Business formation glossary: every acronym a registry will throw at you, in plain language.

A business formation glossary: entity forms, tax concepts, compliance regimes, filings, structures and jurisdiction programmes , defined once, properly, with the distinctions that actually matter.

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All terms

• Aktiengesellschaft AG
  Aktiengesellschaft is the German public limited company by shares, used by listed corporations and large private groups that need freely transferable equity.
• Aktsiaselts AS
  Aktsiaselts is a joint stock company under the laws of countries including Estonia, Norway, Czechia, and Denmark, used for larger companies and listed entities.
• Anonim Sirketi AS
  Anonim Sirketi is the Turkish joint stock company, used for regulated sectors, capital markets activity, and groups planning to issue freely transferable shares.
• Besloten Vennootschap BV
  Besloten Vennootschap is the Dutch private limited liability company, the standard Dutch operating and holding company form for SMEs and foreign-owned subsidiaries.
• C-Corporation C-Corp
  C-Corporation is a US corporation taxed separately from its owners under Subchapter C, the standard form for venture-backed and publicly traded companies.
• DMCC Free Zone Company DMCC FZCO
  DMCC Free Zone Company is a Dubai free-zone company licensed by DMCC, offering 100 percent foreign ownership, zero personal income tax, and a long-running free zone reputation.
• Gesellschaft mit beschrankter Haftung GmbH
  Gesellschaft mit beschrankter Haftung is the standard German private limited liability company, used by most domestic SMEs and foreign-owned operating subsidiaries.
• Limited Company Ltd
  Limited Company is a UK private company limited by shares, the standard incorporation form for British SMEs and the typical "Ltd" suffix.
• Limited Liability Company LLC
  Limited Liability Company is a US business structure that combines the liability protection of a corporation with the tax flexibility and informality of a partnership.
• Limited Liability Partnership LLP
  Limited Liability Partnership is a partnership where every partner has limited liability for the firm's debts and for the malpractice of other partners, common in professional services.
• Limited Partnership LP
  Limited Partnership is a partnership with at least one general partner who manages the business and bears unlimited liability, plus passive limited partners with capped risk.
• Limited Sirketi Ltd Sti
  Limited Sirketi is the Turkish limited liability company, the standard private company form for SMEs and foreign-owned operating subsidiaries in Turkey.
• Naamloze Vennootschap NV
  Naamloze Vennootschap is the Dutch public limited company by shares, used for listed companies, regulated sectors, and groups requiring freely transferable bearer or registered shares.
• Osauhing OU
  Osauhing is the Estonian private limited company, the workhorse entity for Estonian SMEs and remote founders using the e-Residency program.
• Private Limited Company (Singapore) Pte Ltd
  Private Limited Company (Singapore) is the Singapore private limited company, the dominant entity form for both local SMEs and regional headquarters in Southeast Asia.
• Public Limited Company PLC
  Public Limited Company is a UK public company limited by shares that can offer shares to the public and list on the London Stock Exchange.
• S-Corporation S-Corp
  S-Corporation is a US small-business corporation that elects pass-through taxation under Subchapter S, capped at 100 shareholders who must be US persons.
• Sociedade por Quotas Lda
  Sociedade por Quotas is the Portuguese private limited company by quotas, the standard form for Portuguese SMEs and foreign-owned operating companies.
• Sociedade Unipessoal por Quotas Unipessoal Lda
  Sociedade Unipessoal por Quotas is the Portuguese single-member private limited company, allowing one person to operate with limited liability under the same Lda regime.
• Societas Europaea SE
  Societas Europaea is a pan-European public limited company that can move its registered office between EU member states without dissolution and reincorporation.

