You already know the basics. This guide covers 30 more terms you will run into once your company is formed and running, grouped by what they are used for, so you can look them up fast.
Proving your company exists
Apostille: a certificate attached to a document that makes it valid for use in another country that is part of the Hague Convention. You might need one on a certificate of good standing if a foreign bank or partner asks for it.
Certificate of good standing: a document from the state confirming your company is current on filings and fees. Banks, landlords, and other states often ask for one before they will deal with you.
Certified copy: an official copy of a filed document, such as your articles of organization, stamped by the state to confirm it is genuine. Some banks and government agencies require a certified copy instead of a plain printout.
Operating in more than one state
Foreign qualification: registering your LLC or corporation to do business in a state other than the one where it was formed. "Foreign" here just means another state, not another country.
Franchise tax: a fee some states charge for the right to exist or operate there, separate from income tax. It applies whether or not you made a profit. Rules and amounts vary a lot by state, so check the specific state's site.
Nexus: the connection a business has to a state that is strong enough to trigger tax or filing obligations there, for example having an office, employees, or a certain level of sales in that state.
Marketplace facilitator: a platform, like a large online marketplace, that collects and remits sales tax on behalf of sellers who use it. If you only sell through one of these platforms, some of your sales tax burden may already be handled.
DBA: "doing business as," a registered trade name your company uses instead of, or alongside, its legal name. It does not create a new legal entity.
Federal filings you may need
| Term | What it means |
|---|---|
| Pro forma 1120 | A simplified version of the corporate income tax return, filed alongside Form 5472 by foreign-owned single-member LLCs, even with no US income tax due |
| Reportable transaction | Any money movement between your LLC and its foreign owner or related party, such as capital contributions, loans, or payments, that must be listed on Form 5472 |
| ECI | Effectively connected income, income treated as connected to a US trade or business and taxed on a net basis |
| FDAP | Fixed, determinable, annual, or periodic income, a category of US-source income like interest or royalties, often taxed by withholding rather than a return |
| W-8BEN-E | A form a foreign entity gives to a US payer to certify its foreign status and claim any tax treaty benefit |
| 1099-NEC | A form used to report nonemployee compensation paid to a contractor during the year |
If your LLC has a foreign owner, Form 5472 with the pro forma 1120 is due by April 15. PowerLaunch's Run and Scale plans include business IRS tax filings and a licensed tax professional consultation, so this is handled as part of the plan rather than left to you to track alone.
EIN paperwork explained
Responsible party: the person the IRS lists as controlling or managing the LLC or corporation. This name goes on the SS-4 and stays on file with the IRS.
SS-4: the IRS form used to apply for an EIN. PowerLaunch files this for you as part of every plan.
Third-party designee: a person or company authorized on the SS-4 to receive the EIN and speak to the IRS about the application. PowerLaunch acts as your designee to speed up communication with the IRS.
EIN letter, CP575: the official confirmation letter the IRS mails after issuing your EIN. Keep the original, since some banks ask for it specifically.
147C letter: a replacement letter the IRS issues if you lose the CP575, confirming your EIN and business name. It serves the same purpose for banks and other institutions.
State formation and ongoing documents
Names for the same idea vary by state, which causes a lot of confusion.
| Term | What it usually means |
|---|---|
| Articles of organization | The document filed to create an LLC, used in most states |
| Certificate of formation | The same idea as articles of organization, but this is the name used in some states, such as Delaware |
| Statement of information | A periodic filing, often annual or biennial, updating the state on your company's address, officers, or members |
| Initial report | A one-time filing some states require shortly after formation, separate from the ongoing annual report |
| Biennial report | A report due every two years instead of every year, required by some states in place of an annual report |
Because naming and timing differ so much by state, always check the specific state's site for what applies to you. PowerLaunch's Run and Scale plans include the annual state report filing so you do not miss a due date.
Closing or losing your company
Dissolution: the formal process of legally ending a company, filed with the state where it was formed. Scale plan members get free dissolution when they are ready to close.
Administrative dissolution: when a state shuts down your company involuntarily, usually for missing a report or fee, rather than you choosing to close it.
Reinstatement: the process of restoring a company that was administratively dissolved, usually by filing missed reports and paying any owed fees and penalties.
Address and paperwork basics
Virtual address: a real street address you can use for your company without a physical office there. PowerLaunch provides a virtual mailing and business address on every plan.
Mail forwarding: the service of scanning or forwarding physical mail sent to your business address to you electronically or by post.
Operating agreement amendment: a formal update to your LLC's operating agreement, used when ownership, management, or other key terms change after formation.
What to do next
If any of these terms apply to your situation right now, it is worth talking it through before you file anything. Book a free 20 minute consultation at powerlaunch.solutions/book, or go straight to powerlaunch.solutions/signup to start your LLC or C-corp on a plan that already includes the filings and support these terms describe.
