Limited Liability Company (LLC) glossary – This glossary includes terms from the law that are frequently used in limited liability firms.
Administrative Dissolution –Limited liability company dissolution brought about by an action of the state agency in charge of commercial entities, as a result of the LLC’s inability to adhere to specific legal requirements.
Agent for Service of Process –A limited liability corporation must appoint an agent for service of process, who has the sole responsibility of receiving legal documents issued against the firm.
Amendment – A limited liability company’s operating agreement or articles of incorporation can be amended by addition or removal from existing clauses.
Annual Report – A document that must be filed annually with the state contains details about the limited liability corporation.
Application for Certificate of Authority – The name of the form submitted in several states to register a limited liability company to conduct business as a foreign LLC. Also referred to as an application for registration in some states.
Articles of Organization – The documentation submitted in numerous states to establish a limited liability corporation
Assumed Name – A limited liability company’s operating name which is different from its genuine name. Also known as a trading name or fictional name.
Cancellation – The legal process through which a foreign limited liability corporation receives the state’s approval to revoke its business license there.
Certificate of Good Standing – Authentication of a limited liability company’s existence or authorization to conduct business in the state provided by a state official.
Check-the-Box Rule – An unincorporated organization is taxed by default under the partnership or sole proprietorship’s tax laws, but it has the option to elect to be taxed by corporate tax laws.
Constituent – A participant in a transaction; a merger that involves a limited liability business.
Corporation – An artificial organization formed by the laws of the native state.
Derivative Suit – A Legal action, taken by a member on behalf of a limited liability company to defend the company from wrongs that have been done to it.
Dissenters’ Rights – A privilege, given to members that permits them to have the limited liability company appraise and buy their membership interests.
Distribution – A transfer of, a limited liability company’s members to one other, cash or other assets.
Fiduciary Relationship – A relationship in which one party (the fiduciary) is required to behave in the best interests of the other party.
Franchise Tax – It is a levy placed on a limited liability company’s right to exist or conduct business in a state.
Indemnification – A limited liability business offers its management and members financial protection from costs and liabilities incurred as a result of litigation asserting that they violated their obligations while working for or on behalf of the LLC.
Limited Liability Company – A legal organization created per a state’s Limited Liability Company Act that combines elements of partnerships and corporations.
Limited Liability Limited Partnership – A limited partnership in which the general partners are not liable for the debts and obligations of the limited partnership.
Limited Liability Partnership – A general partnership that is registered with the state and whose partners are not entirely liable for the debts and liabilities of the partnership.
Limited Partnership – A legally recognized form of partnership that consists of limited partners who participate in the company but have limited liability, as well as general partners who oversee operations and are responsible for any debts the business pays.
Management – Either the members of a limited liability company that is member-managed or the managers of a limited liability company that is manager-managed.
Managers – The people chosen or designated to oversee a manager-managed limited liability business.
Members – Individuals who possess shares of ownership in a limited liability business.
Merger – The legal joining of two or more business entities, wherein one of the business entities continues to exist and the others are dissolved.
Officers – Persons chosen by the members or management who are in charge of carrying out their policies and making decisions on minor issues.
Operating Agreement – The rules of a limited liability corporation, specify the fundamental guidelines for managing the limited liability company’s affairs and doing its operations.
Organization –The process of setting up a limited liability business.
Organizers – Those that carry out the process of forming a limited liability company are known as organizers.
Partnership – A partnership is an unofficial commercial structure in which two or more people decide to conduct business together. Also called a general partnership as well.
Registration – Registration is the process by which a foreign limited liability company submits the necessary paperwork to get a certificate of authorization to operate in a state other than the one in which it was formed. Furthermore, known as a qualification in some states.
Registration of Name – The act of registering a limited liability company’s name in a foreign state which is generally done before registration there.
Reinstatement – Restoring a limited liability corporation to good standing on a state’s records after it has been administratively dissolved or had its certificate of authority revoked.
Reservation of Name – Using the reservation of name procedure, a limited liability corporation can secure the sole use of a name for a set period.
Restated Articles of Organization – A document that incorporates all currently effective clauses in the articles of organization and revisions thereto for a limited liability business.
Voting Rights – The right of a member to vote on an important decision if an LLC.
Winding Up –The transfer of the LLC’s assets and discharging of debts on its dissolution.