What's the Difference Between Corporation and Incorporation?
These terms are often used interchangeably, but they have distinct meanings.
What is a Corporation?
A corporation is a legal entity separate from its owners, capable of owning assets, entering contracts, and incurring liabilities. It is a separate “person” under the law.
Benefits include: Limited liability, credibility, potential tax benefits, and transferable ownership.
What is Incorporation?
Incorporation is the legal process by which a business becomes a corporation. It involves filing specific documents with the government, including the Articles of Incorporation.
Steps to incorporate:
- Reserve a unique name for your corporation
- Prepare the Articles of Incorporation
- Submit all required forms and pay applicable fees
- Organize the corporation (issue shares, appoint directors, prepare documents)
Key Differences
- Conceptual: A corporation is a business structure; incorporation is the process of creating it
- Legal Requirements: Incorporation involves completing specific steps and filings
- Timeline: Incorporation is a one-time event; a corporation is ongoing
The Bottom Line
Incorporation is the process of creating a new corporation. After the process is completed, the corporation continues to exist until its registration expires or it’s dissolved.
Have questions about incorporating your business?