Business + legal + tax glossary.

Independent worker paid via 1099-NEC. Self-employed for tax purposes. See Independent Contractor.

Payment card and third-party network transactions. Issued by payment processors and platforms (Stripe, PayPal, Square) when annual transactions exceed thresholds.

IRS form reporting miscellaneous income payments: rents, royalties, attorney legal settlements, prizes, medical payments. Distinct from 1099-NEC (which covers contractor services).

IRS form reporting nonemployee compensation paid to independent contractors. Required for any contractor paid $600+ in a calendar year. Due to recipients and IRS by January 31.

Independent valuation of common stock fair market value used to set stock option strike prices in private companies. Required by IRC Section 409A.

IRS classification for tax-exempt charitable, religious, educational, scientific, or literary nonprofits. Donations are tax-deductible to donors.

IRS election filed within 30 days of receiving restricted stock to be taxed at grant value rather than at vesting. Critical for founders and early employees receiving restricted stock at near-zero values; missing the 30-day window can cost six figures in unexpected tax.

Application-to-Person messaging over 10-digit Long Code phone numbers. US compliance regime for business SMS.

State worker classification test used in California (AB5), Massachusetts, New Jersey, others. Stricter than the federal IRS test.

Affordable Care Act. Federal healthcare law. Mandates health insurance coverage offer for employers with 50+ FTEs.

Provision in equity vesting causing unvested shares to vest immediately on certain triggers. Single trigger: acquisition alone. Double trigger: acquisition AND termination without cause.

Fixed-term program supporting early-stage startups with mentorship, structured curriculum, and small investment (typically $20k-$150k) in exchange for equity (typically 5-10%).

Money a business owes to vendors/suppliers.

Money owed to a business by customers.

SEC defined wealth thresholds: $1M+ net worth or $200k+ income ($300k joint), or qualifying credentials. Required for most early-stage equity investments under Regulation D.

Accounting method recognizing revenue when earned and expenses when incurred, regardless of cash timing. Required by GAAP; standard for most operating businesses.

Interest that has accumulated but not yet been paid. Common on convertible notes.

Automated Clearing House. Electronic funds transfer network in the US.

Reversal of an ACH transfer.

Acquisition primarily for the target company's team rather than its product or customers.

Total income minus specific above-the-line adjustments (half SE tax, retirement contributions, HSA, self-employed health insurance, student loan interest). Used to determine eligibility for many tax benefits.

State action terminating an entity for failure to file annual reports or pay fees.

Change to an entity's formation documents (Articles of Organization for LLCs, Articles of Incorporation for corps). State filing required for material changes.

Anti-Money Laundering. Federal regulations to prevent money laundering and terrorist financing.

Individual investing personal funds in early-stage businesses, typically $10k-$250k per check.

Required yearly meeting of members or shareholders.

Recurring revenue normalized to annual. Standard metric for SaaS valuation.

State filing required annually in most states to maintain LLC or corporation in good standing.

LLC formed in a jurisdiction allowing members to not appear in public state records. Wyoming, Delaware, Nevada, New Mexico permit. Federal BOI reporting still required.

Provision protecting investors from dilution if a later round prices at a lower valuation (a down round). Full ratchet or weighted-average.

Credential used to authenticate API requests with scoped permissions.

Categorization of accounts receivable by how long they have been outstanding.

State filing that creates a corporation. Contains corporate name, registered agent, share structure (authorized shares, par value, classes), and incorporator information.

State filing that creates an LLC. Contains LLC name, registered agent, principal address. Some states call this Certificate of Formation (Delaware, Texas).

Strategies to protect personal assets from business liabilities and personal assets from creditor claims.

Acquisition where buyer acquires specified assets but not the entity.

Default US employment relationship (except Montana). Either party can terminate at any time, subject to anti-discrimination laws.

Twilio account credential used to authenticate API requests. Provides full account access.

Maximum number of shares a corporation can issue per its charter. Different from issued/outstanding shares.

Certified for-profit company meeting standards of social and environmental performance. B Lab certification distinct from Benefit Corporation entity.

Business Associate Agreement. Required by HIPAA when a vendor handles protected health information.