• Arm's Length Principle ALP
  Arm's Length Principle is the international standard requiring related-party transactions to be priced as if they occurred between independent, unrelated parties.
• Base Erosion and Profit Shifting BEPS
  Base Erosion and Profit Shifting is the OECD-led project addressing tax planning strategies that exploit gaps and mismatches between tax rules to shift profits to low-tax locations.
• Bilateral Tax Treaty
  Bilateral Tax Treaty is an international agreement between two states that allocates taxing rights over cross-border income and provides relief from double taxation.
• Controlled Foreign Company Rules CFC
  Controlled Foreign Company Rules are anti-deferral tax rules that attribute the passive or low-taxed income of a foreign subsidiary to its domestic parent, even without distribution.
• Corporate Income Tax CIT
  Corporate Income Tax is a direct tax levied on the net profits of a company by the country where it is resident or has taxable presence.
• Dividend Tax
  Dividend Tax is tax levied on profit distributions made by a company to its shareholders, either at the corporate, withholding, or shareholder level.
• Double Taxation Avoidance Agreement DTAA
  Double Taxation Avoidance Agreement is a bilateral treaty allocating taxing rights between two countries to prevent the same income being taxed twice.
• Effective Tax Rate ETR
  Effective Tax Rate is the actual rate of tax a company pays on its accounting or economic profit, reflecting deductions, credits, and timing differences.
• Flat Tax
  Flat Tax is a tax system that applies a single uniform rate to all taxable income, without progressive brackets and often with limited deductions.
• German Trade Tax
  German Trade Tax is a municipal business tax in Germany, levied on the profits of commercial enterprises in addition to federal corporate or income tax.
• Goods and Services Tax GST
  Goods and Services Tax is a broad-based consumption tax, similar in mechanics to VAT, used in countries such as Australia, India, Singapore, Canada, and New Zealand.
• OECD Pillar Two
  OECD Pillar Two is the OECD/G20 framework imposing a 15% global minimum effective tax rate on large multinational groups via the GloBE rules.
• Participation Exemption
  Participation Exemption is a tax regime that exempts dividends and capital gains on qualifying shareholdings from corporate income tax to avoid economic double taxation.
• Permanent Establishment PE
  Permanent Establishment is a taxable presence in another country that gives the source state the right to tax part of a foreign enterprise's business profits.
• Tax Haven
  Tax Haven is an informal label for jurisdictions offering low or zero tax, strong secrecy, or limited substance requirements, attracting non-resident capital.
• Tax Residency
  Tax Residency is the status that determines which country has the primary right to tax a person or company on their worldwide income.
• Territorial Tax System
  Territorial Tax System is a tax system that taxes only income sourced within the country and generally exempts foreign-source income of resident companies.
• Transfer Pricing TP
  Transfer Pricing is the set of rules governing the prices charged on transactions between related entities of the same multinational group.
• US Sales Tax
  US Sales Tax is a single-stage consumption tax levied by US states and local jurisdictions on the retail sale of tangible personal property and some services.
• Value Added Tax VAT
  Value Added Tax is a consumption tax charged at each stage of the supply chain on the value added to goods and services, ultimately borne by the end consumer.
• Withholding Tax WHT
  Withholding Tax is tax deducted at source by the payer on cross-border or domestic payments such as dividends, interest, and royalties.
• Worldwide Tax System
  Worldwide Tax System is a tax system that taxes residents on their global income, with foreign tax credits used to relieve double taxation.

