Glossary

Earned Surplus:
The profits a corporation has retained since its incorporation. It is synonymous with "retained earnings," "retained income" and "accumulated surplus." Earned surplus may also include portions of the surplus(es) of other corporations that may have been acquired by or merged or consolidated into the corporation.

EIN:
Employer Identification Number. A number issued to CORPORATIONS and LLC's by the IRS for tax reporting purposes; a prerequisite for opening a bank account in the US in the name of an LLC or CORPORATION.

Entity:
Something which has a distinguishable existence.

Entity Type:
The class of company as officially registered with a state authority. CORPORATIONS and LLCs are examples of Entity Types, as are Limited Partnerships and Trusts.

Equity:
The net investment which shareholders have in their corporation. It is another term for "Net Worth" which is what remains for the owners after all liabilities are deducted from assets.

Exclusive Use:
In the context of registered names, EXCLUSIVE USE grants the sole right to use of a name to the registered ENTITY.

Expedited Service:
Faster than regular processing, usually within a guaranteed timeframe.

Fiscal Year:
A period used for calculating annual financial statements. A Fiscal Year is often, but not always, the same as a calendar year.

Foreign:
A company CHARTERED (Incorporated/Organized) in Delaware is a Foreign Corporation or Foreign LLC in any state or JURISDICTION other than Delaware, regardless of where the business or headquarters are physically located.

Forfeit Status:
In Delaware, the revocation of a company CHARTER due to failure to maintain a Delaware REGISTERED AGENT.

Formation:
Usually, the creation of an LLC by REGISTRATION in the DOMICILE state and the filing of the CERTIFICATE OF FORMATION. Sometimes also used to mean INCORPORATION.

General Corporation:
See CORPORATION

Good Standing:
A status in Delaware and many other states in which the CORPORATION or LLC has a valid CHARTER by virtue of meeting
all of the state requirements such as REGISTRATION, paying annual taxes and filing an Annual Report, and maintaining a
REGISTERED AGENT and REGISTERED OFFICE in the state. A Certificate of Good Standing is a statement by the Secretary of State that the Entity is in Good Standing.

Incorporation:
The process of creating a CORPORATION by REGISTRATION in the DOMICILE state and filing the CERTIFICATE OF INCORPORATION.

Incorporator:
A person or company appointed by the founder of a new CORPORATION as an agent for the purpose of registering the new company with the Secretary of State and filing the CERTIFICATE OF INCORPORATION or CERTIFICATE OF FORMATION. DBI is an INCORPORATOR; our duties end when the new CORPORATION is registered and the INITIAL DIRECTOR is appointed as our successor.

Initial Director:
The person appointed by the INCORPORATOR of a CORPORATION to hold the responsibility of organizing the company after is has been registered. Such responsibilities may include issuing STOCK SHARE CERTIFICATES, holding the Initial Meeting to elect or appoint the BOARD OF DIRECTORS or OFFICERS, and assembling the BY-LAWS for ratification by the Board.

Initial Member:
The person appointed by the ORGANIZER of an LLC to hold the responsibility of organizing the company after it has been
registered. Such responsibilities may include issuing MEMBERSHIP INTEREST CERTIFICATES, drafting or retaining a professional to draft an OPERATING AGREEMENT, opening bank accounts or other responsibilities.

Interstate:
Involving parties in two or more states.

ITIN:
Individual Taxpayer Identification Number. A number issued to non-citizen non-residents for tax reporting purposes.

Intrastate:
Involving parties within the same state.

Involuntary Withdrawal:

See FORFEIT STATUS

Issued Shares:
The stock shares which have actually been sold, transferred or assigned to a SHAREHOLDER (owner).

Jurisdiction:
The geographical area to which an authority applies. Examples would include Cities, Counties and States.

LLC:
Limited Liability Company. An ENTITY TYPE which features LIMITED LIABILITY similar to a CORPORATION but which is generally regarded as having greater flexibility and ease of administration.

Legalization:
The process of having a document inspected and certified as legitimate for use in a foreign JURISDICTION by a representative of that jurisdiction, such as a Foreign Consulate.

