incorporate

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Incorporation

The process by which a business becomes a legal entity separate from its owner(s). Incorporation presents a number of advantages: becoming a separate legal entity means that the business itself makes or loses money, which protects owners from liability for its debts. Likewise, a corporation is taxed on its earnings separately from its owners, and, in many countries, the corporate tax rates are lower than personal tax rates. The process of incorporation involves writing articles of incorporation and registering them with the appropriate government entity in order to receive a corporate charter, which confers corporate legal status.

incorporate

To obtain a state charter establishing a corporation. Owners of proprietorships and partnerships incorporate in order to obtain limited liability for themselves and for potential investors. The limited liability makes it easier for the firm to raise additional equity capital.

incorporate

To form a corporation by filing documents in the appropriate state authority, which may be one's own state or a corporation-friendly state such as Delaware. Once having formed the corporation,one must pay annual franchise taxes to the state for the privilege of existing as an artificial entity, and one must observe all the forms and conventions of corporate existence. In other words, the sole shareholder cannot form a corporation and then never have meetings, never sign documents in the corporate name,take all corporate money for personal use without accounting for it on the books and records of the corporation, and generally behave as if the corporation did not exist.If the shareholder(s) behave as if the corporation does not exist, then creditors may be able to pierce the corporate veil and seize assets of the individual shareholders.

References in periodicals archive ?
The "Deposit Accounts" section has been revised to incorporate this June 15, 2004, interagency advisory that was issued in response to inquiries the agencies received on whether financial institutions should do business and establish account relationships with those foreign customers cited in the advisory.
s Cyberman(TM) GVD510-3D, which incorporates two CyberDisplay VGA microdisplays, provides a 3D stereoscopic virtual image equivalent to a 40-inch flat-panel screen at a distance of seven feet.
SONICblue(TM) Incorporated (Nasdaq:SBLU), introduced the Go-Video(R) DV6430, the first product of its kind to incorporate live TV control with a DVD/VCR combo.
The intent is to incorporate more and more of the standard into the long-term product strategy as the definition model expands.
The Company's patented DVD/VCR technology incorporates dual functionality, playing both DVDs and VHS tapes in one integrated system.
The MSM5100 chipset incorporates QCT's Wireless Internet Launchpad(TM) suite, enabling a broad range of new terminal products, applications and Internet services, including gpsOne(TM) position location capabilities as well as multimedia features such as Qtunes(TM) Moving Picture Experts Group (MPEG-1) Layer-3 (MP3) player software, and Compact Media Extension (CMX(TM)) Musical Instrument Digital Interface (MIDI)-based multimedia software.

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