• Annual Return
  Annual Return is the yearly statutory filing in which a company confirms its registered information (officers, shareholders, address, share capital) to the company registry.
• Anti-Money Laundering AML
  Anti-Money Laundering is the body of laws, regulations, and procedures designed to detect and prevent the conversion of illicit funds into ostensibly legitimate assets.
• California Consumer Privacy Act CCPA
  California Consumer Privacy Act is the California state law (in force since 2020, expanded by the CPRA in 2023) granting consumers rights over the personal information businesses collect about them.
• Common Reporting Standard CRS
  Common Reporting Standard is the OECD multilateral framework for the automatic exchange of financial account information between tax authorities.
• Compliance Calendar
  Compliance Calendar is a consolidated schedule of every recurring legal, tax, and regulatory deadline a company must meet across its jurisdictions of operation.
• Corporate Governance
  Corporate Governance is the system of rules, practices, and processes by which a company is directed and controlled, balancing the interests of shareholders, management, and other stakeholders.
• Customer Due Diligence CDD
  Customer Due Diligence is the standard onboarding and monitoring process applied to normal-risk customers under AML rules.
• Data Controller
  Data Controller is the natural or legal person that, alone or jointly with others, determines the purposes and means of personal data processing under GDPR.
• Data Processor
  Data Processor is a natural or legal person that processes personal data on behalf of a controller, only on documented instructions, under a binding GDPR Article 28 agreement.
• Data Protection Officer DPO
  Data Protection Officer is the independent advisor a controller or processor must appoint under GDPR Article 37 in defined circumstances, responsible for monitoring data-protection compliance.
• Enhanced Due Diligence EDD
  Enhanced Due Diligence is a stricter level of customer scrutiny applied to higher-risk relationships, typically including source-of-wealth checks and senior management approval.
• FinCEN Beneficial Ownership Information report BOI
  FinCEN Beneficial Ownership Information report is the US federal filing required from most companies under the Corporate Transparency Act, disclosing the natural persons who ultimately own or control the entity.
• Foreign Account Tax Compliance Act FATCA
  Foreign Account Tax Compliance Act is a 2010 US tax law that requires foreign financial institutions to identify and report financial accounts held by US persons.
• General Data Protection Regulation GDPR
  General Data Protection Regulation is the EU regulation governing personal data processing, in force since 25 May 2018, with extraterritorial reach over any controller or processor handling EU residents' data.
• Know Your Customer KYC
  Know Your Customer is the set of identification, verification, and risk-assessment procedures regulated firms must run before onboarding a customer.
• Sanctions Screening
  Sanctions Screening is the process of checking customers, counterparties, and transactions against government sanctions lists (OFAC SDN, EU consolidated list, UN sanctions, UK OFSI list).
• Sarbanes-Oxley Act SOX
  Sarbanes-Oxley Act is the 2002 US federal law that overhauled financial reporting and corporate governance for public companies after the Enron and WorldCom collapses.
• Statutory Audit
  Statutory Audit is an independent examination of a company's financial statements required by law to express an opinion on whether they give a true and fair view.
• Ultimate Beneficial Owner UBO
  Ultimate Beneficial Owner is the natural person who ultimately owns or controls a company, typically through a 25 percent or greater equity or voting threshold.
• Whistleblower Protection
  Whistleblower Protection is the legal regime that shields employees and other insiders from retaliation when they report misconduct, illegality, or threats to the public interest.

• 10-K 10-K
  10-K is the annual report filed by every US public company with the Securities and Exchange Commission, providing audited financial statements and a comprehensive overview of the business.
• 10-Q 10-Q
  10-Q is the quarterly report filed by US public companies with the SEC, containing unaudited financial statements and updates on material events for the most recent fiscal quarter.
• 8-K 8-K
  8-K is a real-time SEC filing used by US public companies to disclose specified material events such as acquisitions, executive departures, earnings releases, and bankruptcies, generally within four business days.
• Annual Accounts
  Annual Accounts are the audited or unaudited financial statements that UK and many Commonwealth companies must prepare each year, file with Companies House, and (where required) send to shareholders and HMRC.
• Apostille
  Apostille is a standardized international certification under the 1961 Hague Convention that authenticates a public document for use in another member country without further legalization.
• Articles of Association AoA
  Articles of Association is the internal constitutional document of a UK or Commonwealth-style company, governing share rights, board powers, meetings, and decision-making.
• Articles of Incorporation
  Articles of Incorporation is the founding charter document filed with a US state to legally create a corporation, setting out its name, purpose, registered agent, and authorized share structure.
• Articles of Organization
  Articles of Organization is the state filing that creates a Limited Liability Company (LLC), naming the entity, its registered agent, and its members or managers.
• Certificate of Good Standing COGS
  Certificate of Good Standing is a government-issued certificate confirming that a company is properly registered, has filed all required reports, and has paid all fees and franchise taxes due.
• Confirmation Statement CS01
  Confirmation Statement is the annual UK Companies House filing in which every UK company confirms that the registry-held information about it - directors, shareholders, registered office, SIC codes, and people with significant control - is up to date.
• Corporate Bylaws
  Corporate Bylaws are the internal rulebook adopted by a corporation that governs board meetings, officer roles, shareholder votes, and committee structure.
• DEF 14A DEF 14A
  DEF 14A is the definitive proxy statement filed with the SEC ahead of a US public company annual meeting, disclosing executive compensation, board nominees, and shareholder voting items.
• Employer Identification Number EIN
  Employer Identification Number is a nine-digit federal tax identification number issued by the US Internal Revenue Service to identify a business entity for tax, payroll, and banking purposes.
• Form D Form D
  Form D is a short SEC notice filed by US private issuers within 15 days of selling securities under Regulation D, the most common exemption from full SEC registration used by startups raising venture capital.
• Individual Taxpayer Identification Number ITIN
  Individual Taxpayer Identification Number is a nine-digit IRS tax processing number issued to individuals who must file US taxes but are not eligible for a Social Security Number, including many non-resident foreign founders.
• Memorandum of Association MoA
  Memorandum of Association is a foundational charter document used in UK, Commonwealth, and many other jurisdictions to register a company, traditionally listing the subscribers and the company objects.
• MERSIS MERSIS
  MERSIS is the central electronic registry system operated by the Turkish Ministry of Trade where every Turkish company is registered and assigned a unique 16-digit MERSIS number.
• Numero de Identificacao Fiscal NIF
  Numero de Identificacao Fiscal is the Portuguese tax identification number issued by the Autoridade Tributaria e Aduaneira to individuals and entities for all tax, banking, and contracting purposes.
• Operating Agreement
  Operating Agreement is a private written contract among the members of an LLC that governs ownership percentages, profit allocation, voting rights, management, and exit terms.
• S-1 S-1
  S-1 is the SEC registration statement that a US private company files to take its shares public for the first time, the central document of an Initial Public Offering.

