Incorporation

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Incorporation

A legal process through which a company receives a charter and the state in which it is based allows it to operate as a corporation.

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.

Incorporation.

When a business incorporates, it receives a state or federal charter to operate as a corporation. A corporation has a separate and distinct legal and tax identity from its owners.

In fact, in legal terms, a corporation is considered an individual -- it can own property, earn income, pay taxes, incur liabilities, and be sued.

Incorporating can offer many advantages to a business, among them limiting the liability of the company's owners. This means that shareholders are not personally responsible for the company's debts. Another advantage is the ability to issue shares of stock and sell bonds, both ways to raise additional capital.

You know that a business is a corporation if it includes the word "Incorporated" -- or the short form, "Inc." -- in its official name.

incorporation

see COMPANY FORMATION.

incorporation

see COMPANY FORMATION.
References in periodicals archive ?
Experian intends to update Corporate Researcher monthly with newly incorporated company names, addresses and the latest financial accounts.
Wingate Inns, an HFS Incorporated company, is one of the largest franchisers of hotels in the world.
Upon closing, the acquired assets of VEI will be injected into a newly incorporated company, named Viridity Energy Solutions Inc, which is a wholly owned subsidiary of Ormat.
The offers are being made by Daytona, a newly incorporated company formed for the specific purpose of making the offers.
The South Korean unit will start doing business as a locally incorporated company next month.
Oyka Kagit Ambalaj Industry & Trade Incorporated Company is at the top of this year's list of the second 500 biggest organizations with 98.
Jasper Mining Corporation (Jasper Mining), an Alberta provincially incorporated company that operates exclusively in British Columbia, has completed a non-brokered private placement of 5,000,000 flow-through units effective December 31, 2009.
EasyKnit is a Bermuda incorporated company with its principal office in Hong Kong and its securities listed for trading on the Hong Kong Stock Exchange under the symbol "616 on SEHK.

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