each is liable and “at risk” only to the extent of his investment to purchase of the stock of the corporation.
C Corporation A type of corporate entity that is taxed on its profits at the Federal income tax level and in many states with a state income tax. The profits are then taxed at the personal level which creates what is called double taxation.
Corporate Book Also known as a corporate kit, houses the corporate records such as the articles, by-laws, minutes, stock certificate(s) and corporate seal.
Damages Monetary compensation paid to a person who has suffered loss, detriment or injury to his person, property or rights through an act or omission of another.
Deed The term for any one of several types of documents signed by the seller (also known as the grantor or vendor) establishing the transfer or ownership (title) or real estate to the buyer (also known as the grantee or vendee).
Directors (of a corporation) A person, appointed or elected by the shareholders of a corporation, who is authorized to direct and oversee the affairs of the corporation.
Dissolution Legally closing a corporation’s existence by filing articles of dissolution with the state.
Dividends Payment of corporate earnings to owners of the corporation (shareholders).
Domicile One’s “home,” the place where one ultimately intends to return. A person’s domicile and residence may be, but are not always the same. A person may have more than one residence but only one domicile.
Donee A person who receives a gift from another.
Donor A person who makes a gift to another
Execute To complete or make a document valid by signing and delivering it.
Federal Tax Identification Number This in a number the IRS produces for your business entity (almost like a social security number) that allows it to open a corporate bank account and acquire the necessary business license.
Fictitious Name/DBA The State allows a Corporation/LLC to do business under multiple names at one time by way of registering a fictitious name.
Indemnification The act of holding another not responsible for loss or damage. Also, the agreement to reimburse another for loss or damage from a third person’s act or refusal to act.
Joint Venture A voluntary agreement between two or more people to conduct business for profit in a specific business situation and for a limited or fixed period of time. Typically, a Joint Venture is managed by a “Venture Manager” or “General Partner” who is liable for losses, and one or more other investing partners, referred to as “Limited Partners,” each of whom are liable for losses only to the extent of his respective capital contribution to the Joint Venture.
Lease An agreement the owner of property and another in which the owner retains title (ownership) of the property but grants to the other exclusive use and possession of the property for a fixed period of time and for a fixed fee. In a lease of real estate, the owner is usually referred to as “landlord” and the person receiving the rights of use and possession is usually referred to as tenant.
Limited Liability Company Essentially, the LLC is a business ownership structure that allows owners to pay business taxes on their individual income tax returns like partners( or, for a one-person LLC, like a sole proprietorship), but that also gives the owners the legal protection of personal limited liability for business debts and judgments as if they had formed a corporation. Therefore, an LLC provides both pass-through taxation of business profits (like a partnership) and limited personal liability for business debts (liked a corporation).
Manager The managers of an LLC are the equivalent of the officers and directors in a corporation. Under a member-managed arrangement, every member (owner) of an LLC has a say in how the business is run and every member can sign agreements binding the LLC (unless otherwise prohibited by agreement). Manager-managed LLCs are managed by a specially designated manager or managers-and these can be members or non-members. This allows you to delegate management responsibilities and limit the number of people authorized to speak for the LLC to a smaller group.
Member This is the title used for owners in a Limited Liability Company.
Minutes These are simply a formal record of the proceedings of a meeting. The organizational meeting is usually held to approve standard items of business necessary for a new corporation to begin doing business.
Nonprofit Corporation Being organized as a tax-exempt nonprofit corporation is a common requirement for obtaining grant funds from government agencies and private foundations. There are also important federal, state, local income, property, sales, excise and other tax exemptions available to nonprofit corporations. In addition, only tax-exempt nonprofit organizations provide donors with the incentive of an individual tax deduction for contributions made to the organization.
Officers Are voted in by the Directors to carry out their policies and the day to day management of the corporation.
Operating Agreement This is an agreement between the members (owners) of a Limited Liability Company that provides the framework for the management of company business.
Professional Corporation a corporation created by a professional or professionals in order to gain corporate tax advantages for traditional partnership or proprietary activities.
Registered Agent A person authorized to receive service of process and other official papers for a corporation.
Reinstatement When your company is dissolved by the state for failure to file your annual uniform business report you may reinstate it and once again obtain good standing for your business.
S Corporation A corporation organized to meet certain Internal Revenue Code requirements and thus qualified for special federal income tax treatment. The income of an S corporation, whether or not distributed, is taxed to its shareholders, but the S corporation, whether or not distributed, is taxed to its shareholders, but the S corporation itself is not subject to federal income tax.
Secured Creditor Generally, a creditor who has a contractually created lien in a debtor’s property.
Secured Debt A debt in which the creditor has a claim against specific property of the debtor.
Security Agreement an agreement granting a security interest.
Service mark A distinctive symbol, work, letter, number, picture, or combination thereof adopted and used by a business to identify its services (distinguish them from the services of others)
Share Subscription A written agreement to purchase a specified number of a corporations unissued shares, perhaps on a period basis and or preceding the corporation’s formation.
Sole Proprietorship the simplest form of business, in which a sole owner and his/her business are not legally distinct entities, the owner being personally liable for business debt.
Subsidiary Corporation A corporation controlled by another corporation, called the parent corporation.
Licensing Allowing others to use and profit from intellectual property for consideration.
Trade Dress The image and overall appearance of a product, subject to the same protection as trademarks,
Trademark A distinctive symbol, word, letter, number, picture, or a combination thereof adopted and used by a merchant or manufacturer to identify his/her goods.
Shareholder An owner of all or a part of a corporation in whose name stock certificates are issued (also referred to as a “stockholder”).
Subscriber A person or entity who agrees to purchase shares of stock of a corporation at a predetermined price on an indeterminate date in the future when the stock is issued.
Shares (Stock) Often called authorized shares are the amount of shares a company has stated in the articles to be able to issue to its owners (Stock Holders).
Uniform Business Report Nearly all states require an annual report to be filed by a certain date so that the current business information such as the address, Directors and officers will be updated with the Secretary of State.