Glossary Terms

Not required for LLCs, but still a good idea. A yearly meeting of an LLC's members wherein the previous year is reviewed and the upcoming year is planned. Actions are taken by vote and documented in minutes and resolutions

A separate document required by foreign countries that are parties to the 1961 Hague Convention that attests to the validity of a signature on a document. The apostille allows the foreign country to accept the validity of the U.S. document for use in its territory. Order Apostille

A method by which an individual or entity protects their assets through the use of multiple LLCs and other entities such as statutory trusts.

Those with an ownership interest in an entity, usually they are called Members in an LLC.

A document filed with the Secretary of State that officially authorizes an entity formed in another jurisdiction to conduct business in the state where the Certificate was filed.

Official document issued by the Secretary of State that confirms an entity is in good standing with the state, i.e., franchise taxes are current, registered agent appointed, etc. This is also called a Certificate of Good Standing

Official document issued by the Secretary of State that confirms an entity is in good standing with the state, i.e., franchise taxes are current, registered agent appointed, etc. To order a Certificate of Good Standing, please click here.

A trust created pursuant to and governed by English Common Law precedents. Normally, a grantor of assets into a common law trust cannot maintain control over those assets without those assets still being considered a part of the grantor’s estate and subject to attachment.

The act of joining two separate and distinct existing entities into one new entity. Normally authorized by resolution and achieved by executing an Agreement of Consolidation between the parties involved. A Certificate of Formation is required for the new LLC entity.

Money, services rendered, or other consideration paid to an entity in exchange for ownership in that entity.

The Incorporation State

The leading body of law governing LLCs formed in Delaware

Individuals elected to manage the affairs of a Corporation. Sometimes, LLCs choose in their Operating Agreements to have directors, but usually LLCs are managed either by the Members or by one or more Managers.

The act of conducting business under a trade name that is different than the official or true name of the LLC.

The taxation of corporate earnings at the corporate level and again at the shareholder level. A Corporation pays income tax on its annual profits. Then, if it issues a dividend to shareholders, these shareholders must pay taxes on this income again on their separate returns. Double taxation is eliminated with an LLC.

Any form of communication not in paper form that creates a record that can be retained, retrieved and reviewed by the recipient. Delaware allows voting by and notice to Members to be provided via electronic transmission.

The process of creating, while still alive, a mechanism for preserving assets for distribution to others upon one’s death or even before. LLCs are commonly used to hold real estate for estate planning purposes.