Understanding business terminology can be challenging. This glossary defines common terms you'll encounter when forming and running your business.
A
- Annual Report
- A required filing that businesses must submit to the state each year (or biennially in some states) to update business information and maintain good standing.
- Articles of Organization
- The document filed with the state to officially form an LLC. It includes basic information about the business, such as name, address, and registered agent.
C
- Certificate of Good Standing
- An official document from the state confirming that a business is properly registered, up to date on filings, and authorized to conduct business.
- Corporation
- A legal entity that is separate from its owners, providing limited liability protection. Corporations can be C-corps or S-corps.
E
- EIN (Employer Identification Number)
- A unique nine-digit number assigned by the IRS to identify a business for tax purposes. Also called a Federal Tax ID Number.
L
- LLC (Limited Liability Company)
- A flexible business structure that combines the liability protection of a corporation with the tax benefits and simplicity of a partnership.
- Limited Liability
- A legal protection that separates personal assets from business debts and liabilities. Owners are generally not personally responsible for business obligations.
O
- Operating Agreement
- A legal document that outlines the ownership structure, operating procedures, and rules for managing an LLC. While not always required by state law, it's highly recommended.
R
- Registered Agent
- A person or business entity authorized to receive legal documents, tax notices, and official correspondence on behalf of a business. Required in all states for LLCs and corporations.
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