Individual who owns 25%+ of an entity or exercises substantial control. Reported to FinCEN under the Corporate Transparency Act.

For-profit corporate entity legally required to consider social and environmental impact alongside shareholder returns. Available in 38+ states.

Group of directors elected by shareholders to oversee corporate management.

Beneficial Ownership Information. Federal filing required by FinCEN under the Corporate Transparency Act.

Federal tax provision allowing accelerated depreciation. Phasing out: 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026, 0% in 2027.

Recording, organizing, and tracking financial transactions.

Financial records: income statement, balance sheet, cash flow, journals, ledgers.

Building a business without outside investment, funded by personal capital, customer revenue, or small loans.

Short-term funding to extend runway between major rounds.

Monthly net cash consumption: cash spent minus cash received.

Separate bank account for business operations. Required for entity to maintain liability protection.

Credit history of the business entity, tracked separately from personal credit.

Permit to operate a business. Federal (industry-specific), state, county, or city level.

Internal rules governing a corporation: board composition, officer roles, meeting procedures, voting thresholds. Adopted at incorporation; not filed publicly.

Default corporation taxed under Subchapter C. Entity-level tax (21% federal flat rate) plus shareholder-level tax on dividends. Standard for VC-backed startups.

Document tracking all ownership of a company: founders, employees with options, investors with preferred stock, SAFE/note holders, warrants, option pool.

Each LLC member's ownership stake measured in dollars. Starts at the member's capital contribution; increases with allocated profits; decreases with distributions.

Cash, property, or services contributed by a member/shareholder in exchange for ownership interest.

Carried interest. Share of investment profits paid to general partners of a VC fund, typically 20%.

Accounting method recognizing revenue and expenses when cash changes hands. Simpler than accrual; permitted for many smaller businesses under specific revenue thresholds.

Movement of cash in and out of a business over a period.

California Consumer Privacy Act. State privacy law granting California residents rights regarding personal data.

Document issued by a foreign state when an entity registers to do business there.

State-issued certificate confirming an entity is in good standing.

Customer dispute reversing a credit card transaction.

Court order placing a lien on an LLC member's economic interest to satisfy a creditor of that member.

Percentage of customers leaving over a period.

Different classes of stock with different rights. Class A often has more voting rights; Class B less.

Provision in employment or consumer contracts requiring disputes to be resolved individually rather than through class actions.

Period at the start of vesting where no equity vests. Standard: 1-year cliff. After 12 months, 25% (of 4-year vesting) vests in one chunk.

Small corporation with restricted share transfer, no public trading, and simplified governance. Available in some states.

Content Management System. Software for managing website content.

Caller Name. Database lookup service displaying calling party's name on receiving phone's caller ID.

Cost of Goods Sold. Direct costs of producing goods or services sold.

Mixing personal and business funds. Major risk: can pierce the LLC veil in court.

Use of a mark in commerce establishing rights even without registration.

Standard ownership shares. Founders and employees typically receive common; investors typically receive preferred.

Trademark rights established by use in commerce, without registration.

Situation where a person's personal interests are at odds with their duties to the company.

Changing entity type (e.g., LLC to C-Corp). Three methods: statutory conversion, statutory merger, or dissolve-and-reform.

Debt instrument that converts to equity at the next priced round. Has interest and maturity, unlike a SAFE.

Preferred stock that can be converted to common stock at the holder's option.

Federal intellectual property protection for original works of authorship: software, writing, music, photography.

Federal law (effective 2024) requiring beneficial ownership reporting to FinCEN.

Legal separation between an entity (LLC or corporation) and its owners. Properly maintained, the veil shields personal assets.

Cost Per Click. Paid advertising pricing model.

Customer Relationship Management. Software tracking interactions with customers and prospects.

Raising small amounts of capital from many people. Reward-based (Kickstarter), equity-based (SEC Reg CF up to $5M, Reg A+ up to $75M).

Campaign Service Provider. In A2P 10DLC ecosystem, registers messaging campaigns with The Campaign Registry on behalf of brands.

Currency Transaction Report. Filed by financial institutions for cash transactions over $10,000.

Dividend rate that accumulates if not paid. At liquidity event, accumulated dividends are paid to preferred before common.

Time given to a party in breach of a contract to fix the breach before termination is allowed.

