Once you have decided to incorporate your business, you may encounter some terminology that you are unfamiliar with. The following terms are commonly used when talking about incorporation services:
Articles of Incorporation – A document that must be filed in order for a business to become incorporated. It outlines the purpose of the corporation, as well as its name, primary location, the names of the directors, and the types and amounts of stock it can issue.
Articles of Organization – Very similar to the Articles of Incorporation, this document must be filed by LLCs.
Contract – A formal agreement between two or more parties detailing a duty that is to be done, and the consequences of not fulfilling the agreement
Copyright – Legal, exclusive rights granted to the creator of a uniquely formed literary, musical, dramatic, or artistic work.
C corporation (C-Corp) – With this type of corporation, shares are held by shareholders and may be publically traded
Directors – People who are elected by shareholders to make the major policy decisions of a legal entity
Foreign Corporation – A corporation that forms in one geographic location but chooses to conduct business in a another
General Partnership – A partnership granting each partner financial liability for all debts and obligations, regardless of how much they have individually contributed
Incorporation – A separate legal entity to conduct business that benefits the interests of the shareholders that invest their capital and the employees that contribute their time and labor.
Intellectual Property – An intellectual creation which holds commercial value, including literary or artistic work, patents, appellations of origin, business methods, and industrial processes.
Joint Venture – A partnership or business agreement between two or more individuals, limited to a single enterprise, which involves the sharing of resources, profits, losses, and control.
Limited Liability Partnership – Partnership in which the liability of all partners is limited. Partners are not held responsible for obligations, debts, or liabilities of the partnership that are the result of other partners, agents, or employees.
Limited Partnership – In this type of partnership, the business is managed by one or more general partners, and capital is provided by partners who have liability limited to their capital contributions and who are not involved in management.
Non-Disclosure Agreement – A contract which solidifies the confidentiality of information.
Non-profit Corporation – A corporation that can only generate profits to benefit the organization.
Partnership – An entity owned by two or more people who are held personally liable for all business debts and obligations.
S corporation (S-Corp) – A corporation that has a limited number of shareholders and is treated like a partnership for tax purposes.
Sole Proprietorship – A business that is owned and operated by one person who is personally liable for all business debts and obligations. Sole proprietors must report profits on their personal tax returns.
Trademark – A device, such as a name or symbol, which is used to identify a product. Trademarks are officially registered and may only be legally used by the owner or manufacturer.
