What is Incorporation?

Incorporation is the legal process used by a business to be recognized by the state as a separate legal entity, known as a corporation. This separation is referred to as the corporate veil, offering limited liability to the owners and shareholders of the corporation. It also separates the corporation’s assets and income while providing the same rights and responsibilities of an individual, such as paying taxes and owning a property.

Incorporation involves drafting a document that states the name, address, and primary purpose of the business, as well as the number and class of authorized shares, if any. This document is known as the articles of incorporation.