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 ?
95, Incorporator Pro software provides the quickest and most accurate way to take a small business to the next level - without consulting a lawyer.
This can allow the incorporators to more easily sell or make gifts of the stock.
3) The shares had no book or other value in excess of par value apart from that created by the real property conveyed, then the only "consideration" for the transfer was the par value of the shares received by the incorporator or incorporators, regardless of the value of the property conveyed.
She alleged that she was hushed up, shown warning placards counting down her time by the minute, and ultimately not allowed to give her full speech -- and then booed and hissed, an account confirmed by at least one other incorporator at the meeting.
June 9 /PRNewswire/ -- BizFilings, an online incorporator serving the entrepreneurial marketplace, today announced that in the first five months of 2009, growth in new business formations in the construction, manufacturing and service industries point to early signs of an economic recovery.
Rhodes is the incorporator of C2 Capital Properties.
Until such time that the HDMI Forum has elected its Board of Directors, the HDMI Founders have designated the law firm of Schwabe, Williamson & Wyatt as incorporator of the HDMI Forum.
Lance Beaty is the incorporator of Nelson & Beaty.
Higgins has been an incorporator of the museum for many years.
Catenacci was an original incorporator and has been a valuable and dedicated member of our board since 1996.
McAlister is the president, incorporator and organizer of that company.
Sloan was an original incorporator of SterlingSouth and was serving as Board Chairman at the time of the acquisition.