Administrative Dissolution
An involuntary dissolution of an LLC by an act of the Secretary of State or similar state authority, caused by the company's failure to comply with certain statutory requirements; especially the failure to file an annual report, to pay franchise taxes or maintain a valid Registered Agent.
Alter Ego
A doctrine of law which disregards the principle of limited liability enjoyed by a legal entity when it is proven that, in fact, no separate identity of the individual and company exists. The alter ego principle may also apply to relationships between entities and their subsidiaries.
Amended Certificate of Authority
A document issued by a state to a foreign LLC evidencing that the company has amended its original certificate of authority.
Amendment
An addition to, deletion from, or a change of existing provisions of the articles of organization of a domestic LLC.
Annual Report
A required annual filing in a state, usually listing members, managers and financial information.
Apostille
Official government authentication of a document, usually by the State Department, Justice Ministry or Foreign Ministry, which legalizes it for use in another country.
Application for Certificate of Authority
The form filed in many states to qualify an LLC to transact business as a foreign entity.
Articles of Organization
The title of the document filed in many states to register a limited liability company (LLC) with the state. Also known as articles of formation.
Assumed Name
A name other than the true name, under which a business organization conducts business. Also referred to as a fictitious name, a trade name or "doing business as" (d/b/a).
Certificate of Authority
Formal evidence of qualification issued by a state to a foreign LLC.
Certificate of Good Standing
A certificate issued by a state official as conclusive evidence that an LLC is in existence or authorized to transact business in the state. The certificate generally sets forth the company's name; that it is duly incorporated or authorized to transact business; that all fees, taxes and penalties owed the state have been paid; that its most recent annual report has been filed; and, that articles of dissolution have not been filed.
Commingle
Commingling, is the sharing and pooling of personal and company assets. For example, rather than maintaining separate business and personal bank accounts, you choose to use one account for personal and business purposes. This is considered commingling and an easy way to become personally liable for LLC acts.
Compliant
This term refers to a level of completion of a legal entity's responsibilities to maintain the formalities of LLC existence under the laws of the jurisdiction in which it is formed.
Consent Resolution
A consent resolution is any resolution signed by members or managers that authorizes a particular action. This act eliminates the need for face-to-face meetings of members and managers.
Contract Creditors
Contract creditors are people or businesses which you owe money or property to because of a written or verbal contractual agreement.
Corporate Seal
A corporate seal is a device made to either emboss or imprint certain company information onto documents. This information usually includes the company's name and date and state of formation. Corporate seals are often required when opening LLC bank accounts, distributing membership certificates or conducting other company business.
An involuntary dissolution of an LLC by an act of the Secretary of State or similar state authority, caused by the company's failure to comply with certain statutory requirements; especially the failure to file an annual report, to pay franchise taxes or maintain a valid Registered Agent.
Alter Ego
A doctrine of law which disregards the principle of limited liability enjoyed by a legal entity when it is proven that, in fact, no separate identity of the individual and company exists. The alter ego principle may also apply to relationships between entities and their subsidiaries.
Amended Certificate of Authority
A document issued by a state to a foreign LLC evidencing that the company has amended its original certificate of authority.
Amendment
An addition to, deletion from, or a change of existing provisions of the articles of organization of a domestic LLC.
Annual Report
A required annual filing in a state, usually listing members, managers and financial information.
Apostille
Official government authentication of a document, usually by the State Department, Justice Ministry or Foreign Ministry, which legalizes it for use in another country.
Application for Certificate of Authority
The form filed in many states to qualify an LLC to transact business as a foreign entity.
Articles of Organization
The title of the document filed in many states to register a limited liability company (LLC) with the state. Also known as articles of formation.
Assumed Name
A name other than the true name, under which a business organization conducts business. Also referred to as a fictitious name, a trade name or "doing business as" (d/b/a).
Certificate of Authority
Formal evidence of qualification issued by a state to a foreign LLC.
Certificate of Good Standing
A certificate issued by a state official as conclusive evidence that an LLC is in existence or authorized to transact business in the state. The certificate generally sets forth the company's name; that it is duly incorporated or authorized to transact business; that all fees, taxes and penalties owed the state have been paid; that its most recent annual report has been filed; and, that articles of dissolution have not been filed.
