Business Glossary

Articles of Organization: The initial documents establishing a corporation which set forth the corporation’s purpose, incorporators and place of business. 

Bylaws: A corporation’s governing document.  The bylaws can be very detailed or very basic, but, in general, most bylaws lay out the procedure for electing officers, the roles of the directors and shareholders, and procedures for expansion and dissolution of the company. 

Corporation:  A corporation is a legal business entity owned by shareholders and managed by a Board of Directors.  A corporation provides protection from liability for its shareholders, who are typically only personally liable for the corporation’s actions up to the amount of their investment in the corporation.  

Good Standing: Term for a business entity that is up to date with its annual reporting and other responsibilities. 

Limited Liability Company (LLC): Typically smaller than a corporation, and consisting of members or managers, an LLC shelters it’s individual members from personal liability while providing more flexibility than a corporation. 

Limited Liability Partnership (LLP):  Unlike a typical partnership, where all of the members are personally liable for all of the acts of the partnership, a LLP protects the partners from other partners’ acts, so long as those acts are not negligent or intentionally harmful. 

Non-Profit: A tax exempt corporation, set up for a charitable purpose.  In order to qualify as a non-profit corporation, and thereby usually avoid paying income taxes, a group must meet stringent eligibility guidelines.  

Secretary of State: In Massachusetts, the Secretary of State’s office regulates corporate formation and recordkeeping. 

Tax Identification Number: Federal Tax Identification Number (EIN) assigned by the IRS that allows a business to open a bank account and conduct financial transactions.