ARTICLES: Also known as the “Certificate of Incorporation” or “Articles of Organization” established by the formation of the new business that is recognized by the state.
AMENDMENT: An addition or change made to the articles of incorporation
BOARD OF DIRECTORS: Appointed members that collectively supervise the inner workings of a business. A minimum of 3 directors are required for a New York State Not-For-Profit
BYLAWS: Regulations and routine conduct contract among members to assist the business regulate its corporate functions. Located in the corporate kit.
CERTIFICATE OF AUTHORITY: Allows a foreign business to operate and collect sales tax in a new state.
CORPORATE KIT: A corporate kit is a record book that stores important business documents. Corp kits will include minutes & by-laws, stock certificates, and a stock transfer ledger. LLC kits will include an operating agreement, membership certificates and a membership listing.
CORPORATION: A legal entity separate from the people who own it, formed with the intention of making a profit or fulfilling a corporate goal.
DBA: “Doing Business As”, “Fictitious name” or an “Assumed name” allows a business to transact under a different name that stems from the businesses’ originally filed name.
DISSOLUTION: Legally ends the operation of the business when filed with the secretary of state.
DOMESTIC/ FOREIGN CORPORATION: All businesses are domestic to the state they originally file in. When a business decides to do business in another state, it becomes a foreign corporation to the new jurisdiction.
FEDERAL TAX ID #: The (FEIN) number often called EIN number (employer identification number) is the social security # of the business. It is required for bank account formation as well as tax filings.
GOOD STANDING: A business is considered in good standing when it is up to date with annual reports and fees due to the state.
INCORPORATOR: An incorporator is the person responsible for arranging the formation of the articles.
LIMITED LIABILITY COMPANY (LLC): A business structure that allows for pass through taxation. A LLC has more flexibility than a corporation in that it has the ability to decide how it wants to be taxed.
LIMITED LIABILITY PARTNERSHIP (LLP): A partnership that requires 2 or more owners with limited personal liability.
LIMITED PARTNERSHIP (LP): A limited partnership includes a GP (general partner) and at least one limited partner.
MANAGERS: A manager is chosen by the members of an LLC to administer tasks and duties to run the LLC effectively.
MEMBERS: A member of an LLC is an owner. If there is only one member, the LLC will be taxed like a sole proprietorship, unless the member choses to be taxed like a corporation. If there are multiple members, the LLC will be taxed like a partnership.
MEMBERSHIP CERTIFICATES: In an LLC, membership certificates can be issued and are similar to stock in a corporation. They show individuals’ ownership and investment in the LLC.
MINUTES: The formalities and procedures documented during the business meetings. Minutes and by-laws are included in a corporate kit.
NO PAR VALUE: No par value refers to a stock having no value
NOT-FOR-PROFIT: Non-profits are formed for the interest of the greater good without the intentions of making a profit. Non-profits can include, but are not limited to, clubs, charities, libraries and environmental programs.
ORGANIZER: An organizer is the person responsible for forming an LLC.
PAR VALUE: Refers to the face value of a stock
PASS THROUGH TAXATION: The method in which business owners report profits on their individual tax returns rather than reporting them through the business entity itself.
PROCESS ADDRESS: The process address is the address where all federal mail pertaining to the business will be delivered.
PROFESSIONAL CORPORATION (PC): Dentists, doctors, lawyers, accountants and other professionals may choose to form a business under a professional corporation to protect their personal assets. Paid salary reported on W-2
PROFESSIONAL LIMITED LIABILITY COMPANY (PLLC): Professionals that form a PLLC will be taxed as sole proprietor with expenses and income reported on personal tax returns.
REGISTERED AGENT: A person allocated to receive mail on behalf of the business.
SHAREHOLDERS: One or more persons or group of people that own at least one share of stock in a company. They are considered the owners of the company.
SOLE PROPRIETORSHIP: A sole proprietorship is done at the county level. It is an unincorporated business that does not differentiate between the business and the owner. The owner is responsible for all business debts and losses. In the event of getting sued, a sole proprietorship does not protect you from losing your personal assets.
STOCK CERTIFICATE: A stock certificate is a legal document that shows ownership of a company.
STOCK LEDGER: Records the ownership and transfer ship of stock. Found in a corporate kit.
TAX EXEMPT ORGANIZATION: When an organization meets certain requirements, it can apply for tax-exempt status to the IRS that will allow them to be excluded from paying federal income taxes on revenue relating to the organizations mission.