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Difference between Corporation and Incorporation- CRSPL

You might know difference between corporation and incorporation, both are business terms but with difference legal structure. Discussing about corporation, then it is a name, which is given to the specific type of business structure on the other hand incorporation means an official process, containing all the details that how an individual will operate business. Apart from this, we will explore in more depth about these terms of business sector.

What is Incorporation?

Incorporation is the process of creating a company, where you are required to create a company bylaws and setting the responsibilities of company shareholders and directors. Incorporation is one of the main task of the setting a company because it creates a legal framework for the entity. This process consists of documentation and it also you to get all the benefits of incorporation such as liabilities protection and tax deduction on corporate income. You should always consult with business consultants before moving into process.

What is Corporation?

Corporation is business setup, it is made of several individuals, who own shares of the business and have right to vote. Board of directors of the corporation elected by shareholders, they are responsible for running the company. You might know but corporation is considered to be separate entity than who own it. Corporation can also have subsidiary companies, who are responsible for managing other tasks such as manufacturing or distribution.

Key Difference between Corporation and Incorporation 

• Corporation is the name that is given to the type of entity, where shareholders are the owners of the company. On the other hand incorporation is the process and details that how an individual will operate a business.

• Corporation does not require incorporation before operating, but in the case of incorporation, it requires a new business before it can be operated but not always.

• Corporation can be educational, private business, government organization, and any type of institution. Incorporation refers legally registration as a company.

• Corporation collects funds from various organizations to make shareholders. Incorporation provides legal protection for personal assets against legal problems such as taxes, funds, credits, ownerships and more.



• The higher number of people choose to form corporation to limit their liability.

• Corporation is also better option for the people who personally do not want to involve in debt and damages that rise from business.

• As it is considered to be a separate entity, shareholders are not liable to any debt, occurred by the company.


• Corporation require more paperwork and fees. 

• Corporations have strict requirements for meeting, filing reports and certain tax obligations.



• Incorporation provides several opportunity to run or operate a legal entity which is separate than its owner, it means all the income and losses are not occur to individual.

• This is one of the finest options for those, who are looking forward to starting their own company.

• Incorporation may also offer you some certain tax advantages.


• Incorporation is pretty time consuming and expensive process, it includes a lots of paper work.

• There are certain requirement related to shareholding meetings, directors meeting, annual reports that must be filed with Government.

• Eventually, there is more risk in incorporation and owning shares in the company, because you will be liable for any debt and lawsuit occurred by the shareholders.

For more such interesting content stay connected with CRSPL business consultants, we will be right back with the new and fresh post. Till then if you have any business query then do reach out to us, we are on top solution for all the business requirement such as registration, compliances, and taxation.