LLC Glossary
Glossary of LLC Terms
Learn the Glossary of LLC Terms by looking up the word or phrase and then reading the definition and example. Become a true LLC scholar and learn the industry lingo.
Administratively Dissolved
Administratively Dissolved is when a business division of a Secretary of State closes a Corporation or Limited Liability Company due to some sort of non-compliance like paying the annual fee or not having a registered agent. The company that has been dissolved administratively will not be able to do business legally until reinstatement is done, if that is a possibility.
Example: April had to pay a fee for her LLC because the state
Administratively Dissolved it. After the reinstatement fee is accepted, the LLC will be able to do business again, and the status will be listed as Active and not Dissolved.
Amendment
An Amendment can refer to changes to the Articles of Organization or Articles of Incorporation. It can also refer to a change in an LLC Operating Agreement. There is usually a fee to make this change to your company.
Example: Bob wanted to change the name of his Wyoming Corporation. He paid a $50 fee to make an Amendment to Article 1. on the Corporation with the Wyoming Secretary of State.
Annual Report
The Annual Report is the filing sent to the Secretary of State a year after the company is formed. Some states required bi-annual reporting and other structures. The Annual Report discloses financial information for the company to determine how much tax is paid for the entity.
Example: Elaine’s accountant reminded her that it was time to file her Annual Report for the LLC she filed in Wyoming. The account had all the financial numbers for the LLC and just needed approval to pay the $60 renewal fee for the Annual Report.
Apostille
An Apostille is a document that certifies your Corporation or Limited Liability Company so it can be used in certain countries outside the United States. You can obtain one of these from the Secretary of State for a fee.
Example: The banker in Turkey wanted to see my Apostille with the seal from the Secretary of State before I could open a bank account in Turkey with my Wyoming LLC.
Article
An Article is a piece of information. Many Articles together make up the Articles of Incorporation for a Corporation or Articles of Organization for an LLC.
Example: Jerry filled out the information for his LLC. For Article 1. he wrote the name of the company, the Registered Agent info for Article 2., and the addresses for Article 3.
Articles of Incorporation
The Articles of Incorporation is a document with information about a corporation. The Articles of Incorporation are submitted to a Secretary of State business office to establish a new Corporation in that state. There is a filing fee involved.
Example: Carmela paid an incorporation business to file her Articles of Incorporation so she could start a new Corporation for her marketing business.
Articles of Organization
The Articles of Organization are used to file for a new Limited Liability Company at a state level. Each Article in the document states different information about the company.
Example: Scott submitted his custom Articles of Organization with the state fee to open a new Limited Liability Company.
Assets
Assets are valuable things that a person or company can own.
Example: Tim listed his company assets as cash, construction tools, and a company truck for his LLC.
Authorized Shares
Authorized Shares for a Corporation are the number of individual stocks the corporation can issue to buyers. The Director(s) of a Corporation will determine the number of Authorized Shares when filing for a new Corporation.
Example: Sally, Burt, and Jack, the Directors of the corporation decided that the corporation would be filed with 50,000 Authorized Shares to sell during the IPO (Initial Public Offering).
Board of Directors
A person or group of people that govern a Corporation are seated on the Board of Directors. Each person is one Director.
Example: There will be annual meetings and minutes taken for the record by the Secretary when the Board of Directors meets concerning Corporation matters and its Shareholders.
Business Division
A Business Division is part of an organization that performs tasks like governing business entity filings.
Example: The Business Division of the Wyoming Secretary of State accepts filings for LLCs and Corporations.
Business Entity
The title Business Entity goes to a business that was organized by one or more people. It is called an entity because the law recognizes it as a person.
Example: Raymond was trying to find the best business entity to start his company. He has narrowed it down to an LLC or a Corporation.
ByLaws
A Corporation’s ByLaws are the rules and regulations that instruct the Corporation. They are similar to an LLC’s Operating Agreement. The ByLaws will state the name of the Corporation, the registered agent, addresses, governing body, what-if scenarios, and other bits of information.
Example: The Board of Directors wrote and signed the Wyoming Corporation ByLaws document to settle an argument in the future on rules or to show the court proof of operation rules.
Certified Copies
Certified Copies are a copy of your Articles of Organization, Articles of Incorporation, Amendment, or Annual Report with a certification stamp from the Secretary of State guaranteeing the authenticity of the document.
Example: Linda at the bank told me she wanted to see a Certified Copy of my Amendment before I could change who was on the business bank account.
Certificate of Authority
A Certificate of Authority is obtained when one business wants to do business in another state with a foreign LLC.
Example: Albert from Tennessee filed for a Wyoming Certificate of Authority so he could use his Tennessee logging business in Wyoming for the summer.
