Incorporated vs. Incorporation

Attribute	Incorporated	Incorporation
Definition	A company that has been legally formed and registered as a corporation	The process of legally forming a corporation
Legal Entity	Yes	Yes
Ownership	Owned by shareholders	Owned by shareholders
Liability	Limited liability for shareholders	Limited liability for shareholders
Taxation	Separate taxation from owners	Separate taxation from owners

Definition

When discussing business entities, the terms "Incorporated" and "Incorporation" are often used interchangeably, but they actually have distinct meanings. "Incorporated" refers to a company that has completed the process of becoming a legal corporation, while "Incorporation" is the actual process of forming a corporation. Incorporation involves filing the necessary paperwork with the state government to establish a separate legal entity.

Legal Status

One of the key differences between Incorporated and Incorporation is their legal status. When a company is "Incorporated," it means that it has completed the process of becoming a legal corporation. This gives the company certain legal protections and benefits, such as limited liability for its owners and the ability to raise capital through the sale of stock. On the other hand, "Incorporation" refers to the act of forming a corporation, but does not necessarily guarantee that the company has achieved legal status as a corporation.

Ownership Structure

Another important distinction between Incorporated and Incorporation is their impact on the ownership structure of a company. When a company is "Incorporated," it means that the business is owned by shareholders who hold stock in the company. These shareholders elect a board of directors to oversee the company's operations. In contrast, "Incorporation" is simply the process of forming a corporation and does not necessarily dictate the ownership structure of the company.

Liability Protection

Liability protection is a key benefit of both Incorporated and Incorporation, but they offer different levels of protection. When a company is "Incorporated," it means that the owners of the company have limited liability for the debts and obligations of the business. This means that the personal assets of the owners are generally protected from business liabilities. On the other hand, "Incorporation" is the process of forming a corporation, which also provides limited liability protection, but only once the company has completed the necessary steps to become a legal corporation.

Tax Implications

Both Incorporated and Incorporation have tax implications for a company. When a company is "Incorporated," it means that the business is treated as a separate legal entity for tax purposes. This can result in certain tax advantages, such as lower tax rates for corporations. On the other hand, "Incorporation" is the process of forming a corporation, which may not have immediate tax implications until the company is officially recognized as a legal corporation by the state government.

Regulatory Requirements

There are specific regulatory requirements associated with both Incorporated and Incorporation. When a company is "Incorporated," it means that the business has met all the legal requirements to become a corporation, including filing articles of incorporation with the state government and paying any required fees. On the other hand, "Incorporation" is the process of meeting these requirements and forming a corporation, but does not guarantee that the company has successfully completed all the necessary steps to achieve legal status as a corporation.

Conclusion

In conclusion, while the terms "Incorporated" and "Incorporation" are often used interchangeably, they have distinct meanings and implications for a company. "Incorporated" refers to a company that has completed the process of becoming a legal corporation, while "Incorporation" is the actual process of forming a corporation. Understanding the differences between these terms is important for business owners and entrepreneurs who are considering incorporating their business.