Business structures and legal entities are full of specialized jargon and easily confused abbreviations.
Business Entity Terms Explained
- Articles of Incorporation
This legal document officially establishes a corporation and outlines key details like the company name, purpose, and authorized shares. - Benefit Corporation (B Corp)
A type of corporation legally required to balance profit goals with social and environmental impact. B Corps are certified by the nonprofit B Lab. - Board of Directors
The group of individuals elected by shareholders to oversee the corporation's management and make decisions on behalf of shareholders. - Close Corporation
A smaller corporation with limited shareholders and liability protection, often used by families or small investor groups. - Cooperative
A business owned and controlled by its workers, who share in the profits and decision-making. - Corporation (C Corp)
A corporation subject to federal income tax, where shareholders have limited liability. - Disregarded Entity
A business not recognized as separate from its owner for tax purposes. - Dissolution
The process of officially terminating a business entity by filing paperwork. - Doing Business As (DBA)
A name a business operates under that differs from its legal registered name. - Employer Identification Number (EIN)
A unique IRS number used to identify a business for tax purposes. - General Partnership
A business owned and operated by two or more individuals who share profits and losses. - Holding Company
A business that owns and controls other companies, typically by owning their stock. - Joint-Stock Company
A business where ownership is divided into shares and shareholders have limited liability. - Limited Liability Company (LLC)
A business entity with limited liability protection but taxed like a partnership. - Limited Partnership
A partnership with both general partners (managing, liable) and limited partners (investors, limited liability). - Limited Liability Partnership
A partnership where partners have limited liability protection. - Nonprofit Corporation
A tax-exempt corporation organized for charitable or public purposes. - Pass-Through Entity
A business that doesn't pay federal income tax but passes profits/losses to owners. - Publicly Traded Company
A business that has issued securities available for public purchase. - S Corporation (S Corp)
A corporation that meets requirements to be taxed like a partnership. - Shareholder
An individual or entity that owns stock in a corporation. - Sister Company
A company closely affiliated with another under the same parent/holding company. - Sole Proprietorship
A business owned and operated by an individual who is personally liable. - State ID Tax Number
A state-issued number used to identify a business for state tax purposes. - Subsidiary
A company owned and controlled by a parent company. - Zone
A designated geographic area with special economic regulations to encourage business.
If you're ready to put your business entity knowledge into action, consult your financial institution for valuable guidance and support.
