The Business Glossary

When one company gains control of another by buying most or all of its shares or assets.

A state forcibly shutting down a business for failing to meet requirements such as filing annual reports or keeping a registered agent.

A group brought in to offer guidance to a company's directors, without the authority or legal duties of an elected board.

A person or entity legally authorized to act on behalf of another party.

The person or company designated to accept legal and tax documents on a business's behalf; also called a registered agent.

A legal theory that strips a corporation of its liability protection when it's shown to have no real separation from its owner.

A state-issued document confirming that a foreign corporation has updated its original authority to do business there.

A yearly gathering of shareholders to elect directors and review the company's business.

A yearly filing that updates the state on a company's directors, officers, and finances.

The paperwork a company files to gain permission to operate as a foreign corporation in another state.

A business dealing conducted the way it would be between unrelated parties, on fair market terms rather than personal favor.

The founding document filed with a state to legally create a corporation.

The founding document filed with a state to legally create an LLC.

A business name other than the company's legal name, also known as a DBA or trade name.

The maximum number of shares a corporation is permitted to issue under its articles of incorporation.

The value used to calculate gain or loss for tax purposes, typically what you paid for an asset or shares.

A financial instrument payable to whoever physically holds it, rather than to a named owner.

State-level regulation covering the sale of securities and the licensing of brokers and dealers.

The group elected by shareholders to oversee a corporation and appoint its officers.

A long-term debt instrument backed by property or other fixed assets.

The body of state law that governs how corporations are formed and operated.

The internal rulebook that governs how a corporation runs its day-to-day affairs.

The standard corporate structure with no cap on shareholders, commonly used by companies planning to raise significant outside capital.

Official state proof that a foreign corporation is authorized to do business there.

A state-issued document confirming a corporation legally exists and can conduct business.

A state document confirming a business is properly registered, current on filings and fees, and hasn't been dissolved.

Another name for the document filed to legally create a corporation, also called Articles of Incorporation.

A corporation that elects a simplified legal structure under state close-corporation rules, often with fewer shareholders and relaxed formalities.

A corporation whose stock is owned by a small group and isn't publicly traded.

Mixing personal and business funds in one account, which can put an owner's personal liability protection at risk.

A standard class of stock with no special rights or preferences attached.

Up to date with the legal formalities required to keep a business entity in good standing under state law.

A written decision signed by all directors or shareholders in place of holding a formal meeting.

Something of value — money, property, or services — exchanged to make an agreement legally binding.

Combining two or more corporations by law into a single, newly formed corporation.

A corporation taking part in a merger, consolidation, or share exchange.

Parties owed money or goods under a written or verbal agreement.

A security that its holder can exchange for another type of security, such as debt converting into stock.

Another term for the document that officially establishes a corporation, also called Articles of Incorporation.

A required word or abbreviation, like "Inc." or "LLC," that signals a business's legal entity type in its name.

A binder of essential corporate records and supplies, often including a seal, stock ledger, and blank meeting minutes.

A stamp bearing a company's name and formation details, sometimes required for bank accounts or official documents.

A legal entity created under state law that exists separately from its owners.

A state's statutes governing how corporations are formed, run, and dissolved.

A voting method letting shareholders combine all their votes behind one or a few director candidates instead of spreading them evenly.

Short for "doing business as" — a registered trade name a company uses instead of its legal name.

A long-term loan to a corporation that isn't backed by specific collateral.

Raising money for a business by borrowing rather than selling ownership stakes.

A lawsuit a shareholder files on the corporation's behalf to address harm done to the company.

The individuals elected to oversee a corporation's management and major decisions.

The right of shareholders who oppose a major corporate transaction to have their shares bought back at a fair price.

The formal legal process that ends a corporation's existence.

A payment of cash or property from a company to its owners.

A share of a corporation's profits paid out to its shareholders.

Being taxed twice on the same income — once at the corporate level and again when profits reach shareholders as dividends.

How long a corporation is set to legally exist — indefinitely, or for a fixed number of years.

A contract between a company and an employee setting out the terms of their working relationship.

Raising capital by selling ownership shares in the business.

An ownership stake in a company, as opposed to a creditor's claim against it.

A business name used instead of a company's legal name; another term for a DBA.

A relationship requiring one party to act honestly and in the other party's best interest.

A corporation doing business in a state other than the one where it was originally formed.

A partial unit of stock ownership, smaller than one full share.

A state fee charged for the privilege of operating a business entity there, regardless of profit.

The process of a company offering its shares for sale to the general public for the first time.

A business's status when it's current on all required state filings and fees.

An international treaty that simplifies authenticating documents for use in other member countries, via an Apostille.

An attempt to gain control of a company against the wishes of its board of directors.

The legal process of forming a corporation under state law.

The person who signs and files the Articles of Incorporation to create a corporation.

A company's promise to cover costs and legal liability its directors or officers face while acting on its behalf.

A company's shutdown forced through a legal or administrative process rather than chosen by its owners.

A court-ordered shutdown of a corporation, often requested by the state, a shareholder, or a creditor.

A notary's statement certifying that a document was signed under oath in their presence.