Certificate of Good Standing
A Certificate of Good Standing is proof that all is well with your LLC or Corporation. It will state that all your taxes are paid and registrations are up to date.
Example: Zelma needed to show her insurer a Certificate of Good Standing for her LLC before he could issue the insurance policy.
Certificate of Incorporation
The Certificate of Incorporation is a document that the state issues to show proof that your Corporation has been filed in that state. There is usually a stamp and filing number issued by the filing division on the document.
Example: After I filed the Articles of Incorporation, the state returned them with a Certificate of Incorporation. I showed both documents, along with my EIN, to my business banker.
Certificate of Organization
The state where you filed your LLC Articles of Organization will issue you a Certificate of Organization after the completed filing. The Certificate is a document saying that the LLC has been filed.
Example: Mario showed the Certificate of Organization to prove the company was legal to operate.
Change Registered Agent
To perform a Change Registered Agent is the act of firing your current registered agent and appointing a new registered agent to be the communication contact for the Corporation or LLC.
Example: Harry put in a Change Registered Agent form with the state after he hired a new registered agent.
Corporation
A Corporation is a legal entity that is separate from the people who created the business structure. The Corporation will protect its owner with limited liability protection like an LLC does. A Corporation will have shares of stock to issue. An Officer hierarchy is used to manage the Corporation.
Example: Donna and Mandy set up a Wyoming Corporation to sell their buddy bandannas. The Corporation will be used to get an EIN and set up a Wyoming business bank account.
Company
A Company is a business that is not a Corporation. You can not list the word Corporation in the title of a Limited Liability Company when you are filing the Articles of Organization.
Example: I set up a company website for my LLC.
Compliance
In our example, Compliance is to comply with the command of the Secretary of State. The laws, regulations, standards, and other commands must be met to show compliance with your LLC or Corporation.
Example: Peter showed Compliance by making sure his annual report was filed before the due date.
Corpkit
A CorpKit is a binder that holds all of your important incorporation documents like the Articles, Registered Agent information, Certificates or Stock, ByLaws or Operating Agreement, and it might contain a seal and embosser.
Example: Alfred brought the Corp Kit with all the legal documents to the Meeting of the Shareholders.
Corporate Seal
A Corporate Seal is either a stamp or impression left by an embosser that is marked on a document. The Corporate Seal will show the name of the Corporation, date of formation, and state of origin.
Example: Felix attached the Corporate Seal to the internal documents to show they were authentic.
Custom Articles
Custom Articles are individually drafted Articles of Organization or Incorporation that are not the standard template provided by a Secretary of State. There will be certain Articles you must list, but you can add more than the required Articles if you wish.
Example: Pat’s attorney drafted up some Custom Articles to submit to the Secretary of State to form the new LLC.
Director
A Director of a Corporation sits on the Board of Directors. The Director(s) appoint officers and look out for the best interests of the stockholders.
Example: A Director at the meeting brought up the idea to the other Directors that they should fire the CEO.
Dissolution
Dissolution paperwork is filed to close a Company or Corporation. This can be filed by the owner or, in the case of penalty, a member of the state.
Example: To legally close the LLC, Kevin filed a Limited Liability Company Articles of Dissolution with the Secretary of State.
Domestication
Domestication refers to taking a business that was formed in State A and moving it to State B to become a legal State B business without closing it down and starting a new business. Paperwork and a fee are submitted to the Secretary of State to complete the task. You usually need certified copies of your documents in a certain time frame to not get rejected.
Example: Pepper moved the LLC she formed in Vermont and filed a Domestication to make it a Wyoming LLC.
Embosser
An Embosser is an instrument that is used to create a raised seal of your business on official paperwork. The Embosser is a piece of metal with a lever and seal disc attached to the end. A seal is not required by the Secretary of State. The Embosser will be used on internal documents like an Operating Agreement.
Example: Dante ordered an Embosser with his CorpKit so he could put seals on his business documents.
Incorporator
An Incorporator is a person who creates a Corporation. This is like an Organizer for an LLC.
Example: The creators of Purple Splat Machine INC, Sam and Max, listed both their names as Incorporators on the Articles of Incorporation.
IPO
IPO refers to an Initial Public Offering. This is when a Corporation offers sales of its shares of stock for the first time to the public.
Example: The newly formed Corporation has a lot of positive coverage in the news right now. The owners decided it was a good time for an IPO to sell shares of stock.
LLC
An LLC is a company started at the state level with Articles of Organization to be filed. The purpose of the LLC is to keep the company assets separate from the owner and vice versa.
Example: If your company is sued and there is a judgment placed against Zach’s LLC, the court can not take assets in Zach’s name, only the LLC’s name.
Mailing Address
A Mailing Address is where mail will be sent.
Example: Jennifer had her incorporation firm list their address as the Mailing Address for the Corporation being formed.
