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
A general or close corporation that elects pass-through taxation treatment with the IRS. Limited to 100 shareholders, and these shareholders must be U.S. resident individuals.
Secretary of State
The State official and agency responsible for business formations.
Service of Process
Time-sensitive documents, such as lawsuits and subpoenas, served upon a registered agent on behalf of a client that typically require a response by the client.
A unit of ownership, or equity, interest in a Corporation.
One who has title to a share, and, therefore, ownership or equity in a Corporation.
An individual who operates a business under his own name, or as a DBA. No limited liability protection.
Statement of Incorporator
A document created by the Incorporator that passes any possible elements of control over the Corporation to the initial Directors.
Statement of Organizer
A document created by the Organizer that passes any possible elements of control over the LLC to the initial Members.
An indicator of whether or not an entity is current with franchise taxes and other filings, as well as registered agent services. A company not in good standing runs the risk of having its corporate veil pierced.
An entity created by a grantor through a Governing Instrument wherein assets are placed into a trust, managed by a trustees and advisors, and benefits paid to beneficiaries. In Delaware, the grantor can act as a trustee and/or advisor, and be a beneficiary, and still maintain limited liability protection of any personal assets.
Same as “Share.”
A formal filing with the Secretary of State that amends the original Certificate of Incorporation to change number of authorized shares or change par value. Click here to File Stock Amendment
A certificate that evidences a stockholder’s ownership or equity interest.
Stock Transfer Ledger
A record utilized by a Corporation to keep track of the transfer of any stocks.
Same as “Shareholder.”
Subchapter S Corporation
Same as “S Corporation.”
Subchapter S Election
The formal election made by a general or close Corporation to be taxed as a partnership with pass-through taxation. This election is made when IRS Form 2253 is filed in a timely manner.
Since 1981, Harvard Business Services, Inc. has helped form 140,525 Delaware corporations and LLCs for people all over the world.
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