This Borderless Founder glossary defines the 33 formation, tax, banking and compliance terms that most often confuse founders operating across borders - including EIN, ITIN, Form 5472, effectively connected income, franchise tax, registered agent, PSC and economic nexus. Each entry states what the term means and the practical consequence of getting it wrong.
Formation
Formation terms
8 terms.
Formation
EIN
An Employer Identification Number is a nine-digit number the IRS issues to identify a busi…Read definition →FormationRegistered agent
A registered agent is a person or company with a physical street address in your formation…Read definition →FormationForeign qualification
Foreign qualification is registering a company to do business in a state other than the on…Read definition →FormationOperating agreement
An operating agreement is the internal contract setting out how an LLC is owned and run - …Read definition →FormationArticles of organization
The articles of organization are the document filed with a state to create an LLC, typical…Read definition →FormationLLC
A limited liability company is a US business structure that separates the owners' personal…Read definition →FormationC corporation
A C corporation is a US company taxed separately from its owners, meaning profits can be t…Read definition →FormationResponsible party
The responsible party is the individual who ultimately owns or controls an entity, named o…Read definition →Tax
Tax terms
13 terms.
Tax
ITIN
An ITIN is a tax processing number the IRS issues to individuals who need a US taxpayer id…Read definition →TaxForm 5472
Form 5472 is an IRS information return reporting transactions between a US entity and its …Read definition →TaxDisregarded entity
A disregarded entity is a business the IRS looks through for income tax purposes, treating…Read definition →TaxEffectively connected income
Effectively connected income is income connected with the conduct of a US trade or busines…Read definition →TaxEconomic nexus
Economic nexus is a connection to a US state created by sales volume rather than physical …Read definition →TaxW-8BEN
Form W-8BEN is a certificate a foreign individual gives to a US payer to establish non-US …Read definition →TaxW-9
Form W-9 is a request for a taxpayer identification number and certification, used by a US…Read definition →TaxCFC rules
Controlled foreign company rules let a country tax its residents on profits held in a fore…Read definition →TaxPermanent establishment
A permanent establishment is a fixed place of business through which an enterprise carries…Read definition →TaxTax treaty
A tax treaty is an agreement between two countries allocating taxing rights over cross-bor…Read definition →TaxWithholding tax
Withholding tax is tax a payer deducts from a payment and remits directly to the tax autho…Read definition →TaxPro forma Form 1120
A pro forma Form 1120 is a partially completed US corporation income tax return used as a …Read definition →TaxMarketplace facilitator
A marketplace facilitator is a platform that facilitates sales for third-party sellers and…Read definition →Banking
Banking terms
2 terms.
Payments
Payments terms
1 term.
Compliance
Compliance terms
5 terms.
Compliance
Franchise tax
A franchise tax is an annual charge some US states levy for the privilege of existing as a…Read definition →ComplianceAnnual report
An annual report is a periodic filing confirming a company's current details with the stat…Read definition →ComplianceGood standing
Good standing means a company is up to date with the state that registered it - reports fi…Read definition →ComplianceAdministrative dissolution
Administrative dissolution is a state terminating a company's registration for non-complia…Read definition →ComplianceBOI report
A BOI report is a filing to FinCEN identifying the individuals who ultimately own or contr…Read definition →UK
UK terms
3 terms.
UK