Total cost to acquire a new customer.

Online repository of documents shared with investors/acquirers during diligence.

Doing Business As. Fictitious business name registration. Used when operating under a name different from the legal entity name.

Net operating income divided by total debt service. SBA wants 1.25x+.

Total monthly debt payments divided by gross monthly income. Used in loan underwriting.

Cash received before service is delivered. Liability until earned.

C-Corporation formed in Delaware. Standard structure for venture-backed startups due to mature corporate law and the Delaware Court of Chancery.

Tax deduction for the gradual loss of value of long-lived business assets (equipment, vehicles, real estate). Methods: straight-line, accelerated (MACRS), Section 179, bonus depreciation.

Patent protecting ornamental design of functional items. 15-year term.

Reduction in existing shareholders' ownership percentage when new shares are issued. Every funding round dilutes.

Member of a corporation's board of directors. Fiduciary duty to corporation and shareholders.

Federal tax classification: single-member LLC treated as a sole proprietorship for federal tax. The LLC files no separate federal return; income flows to Schedule C of personal 1040.

Formal end of an entity's existence. Requires state filing (Articles of Dissolution), tax clearance in some states, final tax returns, and EIN closure.

Common-law doctrine permitting necessary expenses to be charged to a spouse's account. Largely abolished in modern statutes.

Moving an entity from one state to another while preserving its legal existence, EIN, and contract continuity. Available in about 30 states.

Tax structure where the same earnings are taxed at the entity level (corporate tax) then again at the shareholder level (dividend tax). Applies to C-Corporations.

Funding round at a lower valuation than the previous round. Triggers anti-dilution protection for prior investors.

Provision allowing majority shareholders to force minority to participate in a sale of the company.

Investigation of a target company before an investment, acquisition, or major contract.

Dun & Bradstreet Universal Numbering System. Unique identifier for businesses.

Portion of acquisition price contingent on future business performance.

Earnings Before Interest, Taxes, Depreciation, and Amortization.

Sales tax obligation triggered by revenue or transaction volume in a state, even without physical presence. Standard threshold: $100k revenue or 200 transactions per state, post-Wayfair.

Employer Identification Number. Federal tax ID for entities. Required for business bank accounts, payroll, and federal tax filings. Free from IRS.

Worker subject to your direction and control. Receives W-2. Employer pays FICA match, unemployment insurance, workers comp.

Written contract between employer and employee defining role, compensation, benefits, IP assignment, confidentiality, termination terms.

Employer of Record. Third-party that becomes the legal employer for tax, payroll, and compliance while the client company directs the work.

Ownership interest in a business. Stock for corporations, membership interest for LLCs.

Raising capital by selling ownership stakes (equity) in the company. Distinct from debt financing.

Additional equity grants to existing employees to maintain incentives after initial grants vest.

Quarterly payment of expected federal and state tax for those whose income is not subject to withholding. Required if you expect to owe $1,000+ in tax for the year.

Time during which seller cannot negotiate with other potential acquirers.

Liquidity event for owners and investors: acquisition, IPO, secondary sale, or recapitalization.

Limited exception to copyright allowing use for commentary, criticism, education, parody, news reporting.

Foreign Account Tax Compliance Act. US law requiring US persons to report foreign financial accounts (Form 8938) and foreign banks to report US account holders.

Report of Foreign Bank and Financial Accounts (FinCEN Form 114). Required for US persons with $10k+ in foreign accounts at any time during the year.

For Benefit Of account. Account holding funds on behalf of others.

Foreign Corrupt Practices Act. Federal law prohibiting bribery of foreign officials.

Federal Deposit Insurance Corporation. Insures US bank deposits up to $250,000 per depositor per insured bank.

Federal Insurance Contributions Act. Tax funding Social Security (12.4%) and Medicare (2.9%). Split between employer and employee for W-2 wages.

Legal obligation of directors, officers, and managers to act in the best interests of the company and its shareholders/members.

Financial Crimes Enforcement Network. Bureau of US Treasury administering BOI reporting + FBAR.

Foreign Investment in Real Property Tax Act. Withholding requirements on foreign sales of US real estate.

