Glossary of Corporate Terms

If you're getting ready to launch a new business, chances are you know your product or service and your market like the back of your hand. But the mechanics of forming a business entity-knowing the terminology-may be more difficult to understand.

To help you sort through the terminology, Harvard Business Services, Inc. has included a comprehensive glossary to help guide you. To use the glossary, match the first letter of the term you want to look up with the alphabet list below, and click on that letter.

Of course, our team of business formation professionals is standing by to help you make informed decisions if you need more information

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Alternative Tax (Assumed Capital) Method

An alternative method for calculating Delaware Franchise Taxes for corporations (cannot be used if stock has no par value). Alternative Tax is determined by dividing a corporation’s gross assets by all issued shares and then multiplying this number (quotient) or the actual par value, whichever is greater, by the authorized shares. Divide this figure by $1,000,000, and then multiply by $400 to get final tax due. Corporations are allowed to pay the lesser of Alternative Tax Method and Authorized Shares Method. Added to this figure is a $50 Annual Report Filing fee to make a minimum tax of $450. Maximum tax is $200,000.



  A formal filing with the Secretary of State that amends the original or any prior filing, e.g., change of company name, change in number of authorized shares, change in par value, et al.


Annual Agent

 Same as “Registered Agent.” Annual Agent is required by statute to be appointed by the company to receive and forward legal and government documents on behalf of the company. Sometimes called Annual Agent because services are paid for on an annual basis.


Annual Meeting

 A yearly meeting of a corporation’s stockholders wherein the previous year is reviewed and the upcoming year is planned. Actions are taken by vote and documented in minutes and resolutions.


Annual Report

 For LLCs in Delaware, this report is simply an invoice for Franchise Taxes due. The only information contained on the Annual Report is the name of the entity and the amount of Franchise Tax due.



 A separate document required by foreign countries that are parties to the 1961 Hague Convention (most U.S. allies) that attests to the validity of a signature on a U.S. document. The apostille allows the foreign country to accept the validity of the U.S. document for use in its territory. 



 An object possessed or owned by an individual or entity that has value.


Asset Protection

 A method by which an individual or entity protects assets through the use of multiple entities, trusts, insurance and estate planning.


Assumed Capital

 The value of a corporation’s shares determined by dividing its gross assets by all of its issued shares and then multiplying this number (quotient) or the actual par value, whichever is greater, by its authorized shares.


Authorized Shares

 See “Authorized Stock.”


Authorized Shares Method

 The standard method of calculating a corporation’s Franchise Tax in Delaware; it is determined by assigning a tax for a certain range of authorized shares. For instance, authorized shares of 5,000 or less result in a tax of $175. Added to this is the $50 Annual Report Filing fee to make a minimum tax due of $225. Maximum tax is $200,000.


Authorized Stock (or Authorized Capital Stock)

 The total number of shares of stock that a corporation authorizes itself to issue. This total must be provided in the original Certificate of Incorporation, but can be amended in the future. Amount of Authorized Capital Stock may affect filing fees and Franchise Tax.


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