LEGAL DEFINITIONS 
(L-Z)

MANAGERS: A person who is not a member of the LLC but runs the business. This is done when the members of the LLC want a nonmember to run the operations.

 

MEMBERS: The subscriber(s) to a firm’s memorandum of association who deemed to have agreed to become a member of the firm, and whose name is entered in the firm’s register of members when the firm is registered.

 

MEMBERS’ PERCENTAGE INTERESTS: LLC ownership can be expressed in two ways: (1) by percentage; and (2) by membership units, which are similar to shares of stock in a corporation. In either case, ownership confers the right to vote and the right to share in profits.

 

MULTI-MEMBER: A limited liability company that has more than one member.

 

OPERATING AGREEMENT: An agreement among limited liability company members governing the LLC’s business, and members’ financial and managerial rights and duties.

 

ORGANIZERS: Individuals or business entities that play key roles in forming limited liability companies (LLCs).

POWER OF ATTORNEY (used only if the seller will not be attending the Closing): A written consent signed by the seller giving the law firm authority to represent the seller during the Closing.

 

PRINCIPAL PLACE OF BUSINESS: The primary location where a taxpayer’s business is performed.

PROPERTY: Any tangible personal items or real estate you currently own (i.e., homes, money, jewelry, artwork, automobiles, etc.).

PROPERTY INSPECTION: A limited and non-invasive examination of the condition of a property.

 

PROPERTY INSPECTION REPORT: A written report with information and color pictures describing the condition of a property. This report is usually valid for sixty (60) days.

PROXY: A person who is designated by another to represent that individual at a meeting or before a public body. It also refers to the written authorization allowing one person to act on behalf of another.

 

PURPOSE: The reason for which the business is created.

 

QUORUM: The minimum number of people who must be present to pass a law, make a judgement, or conduct business.

 

REGISTERED AGENT:  The person designated by a limited liability company to receive legal papers that are served on the company.

RESIDENTIAL DISCLOSURE STATEMENT: A document owners of residential real estate (single family homes, individual condominiums, townhouses, etc., and buildings with up to four dwelling units) must give the buyer.

 

RIGHT OF FIRST REFUSUAL: A contractual right of an entity to be given the opportunity to enter into a business transaction with a person or company before anyone else can.

 

SHARES: One of the equal parts into which a company’s capital is divided, entitling the holder to a proportion of the profits.

 

SINGLE-MEMBER: A limited liability company that has only one member.

STATE OF ILLINOIS TRANSFER TAX DECLARATION STAMPS: State tax stamps issued that declare and allow the seller to transfer title of the seller’s property to a new owner (the buyer). 

SURVEY OF THE PROPERTY/LAND: Surveys are used to determine ownership of boundaries and features on a property.

TITLE INSURANCE: Insurance that protects a real estate owner and financial lenders against any property loss or damage due to any potential liens, encumbrances, or defects on the property.

 

TITLE INSURANCE COMPANY: The institution that creates and finalizes the Title Insurance.

 

TRANSFER DOCUMENTS: Different legal forms that transfer ownership of a property.

 

TRUST: A trust agreement is a document that spells out the rules that you want followed for property held in trust for your beneficiaries.

TRUSTEE: The person who manages your trust.

WARRANTY DEED: A document used to legally transfer property from one person to another.

 

WATER CERTIFICATION: (City of Chicago properties only). A certificate issued by the City of Chicago Department of Finance stating that the seller’s water account is paid in full so the seller can transfer the account to the new owner.

 

WILL: A legal document, signed by you and your witnesses, that sets forth your wishes regarding the distribution of your property and the care of any minor children.