Business Law Legal Definitions
Sole proprietorship– A type of business entity that is owned and operated by a single individual.
Corporation – A corporation is a legal entity that exists separately from the people who create it. Corporations are created by filing Articles of Incorporation with the Secretary of State and by adopting bylaws. It is further defined as a non-human person. (Create hyperlinks to respective definitions here)
C Corporation– C corporation refers to any corporation that is taxed separately from its owners.
S Corporation– A corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any federal income taxes. Instead, the corporation’s
income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.
Limited Liability Company– A flexible form of enterprise that blends elements of partnership and corporate structures. An LLC is not a corporation; it is a legal entity that provides limited liability to its owners.
General Partnership – A General Partnership is a business owned by two or more individuals or other business entities. Although it is not required, it is strongly recommended that a general partnership prepare a
written partnership agreement that outlines the business’ structure and each partner’s responsibilities.
Trade Name– a name that a business uses for trading commercial products or services. If it is different than an individual’s or corporation’s name, it is listed as “doing business as” or DBA.
Doing Business As (DBA)- A trade name, or fictitious business name, under which the business or operation is conducted and presented to the world is not the legal name of the legal person (or persons) who actually own
it and are responsible for it.
Secretary of State– the elected State official who is responsible for the regulation of commerce. Corporate documents are filed with the office of the Secretary of State.
Franchise– A privileged granted or sold to use a name or to sell products or services.
Franchisee– One that has been granted the right by a corporation to sell its product or service within a particular area.
Franchisor– A corporation that grants a franchise, as to a franchisee.
Articles of Incorporation– A legal document, filed with the state, that creates a corporation. Within this document, the corporate address and registered agent are listed.
By Laws– Rules of corporate governance.
Operating Agreement– An agreement among a limited liability company (“LLC”) Members governing the LLC’s business, and members’ financial and managerial rights and duties.
Registered Agent– A business or individual designated to receive service of process when a business entity is a party in a legal action.
Board of Directors– A body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors.
Dissolution– In business law, the procedure to end a legal entity or agreement.
Contract- An agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them.
Clause– A distinct article or provision in a contract.
Right of First Refusal– A contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party.
Fiduciary– A person who has a legal obligation to act in the interests of another.
Fiduciary Duty– The legal duty to act in the best interests of another, such as the duty of corporate officers to shareholders.
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