Authenticating a document for use abroad in a country that isn't part of the Hague Convention.

A flexible business structure that combines the liability protection of a corporation with the tax treatment of a partnership.

A partnership with general partners who run the business and limited partners who invest with reduced personal liability.

Protection that shields an owner's personal assets from a company's debts and legal claims.

More than half of the votes, shares, or members — the threshold usually needed to approve major decisions.

A company's directors and executive officers, collectively.

The individuals responsible for running an LLC's day-to-day operations on behalf of its members.

The owners of a limited liability company.

Documents that serve as proof of a member's ownership stake in an LLC.

The legal combination of two corporations in which one survives and the other ceases to exist.

The official written record of what was discussed and decided at a directors' or shareholders' meeting.

Filing to reserve a company's name in another state ahead of formally registering to do business there.

A filing that holds a business name for exclusive use for a limited period before formation.

Stock issued without a minimum price set in the articles of incorporation, priced instead at the board's discretion.

A corporation formed for a charitable or social purpose rather than to generate profit for its owners.

Formal notification that a lawsuit or legal action has been filed against a party.

The people appointed by the board of directors to manage a corporation's daily operations.

An LLC's internal contract governing ownership, management, and how profits are shared.

The initial meetings held after incorporation to formally set up the company's structure and operations.

The person who files the paperwork to form a limited liability company.

The minimum price set for a share in the articles of incorporation, below which it cannot be sold.

A corporation that owns a controlling stake in another company.

A business owned and run by two or more people or entities together.

A tax structure where business profits are reported on the owners' personal tax returns instead of being taxed at the entity level.

A corporate lifespan with no set end date, continuing indefinitely unless formally dissolved.

A court's decision to hold owners personally liable by disregarding the company's separate legal status.

The right of existing shareholders to buy new shares before they're offered to outsiders, to maintain their ownership percentage.

A class of stock that gets priority over common shares for dividends or assets if the company dissolves.

A corporation formed specifically for licensed professionals, such as doctors or attorneys, under special state rules.

Someone who organizes interest and support for a company before it's formally incorporated.

The process of registering to legally do business in a state other than where a company was formed.

The minimum number of members or directors who must be present for a meeting's decisions to be valid.

The cutoff date used to determine which shareholders are entitled to vote or receive a dividend.

Stock that the issuing corporation has the right to buy back under terms set in its articles of incorporation.

A person or company designated to receive legal and government notices on a business's behalf at a physical in-state address.

A corporation's official address on file with the state, typically its registered agent's address.

Rules issued by government agencies that carry the same legal force as statutes.

The process of restoring a dissolved or revoked company to good standing after resolving what caused the loss of status.

A formal decision approved and recorded by a company's directors or shareholders.

A model set of corporate statutes drafted by the American Bar Association that many states have used as the basis for their own laws.

A tax status that lets a corporation's profits and losses pass through to shareholders, avoiding corporate-level income tax, subject to IRS eligibility rules.

A certificate representing a fractional share, issued instead of a full share.

State and federal laws regulating the sale and transfer of stocks, bonds, and other investments.

A tradable financial asset, such as a stock or bond, representing value or an ownership stake.

The formal delivery of legal documents notifying a party of a lawsuit or legal action against them.

A single unit of ownership in a corporation.

A transaction where shares of one corporation are traded for shares of another without either company ceasing to exist.

A corporation's owners, holding an interest in the company proportional to their shares.

A simplified merger process for combining a subsidiary into its parent company without a shareholder vote.

An unincorporated business owned by one person, who is personally liable for its debts and obligations.

A shareholder meeting called to address a specific matter outside the regular annual meeting.

Laws enacted by a state legislature or Congress that take precedence over administrative regulations.

A unit of ownership in a corporation, which can be common, preferred, voting, or non-voting.

A document certifying ownership of a specific number of shares in a corporation.

A contract governing the sale or transfer of a shareholder's stock, often including terms like right of first refusal.

A corporation's owners, holding an interest in the company proportional to their shares; also called shareholders.

People who agree to purchase shares in a corporation under specified terms.

A company that is majority-owned or controlled by another company.

A change in control of a corporation through merger, acquisition, or other transaction.

The company being pursued in a takeover or acquisition attempt.

An organization the IRS has recognized as exempt from federal income tax, typically for charitable or educational purposes.

A wrongful act, such as negligence or fraud, that causes harm and can lead to civil liability.

Legal protection for a business's name, logo, or other identifying mark.

Previously issued shares that a corporation has bought back and now holds itself.

A firm that buys a company's shares and resells them to the public, typically during an IPO.

A company's shutdown initiated by its own owners or directors, rather than forced by the state or a court.

An agreement among shareholders to vote their shares together in a coordinated way, often to influence director elections.

A shareholder's right to vote their shares as set out in the law, articles of incorporation, or bylaws.

An arrangement where shareholders transfer their shares to a trustee who votes on their behalf under agreed terms.

Stock issued for less than its stated or par value.

The process of settling a company's debts and distributing remaining assets as part of its dissolution.

The formal process by which a foreign corporation ends its authority to do business in a state.