Contract provision excusing performance due to extraordinary events beyond parties' control (war, pandemic, natural disaster).

Non-US person forming a US business entity. Can own US LLCs and C-Corps without restriction; ineligible for S-Corp election.

Registration of an entity to operate in a state other than its formation state. Required when conducting business in another state beyond minimal contacts.

US Individual Income Tax Return. Filed by US individuals annually. Includes Schedule C for sole proprietors and single-member LLCs, Schedule E for rental income.

Annual Withholding Tax Return reporting US tax withheld from payments to non-US persons.

US Partnership Return. Filed by multi-member LLCs taxed as partnerships and by partnerships. Informational; partnership pays no federal income tax. Issues K-1s to members.

US Corporation Income Tax Return. Filed by C-Corporations. Entity pays federal tax at 21%.

US Income Tax Return for an S Corporation. Informational return; tax flows to shareholders via K-1.

Election by a Small Business Corporation. Filed to elect S-Corporation tax treatment. Must be filed within 75 days of the desired effective date or for the next tax year.

Information return for foreign-owned single-member LLCs reporting transactions between the LLC and the foreign owner. Required annually. Penalty for failure: $25,000.

Application for Automatic Extension to file business tax returns (1065, 1120, 1120-S). Extends filing 6 months. Does NOT extend payment deadline.

Entity Classification Election. Filed by an LLC to elect classification as a C-Corporation for federal tax purposes.

Employer's Annual Federal Unemployment Tax Return (FUTA). Filed annually by January 31. Federal unemployment tax is 6% on the first $7,000 of wages.

Employer's Quarterly Federal Tax Return. Reports federal income tax withheld, Social Security tax, Medicare tax. Filed quarterly.

Employment Eligibility Verification. Required for all US employees to verify identity and work authorization. Completed within 3 business days of hire.

Application for Employer Identification Number. Used to apply for an EIN. Online for US founders (same-day); paper or fax for foreign founders (1-3 weeks).

Original creator of a business. Founders typically receive common stock subject to vesting.

Initial shares issued to founders at incorporation, typically subject to vesting.

State tax on entities for the privilege of being formed or doing business in the state. Distinct from income tax. Delaware: $300 flat. California: $800 minimum.

Earliest funding round from personal network. Typically $10k-$100k via SAFE notes.

Full-Time Equivalent. Counts employee hours: 40 hr/week = 1 FTE. Used for ACA coverage requirements (50+ FTEs).

Strongest anti-dilution: investor's effective price drops to the down-round price. Most aggressive form.

Federal Unemployment Tax Act. Federal tax funding unemployment insurance. 6% on the first $7,000 of wages per employee, generally offset to 0.6% by state UI credit.

Generally Accepted Accounting Principles. Standard accounting framework used in the US.

Employee placed on leave during notice period, often paid not to work.

General Data Protection Regulation. EU privacy law granting EU residents rights to access, correct, delete personal data.

Default partnership form with shared management and liability. All partners share unlimited liability.

Gramm-Leach-Bliley Act. Federal law requiring financial institutions to protect customer information.

Entity status indicating all state filings current, fees paid.

Brand recognition + reputation value associated with a trademark.

General Partner. Manager of a venture capital fund. Receives management fee and carry.

Revenue minus Cost of Goods Sold (COGS), divided by revenue.

Health Insurance Portability and Accountability Act. Federal law protecting health information.

Provision in contracts where one party agrees not to hold the other liable for specified claims.

Portion of purchase price held in escrow to cover post-close indemnification claims.

Parent entity owning subsidiaries. Used for asset protection, tax planning, succession planning, and operational separation.

Process of creating a corporation through state filing of Articles of Incorporation.

Provision where one party agrees to compensate the other for specified losses.

Worker who is independent: sets own hours, methods, has multiple clients. Receives 1099. Self-employed for tax purposes.

Funding round consisting only of existing investors. Signal can be positive or concerning.

Non-physical business property: software, customer lists, trade secrets, goodwill, trademarks.

Creations of the mind protected by law: patents, copyrights, trademarks, trade secrets.

Fee paid by merchant's bank to cardholder's bank for each transaction.

Procedures and policies designed to ensure reliable financial reporting, asset safeguarding, and compliance.

