The Company of One

Glossary

The terms of running a one-person company, from merchant of record and MRR to VAT OSS and vibe coding, each defined in a few sentences with its source.

83(b) election#
In the US, a choice under section 83(b) of the Internal Revenue Code to include property received for services, such as stock that is subject to vesting, in gross income for the year it's transferred rather than when it vests. The election must be made no later than 30 days after the transfer and can't be revoked without the Treasury's consent.1
AI agent#
Software in which a large language model (LLM) directs its own steps and tool use to complete a task, rather than following a fixed sequence. Anthropic distinguishes agents from workflows, in which the model and its tools run along predefined code paths.2
ARR annual recurring revenue#
The recurring revenue a subscription business counts over a full year. It measures the same thing as MRR, over twelve months instead of one.3
Automation billing units task, operation, credit, execution#
The units automation platforms count to bill usage, which differ by vendor. At Zapier a task is any successful action that runs;4 at Make an operation is a single module run,5 and credits replaced operations as Make's billing unit (1 operation equals 1 credit for non-AI apps);6 at n8n an execution is a single run of a whole workflow, however many steps it has.7 Because they count different things, plan allowances in these units aren't directly comparable across vendors (as of 2026-10-13).
Bootstrapping#
In startup use, building and growing a company without outside investors, typically from the founder's own money and the company's revenue. It extends the general sense of the verb bootstrap: “to promote or develop by initiative and effort with little or no assistance.”8
Build in public#
The practice of sharing a company's progress openly while it's being built, usually on social media: product updates, decisions and sometimes figures such as revenue or user counts. An informal community term with no standard dictionary definition.
C corporation C corp#
In the US, a corporation the IRS recognizes as a separate taxpaying entity for federal income tax. Its profit is taxed to the corporation when earned and taxed again to shareholders when distributed as dividends, which the IRS calls a double tax.9
CAC customer acquisition cost#
What it costs a business to turn a prospect into a paying customer, usually calculated as total sales and marketing costs over a period divided by the number of new customers acquired in that period.10
Chargeback#
A reversal of a card payment, started when the customer disputes the charge with their bank or card provider, which pulls the funds back from the business. A refund is issued by the business; a chargeback is initiated through the customer's bank, under legal frameworks and card network rules.11
Churn#
For a subscription business, the rate at which customers cancel their subscriptions. The recurring revenue lost to cancellations in a month is called churn MRR.3
EIN employer identification number#
In the US, a federal tax ID number for businesses, tax-exempt organizations and other entities, issued free by the IRS. The IRS lists who needs one (for example, a business with employees); others may request one for banking or state tax purposes.12
Form 1099-K#
In the US, an IRS form reporting the payments a person received for goods or services during the year through payment cards, or through payment apps and online marketplaces (third party settlement organizations, TPSOs). As of 2026-10-13 the IRS says a TPSO must report when payments through it exceed $20,000 in more than 200 transactions, though it may send the form for lower amounts.13
Franchise tax#
A tax some US states charge companies that are formed or registered there, separate from income tax. In Delaware, for example, every corporation formed in the state must file an annual report and pay franchise tax, and Delaware LLCs pay a flat annual tax ($400, due June 1, as of 2026-10-13).14
Free tier#
A plan a vendor offers at no charge, usually with lower limits on usage, features, seats or projects than its paid plans. OneManOnly gives free-tier limits exactly as the vendor states them, with the date they were checked.
Indie hacker#
Someone who builds and runs an internet business, often a software product, alone or with a very small team and usually without outside investment. An informal community term with no standard dictionary definition.
Interchange interchange fee#
A fee transferred between the merchant's bank (the acquiring bank) and the cardholder's bank (the issuing bank) on each card transaction, at rates the card network publishes. Visa says merchants don't pay interchange directly: they pay a “merchant discount” to their own financial institution, typically a percentage per transaction.15
LLC limited liability company#
In the US, a business structure allowed by state statute, whose owners are called members; most states permit single-member LLCs. For federal income tax, a single-member LLC is by default disregarded as separate from its owner and one with two or more members is treated as a partnership, unless it elects on Form 8832 to be treated as a corporation.16
LTV customer lifetime value, also CLV#
An estimate of the total value a customer brings a business over the whole relationship, typically calculated as the value generated per customer multiplied by how long they stay a customer. It's often compared with CAC.17
MCP Model Context Protocol#
An open-source standard for connecting AI applications, such as Claude or ChatGPT, to external systems: data sources (files, databases), tools (search engines, calculators) and workflows.18
Merchant of record MoR#
