Difference Between Corporation & Incorporation

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A corporation is an independent legal entity. The word "corp" is Latin for "body"--a legal, rather than a natural body, generally consisting of a group of people. Through the process of incorporation, the body unites into a formal corporation.

Process

Function

  • A corporation's articles of incorporation are a charter, or authorization, that establishes the existence of a corporation in a specific state. Requirements and fees vary from state to state.

Legal Process

  • The articles outline basic information about the new business. Filed with the Secretary of State's office, the articles of incorporation describe the essential identifying and operating characteristics of the proposed business.

Benefits

  • Once approved by the state, the articles legally create the corporation as a registered business entity. It then becomes an "artificial body" with rights, responsibilities, taxes and consequences separate from its incorporators--the group of people who filed the paperwork and who request to merge into a corporation.

Misconceptions

Net Result

References

  • Photo Credit "Business meeting" is Copyrighted by Flickr user: llawliet (Lee Chisholm) under the Creative Commons Attribution license. "Nestlé's Flawed Business Model" is Copyrighted by Flickr user: Alex Osterwalder (Alexander Osterwalder) under the Creative Commons Attribution license. "SKY click competitors (ups)" is Copyrighted by Flickr user: Alex Osterwalder (Alexander Osterwalder) under the Creative Commons Attribution license. "Dear Sally, Stop. Please Get Me Out of Here, Stop." is Copyrighted by Flickr user: foundphotoslj under the Creative Commons Attribution license. "Pop!Tech 2008 - Juan Enriquez" is Copyrighted by Flickr user: Pop!Tech under the Creative Commons Attribution license. "Pop!Tech 2008 - Erin McKean" is Copyrighted by Flickr user: Pop!Tech under the Creative Commons Attribution license. "suits4.jpg" is Copyrighted by Flickr user: CFAGELNYC under the Creative Commons Attribution license.
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