Commingle
Commingling, is the sharing and pooling of personal and company assets. For example, rather than maintaining separate business and personal bank accounts, you choose to use one account for personal and business purposes. This is considered commingling and an easy way to become personally liable for LLC acts.
Compliant
This term refers to a level of completion of a legal entity's responsibilities to maintain the formalities of LLC existence under the laws of the jurisdiction in which it is formed.
Consent Resolution
A consent resolution is any resolution signed by members or managers that authorizes a particular action. This act eliminates the need for face-to-face meetings of members and managers.
Contract Creditors
Contract creditors are people or businesses which you owe money or property to because of a written or verbal contractual agreement.
Corporate Seal
A corporate seal is a device made to either emboss or imprint certain company information onto documents. This information usually includes the company's name and date and state of formation. Corporate seals are often required when opening LLC bank accounts, distributing membership certificates or conducting other company business.
Dissolution
The statutory procedure that terminates the existence of a domestic LLC.
Double Taxation
When a company must pay taxes on its earnings and individual shareholders must also pay taxes on any dividends that are distributed. General, "C" corporations are doubly taxed in this manner, unlike Limited Liability Companies.
Duration
How long a business will be recognized as a legal entity. A company with a perpetual duration will last forever unless the state dissolves the company. A 30-year duration means that the company will automatically dissolve on its 30th anniversary of existence.
Employment Agreement
An employment agreement is a contract between your company and an employee. These agreements can be written or verbal; although all employment agreements should be in writing. Employers are more likely to have employment agreements with key employees. The terms and conditions of an employment agreement should be consistent with statutes, articles, operating agreements, and any existing shareholder agreements.
Fiduciary Relationship
A relationship in which one party (the fiduciary) must act in good faith and with due regard to the best interests of the other party or parties.
Foreign LLC
A term applied to an LLC doing business in a state other than its state of formation.
Franchise Tax
A tax or fee usually levied annually upon a limited liability company or similar business entity for the right to exist or do business in a particular state. Failure to pay the franchise tax or similar fees may result in the administration dissolution of the company and forfeiture of the charter.
Good Standing
An LLC is said to be in good standing when it has remained current with the necessary reports and fees required by the regulatory jurisdictions under which it operates.
Involuntary Dissolution
The termination of an LLC's legal existence pursuant to an administrative or judicial proceeding; dissolution forced upon an LLC rather than decided upon by the company.
Judicial Dissolution
Involuntary dissolution of an LLC by a court at the request of the state attorney general, an owner or a creditor.
Jurat
Specific notary language citing, under oath, that a signature has been witnessed.
Legalization of Certified Documents
Needed for companies (overseas) that are not part of the Hague Convention. Companies in a country that is not part of the Hague will not benefit from an Apostille. (1) To make legal or lawful; authorize or sanction by law.
Limited Liability Company (LLC)
An artificial entity created under and governed by the laws of the jurisdiction in which it was formed. Limited liability companies are generally able to provide the limited personal liability of corporations and the pass-through taxation of partnerships or S Corporations.
Limited Personal Liability
The protection generally afforded a member of a limited liability company from the debts of and claims against the company.
Managers
The individuals who are responsible for the maintenance, administration and management of the affairs of a limited liability company (LLC). In most states, the managers serve a particular term and report to and serve at the discretion of the members. Specific duties of the managers may be detailed in the articles of organization or the operating agreement of the LLC. In some states, the members of an LLC may also serve as the managers.
Members
The owner(s) of a limited liability company (LLC). Unless the articles of organization or operating agreement provide otherwise, management of an LLC is vested in the members in proportion to their ownership interest in the company.
Membership Certificates
Evidence of ownership of and membership in a limited liability company.
Merger
The statutory combination of two or more business entities in which one of the companies survives and the other companies cease to exist.
Minutes
The written record of transactions taken or authorized by the members or managers. These are usually kept in the minute book in diary fashion.
Name Registration
The filing of a document in a foreign state to protect the LLC name, often in anticipation of qualification in the state.