• Associate Company
  Associate Company is a company in which an investor holds significant influence, typically through 20-50% of voting rights, without controlling it.
• Branch Office
  Branch Office is a foreign extension of a parent company that conducts business locally without forming a separate legal entity.
• Capitalization Table Cap Table
  Capitalization Table is a document showing all of a company's securities, who owns them, on what terms, and the resulting ownership percentages.
• Dual-Class Share Structure
  Dual-Class Share Structure is a capital structure with two or more classes of shares carrying different voting rights for the same economic interest.
• Holding Company
  Holding Company is a parent entity that owns controlling stakes in other companies but typically does not produce goods or services itself.
• Joint Venture JV
  Joint Venture is a business arrangement where two or more parties contribute resources to a shared entity or project under joint control.
• Liaison Office
  Liaison Office is a non-trading representative office of a foreign company used for marketing, research, and coordination without generating revenue.
• Nominee Director
  Nominee Director is a director who serves on a board on behalf of and under the instructions of a third party, often a shareholder.
• Nominee Shareholder
  Nominee Shareholder is a person or company that holds shares in its own name on behalf of the beneficial owner under a declaration of trust.
• Parent Company
  Parent Company is a company that owns enough voting shares in another company to control its board and financial policies.
• Registered Agent RA
  Registered Agent is a person or company designated to receive legal and tax documents on behalf of a business in its state of formation.
• Registered Office
  Registered Office is the official address of a company on the corporate registry, used for legal correspondence and statutory notices.
• Reverse Merger
  Reverse Merger is a transaction where a private company becomes publicly listed by merging into an existing public shell company.
• Special Purpose Acquisition Company SPAC
  Special Purpose Acquisition Company is a blank-check company that raises capital in an IPO with the sole purpose of later acquiring a private operating business.
• Special Purpose Vehicle SPV
  Special Purpose Vehicle is a separate legal entity created to isolate a specific transaction, asset, or risk from its sponsor's balance sheet.
• Subsidiary
  Subsidiary is a company controlled by another company, called its parent, usually through majority ownership of voting shares.
• Super-Voting Shares
  Super-Voting Shares are a class of equity carrying multiple votes per share, typically held by founders to preserve control after dilution.
• Variable Interest Entity VIE
  Variable Interest Entity is an entity consolidated by an investor under US GAAP based on economic exposure rather than majority voting equity.
• Virtual Office
  Virtual Office is a service that provides a business address, mail handling, and sometimes meeting rooms without dedicated physical premises.
• Wholly-Owned Subsidiary WOS
  Wholly-Owned Subsidiary is a subsidiary whose voting shares are 100% owned by a single parent company, leaving no minority shareholders.