Limited Liability:
A feature shared by LIMITED LIABILITY COMPANIES and CORPORATIONS by which a person's accountability for loss due to
the debts, obligations or liabilities of a company is limited to the amount the person paid for the Stock Shares or Membership Interest (or otherwise invested in the company); provided that the person did not personally guarantee the debts of the Entity or commit fraud or other illegal dealings.

Manager:
Specifically, when used in the discussion of an LLC, a Manager is an employee or agent, appointed by the MEMBERS of the LLC, to run the operations of the company on their behalf. The position is similar to that of the DIRECTOR of a CORPORATION or the General Partner of a Partnership. Unless the title is given as "Managing Member", a Manager can be assumed to have no ownership stake in the LLC. When an LLC distinguishes between MEMBERS and MANAGING MEMBERS, the "Member"'s role may be compared to that of a "Silent Partner" while the "Managing Member"'s may be compared to that of the General Partner; such a distinction is at the discretion of the LLC and is not required to be made in Delaware.

Member:
A person who owns all or part of an LLC. The Member is similar to the SHAREHOLDER of a CORPORATION or the Partner in a Partnership.

Membership Interest:
A MEMBER'S percent of ownership of an LLC. A Membership Interest Certificate is similar to a Stock Certificate in that it records the investor's share of ownership.

Minutes:
A record of the proceedings of a Meeting of the DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS or MANAGERS of a
company. CORPORATIONS should maintain MINUTES of their meetings; LLC's are not required to do so; but may if they so choose.

Naming Conventions:

The rules or standards which must be followed in selecting a company name to be REGISTERED with the Secretary of State or other authority.

Net Assets:
The amount by which the total assets of a corporation, including money, securities, property, equipment, etc., exceed its total debts.

NGO, Non-Profit, Non-Stock:
See NOT-FOR-PROFIT

No Par Value:
STOCK with no money value stated in the company CHARTER. NO PAR VALUE stock may be sold for whatever price per share the investor and seller agree to.

Not-for-Profit Corporation:
A CORPORATION organized solely for Charitable, Educational or Religious reasons.

Officer:
Person(s) elected by the SHAREHOLDERS or DIRECTORS of a CORPORATION to direct daily operations and or business
planning. Examples include: CEO, President, Secretary, and Treasurer.

Operating Agreement:

The document outlining the business structure, manner of operations and distribution rights of an LLC. The Operating
Agreement is similar to the BY-LAWS of a CORPORATION or the Partnership Agreement of a Partnership.

Operating Surplus:
The amount remaining at the end of a corporation's reporting period (fiscal year), following the deduction of expenses, taxes and dividends. At the end of the fiscal year, operating surplus is added to earned surplus on the corporation's books.

Organizer:
A person or company appointed by the founder of a new LLC as an agent for the purpose of Registering the new company with the Secretary of State and filing the CERTIFICATE OF FORMATION. DBI is an Organizer and our duties will end when the INITIAL MEMBER is appointed as our successor.

Par Value:
The stated money value on the face of a STOCK share. If a Par Value is stated when the CHARTER is registered, the company must receive CONSIDERATION worth at least Par Value for each share sold.

Pass Through:
A quality of certain Tax Statuses whereby the profits and loss of the company will "pass through" to the owner of the company (SHAREHOLDER or MEMBER) and be claimed on the owner's personal income tax return.

Paid-in Surplus:
The difference between paid-up capital and the stated value of the corporate stock. It is the surplus that is created when
shareholders have paid more for their stock than the stated value (par value or no par value) per share.

Paid-up Capital:
The total amount paid by SHAREHOLDERS for their shares of CAPITAL STOCK. On the balance sheet of the CORPORATION,
Paid-Up Capital is equal to the stated value (PAR VALUE or NO PAR VALUE) of its COMMON STOCK plus what Shareholders may have paid, or contributed in value, in excess of stated value.

