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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
"We need to think beyond this and ask ourselves how--if we provide connectivity everywhere--we can incorporate telecommunications and other technologies to really change the way we go about doing what we do."
Media are blasted into the blast cabinet using the JWL-401 Jet Wheel that is said to incorporate superior blast wheel design technology.
The "Payment System Risk and Electronic Funds Transfer Activities" section incorporates the Board's changes to its Policy on Payments System Risk (the PSR policy).
What's more, after a year-long search for new, cutting-edge functionality to incorporate into the campus card, Campus Services officials were kicking off the school year with a product from the tiny start-up vendor Cybermark.
The H8/38086F incorporates a voltage booster circuit on the LCD controller.
The new mill design (figure 2) was approached mainly as a scaled up version of laboratory mills, which incorporate very smooth stainless steel side frames, sealed roller bearings, lightweight spring loaded material guides in contact with the rolls, thermally efficient rolls, a color touch screen PLC access unit and hydraulic nip control.
Based on an Allen-Bradley controller, Sentral incorporates a host of sensors (ratio, purge, discharge, fill) and programmable job menus.
Developed by the Dermot Company, the Mosaic incorporates many green design features including site planning and massing that maximizes exposure to natural light and views, integration of high performance HVAC systems with turbine-generated power produced onsite, green roofs, and utilization of a variety of locally available building materials to celebrate a look rooted in the regional community.
Consistent with the GLB Act, the guidance incorporates applicable restrictions on examining a functionally regulated insurance subsidiary of a state member bank.
The VPIparameterExtractor was jointly developed by Mathematical Systems Incorporated (MSI), and incorporates unique optimization and photonic component experience.
Forward Technology Industries Inc., Minneapolis, brought out its new high-accuracy linear vibration welder with a work envelope up to 10 x 12 in., which incorporates an automated pallet transfer assembly system.

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