The entity legally responsible for processing customers' payments for a business's goods or services, and liable for the transactions' financial, legal and compliance side, including collecting the right sales tax, VAT or GST at the point of sale and remitting it to tax authorities.19
Micro-SaaS#
A small software-as-a-service product (SaaS: software licensed on a subscription basis and centrally hosted20), usually aimed at a narrow niche and run by one person or a very small team. “Micro-SaaS” itself is an informal community term with no standard dictionary definition.
MRR monthly recurring revenue#
The recurring revenue a subscription business earns each month, often calculated as the number of paying customers multiplied by the average revenue per user (ARPU) per month.3
No-code#
Tools for building software, websites or automations with visual editors, templates and settings instead of written code. An industry term with no single standard definition; “low-code” tools mix visual building with some code.
Nonemployer business#
In US Census Bureau statistics, a business with no paid employees that is subject to federal income tax. Most are self-employed people running unincorporated businesses (sole proprietorships), though some are partnerships or corporations; the Bureau's annual Nonemployer Statistics (NES) counts them.21
One-person company OPC#
In general use, a business owned and run by one person without employees. In India it's also a legal form: section 2(62) of the Companies Act, 2013 defines a One Person Company (OPC) as a company with only one person as a member, and section 3(1)(c) treats it as a private company.22
Open startup#
A company that publishes its business figures, such as revenue, MRR or traffic, for anyone to see, often on a public dashboard. An informal community term with no standard dictionary definition.
Payment processor#
A third-party company that handles the technical side of a payment: validating the payment information, obtaining authorization and managing communication between the merchant's bank (the acquiring bank) and the customer's (the issuing bank).23
Payout#
A transfer of a business's available balance from its payment provider to its bank account. Providers such as Stripe send payouts on a schedule (manual, daily, weekly or monthly); the schedule sets when payouts are sent, not how long new payments take to become available.24
Registered agent#
In the US, the person or company a business names to accept service of process (official legal papers) on its behalf in a state. In Delaware, for example, a registered agent must keep a street address and office in the state, open during normal business hours, under 8 Del. C. § 132.25
Rolling reserve#
A share of each transaction that a payment provider holds back for a set number of days after the charge, then releases, to cover refunds and disputes. Stripe contrasts it with a fixed reserve, which releases held funds on a specified date.26
S corporation election S corp#
In the US, a corporation's election, filed on IRS Form 2553 and signed by all shareholders, to pass its income, losses, deductions and credits through to shareholders for federal tax purposes, so they're taxed at individual rates and the corporate income avoids double taxation. The IRS requirements include being a domestic corporation with no more than 100 shareholders and one class of stock.27
SAFE simple agreement for future equity#
A short contract in which an investor funds a startup now in exchange for the right to shares of its stock later; it converts into shares automatically when the startup raises a priced round. Created at Y Combinator in 2013.28
Sales-tax nexus economic nexus#
In the US, a seller's connection with a state that obliges it to collect and remit that state's sales or use tax. Since the Supreme Court's 2018 South Dakota v. Wayfair decision, states may base it on economic presence alone, without any physical presence; Texas, for example, doesn't require remote sellers with under $500,000 in Texas revenue in the preceding twelve calendar months to collect.29
Seat pricing per-seat pricing#
A pricing model in which each pricing unit is one user, so the price grows with the number of people who need access.30
Sole proprietorship#
In the US, an unincorporated business owned by one person.31 It isn't a separate business entity, so the owner's business and personal assets and liabilities aren't separate; anyone doing business without registering as another structure is automatically a sole proprietorship.32
Solopreneur#
“One who organizes, manages, and assumes the risks of a business or enterprise without the help of a partner: a solo entrepreneur,” in Merriam-Webster's definition.33
Usage-based pricing#
A pricing model that charges customers based on how much of a product or service they use, as opposed to flat-rate, per-seat or tiered pricing.30
VAT OSS One Stop Shop#
The EU system that lets a business selling across EU member states register for VAT in one member state (its member state of identification) and declare and pay VAT through it. It extended the earlier mini One Stop Shop (MOSS) from 1 July 2021 and covers three schemes: the non-Union scheme, the Union scheme and the import scheme.34
Vibe coding#
Writing code, making web pages or creating apps by telling an AI program what you want and letting it create the product, without the person needing to understand how the code works. Merriam-Webster traces the term to a February 2, 2025, post on X by Andrej Karpathy, a co-founder of OpenAI.35
Webhook#
An automatic notice from one service to another: when an event happens (a payment succeeds, a customer disputes a charge), the sending service pushes the event's data to a URL the receiving app has registered, its endpoint. Stripe, for example, sends webhook events over HTTPS as JSON.36