Mail Forwarding
Mail Forwarding, in the corporate world, refers to having mail sent to a paid public address other than your residence and then having the mail forwarded to your private address.
Example: I pay for mail forwarding and my Registered Agent sends me my mail for my LLC to California after it arrives at her address in Wyoming.
Manager
A Manager in Limited Liability Company terms is someone who runs day-to-day operations for the LLC.
Example: Dave is not an owner at the LLC; he is a Manager who answers the phone and processes paperwork.
Member
A Member in LLC terms is usually referred to as someone who owns part or all of an LLC.
Example: The Members of the LLC hired a Manager to run the office.
Membership Certificate
Membership Certificates are documents that state ownership in an LLC. They are similar to shares of stock for a corporation as far as ownership is concerned.
Example: After Lloyd bought a third of an LLC, the other two owners gave him a Membership Certificate with one-third ownership listed on the page.
Minutes
Minutes are a record of what was said at a corporation meeting, like a shareholder meeting, a board of directors meeting, or a board committee meeting.
Example: Amanda was appointed the Secretary of ACME Inc. She will take the meeting Minutes and record what was said and performed.
Name Reservation
A Name Reservation is a filing that is used when you want to keep the name available for a new LLC or Corporation and are not ready to file the new business yet. Most states offer a Name Reservation for a fee with about a 60-day window.
Example: Betty is going to file her new LLC next month. She doesn’t want anyone to take the name of her LLC, so she filed a Name Reservation for “Betty and the Blue Boy Basket Bouncers, LLC”.
No Par Value
No Par Value refers to a corporation’s shares of stock having to determine value when the corporation is formed.
Example: The Board of Directors wanted to see how high their stock could sell for, so they set the price per share at No Par Value.
Officer
An Officer of a Corporation is a high-ranking employee hired by the business owner or Board of Directors. Titles of an Officer would be treasurer, president, vice president, secretary, CEO, and CFO.
Example: Samuel was hired to be the Vice President of the Wyoming Corporation. He is an Officer of the Wyoming INC now.
Operating Agreement
Operating Agreement documents are drafted to establish rules and regulations for a Limited Liability Company. The type of information in the Operating Agreement will be the LLC name, address, ownership percentages, the profit payout schedule, registered agent info, dissolution procedures, and other pieces of information.
Example: The Members of the LLC drafted an Operating Agreement to set the rules for the LLC to be followed internally.
Organizer
An Organizer of a Limited Liability Company is the person or company that prepares the LLC Articles of Organization and files the document to create an LLC. The Organizer does not have to be a member of the Limited Liability Company.
Example: Kayla signed her name as Organizer on the Wyoming Articles of Organization after she prepared the document to be submitted to the state for a new Wyoming LLC.
Par Value
Par Value is the set value of a share of stock when you initially file for a new Corporation.
Example: Wilma is starting a new Corporation. She set the value at $100,000, and she wants 10,000 shares to be registered. The Par Value of each share will be $10.
Preferred Stock
Preferred Stock is a term used to describe a kind of stock other than Common Stock. Depending on the ByLaws, Preferred Stock may get paid more or quicker than Common Stock. Preferred Stockholders usually do not have voting rights like those with Common Stock.
Example: Frank decided to purchase Preferred Stock over Common Stock for the extra incentives.
Registered Agent
Registered Agent service is provided by a resident or company in the state which you want to form a new LLC or Corporation. The Registered Agent will accept any service of process for the business and any communications from the state.
Example: Victor hired a Registered Agent to accept important legal documents for his LLC.
Registered Office
A Registered Office refers to an office address that a Registered Agent has registered with the local Secretary of State. The registered agent or an employee will be there at specified times to accept communications from state offices and courts.
Example: The Registered Agent gave her office address to the Secretary of State to register as her Registered Office address for the Registered Agent business.
Reinstatement
Reinstatement is something that needs to be done if your LLC or Corporation has been shut down and you want it active and live again. You will have to submit a form with payment and correct what got you there in the first place if it’s an Administrative Dissolution.
Example: Rodolfo didn’t pay his annual report tax. The company was dissolved by the state. Rodolfo had to file a Reinstatement with the state to open the Corporation back up.
Resolution
Resolutions are documents created by someone involved with the LLC or Corporation. The document will state a formal declaration like a resignation or appointment.
Example: Debbie showed her banker a copy of her Corporate Resolution that states she is authorized to open a business bank account by the INC.
Statutory Agent
A Statutory Agent is a title of a role that is identical to a Registered Agent. See Registered Agent above. The two states that use the title Statutory Agent instead of Registered Agent are Arizona and Ohio.
Example: I found out my LLC was being sued after my Statutory Agent informed me after receiving the summons at their office address.
