A corporation is a legal entity that separates the business operations from their owners. Incorporation is a type of business registration that allows for the legal registration of the company's liabilities with the state. In order to keep its corporate status, a business must be incorporated. It must have a clearly defined management structure and organization registration.
To become an incorporated officer of a company must file articles with the state. They also need to pay any applicable filing fees, levies, and other costs. Although it is not required by law to have a lawyer to incorporate, most businesses hire their accountants and lawyers to help them prepare the articles.
Incorporating a business has many benefits. These include the ability to separate the interests and liabilities between the company's owners and the operators. This allows the company to continue operating and accumulate debts. These responsibilities are not solely the responsibility of shareholders or directors. It's also easier to raise capital funds for a corporation than with other types of business registration.
Double taxation is a disadvantage to having a C-corporation business designation. This is because profits made by a corporation are first taxed as income for the corporation, and then as income for shareholders. There are other downsides, such as the need for a specific management structure and organization, and the need for a Board and annual meetings.