Name Reservation
A procedure that allows an LLC to obtain exclusive use of a business name for a specified period of time.
Notice of Service of Process
Official notification of an action or proceeding by the delivery of a legal or court document, with a request to answer in a specific period of time.
Operating Agreement
A contract among the members of a limited liability company governing the membership, management, operation and distribution of income of the company.
Partnership
A business organization in which two or more persons agree to do business together.
Pass-Through Taxation
Rather than tax the income of the entity, taxation is "passed through" to the individual shareholders in S Corporations (and LLCs). Income or losses are declared on their individual tax returns.
Perpetual Existence
Unlimited term of existence; characteristics of most business corporations.
Piercing the Corporate Veil
Piercing the corporate veil is a legal theory sometimes used to impose personal liability on members and managers for LLC acts. This theory permits a court to disregard the separate identity of the business.
Qualification
The filing of required documents by an LLC to secure a certificate of authority to conduct its business in a state other than the one in which it was formed.
Registered Agent
A person or entity designated to receive important tax and legal documents on behalf of the business. The Registered Agent must be located and available at a legal address within the specified jurisdiction at all times. Failure to maintain a Registered Agent in the jurisdiction in which an LLC is registered, may result in the forfeiture of good standing status. Also known as a Resident Agent.
Registered Office
The statutory address of an LLC. In states requiring the appointment of a Registered Agent, it is usually the address of the Registered Agent.
Reinstatement
Returning an LLC that has been administratively dissolved or had its certificate of authority revoked, to good standing on a state's records.
Resolution
A formal statement of any item of business that has been voted upon.
Restated Articles of Organization
A document that combines all currently operative provisions of an LLC's articles of organization and amendments thereto.
Sole Proprietorship
An unincorporated business with a sole owner in which the owner may be personally liable for business debts and claims against the business.
Tort
A tort is any act or failure to act (if there was a duty to act) which causes harm or damage. Examples of torts include assault, battery, fraud, misrepresentation, defamation, libel, slander, invasion of privacy, and negligence. If there is a claim against your LLC, other than a claim by the government, it will likely be based in contract or tort.
Trademark
A word or mark that distinctly indicates the ownership of a product or service, and that is legally reserved for the exclusive use of that owner.
Voluntary Dissolution
Action by members or managers to dissolve an LLC.
Winding Up
The discharging of an LLC's liabilities and the distributing of its remaining assets to its members in connection with its dissolution.
Withdrawal
The statutory procedure whereby a foreign LLC obtains the consent of a state to terminate its authority to transact business there.
The statutory procedure that terminates the existence of a domestic LLC.
Double Taxation
When a company must pay taxes on its earnings and individual shareholders must also pay taxes on any dividends that are distributed. General, "C" corporations are doubly taxed in this manner, unlike Limited Liability Companies.
Duration
How long a business will be recognized as a legal entity. A company with a perpetual duration will last forever unless the state dissolves the company. A 30-year duration means that the company will automatically dissolve on its 30th anniversary of existence.
Employment Agreement
An employment agreement is a contract between your company and an employee. These agreements can be written or verbal; although all employment agreements should be in writing. Employers are more likely to have employment agreements with key employees. The terms and conditions of an employment agreement should be consistent with statutes, articles, operating agreements, and any existing shareholder agreements.
Fiduciary Relationship
A relationship in which one party (the fiduciary) must act in good faith and with due regard to the best interests of the other party or parties.
Foreign LLC
A term applied to an LLC doing business in a state other than its state of formation.
Franchise Tax
A tax or fee usually levied annually upon a limited liability company or similar business entity for the right to exist or do business in a particular state. Failure to pay the franchise tax or similar fees may result in the administration dissolution of the company and forfeiture of the charter.
Good Standing
An LLC is said to be in good standing when it has remained current with the necessary reports and fees required by the regulatory jurisdictions under which it operates.
Involuntary Dissolution
The termination of an LLC's legal existence pursuant to an administrative or judicial proceeding; dissolution forced upon an LLC rather than decided upon by the company.