Document accompanying preferred stock investment defining ongoing investor protections: information rights, registration rights, board observer rights.

Interest on Lawyer Trust Account. Required for client funds held by law firms.

Agreement transferring intellectual property rights from one party to another.

Initial Public Offering. First sale of a company's shares to the public through a stock exchange.

Federal classification test for employee vs independent contractor. Three factors: behavioral control, financial control, relationship type.

Incentive Stock Option. Employee stock option with favorable tax treatment if specific holding rules are met. Limited to $100k vesting per year per person.

Shares actually issued to founders, employees, and investors. Subset of authorized shares.

Individual Taxpayer Identification Number. For non-US individuals with US tax obligations. Issued by IRS via Form W-7.

Schedule K-1. Tax form issued by partnerships, multi-member LLCs (taxed as partnerships), and S-Corps to members/shareholders. Reports allocated share of income.

Know Your Customer. Process to verify customer identity, often required for financial institutions.

Acquisition financed primarily by debt secured by target company assets.

Total revenue expected from a customer relationship.

Standard for trademark infringement.

Partnership with at least one general partner (manages, unlimited personal liability) and one or more limited partners (passive, limited liability).

Right of preferred shareholders to receive their investment back before common shareholders in a liquidation event. Standard: 1x non-participating.

Event allowing equity holders to convert ownership to cash: acquisition, IPO, secondary sale, recapitalization.

Limited Liability Company. State-law entity providing liability protection with flexible federal tax treatment.

Internal document governing LLC operations: ownership, voting, distributions, transfers, dissolution. Not filed publicly.

Limited Liability Partnership. Partnership where individual partners are not liable for malpractice of other partners. Common for professional services.

Letter of Intent. Non-binding document outlining the major terms of an acquisition or partnership.

Limited Partner. Passive investor in a venture capital fund or limited partnership.

Mergers and Acquisitions. Transactions combining or transferring control of companies.

Modified Accelerated Cost Recovery System. Federal depreciation system used for most business property. Defines recovery periods and accelerated depreciation methods.

International trademark registration system.

LLC where designated managers (who may or may not be members) run day-to-day operations.

Provision allowing buyer to walk away from a deal if certain adverse changes occur.

Date a debt instrument (e.g., convertible note) must be repaid or converted. Typical convertible note maturity: 18-36 months.

Owner of an LLC. The LLC equivalent of a shareholder.

LLC where all members participate in day-to-day management.

Account allowing business to accept card payments.

Online business bank popular with startups and foreign-owner LLCs.

Combination of two entities into one. Statutory merger filed with state.

Most Favored Nation. Provision granting one party the same favorable terms offered to any other counterparty.

Recurring revenue per month. Used in subscription business metrics.

LLC with two or more members. Default federal tax classification: partnership (Form 1065 with K-1s).

Non-Disclosure Agreement. Contract restricting disclosure of confidential information.

Revenue minus operating expenses (excluding interest, taxes, depreciation).

Revenue growth from existing customers, including expansion and churn.

Net Operating Loss. Business loss exceeding income. Can be carried forward (typically indefinitely post-TCJA) to offset future taxable income.

Provision restricting an employee from competing with the business post-employment.

Provision restricting solicitation of employees or customers post-employment.

Entity organized for purposes other than profit (charitable, religious, educational, etc.). Most are corporations qualifying as 501(c)(3) for federal tax exemption.

National Provider Identifier. Required for healthcare provider billing.

Non-Qualified Stock Option. Employee stock option without favorable ISO tax treatment. Available to non-employees.

Office of Foreign Assets Control. Treasury bureau enforcing economic sanctions.

USPTO examiner correspondence raising issues with a trademark application.

Designated person with specific corporate responsibilities (CEO, CFO, Secretary, Treasurer).

See LLC Operating Agreement.

Reserved shares set aside for future employees and advisors. Typically 10-15% of fully-diluted shares.

Standard, expected, and routine business activities. Used in M&A covenants restricting actions outside ordinary course.

Shares issued and currently held by shareholders. Different from authorized shares and treasury shares.

Preferred stock that receives both the liquidation preference AND participates pro-rata in remaining proceeds.

