Startup tax glossary
Every term defined in plain English, each linked to the guide or calculator where it matters.
Nexus
The connection between a business and a state that triggers tax and registration duties.
Franchise Tax
A state charge for the privilege of doing business there, often owed even with zero profit.
Assumed Par Value (APV)
Delaware’s asset-based franchise-tax method: gross assets ÷ issued shares × authorized shares, $400 per $1M.
Authorized Shares
The maximum shares a corporation may issue, and the basis of Delaware’s default tax method.
Registered Agent
The in-state party designated to receive lawsuits and state mail for an entity.
Good Standing
A state’s certification that an entity is current on reports, taxes, and agent requirements.
Foreign Qualification
Registering an out-of-state entity to legally do business in another state.
Apportionment
How multi-state income is divided among states, usually by sales, property, and payroll factors.
Statement of Information
California’s $20 officer/address update filed with the Secretary of State.
EIN
Employer Identification Number: the federal tax ID every entity needs for banking and hiring.
Operating Agreement
The LLC’s internal contract: ownership, voting, distributions, dissolution.
Corporate Bylaws
A corporation’s internal operating rules adopted by the board.
83(b) Election
Tax restricted founder stock at grant value by filing within 30 days of issuance.
BOI Reporting
Beneficial Ownership Information reports to FinCEN, since August 2026, required only of foreign companies registered in a US state.
S-Corp Election
Federal Form 2553 pass-through election: 1.5% California tax instead of LLC gross-receipts fees.
C-Corporation
Separately taxed entity (21% federal; 8.84% CA; 8.7% DE apportioned): the venture standard.
LLC
Limited Liability Company: pass-through by default with a liability shield.
Charging Order
A creditor’s lien on LLC distributions, in Wyoming, the exclusive remedy with lifetime protection.
Piercing the Corporate Veil
Courts ignoring the entity to reach owners, usually for commingling or undercapitalization.
Dissolution
Formal termination ending future taxes and reports: dormancy is not dissolution.
Redomestication (Conversion)
Moving an entity’s domicile between states while preserving EIN, history, and contracts.
Par Value
Nominal per-share value in the charter (often $0.00001), distinct from market value.
Gross Receipts
Total revenue before deductions: the base California’s LLC fee keys off (plus COGS).
Schedule L (Form 1120)
The corporate balance sheet: Line 15d total assets feeds Delaware APV math.
Texas Margin Tax
Texas’s gross-receipts-based business tax with a no-tax-due threshold ($2.65M for 2026–2027 reports).
Nevada Commerce Tax
Nevada’s industry-rated gross-revenue tax above a $4M exemption.
Article 9-A (NY)
New York’s corporate franchise tax article: 6.5% business income base or a $25–$200,000 fixed dollar minimum, whichever is higher.
No-Tax-Due Threshold (TX)
Indexed Texas revenue line ($2.65M for 2026–2027 reports) under which margin tax is $0, but the PIR is still due.
Public Information Report (TX PIR)
Texas Form 05-102 listing officers/directors: mandatory every year, even at $0 tax.
Form 3536 Safe Harbor
Pay ≥100% of last year’s CA LLC fee by June 15 and the 10% underestimate penalty can’t apply.
Estimated Tax
Pay-as-you-go installments: California’s lopsided 30/40/0/30 pattern front-loads 70% by June.
Payroll Withholding
Income + FICA taxes remitted per paycheck: the trigger that creates nexus and the duty that proves payroll.
State Business License
The operating permit layer beneath entity registration: e.g. Nevada’s $200/$500 annual license.
Annual Report
The yearly state filing keeping entity data current, distinct from tax returns.
Certificate of Good Standing
State-issued proof an entity is current: demanded by banks, investors, and counterparties.
Single-Member LLC (SMLLC)
One-owner LLC, disregarded federally: profit lands on the owner’s return, but CA still charges $800 + fees.
DBA (Fictitious Business Name)
‘Doing business as’ registration letting an entity or sole prop operate under another name.
Domestication
A state-law procedure moving an entity’s domicile while preserving its legal continuity.
Registered Series (DE)
Individually registered cells of a Delaware Series LLC: $100 each per year under HB 400.
Close Corporation
A corporation with few shareholders operating with partnership-like informality under statute.
Benefit / Public Benefit Corporation
For-profit corporation with a stated public benefit purpose and stakeholder duties.
Nonprofit Corporation
Mission-driven corporation: Delaware exempts most from franchise tax but still requires the annual report.
LP vs LLP
Limited Partnership (passive investors + general partner liability) vs Limited Liability Partnership (professional firms, all-partner shield).
General Partnership
Default association of co-owners: no filing, no fee, no shield, every partner fully liable.
Sole Proprietorship
Unincorporated one-person business: zero formation cost, zero shield, Schedule C taxation.
Payroll Tax
Employer-side FICA (7.65%), unemployment insurance, and withholding remitted per pay run.
Unemployment Insurance (SUTA/FUTA)
Employer-paid jobless benefits funding: 6% federal (credited to 0.6%) plus state SUTA rates.
Sales Tax Permit
State permission to collect sales tax: required before the first taxable sale, not after.
Annual List (NV)
Nevada’s yearly officer/manager roster: $150, distinct from the business license and commerce tax.
Beneficial Owner (FinCEN)
Anyone with ≥25% ownership or substantial control: the persons BOI reporting names.