Glossary
US business terms, explained simply.
27 definitions to understand every document and every step.
- Annual Report
- Report filed with the state each year to keep the company in good standing. Required in most states, with varying fees.
- Articles of Organization
- An LLC's founding document, filed with the Secretary of State. It states the company's name and its registered agent, among other things.
- BOI (Beneficial Ownership Information)
- Beneficial ownership report filed with FinCEN. Since March 2025, companies formed in the United States are exempt (interim rule).
- C-Corporation
- A corporation subject to federal corporate income tax. The structure most venture capital investors expect.
- CP 575
- IRS letter confirming that the EIN has been issued. Banks ask for it.
- Disregarded entity
- A single-member LLC whose results are not taxed at the company level for federal income tax, but allocated to its owner.
- EIN (Employer Identification Number)
- Nine-digit federal tax number issued by the IRS to a company.
- Foreign qualification
- Registering a company in a state other than its state of formation, when it does business there.
- Form 1065
- Annual federal return of a multi-member LLC taxed as a partnership.
- Form 1120
- Federal corporate income tax return. Used in pro forma version with Form 5472 for a single-member LLC with a foreign owner.
- Form 5472
- Return reporting transactions between a company and its foreign owners. $25,000 penalty if omitted.
- Form 8832
- Form an LLC uses to choose its tax classification (for example, to be taxed as a corporation).
- Franchise tax
- Annual tax some states charge for the right to exist or do business, such as the $300 annual tax on Delaware LLCs.
- Good standing
- Status of a company that is up to date with its state obligations (reports, taxes, registered agent).
- IRS (Internal Revenue Service)
- The US federal tax authority.
- ITIN
- Individual tax identification number issued by the IRS to people who cannot get an SSN. Not required to get an EIN.
- KYC (Know Your Customer)
- Identity and business verification procedures banks apply before opening an account.
- LLC (Limited Liability Company)
- A flexible US company with limited liability, taxed as a pass-through by default.
- Member / Manager
- A member is an owner of the LLC; the manager is the person who runs it (and may be a member).
- Operating Agreement
- The LLC's internal contract setting out ownership, powers and operating rules.
- Registered Agent
- A person or company with an address in the state, responsible for receiving the LLC's legal documents.
- Sales tax
- Tax on sales collected by states (not at the federal level), based on presence or sales thresholds specific to each state.
- Secretary of State
- The office in each state that registers companies and receives their annual reports.
- Service of process
- Official delivery of a legal document to a company, received by its registered agent.
- SS-4
- The IRS form used to apply for an EIN.
- SSN (Social Security Number)
- The US Social Security number. Not needed to form an LLC or get an EIN.
- USPS Form 1583
- US Postal Service form authorizing a provider to receive your mail. Required for a business address.
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