← How to Start an LLC
Glossary: How to Start an LLC
Every key term from the course, in plain English. Bookmark this page — you'll come back to it.
- LLC
- Limited liability company — a business structure that separates your personal assets from business debts and lawsuits.
- Articles of Organization
- The document you file with the state to officially create your LLC. Called Certificate of Formation in some states.
- Registered agent
- The person or service designated to receive legal documents on your LLC's behalf. Must have a physical address in the state.
- EIN
- Employer Identification Number — your business's tax ID from the IRS. Free to get, required for business bank accounts and hiring.
- Operating agreement
- The internal document spelling out who owns what, how decisions get made, and what happens if someone leaves. Critical for multi-member LLCs.
- Member
- An owner of an LLC. Can be one person (single-member) or multiple people.
- Piercing the corporate veil
- When a court ignores your LLC's liability protection — usually because you mixed personal and business money or skipped formalities.
- Annual report
- A yearly filing with the state confirming your LLC still exists and updating basic info. Miss it and the state can dissolve your LLC.
- Pass-through taxation
- How most LLCs are taxed — profits flow to the owners' personal tax returns instead of being taxed at the company level.
- S-corp election
- An optional tax choice that can save on self-employment taxes once profits are high enough. Worth discussing with a CPA.
- Business license
- Permission from your city/county/state to operate. Separate from the LLC filing — most businesses need both.
- DBA
- 'Doing business as' — a registered alternate name for your business. Lets your LLC operate under a brand name.
- Commingling
- Mixing personal and business money — the #1 way people accidentally destroy their LLC's liability protection.
- Franchise tax
- An annual tax some states charge LLCs just for existing there, regardless of profit.