Guide 37 · Reference layer
Glossary: US formation terms for foreign founders
Every form, bank and provider in this market speaks in abbreviations coined for domestic readers. This glossary defines the terms a foreign founder actually meets — in the order the journey presents them — with each definition kept to what the term means for a company owned from abroad. First use in any guide on this site links back here.
On this page
Formation and identity terms
Articles of Organization. The state filing that creates an LLC (a corporation files Articles — or a Certificate — of Incorporation). The stamped copy returned by the state is your proof of formation. Operating agreement. The private contract among the members that governs ownership, management and exits; not filed with the state. See our guide. Registered agent. The person or company named in the state record to receive legal process and official mail for your company, at an address in the formation state. Mandatory in every state. EIN. Employer Identification Number — the company's federal tax number, issued by the IRS on Form SS-4. Needed for banking, Stripe, marketplaces and filings. ITIN. Individual Taxpayer Identification Number — a personal tax-processing number for people ineligible for an SSN who have a US tax filing need. Not required to form a company or obtain an EIN; see our W-7 guide.
Responsible party. The individual the IRS records as controlling the entity for EIN purposes — for a founder company, the true owner. Nominees are prohibited. CP 575. The IRS letter confirming your EIN. Form 147C. The IRS's replacement confirmation when the CP 575 is lost. Disregarded entity. A single-member LLC whose income and expenses are treated for federal tax purposes as the owner's directly, unless it elects corporate treatment. Beneficial owner. The human who ultimately owns or controls a company; banks and marketplaces verify this person.
Federal tax terms
Form 5472. The IRS information return a foreign-owned US company files (with a pro-forma Form 1120) reporting transactions with its owner and related parties; due even with no trading; penalty from $25,000. See our explainer. Pro-forma Form 1120. The corporation return filed in skeleton form — name, address, EIN — solely to carry the 5472 for a disregarded LLC. Form 1040-NR. The personal income tax return for nonresident aliens, due when the founder personally has taxable US income. ECI. Effectively connected income — income connected with a US trade or business, taxed on a net basis. FDAP. Fixed, determinable, annual or periodical income — US-source interest, dividends, rent and royalties, generally withheld at 30% gross. Our 1040-NR guide separates the two.
W-8BEN-E. The form a foreign-owned entity gives US payers to certify its foreign status for withholding and reporting; given to the payer, not filed with the IRS. W-9. The equivalent certification for US persons — a foreign-owned disregarded entity does not sign one for itself. Form 1099-K. The information return payment processors and marketplaces issue reporting your gross payment volume under the company's EIN. Form 8833. The disclosure filed with a return when a treaty position overrides or reduces US tax. BOI report. The FinCEN beneficial-ownership report; companies formed in the US by foreign owners meeting the rules file it — our BOI guide carries the current position.
State and ongoing terms
Annual report. The recurring state filing (name varies: statement of information, franchise tax report) that keeps the company active. Franchise tax. A state's charge for the privilege of existing — Delaware's flat LLC tax is the famous one. Good standing. The state's confirmation — often a purchasable certificate — that the company exists and is compliant. See our guide. Foreign qualification. Registering your company in a second state where it does business; 'foreign' here means out-of-state, not overseas. Administrative dissolution. The state striking off a company that stopped filing or paying — reversible by reinstatement, at a price. Nexus. The connection (physical presence, inventory, sales volume) that subjects a company to a state's taxes.
Apostille. The certification that makes a US document acceptable to a foreign authority under the Hague Convention — our guide covers when founders need one. DBA. 'Doing business as' — a registered trade name different from the legal name. Series LLC. An LLC form in some states holding multiple segregated series under one filing. S corporation. A corporation (or electing LLC) taxed on a pass-through basis — unavailable where any shareholder is a nonresident alien, which is why it rarely appears in this market honestly explained.
How to use this glossary
Where a definition here and a definition on a government page differ, the government page wins — the IRS glossary and your formation state's business portal are the primary sources. This page is Sethhost's orientation layer: it exists so the guides can use the market's own vocabulary without stopping to translate it, and it is reviewed when the underlying rules change. For the terms as they apply to one decision at a time, the readiness check and the quiz on this site translate your answers into the short list of obligations your company actually carries.
Verification. Definitions checked 2026-11-12 against IRS.gov (EIN, ITIN, Forms 5472/1040-NR/W-8BEN-E/1099-K), FinCEN's BOI pages, and state business-portal usage for annual report, good standing and foreign qualification.
Reading is step one. The paperwork is the rest.
Sethhost handles formation paperwork, the EIN workflow, registered agent service, your website, a US number, and a compliance calendar — one company, one bill. Hosted is $79 per month and formation is included in your first term; the state filing fee is always shown separately.