Business with two or more owners who share profits and losses. Default federal tax structure for multi-member LLCs.

Entity tax structure where income and losses flow through to owners' personal returns rather than being taxed at the entity level. LLCs, S-Corps, and partnerships are pass-through entities.

Federal IP protection for inventions: utility patents (functional, 20 years), design patents (ornamental, 15 years), plant patents.

Status of a patent application that has been filed but not yet granted.

Investigation of prior art before filing patent application.

Dun & Bradstreet business credit score, 0-100.

Patent Cooperation Treaty filing. Provides international filing route.

Pass-through entity tax credit. State credit for entity-paid taxes under PTET regimes.

Professional Employer Organization. Outsourced HR provider that becomes the employer of record for payroll, benefits, compliance.

Contractual promise by an individual to be personally liable for an entity's debts.

Cash bonus tied to equity value. Recipient receives cash equivalent to equity appreciation without owning shares.

Protected Health Information. Health information that identifies an individual. Subject to HIPAA.

Court action stripping liability protection from an LLC or corporation. Triggered by commingling, undercapitalization, fraud, or alter-ego conduct.

API for connecting US bank accounts to applications.

Patent for asexually reproduced plant varieties. 20-year term.

Professional Limited Liability Company. LLC structure for licensed professionals (lawyers, doctors, accountants) where standard LLC is not permitted.

Valuation of a company after new investment is added. Pre-money + investment = post-money.

Document authorizing one person to act on behalf of another.

Valuation of a company before new investment. Used to calculate dilution and price per share.

Earliest stage of institutional funding. Typically $250k-$1M, often via SAFE or convertible note.

Senior class of stock with rights superior to common: liquidation preference, dividends, anti-dilution, sometimes voting.

Existing patents, publications, or products that could affect patentability.

Document describing how a business collects, uses, shares, and protects user/customer data. Required by CCPA, GDPR, and many state laws.

Financial projections or scenario analyses.

Right of an investor to participate in future rounds to maintain their ownership percentage.

Corporate entity for licensed professionals (lawyers, doctors, accountants) in states requiring professional structure.

LLC equity grant that gives recipient a share of future profits (not past value). Tax-advantaged for LLCs; equivalent to ISOs functionally.

Lower-cost patent application establishing priority date. Must be followed by non-provisional within 12 months.

Pass-Through Entity Tax. State-level workaround to TCJA's $10k SALT cap. State allows pass-through entity to pay state income tax at entity level (federally deductible).

Qualified Business Income. Pass-through business income eligible for the 20% deduction under Section 199A. Phaseouts begin at $191,950 (single) / $383,900 (married joint).

Qualified Small Business Stock. C-Corp stock eligible for federal capital gains exclusion (up to $10M) under Section 1202 if held 5+ years. Available only for C-Corps.

Minimum number of members or shareholders required for valid decisions.

Federal credit for qualified research expenditures: wages, supplies, contract research. Can offset payroll taxes for small businesses (Section 41(h), up to $500k/year).

IRS standard requiring S-Corp owner-employees to be paid a salary commensurate with their role before taking distributions. Underpaying salary to inflate distributions is a top audit target.

Standard of care expected in fulfilling a legal duty. Higher than "good faith" but lower than "best efforts."

Regulation D exemption allowing public solicitation but limited to accredited investors. Requires verification.

Person or service authorized to receive service of process and official state mail on behalf of an entity.

SEC exemption from securities registration for private offerings. Rule 506(b) and 506(c) are most common.

Statements made by seller about the business in an acquisition agreement.

Company right to buy back unvested or restricted shares from an employee upon departure.

State document allowing a business to purchase goods for resale without paying sales tax.

Held-back funds by payment processor to cover potential chargebacks.

Stock granted subject to vesting and other restrictions. Company has the right to repurchase unvested shares at original price.

Loan repaid as a percentage of monthly revenue. Total repayment is a multiple of borrowed amount (1.3-2x typical).

Right requiring a shareholder to offer their shares to the company or existing shareholders before selling to a third party.

Acquisition strategy combining multiple smaller companies in the same industry.

Restricted Stock Unit. Promise of future stock issuance subject to vesting. Taxed at vesting as ordinary income.

Months of cash remaining at current burn rate.