Perpetual Duration:
An LLC or Corporation which will continue to exist as a legal Entity indefinitely or until a Certificate of CANCELLATION or
DISSOLUTION is filed. The opposite would be a company with a finite duration, which would automatically be legally dissolved on an stated expiration date.

Preferred Stock:
Entitles its SHAREHOLDERS to priority over other the shareholders of other classes of STOCK in the DISTRIBUTION of profits. Frequently, preferred stock entitles its holders to DIVIDENDS of a specified amount each year which must be paid before COMMON STOCK dividends, if any, are paid. Preferred stockholders typically surrender voting rights in return for priority in dividend payout. However, they may obtain voting rights by deferring their dividends. These dividends, in turn, will accrue, adding to the overall outstanding debt of the company.

Qualification:
The process of applying for authority (permission) to transact intrastate commerce in a state in which your CHARTER is not DOMISCILED. When a company successfully Qualifies in another state they are typically issued a Certificate of Authority to Transact Business as a Foreign Corporation/LLC.

Registered Agent:
The agent appointed to receive SERVICE OF PROCESS and tax notices on behalf of a registered ENTITY. Required by law in most states.

Registered Office:
The address of the REGISTERED AGENT. The Registered Office is not the address of the company headquarters.

Registration:
The process of entering a company into the record in a specific JURISDICTION and filing any documentation necessary to satisfy the requirements of that jurisdiction. See also INCORPORATION, FORMATION, ORGANIZATION.

S-Corporation:
An Entity (STOCK CORPORATION or LLC) which has successfully elected to be taxed under Subchaper S of the IRS code.

Service of Process:
The delivery of legal notice of an action of the court. Service of Process can be delivered by registered mail or hand delivered by a Process Server.

Shareholder:
The owner of a portion of a STOCK CORPORATION is called a SHAREHOLDER because they have been issued Stock Shares in evidence of their ownership stake. In the case of a CORPORATION owned by one person, that owner might be known as a Sole Shareholder.

Stated Capital:
The sum of the par value of all issued shares of the CORPORATION assigned PAR VALUE plus other amounts that have been paid into the stated capital of the corporation.

Statement by Incorporator:
A notarized statement by the INCORPORATOR attesting to the organization of a company, including the names of OFFICERS, MEMBERS, MANAGERS, and sometimes SHAREHOLDERS.

Stock:
A SECURITY which represents the CAPITAL invested into a CORPORATION by the founders/owners/investors. A Stock Share is a unit of Stock issued to an investor usually expressed by a STOCK CERTIFICATE.

Stock Certificate:
A certificate recording a share of ownership in a CORPORATION by specifying the name of the owner, the name of the Corporation, the number of SHARES AUTHORIZED and the number of SHARES ISSUED.

Suffix:
The part of a company's legally registered name which identifies which ENTITY TYPE it is. For example "Inc." is a Suffix which identifies the Entity Type as a CORPORATION.

Surplus:
The amount by which the net assets of a CORPORATION exceed its stated capital.

Tax Status:
Tax Status defines what Federal Tax return a person or Entity will file. Examples of Tax Status include Disregarded Entity, C-CORPORATION or S-CORPORATION.

Title:
Synonymous with "Name"

Total Surplus:
The sum of all surpluses, including earned and capital surplus and any additions to surplus from revaluations of assets which may have appreciated or depreciated in value during the fiscal year.

Treasury Shares:
Any shares of stock which were previously issued to a SHAREHOLDER and subsequently bought back from the shareholder by the CORPORATION itself, and which were not cancelled nor retired following reacquisition. Treasury Shares are included when counting the total number of shares issued but are not considered outstanding.

Virtual Office:
A suite of services which provide remote access to the amenities of a professional office, including an office address at which a receptionist or mailroom person can receive and sign for regular and certified mail, courier delivery and small parcels, with mail forwarding, a telephone number, phone forwarding, fax number and fax forwarding.

VOID Status:
In Delaware, the revocation of a company CHARTER due to failure to pay taxes or file and Annual Report.

Without Par Value:
See NO PAR VALUE

Zero Par:
See NO PAR VALUE