WHAT IS INCORPORATION?

Incorporation is the legal process used to form a corporate entity or company. A corporation is a separate legal entity from its owners, with its own rights and obligations. Corporations can be created in nearly all countries in the world and are usually identified as such by the use of terms such as "Inc." or "Limited" in their names.

Creation and Organization of Corporations

Incorporation involves drafting legal documents called "Articles of Incorporation" that list the primary purpose of the business, its name and its location, and the number of shares and class of stock being issued, if any. Incorporation also involves jurisdiction-specific registration information and fees.

Why one needs to incorporate their business?

Once you incorporate your business, you will help your organization to develop by creating a line, which will determine who has the rights to make the final decisions.

Furthermore, when a person incorporates his business, he is making a brand new entity, which assist in creating the line which separates the personal finances and the business finances. When you finally incorporate your business, all of the employees in your company will have protection in case something catastrophic happens regarding your financial situation.

Through company incorporation involving a pty limited company, one produce stocks which investors can buy hoping that the stock’s value will get bigger and in the meantime one would accomplish company success. The company incorporation will let the investors buy and sell stocks leaving the investment responsibility in the possession of stock investors.

Advantages of Incorporation

Incorporation has many advantages for a business and its owners, including protection of the owner's assets, because the company is liable for its own debts. It includes easy transfer of the business ownership to another party through the sale of shares.

·    Protect Your Personal Assets: Incorporating your business is one of the best ways you can protect your personal assets. A corporation can own property, carry on business and incur liabilities

·  Have Easier Access to Capital: Raising capital is generally easier for a corporation, since a corporation can issue shares of stock. This may make it easier for your business to grow and develop. In most cases, banks would rather lend money to corporations than to unincorporated business ventures. Corporations generally have access to more alternative sources of capital through which they can pay off their debts.

·   Enhance Your Business’ Credibility: The benefits of incorporating go beyond finances. In a sense, having “Inc.” or “Corp.” after your business name conveys permanence, credibility, and stability, and communicates your commitment to the ongoing success of your business venture.

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