Glossary

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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Family Limited Partnership

A limited partnership created by a family to help protect the family’s personal assets. Normally, the parents act as the general partners and place all of the family assets, like the home and the cars, into the FLP. The children are designated as the limited partners and contribute no assets to the FLP. Typically, each parent owns ½ % of the FLP, and the children own the remaining 99%, usually in a trust. If the parents are sued, then only 1% of the family’s assets are at risk.

 

Federal Income Tax

Taxation by the U.S. government of the income realized by individuals and entities during a given fiscal or calendar year.

 

Federal Tax Identification Number

Same as “Employer Identification Number.”

 

Foreign Corporation

A corporation first formed outside of Delaware authorized to conduct business within the State of Delaware.

 

Forfeiture

The act by which the Attorney General or the Chancery Court forfeits the charter of a corporation due to the corporation’s abuse, misuse or nonuse of its corporate powers.

 

Franchise Tax

An annual tax levied upon all corporations and LLCs for the privilege of being incorporated or formed in Delaware. All LLCs pay franchise tax of $300 as of July 1, 2014. The minimum franchise tax for corporations is $225 as of July 1, 2014. Make a payment online.

 

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