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Business Glossary

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Browse or search business terms in the online business glossary. Here you will find the definition of incorporate, information on business terms, both specific to incorporation and otherwise. Further expand your business vocabulary by using the cross-reference index.

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Acquisition

Obtaining control of another corporation by purchasing all or a majority of its outstanding shares, or by purchasing its assets.

Administrative Dissolution

An involuntary dissolution of a corporation by an act of the Secretary of State or similar state authority, caused by the corporation'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.

Advisory Board of Directors

An advisory board of directors are individuals appointed to advise an elected board of directors. This board is not bound by the duties imposed upon elected board members, and the corporation is not required to follow their recommendations.

Agent

Anyone who is authorized to act on the behalf of another. A corporation acts only through its agents; therefore, it is important to define what actions an agent is authorized to perform.

Agent for Service of Process

An agent, required to be appointed by a corporation, whose authority is limited to receiving process issued against the corporation. Also known as a Registered Agent or a Resident Agent.

Alter Ego

A doctrine of law which disregards the principle of limited liability enjoyed by a corporate entity when it is proven that, in fact, no separate identity of the individual and corporation exists. The alter ego principle may also apply to relationships between corporate entities and their subsidiaries.

Amended Certificate of Authority

A document issued by a state to a foreign corporation evidencing that the corporation has amended its original certificate of authority.

Amendment

An addition to, deletion from, or a change of existing provisions of the articles of incorporation of a domestic corporation.

Annual Meeting

A yearly meeting of shareholders at which directors are elected and other general business of the corporation is conducted.

Annual Report

A required annual filing in a state, usually listing directors, officers and financial information. Also, an annual statement of business and affairs furnished by a corporation to its shareholders.

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. This service is included in The Company Corporation's international package.

Application for Certificate of Authority

The form filed in many states to qualify a corporation to transact business as a foreign corporation.

Arm's Length Relationship

An arm's length relationship is a term used to describe a type of business relationship a corporation should have with a close associate to avoid a conflict of interest. For example, when you negotiate with your banker or your supplier, any agreement which results will likely reflect market value and commercially reasonable terms and conditions. When you loan money to your son or daughter, you may be inclined to provide much more favorable terms and conditions. The first example would be considered to be an arm's length relationship, while the second example would not. When your corporation does business with or makes loans to corporate officers and directors, the relationship must be at arm's length to avoid conflicts of interest.

Articles of Incorporation

The title of the document filed in many states to create a corporation. Also known as the certificate of incorporation or corporate charter.

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 corporation or other business organization conducts business. Also referred to as a fictitious name, a trade name or "doing business as" (d/b/a).

Authorized Shares

The maximum number of shares that a corporation may issue pursuant to its articles of incorporation.

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