Federal tax classification under Subchapter S. LLC or corporation that elects S-Corp treatment via Form 2553. Owner-employees receive W-2 wages plus distributions (not subject to SE tax).

Simple Agreement for Future Equity. Created by Y Combinator. Common pre-seed and seed instrument.

State tax on retail sales of taxable goods (and some services). Rates vary by state and locality. Sellers collect from buyers and remit to state.

TCJA $10,000 limitation on state and local tax deduction. PTET workarounds restore deduction for pass-through owners.

Government-imposed economic restrictions against specific countries, organizations, or individuals.

Suspicious Activity Report. Filed by financial institutions reporting suspected illicit activity.

Stock Appreciation Rights. Cash or stock payment based on appreciation in company value.

Small Business Administration. Federal agency offering loan programs.

SBA program for real estate and major equipment. Three-party structure.

Most common SBA loan program. Up to $5M for working capital, expansion, equipment, real estate.

Profit or Loss From Business (Sole Proprietorship). IRS form filed by sole proprietors and single-member LLCs (default classification) as part of personal 1040.

Supplemental Income and Loss. IRS form reporting rental real estate, royalties, partnership/S-Corp K-1 income, estate/trust income.

Self-Employment Tax. IRS form calculating SE tax on net self-employment earnings.

Specially Designated Nationals and Blocked Persons List. OFAC list of sanctioned parties.

Self-Employment Tax. 15.3% (12.4% Social Security + 2.9% Medicare) on net self-employment earnings, applied to 92.35% of net earnings.

IRC section providing the QSBS exclusion. Up to $10M of gain on qualified C-Corp stock excluded from federal capital gains tax.

IRC section allowing immediate expensing of qualifying business property (equipment, software, certain real estate improvements) up to annual limits.

IRC section providing the 20% pass-through deduction (QBI deduction) for owners of pass-through entities.

Tax election treating a stock purchase as an asset purchase for tax purposes.

IRC section providing tax-free incorporation. Transfers of property to a controlled corporation are tax-free if transferors own 80%+ control immediately after.

IRC section regulating non-qualified deferred compensation, including stock options. Stock options must be granted at FMV to avoid penalty.

Early institutional funding round. Typically $1M-$4M. Early product, some users or revenue.

First major institutional venture capital round. Typically $5M-$15M at $20M-$60M valuation.

Growth-stage venture round following Series A. Typically $15M-$40M. Scaling unit economics and team.

Growth/late-stage venture round. Typically $40M+. Scaling toward profitability or IPO.

LLC structure allowing multiple "series" (sub-units) under one parent LLC. Each series isolates liability. Available in 18+ states.

Limited partnership structure with multiple series sharing management. Used in fund and real estate structures.

Formal delivery of legal documents to a party. Received by the Registered Agent.

Owner of corporate stock. Corporate equivalent of LLC member.

LLC with one owner. Default federal tax: disregarded entity (Schedule C on personal 1040).

Service Organization Control 2. Audit standard for service providers handling customer data.

Individual operating a business without forming an LLC or corporation. No liability protection; income reported on Schedule C.

Secretary of State. State agency that handles business entity filings in most states.

Sarbanes-Oxley Act. Federal law requiring public company financial reporting controls.

Evidence of trademark use in commerce. Required by USPTO.

Specified Service Trade or Business. Profession category with QBI deduction limits. Includes law, medicine, accounting, consulting, financial advising.

USPTO filing confirming intent-to-use trademark application is now in actual use.

Process of converting an entity via a single state filing. Cleanest conversion method where available (about 36 states).

Right to purchase company stock at a fixed price (strike price) within a specified period. Subject to vesting.

Acquisition where buyer acquires shares of target company.

Total equity belonging to shareholders.

Price at which a stock option can be exercised. Set at fair market value at grant for ISOs and most NSOs.

Banking-as-a-service infrastructure from Stripe.

Entity owned (in whole or part) by another entity (the parent or holding company).

Time period after which representations and warranties in a contract expire.

State Unemployment Tax. Employer pays state-specific UI tax. New employer rate typically 2.5-3.5%.

Society for Worldwide Interbank Financial Telecommunication. International wire transfer network.

