Definition of Incorporation
Incorporation is the process of branding a business in a legal and professional manner, allowing it to acquire the status of a person and conduct legal activities.
Benefits of Incorporating
- Limited liability protection: Personal assets of shareholders are not at risk beyond their investments.
- Corporate veil: Enables companies to take risks and grow while limiting owners’ personal financial exposure.
Process of Incorporating
Creating a corporation involves filing articles of incorporation with the government to establish the company as a legal entity owned by shareholders.
Example of Incorporating
Incorporation is exemplified by combining various parts of a business to form a legal corporation, separating it from its founders.
What is Incorporation?
Incorporation formally organizes a business, separating it from its owners as a distinct entity with its assets and income.