Difference Between Corporation and Incorporation

A corporation is a functioning body formulated to operate a business. A corporation can comprise a group of people or simply an entity to function in a specific business.


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If a general manager asks the sales manager to recruit some salesman on his behalf, it is an instance of ___________.

2 / 10

In order to gain a competitive edge on the competition, some companies focus on:

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The method of evaluating the efficiency of workers is termed as _________.

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Which of the following is not an economic activity?

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Working capital means _________.

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The return of shares to the company is known as ___________.

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Non-economic activities aim at __________.

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_________ deals with appointing people and placing them at the appropriate jobs.

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__________ scale firms enjoy economies of scale.

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To form an organisation or a business entity, it is significant to have a corporation. Forming a corporation is the second step in building a business entity.

Key Takeaways

  1. A corporation refers to a legal entity distinct from its owners, providing limited liability and facilitating the ownership of shares, while incorporation describes the process of forming such an entity.
  2. Incorporation involves registering a business with the appropriate government authority, creating a legal structure for tax purposes, and protecting personal assets from business liabilities.
  3. Corporations can exist in various forms, such as public, private, and nonprofit, offering different levels of control and management structures. In contrast, incorporation serves as the initial step to establishing a corporation.

Corporation vs Incorporation

A corporation refers to a legal entity separate from its owners or shareholders, has its rights and obligations, and can enter into contracts, own property, and sue or be sued. Incorporation refers to forming a corporation and providing the business with a legal framework.

Corporation vs Incorporation

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A corporation has the full right and says in matters of Administrative importance of an organisation, e.g. salary, staff, decisions related to provident funds, etc.

It is the second step, as the initial step is incorporating the business.

The procedure followed legally to establish a company is known as Incorporation. The short form of Incorporation is ‘Inc.’

Incorporation denotes the legal status of a company or business organisation. Incorporation comprises its initial functions.

A business can use Inc./Corp. Abbreviation after its name as per its choice. Although, after getting registered, the business must ensure to use only that extension for all the work related to the legal domain.

Comparison Table

Parameter of ComparisonCorporationIncorporation
DefinitionA corporation is a body or an authority which runs a business.An Incorporation is an initial procedure which has to be followed lawfully to get a company registered as a Corporation.
Stage It is the second stage of a business.It is the primary and foremost stage; the procedure is conducted while registering the corporation.
AbbreviationThe short form of corporation is Corp. The short form for incorporation is Inc.
Flow of ProcessA corporation is the outcome of the Incorporation procedure.Incorporation of a business entity is an opening process which needs to be completed lawfully.
SignificanceA business entity doesn’t need to enrol as a Corporation. It entirely depends on the choice of the owner of the business.While performing any business activity, it is unavoidable to encounter some Incorporation accompanying it.

What is Corporation?

A corporation could be of any sector, private or public; it could be established for any purpose, such as education, business, or any institution.

The abbreviation of the corporation is ‘Corp’. After registering as a Corporation, a company must use the abbreviation Corp. and its name in every legal document it signs.

A corporation has its own tax liabilities structure.

A corporation begins when registered and all the legal formalities are fulfilled.

If a business entity decides to become a Corporation, it will bring several benefits, such as getting other organisations to become shareholders of the entity.

Although it involves a lengthy procedure to become a corporation, it is not recommended for small business entities.


What is Incorporation?

Incorporation is the initial procedure to be followed lawfully to register the business as a corporation.

By getting your business entity incorporated, many benefits are attained, such as limited liability against one’s assets.

The concept of limited liability safeguards the personal belongings of the partners from the risk of legal problems such as taxes, creditors, etc.

Incorporations have independent tax policies for their products.

Rules and regulations of the Incorporation process are different in each country.

All in all, it can be said that to get a business entity registered as a corporation, it is necessary to have the legal documents received after the Incorporation procedure.

These documents are known as the Charter of the company, and it has to be filled along with the other legal formalities, e.g. name of the company, business type, etc., during the creation of the Corporation.


Main Differences Between Corporation and Incorporation

  1. A corporation is a functioning body that runs the business entity’s operations. On the other hand, Incorporation is a legal procedure that must be followed to build a Corporation.
  2. Incorporation and Corporation have different meanings, but that does not mean one is dominant.
  3. The abbreviation of Corporation is Corp., whereas the abbreviation of Incorporation is Inc.
  4. The procedure to be followed for the Incorporation of the company is different in every country established according to the domestic laws of that country.
  5. On the other hand, Corporations in any of the countries usually have similar functions, objectives and characteristics.
  6. A corporation carries on till it is managing to pay all its expenses and debts and continues to grow by using its assets. On the other hand process of Incorporation begins with the Incorporation certification being issued until the corporation is eventually composed.
  7. A corporation is primarily accountable for the daily operations of the business entity. On the other hand, Incorporation oversees the legal procedure, which concentrates on protecting the private assets of the shareholders and owners of the business, along with their concerns and benefits.
Difference Between Corporation and Incorporation
  1. https://journals.sagepub.com/doi/abs/10.2190/NS3.3.c
  2. https://books.google.co.in/books?hl=en&lr=&id=Zbq8AQAAQBAJ&oi=fnd&pg=PR9&dq=+what+is+corporation&ots=AKSfwr5v-l&sig=Tofaxjl1xAESPCbmqpw1nRHnkl0&redir_esc=y#v=onepage&q=what%20is%20corporation&f=false
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