Glossary of Business Terms
Ohio Secretary of State Business Glossary
This glossary defines key business terms and entity types as used by the Ohio Secretary of State’s office. It is designed to help individuals, business owners, and organizations understand the terminology used in business registration, filings, and entity management in Ohio.
A-C
Benefit Corporation
A benefit corporation is a type of for-profit business that includes one or more beneficial purposes in its articles of incorporation. These purposes aim to produce a positive impact on society, the environment, or other interests beyond generating profit for shareholders.
Beneficial Purpose
A beneficial purpose means pursuing a genuine positive effect—or reducing negative impacts—of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific, or technological nature that benefits others beyond shareholders.
Business Trust
A business trust is an unincorporated business association created through a trust instrument. Property is managed by trustees for the benefit of individuals who hold transferable shares of beneficial interest.
Certificate of Good Standing
A Certificate of Good Standing (also known as a Full Force and Effect Certificate or Certificate of Registration) confirms that a business entity is current with all required filings and taxes. Businesses can request a certificate from the Ohio Secretary of State.
Charitable Organization
A charitable organization is either:
A tax-exempt organization under IRS Section 501(c)(3), or
An entity established for benevolent, philanthropic, patriotic, educational, humane, or scientific purposes, or that uses charitable appeals to solicit donations.
Consolidation
Consolidation occurs when two or more entities combine into one new entity.
Example: Corporation A and Corporation B merge to form a new Corporation C.
Constituent Entity
Any entity involved in a merger, consolidation, or conversion is called a constituent entity.
Conversion
A conversion is the process of changing from one business entity type to another.
Example: A corporation converts into a Limited Liability Company (LLC).
Converting Entity
A converting entity is the original business that intends to change its structure (e.g., a corporation converting into an LLC).
Cooperative
A cooperative (formed under R.C. Chapter 1729) is a nonprofit corporation owned by its members, who receive patron dividends instead of profit-based distributions. It operates for the benefit of its members as patrons.
D-L
Domestic Business
A domestic business is an entity formed in the State of Ohio.
Fictitious Name
A fictitious name is a business name used by an entity that is not registered as a trade name. Registering a fictitious name does not grant exclusive rights to use it.
Foreign Business
A foreign business is an entity formed outside Ohio (in another state or country) that registers with the Ohio Secretary of State to conduct business in Ohio.
For-Profit Corporation
A for-profit corporation is a legal entity owned by shareholders and recognized as separate from its owners, who are not personally liable for its debts or actions.
General Partnership
A general partnership is a business formed by two or more co-owners who share profits and liabilities. Partners are personally responsible for all business debts.
Limited Liability Company (LLC)
An LLC combines elements of partnerships and corporations. Members are protected from personal liability, and the LLC may operate for profit or nonprofit purposes.
Limited Liability Partnership (LLP)
An LLP is a partnership in which all partners enjoy limited personal liability while participating in management.
Limited Partnership (LP)
A limited partnership includes one or more general partners (who manage and are liable) and one or more limited partners (who contribute capital and share profits but are not liable beyond their investment).
M-S
Merger
A merger occurs when two or more entities combine, and one survives as the resulting corporation.
Example: Corporation A merges into Corporation B, and Corporation B remains.
Name Reservation
A name reservation allows individuals to reserve a proposed LLC or corporation name for 180 days. This ensures the name’s availability before filing business formation documents.
Nonprofit Corporation
A nonprofit corporation operates not for profit and does not distribute earnings to members or officers, except as reasonable compensation for services.
Professional Corporation
A professional corporation (P.C.), formed under R.C. Chapter 1785, provides professional services (such as legal, medical, or accounting) as defined by Ohio law.
Real Estate Investment Trust (REIT)
A REIT is a trust that owns or operates income-producing real estate and issues transferable certificates of beneficial interest to investors.
Service Mark
A service mark identifies and distinguishes services (not products) of one provider from others.
Sole Proprietorship
A sole proprietorship is a business owned by one person, with no legal distinction between the owner and the business.
Statutory Agent
A statutory agent (also known as a registered agent) is the official contact authorized to receive legal notices and official documents on behalf of a business in Ohio.
T-Z
Trademark
A trademark identifies and distinguishes goods or products from those of others. It can include words, symbols, or designs that represent a brand.
Trade Name
A trade name designates the official business name used in commerce. Registration of a trade name grants the exclusive right to use that name in Ohio.