The word “incorporated,” shows that a business entity is a corporation.
“Inc.” is an abbreviation for “incorporated,” and both the abbreviation and the full term indicate a company’s formal corporate business structure.
A corporation, sometimes known as an “inc.”, is a totally distinct legal person from its owners and stockholders. Since an incorporated corporation essentially becomes a different “person” under the law, this is a significant legal distinction. Limited liability is provided to the owners of corporations, and in the event of an owner’s death, the corporation continues to exist.
Types of corporations
The process of “incorporation” grants a company the legal authority to add “inc.” or “incorporated” after its name and transforms it into a corporation. The procedures for incorporation differ depending on the state and the particular corporation type you want for your company.
Typically, in order to obtain the “inc.,” you must first decide whether to incorporate your company as an S-Corporation (S-Corp) or a C-Corporation (C-Corp). The most typical kind is a C corporation, which charges corporate and individual taxes on dividend income. There are no ownership limitations for C-Corporations.
In contrast, a S corp. allows corporate gains and losses to “pass-through” to the owners’ personal income tax returns. Because of this, a S corp. is referred to as a “pass-through tax entity.” The maximum number of shareholders for an S-Corp, often known as a close corporation, is 100, all of whom must be citizens of the United States.
The road to incorporation
You must decide the state to incorporate in after choosing the sort of organization. Of course, you may always select your home state, but some business owners choose states with pro-corporate legislation.
Each and every corporation must have directors and a registered agent who agrees to receive important legal and tax documents on behalf of the business entity. During regular business hours, a registered agent must be accessible to accept these documents.
Writing and submitting articles of incorporation to the Secretary of State of your selected state is the next stage in the incorporation process. Each state also has a filing fee that you must pay when filing the articles.
Business can start as soon as you learn that your company has been registered as a corporation with the state. Then, You can properly add “incorporated” or “inc.” to your name.
You must categorically state that your newly founded corporation is an incorporated entity. You may also use the full terms “corporation” or “company,” as well as the abbreviations “corp.” or “co.” to achieve this.
In general, keep in mind that the terms “incorporated” and those mentioned below exist so that the general public is aware that the firm in issue is, in fact, incorporated as such with a secretary of state.