• ADGM ADGM
  ADGM is an Abu Dhabi international financial centre and free zone with its own English-common-law courts and regulator (FSRA), used for fund management, fintech, and holding structures.
• BVI Business Company BC
  BVI Business Company is a flexible British Virgin Islands company governed by the BVI Business Companies Act, widely used for joint ventures, holding structures, and private SPVs because of its simplicity and English-common-law base.
• Cayman Exempted Company
  Cayman Exempted Company is a Cayman Islands company whose operations are conducted mainly outside the Cayman Islands and which benefits from a 20-year tax exemption undertaking, used for funds, SPVs, and joint ventures.
• DAFZA DAFZA
  DAFZA is a Dubai free zone adjacent to Dubai International Airport, designed for logistics, aviation, pharmaceuticals, electronics, and re-export businesses needing fast cargo access.
• Delaware C-Corp Domicile
  Delaware C-Corp Domicile is a C-Corporation incorporated in Delaware, the dominant US state of incorporation for venture-backed startups and public companies thanks to its specialized Court of Chancery and predictable corporate law.
• DIFC DIFC
  DIFC is a Dubai financial free zone with its own English-common-law courts and regulator (DFSA), hosting banks, asset managers, insurers, fintech firms, and holding structures.
• DMCC DMCC
  DMCC is a Dubai government free zone authority hosting more than 24,000 member companies, originally focused on commodities trading and now covering general trade, services, crypto, and holding structures.
• Economic Substance ESR
  Economic Substance is a set of rules requiring companies in low-tax or zero-tax jurisdictions to demonstrate real local activity, including staff, premises, and decision-making, in order to enjoy preferential tax treatment.
• Estonia e-Residency
  Estonia e-Residency is a government-issued digital identity from Estonia that gives non-residents secure access to Estonian e-services, including company registration and signing documents online, without granting physical residency or citizenship.
• Free Trade Zone FTZ
  Free Trade Zone is a US Customs-supervised area where imported goods are treated as outside US customs territory for duty purposes, allowing duty deferral, reduction, or elimination on re-exported merchandise.
• Free Zone
  Free Zone is a geographically defined area where companies operate under a separate regulatory and tax regime, typically with 0 percent corporate tax, full foreign ownership, and customs exemptions.
• Golden Visa
  Golden Visa is a residency permit granted to non-citizens in exchange for a qualifying investment, real estate purchase, or capital deposit, often leading to permanent residency or citizenship after a defined period.
• JAFZA JAFZA
  JAFZA is the flagship Dubai industrial free zone next to Jebel Ali Port and Al Maktoum International Airport, used by manufacturers, traders, and logistics companies needing sea-air-land connectivity.
• Madeira IBC IBC
  Madeira IBC is an EU-approved tax regime in the Portuguese island of Madeira offering 5 percent corporate tax on qualifying activities, subject to job creation and substance requirements.
• NHR (Portugal Non-Habitual Resident) NHR
  NHR (Portugal Non-Habitual Resident) is a legacy 10-year Portuguese tax regime granting reduced or zero tax on foreign-sourced income and a flat 20 percent rate on Portuguese employment income from high-value-added activities.
• Offshore Jurisdiction
  Offshore Jurisdiction is a country or territory offering favorable tax, secrecy, and corporate flexibility regimes to non-resident companies whose business activity occurs primarily outside the jurisdiction.
• Onshore Jurisdiction
  Onshore Jurisdiction is a standard tax-resident jurisdiction where companies are subject to the country general corporate tax regime, public registries, and full regulatory framework, with no special non-resident carve-out.
• UAE Mainland
  UAE Mainland is a UAE company licensed by an emirate Department of Economic Development (DED), able to trade freely across the UAE, hold government contracts, and now allow 100 percent foreign ownership in most activities.

New terms as the rules change

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