Sources

  1. Legal Information Institute, Cornell Law School, 26 U.S. Code § 83: Property transferred in connection with performance of services, retrieved 2026-10-13.
  2. Anthropic, Building Effective AI Agents, retrieved 2026-10-13.
  3. Stripe, Monthly recurring revenue (MRR) explained, retrieved 2026-10-13.
  4. Zapier Help Center, How is task usage measured in Zapier?, retrieved 2026-10-13.
  5. Make Help Center, Operations, retrieved 2026-10-13.
  6. Make Help Center, Credits, retrieved 2026-10-13.
  7. n8n, n8n Plans and Pricing, retrieved 2026-10-13.
  8. Merriam-Webster, Bootstrap, retrieved 2026-10-13.
  9. Internal Revenue Service, Forming a corporation, retrieved 2026-10-13.
  10. Stripe, CAC in SaaS: A guide for businesses, retrieved 2026-10-13.
  11. Stripe, Chargebacks 101: What they are and how businesses can prevent them, retrieved 2026-10-13.
  12. Internal Revenue Service, Employer identification number, retrieved 2026-10-13.
  13. Internal Revenue Service, Understanding your Form 1099-K, retrieved 2026-10-13.
  14. Delaware Division of Corporations, Annual Report and Tax Information, retrieved 2026-10-13.
  15. Visa, Credit Card Processing Fees & Interchange Rates, retrieved 2026-10-13.
  16. Internal Revenue Service, Limited liability company (LLC), retrieved 2026-10-13.
  17. Stripe, Customer lifetime value (CLV): What it is and how to improve it for your business, retrieved 2026-10-13.
  18. Model Context Protocol, What is the Model Context Protocol (MCP)?, retrieved 2026-10-13.
  19. Stripe, What Is a Merchant of Record?, retrieved 2026-10-13.
  20. Merriam-Webster, SaaS, retrieved 2026-10-13.
  21. US Census Bureau, About the Nonemployer Statistics Program, retrieved 2026-10-13.
  22. Archana Balasubramanian, Mondaq (secondary source; first published on Lawyered.in, June 2022; the Ministry of Corporate Affairs and India Code sites were unreachable), One Person Company, retrieved 2026-10-13.
  23. Stripe, Payment processing: How payment processing works, retrieved 2026-10-13.
  24. Stripe Documentation, Receive payouts, retrieved 2026-10-13.
  25. Delaware Division of Corporations, List of Delaware Registered Agents, retrieved 2026-10-13.
  26. Stripe Documentation, Set reserves on your connected accounts, retrieved 2026-10-13.
  27. Internal Revenue Service, S corporations, retrieved 2026-10-13.
  28. Y Combinator, The SAFE: the open standard for startup fundraising, retrieved 2026-10-13.
  29. Texas Comptroller of Public Accounts, Remote Sellers, retrieved 2026-10-13.
  30. Stripe Documentation, Recurring pricing models, retrieved 2026-10-13.
  31. Internal Revenue Service, Sole proprietorships, retrieved 2026-10-13.
  32. US Small Business Administration, Launch your business: Choose a business structure, retrieved 2026-10-13.
  33. Merriam-Webster, Solopreneur, retrieved 2026-10-13.
  34. European Commission, The One Stop Shop (VAT e-Commerce), retrieved 2026-10-13.
  35. Merriam-Webster, Vibe coding (Slang & Trending), retrieved 2026-10-13.
  36. Stripe Documentation, Receive Stripe events in your webhook endpoint, retrieved 2026-10-13.