s Archives - IncNow https://www.incnow.com/glossary/ Delaware LLC Incorporation Services Wed, 31 May 2023 14:21:57 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.2 Subsidiary https://www.incnow.com/glossary/subsidiary/ Sat, 19 Oct 2013 02:09:43 +0000 http://www.incnow.com/?post_type=glossary&p=991 A business that is mostly or completely owned by another business (see “Umbrella Organization”).

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]]> A business that is mostly or completely owned by another business (see “Umbrella Organization”).

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]]> Subchapter S-Election https://www.incnow.com/glossary/subchapter-s-election/ Sat, 19 Oct 2013 02:09:25 +0000 http://www.incnow.com/?post_type=glossary&p=987 (Also referred to as an S-Election) – The election by stockholders of a company or LLC members with one or more U.S. citizens or permanent residents that results in the passing-through of a corporation’s taxable income to the stockholders. Trusts, corporations, and non-U.S. citizens cannot be stockholders or LLC members without disqualifying the S-Election.

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]]> (Also referred to as an S-Election) – The election by stockholders of a company or LLC members with one or more U.S. citizens or permanent residents that results in the passing-through of a corporation’s taxable income to the stockholders. Trusts, corporations, and non-U.S. citizens cannot be stockholders or LLC members without disqualifying the S-Election.

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]]> Statutory Trust https://www.incnow.com/glossary/statutory-trust/ Sat, 19 Oct 2013 02:09:03 +0000 http://www.incnow.com/?post_type=glossary&p=988 Formerly known as “Business Trusts”, statutory trusts are designed for financing purposes to hold a single significant asset, such as a cruise ship, aircraft, or office tower.

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]]> Formerly known as “Business Trusts”, statutory trusts are designed for financing purposes to hold a single significant asset, such as a cruise ship, aircraft, or office tower.

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]]> Statute of Frauds https://www.incnow.com/glossary/statute-frauds/ Sat, 19 Oct 2013 02:08:00 +0000 http://www.incnow.com/?post_type=glossary&p=983 Legal requirements that certain contracts be in writing, for example contracts for sale of real estate and sale of goods over $500. The Delaware LLC Act has waived these requirements for a Delaware LLC Operating Agreement.

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]]> Legal requirements that certain contracts be in writing, for example contracts for sale of real estate and sale of goods over $500. The Delaware LLC Act has waived these requirements for a Delaware LLC Operating Agreement.

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]]> Springing Member LLC https://www.incnow.com/glossary/springing-member-llc/ Sat, 19 Oct 2013 02:07:30 +0000 http://www.incnow.com/?post_type=glossary&p=979 Required by lenders in special financing transactions, this is a Single Member LLC Operating Agreement which contains a second non-equity special member (an unrelated party) whose primary function is to “spring into action” should the single member go into bankruptcy, or other related triggers. The LLC Operating Agreement restricts the sole-equity member’s ability the LLC […]

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]]> Required by lenders in special financing transactions, this is a Single Member LLC Operating Agreement which contains a second non-equity special member (an unrelated party) whose primary function is to “spring into action” should the single member go into bankruptcy, or other related triggers. The LLC Operating Agreement restricts the sole-equity member’s ability the LLC should the single member be unable to operate the entity. This is often required to be the form of entity, should the lender repackage or bundle the loan subject to certain restrictions to be sold as a marketable security. The primary purpose is to avoid the assets of the LLC from becoming part of its member’s bankruptcy estate. These LLCs are usually used in loans over $4 million. They also require attorney opinion letters from counsel where the property is located and in the state of incorporation. Lenders also require these be Delaware LLCs.

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]]> Sole Proprietorship https://www.incnow.com/glossary/sole-proprietorship/ Sat, 19 Oct 2013 02:06:35 +0000 http://www.incnow.com/?post_type=glossary&p=978 An individually-owned business that is not incorporated or is a one-member LLC. The owner (“sole proprietor”) is held 100% personally liable for all business debts and expenses unless they form an LLC.

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]]> An individually-owned business that is not incorporated or is a one-member LLC. The owner (“sole proprietor”) is held 100% personally liable for all business debts and expenses unless they form an LLC.

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]]> Sole Proprietor https://www.incnow.com/glossary/sole-proprietor/ Sat, 19 Oct 2013 02:06:03 +0000 http://www.incnow.com/?post_type=glossary&p=975 1. This literally means a “one owner” business. Usually, this refers to an unincorporated business. The operator/owner is held fully liable for all business debts and expenses of the company. 2. In the context of taxation, it can refer to a Single Member LLC taxed as a sole proprietorship, where the income and expenses go […]

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]]> 1. This literally means a “one owner” business. Usually, this refers to an unincorporated business. The operator/owner is held fully liable for all business debts and expenses of the company.
2. In the context of taxation, it can refer to a Single Member LLC taxed as a sole proprietorship, where the income and expenses go on the individual’s Schedule C of his or her Form 1040 tax return. Although, this often referred to as a “disregarded entity” that is only for tax purposes. For liability protection, a single member LLC is still regarded as an entity separate from its member.

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]]> Single Member LLC https://www.incnow.com/glossary/single-member-llc/ Sat, 19 Oct 2013 02:04:35 +0000 http://www.incnow.com/?post_type=glossary&p=974 An LLC with one owner. Also known as a member.

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]]> An LLC with one owner. Also known as a member.

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]]> Single Purpose LLC https://www.incnow.com/glossary/single-purpose-llc/ Sat, 19 Oct 2013 02:04:11 +0000 http://www.incnow.com/?post_type=glossary&p=971 While most LLCs have general purposes that allow the LLC to engage in any purpose authorized by law, some LLCs used for special investor financing, including securitized transactions, have a very specific purpose, such as to just own and manage one defined property. Often lender requirements put other restrictions on the LLC, such as limitations […]

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]]> While most LLCs have general purposes that allow the LLC to engage in any purpose authorized by law, some LLCs used for special investor financing, including securitized transactions, have a very specific purpose, such as to just own and manage one defined property. Often lender requirements put other restrictions on the LLC, such as limitations on the ability of the member to amend the agreement without the lender’s consent.

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]]> Shelf Company https://www.incnow.com/glossary/shelf-company/ Sat, 19 Oct 2013 02:03:53 +0000 http://www.incnow.com/?post_type=glossary&p=968 This is a company that is active in the eyes of the state, but does not actually carry out business. One purpose is to sell a company with a history to new businesses.

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]]> This is a company that is active in the eyes of the state, but does not actually carry out business. One purpose is to sell a company with a history to new businesses.

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