Glossary of most frequent business formation terms

A B C D E F G H I J L M N O P Q R S T U V W

-F-

Fictitious Name

Fiduciary

Fiduciary relationship

Fiscal Year (FY)

Federal Tax Identification Number

Foreign Corporation

Franchise Tax

 

-F-

 

Fictitious Name

See assumed name.

 

Fiduciary

An individual, corporation or association holding assets for another party, often with the legal authority and duty to make decisions regarding financial matters on behalf of the other party.

 

Fiduciary relationship

A relationship in which an individual, corporation or association (fiduciary) manage assets for another person (principal) beneficial to his/her interests.

 

Fiscal Year (FY)

A corporation's accounting year. 12 consecutive months ending on the last day of any month and chosen by a business as the accounting period for annual reports. The fiscal year serves as a period of reference for the company and does not necessarily correspond to the calendar year.

 

Federal Tax Identification Number

The Social Security number of an individual or the Employer Identification Number (EIN) of a business, fiduciary or other organization. The federal government gives an EIN for tax purposes. Banks generally require a tax identification number to open bank accounts. 

 

Foreign Corporation

A corporation that operates in a state other than its state of incorporation; the state in which it operates refers out-of-state corporations as “foreign.” In order to conduct business in another state, it must register for a certificate of authority to conduct business in the other state or possibly lose access to that state's courts and face fines. The term also refers to corporations chartered in foreign nations. Opposite of Domestic Corporation.

Fractional share

Stocks amounting to less than one full share, usually resulting from splits, acquisitions, exchanges, or dividend reinvestment programs.

 

Franchise Tax

A tax or fee on the privilege, imposed by a state government on a corporation, limited liability company or similar business entity for the right to exist or do business in a state. The value of the franchise tax may be measured by amount of earnings, assets, total value of capital or stock, or by amount of business done. Failure to pay the franchise tax or similar fees may result in the administration dissolution of the company and forfeiture of the charter.