Judicial Dissolution
Involuntary dissolution of an LLC by a court at the request of the state attorney general, an owner or a creditor.
Jurat
Specific notary language citing, under oath, that a signature has been witnessed.
Legalization of Certified Documents
Needed for companies (overseas) that are not part of the Hague Convention. Companies in a country that is not part of the Hague will not benefit from an Apostille. (1) To make legal or lawful; authorize or sanction by law.
Limited Liability Company (LLC)
An artificial entity created under and governed by the laws of the jurisdiction in which it was formed. Limited liability companies are generally able to provide the limited personal liability of corporations and the pass-through taxation of partnerships or S Corporations.
Limited Personal Liability
The protection generally afforded a member of a limited liability company from the debts of and claims against the company.
Managers
The individuals who are responsible for the maintenance, administration and management of the affairs of a limited liability company (LLC). In most states, the managers serve a particular term and report to and serve at the discretion of the members. Specific duties of the managers may be detailed in the articles of organization or the operating agreement of the LLC. In some states, the members of an LLC may also serve as the managers.
Members
The owner(s) of a limited liability company (LLC). Unless the articles of organization or operating agreement provide otherwise, management of an LLC is vested in the members in proportion to their ownership interest in the company.
Membership Certificates
Evidence of ownership of and membership in a limited liability company.
Merger
The statutory combination of two or more business entities in which one of the companies survives and the other companies cease to exist.
Minutes
The written record of transactions taken or authorized by the members or managers. These are usually kept in the minute book in diary fashion.
Name Registration
The filing of a document in a foreign state to protect the LLC name, often in anticipation of qualification in the state.
Name Reservation
A procedure that allows an LLC to obtain exclusive use of a business name for a specified period of time.
Notice of Service of Process
Official notification of an action or proceeding by the delivery of a legal or court document, with a request to answer in a specific period of time.
Operating Agreement
A contract among the members of a limited liability company governing the membership, management, operation and distribution of income of the company.
Partnership
A business organization in which two or more persons agree to do business together.
Pass-Through Taxation
Rather than tax the income of the entity, taxation is "passed through" to the individual shareholders in S Corporations (and LLCs). Income or losses are declared on their individual tax returns.
Perpetual Existence
Unlimited term of existence; characteristics of most business corporations.
Piercing the Corporate Veil
Piercing the corporate veil is a legal theory sometimes used to impose personal liability on members and managers for LLC acts. This theory permits a court to disregard the separate identity of the business.
Qualification
The filing of required documents by an LLC to secure a certificate of authority to conduct its business in a state other than the one in which it was formed.
Registered Agent
A person or entity designated to receive important tax and legal documents on behalf of the business. The Registered Agent must be located and available at a legal address within the specified jurisdiction at all times. Failure to maintain a Registered Agent in the jurisdiction in which an LLC is registered, may result in the forfeiture of good standing status. Also known as a Resident Agent.
Registered Office
The statutory address of an LLC. In states requiring the appointment of a Registered Agent, it is usually the address of the Registered Agent.
Reinstatement
Returning an LLC that has been administratively dissolved or had its certificate of authority revoked, to good standing on a state's records.
Resolution
A formal statement of any item of business that has been voted upon.
Restated Articles of Organization
A document that combines all currently operative provisions of an LLC's articles of organization and amendments thereto.
Sole Proprietorship
An unincorporated business with a sole owner in which the owner may be personally liable for business debts and claims against the business.
Tort
A tort is any act or failure to act (if there was a duty to act) which causes harm or damage. Examples of torts include assault, battery, fraud, misrepresentation, defamation, libel, slander, invasion of privacy, and negligence. If there is a claim against your LLC, other than a claim by the government, it will likely be based in contract or tort.
Trademark
A word or mark that distinctly indicates the ownership of a product or service, and that is legally reserved for the exclusive use of that owner.
Voluntary Dissolution
Action by members or managers to dissolve an LLC.
Winding Up
The discharging of an LLC's liabilities and the distributing of its remaining assets to its members in connection with its dissolution.
Withdrawal
The statutory procedure whereby a foreign LLC obtains the consent of a state to terminate its authority to transact business there.
