Our compact glossary on offshore company formation terms can be of help. The glossary containes 250 words and their definitions used in offshore business industry. You can easily find the most frequent business formation terms marked with * (asteric) in the glossary. The words’ list will be updated as the new terms come into use.
A certificate issued by a state official as conclusive evidence that a corporation is in existence or authorized to transact business in the state. The certificate generally sets forth the corporation’s name; that it is duly incorporated or authorized to transact business; that all fees, taxes and penalties owed to the state have been paid; that its most recent annual report has been filed; and, that articles of dissolution have not been filed. Also known as a certificate of existence or certificate of authorization.
The document filed in many states to create a corporation. It is given when the Registrar of Companies is satisfied that all the required documents have been submitted. The certificate means that the company has a separate legal identity, and in the case of a private limited company, can begin trading. See also the articles of incorporation or corporate charter.
A Certificate of Incumbency (CI) of a company (e.g., an International Business Company) is issued by its registered agent or authorities of the jurisdiction of incorporation. The document attests that the person(s) listed is (are) actually director(s) of the company.
The CI is often requested by local authorities when a foreign legal entity is forming a subsidiary as well as by banks and brokerages when opening an account with them.
Common shareholders select the directors to manage the corporation, are entitled to dividends out of the earnings of the corporation declared by the directors, and are entitled to a per share distribution of whatever assets remain upon dissolution of the corporation after satisfying creditors and holders of senior securities.
The law treats a corporation as a legal “person” that has standing to sue and be sued, distinct from its stockholders. The legal independence of a corporation prevents shareholders from being personally liable for corporate debts.
Although corporations have a double taxation problem (both corporate profits and shareholder dividends are taxed), corporate profits are taxed at a lower rate than rates for individuals.
Or the sale of a large amount of stock by a single entity over a period of time rather than all at once, to avoid adversely affecting its market price. Opposite to accumulation.
Official record of the events of a corporation, typically including all the events taking place at both shareholders’ meetings and board of directors’ meetings. Organizational minutes allow for the issuance of shares to shareholders, appoint directors and officers and approve the by-laws of the corporation. These records are usually kept in the corporations’ record book. Also called Organizational minutes or Corporate Minutes.
Resolution can also describe an official document representing an action on the part of the board of directors of a corporation.