Right of minority shareholders to participate in a sale by majority shareholders on the same terms.

State Department of Revenue certificate confirming all taxes paid. Required before dissolution in some states.

Direct reduction of tax owed (different from a deduction). Examples: R&D credit, work opportunity tax credit (WOTC), employee retention credit.

Bilateral agreement between two countries reducing or eliminating double taxation.

Tax Cuts and Jobs Act (2017). Major federal tax reform. Lowered C-Corp tax to 21%, introduced QBI deduction, changed depreciation rules, capped SALT at $10k.

Non-binding document outlining the major terms of an investment.

Billing arrangement based on hours worked and materials used (vs fixed-fee).

Name under which a business operates. Same concept as DBA. Registered at state or county level.

Confidential business information providing competitive advantage. Protected by reasonable secrecy measures, not registration.

Mark used in commerce to identify goods or services. Federal registration via USPTO provides nationwide rights.

Shares repurchased by the company. Held in treasury rather than retired. Not voting; no dividends.

Event causing acceleration of vesting (e.g., acquisition, termination without cause).

Account holding funds on behalf of others. Required for law firms (IOLTA), real estate brokerages, certain fiduciary services.

Uniform Commercial Code filing recording security interests in personal property.

Unemployment Insurance. State-administered insurance program for laid-off workers. Employers pay UI tax to state.

IRS penalty for failure to make required quarterly estimated tax payments. Currently ~8% annualized.

Per-unit profitability of a business.

Section of a pitch deck or business plan explaining how raised capital will be deployed.

State tax on out-of-state purchases where sales tax was not collected. Owed by the buyer.

United States Patent and Trademark Office.

Full functional patent. 20-year term from filing.

Estimate of a company's worth. Pre-money: before new investment. Post-money: after.

Maximum valuation at which a SAFE or convertible note converts. Lower cap = more equity to the investor at conversion.

Venture Capital. Institutional funding for high-growth startups in exchange for equity. Standard for tech startups expecting 10x+ returns.

Loans to venture-backed startups, typically from specialty lenders. Interest plus warrants. Extends runway without further equity dilution.

Process of earning equity over time. Standard: 4-year vesting with 1-year cliff.

Contract among shareholders specifying how they will vote on certain matters.

Wage and Tax Statement. Form issued to employees reporting wages and tax withheld.

Employee's Withholding Certificate. Filed by employees to direct employer how much federal income tax to withhold.

Certificate of Foreign Status. Filed by non-US individuals to certify foreign status for US tax withholding.

Same as W-8BEN but for entities (not individuals). Plus FATCA chapter 4 certification.

Request for Taxpayer Identification Number. Filed by US persons or entities to provide their TIN to a payer.

Court-ordered deduction from an employee's wages to satisfy debt.

Written record of pay periods: gross wages, deductions, net pay, hours worked. Required by most states.

Voluntary relinquishment of a right. Must be express and informed to be enforceable.

Right to purchase company stock at a fixed price within a specified period. Similar to stock options but typically held by investors or lenders.

South Dakota v. Wayfair (2018). Supreme Court ruling upholding state economic nexus for sales tax. Eliminated physical presence requirement.

Standard anti-dilution: partial adjustment based on the size of the down round relative to total shares outstanding.

Federal and state laws protecting employees who report illegal activity from retaliation.

Final phase of dissolution: settling debts, distributing assets, filing final returns, closing accounts.

Process to attempt recovery of an erroneous wire transfer.

Same-day electronic transfer of funds between banks.

Filing terminating an LLC's registration in a foreign state. Distinct from dissolution (terminating the entity itself).

Mandatory deduction of US tax on payments to non-US persons. Default 30%; treaties may reduce.

Doctrine determining who owns the copyright in a work created by an employee or contractor.

State-mandated insurance covering employee injuries and illness. Required in 49 states (Texas optional).

Current assets minus current liabilities.

Post-close adjustment of acquisition price based on actual vs target working capital at closing.

Work Opportunity Tax Credit. Federal credit for hiring members of targeted groups. $1,200-$9,600 per hire depending on category.

LLC formed in Wyoming. Popular for asset protection (strongest charging order protection), anonymity, and low fees ($100 formation, $60 annual).