INCORPORATE
To Incorporate is a legal entity that can exist separately from its owners. Creation of a corporation occurs when properly completed articles of incorporate (called a charter or certificate of incorporate in some states) are filed with the proper state authority, and all fees are paid.
One of the primary advantages of incorporate is the limited liability the corporate entity affords its shareholders. Typically, shareholders are not liable for the debts and obligations of the corporation; thus, creditors will not come knocking at the door of a shareholder to pay debts of the corporation. In a partnership or sole proprietorship the owner's personal assets may be used to pay debts of the business. Maintaining the limited liability of a corporation requires that the shareholders and directors follow all the rules of governance, including holding annual meetings and maintaining meeting minutes. |
