When a corporation is in the state in which it is incorporated it is known as?

When you see "Inc." after a company name mean and what does it tell you about the company? There are several abbreviations that companies include in their official titles.

When you set out to create a business, you first need to decide what kind of legal structure your company is going to have.

Incorporating (and including “Inc." after your company's name) is one option. And yet you may have wondered — both for you and your business — what does Inc. mean?

Would you be better structured as a limited company? The more you know, the clearer your options will be.

What does Inc. stand for?

When a company has the letters “Inc." after its name, it means the company has been incorporated. There also are other abbreviations that a company can have after its name:

• Corp. The difference between Inc. and corp. is that Inc. means the company has been incorporated. If a company uses corp., it usually is incorporated, but may not be.
• LLC. This abbreviation that means the company is a limited liability company. This type of company is owned by its members and it has pass-through tax liability, which means the company does not pay taxes on income, but the members do. Members are protected from liability, which lies with the company.
• Co. This option that simply states the business is a company, and it may not be incorporated.

What does it mean to be incorporated?

When a company is incorporated, it means that it has formally designated itself as a corporation under the laws of at least one state.

In other words, it has filed all the necessary legal documents with that state and is operating as a corporation in the eyes of the government and the IRS.

A company that is incorporated must follow all laws pertaining to corporations.

Steps to incorporation

When a business decides to incorporate, it first must choose the state in which it will incorporate. Then the following steps are taken:

• Select a name and search to make sure that the name has not already been taken by another corporation in that state.
• Choose a type of corporation to be: an S corporation (which has pass-through tax liability so the corporation does not pay tax, but the shareholders do), a C corporation (which pays corporation taxes), or an LLC.
• Choose a board of directors. 
• Decide what kind of shares it will be issued to stockholders. These can include ordinary, preferred, or shares with or without voting rights.
• Designate a registered agent within the state who can receive legal documents on behalf of the corporation.
• Files articles of incorporation with the state.
• Write bylaws or rules for how the company will conduct its business.
• Issue stock to shareholders.

Once those steps have been followed, a corporation is up and running and ready to do business.

What does Inc. mean in business? It means you've checked all the boxes and set your company up for success with a solid legal basis.

The word "incorporated" indicates that a business entity is a corporation.

"Inc." is an abbreviation of "incorporated," and both the abbreviation and the full word mean that a company's business structure is a legal corporation.

A corporation or "Inc." is an entirely separate entity from its owners and shareholders. This is an important legal distinction since an incorporated business essentially becomes a separate "person" under the law. A corporation affords the owners limited liability, and if an owner dies, the corporation—as its own entity—lives on.

Types of Corporations

"Incorporation" is the process through which a business becomes a corporation, thereby earning it the right to put an "Inc." or "Incorporated" after its name. The rules concerning incorporation vary by state and the specific type of corporation you wish your business to be.

Generally, to earn the "Inc.," you must first choose whether you want to incorporate your business as an S corporation (S corp.) or a C corporation (C corp.). A C corp. is the most common type, with taxes paid on the corporate level and at the individual level on dividends. C corporations have no ownership restrictions.

In an S corp., on the other hand, profits and losses "pass-through" the business to the owners' personal income tax returns. For this reason, an S corp. is considered a "pass-through tax entity." An S corp., also called a close corporation, is limited to no more than 100 shareholders, who must be United States citizens.

The Road to Incorporation

After selecting the type of corporation, you must choose which state to incorporate in. Your home state is always an option, of course, but some corporation owners choose states with laws favorable to corporations. 

Every corporation must have directors and a registered agent who agrees to receive important legal and tax documents on behalf of the business. A registered agent must be available to receive these documents during normal business hours.

The next step on the road to incorporation is to compile and file articles of incorporation with your chosen state's Secretary of State. Each state also has a filing fee that you must pay when filing the articles.

Once you have received notification that your business entity is registered with the state as a corporation, you are literally in business. At this point, you can formally add the denomination "Incorporated" or "Inc."

Your newly formed corporation should absolutely indicate that it is an incorporated entity. To accomplish this, you may also choose to use the full words "Corporation" or "Company," or the abbreviations "Corp." or "Co."

Overall, remember that "Incorporated" and the similar words listed exist so that the public knows that the business in question is, indeed, incorporated as such with a Secretary of State.

What state is called the state of incorporation?

What is meant by incorporated corporation?

What is a corporation that is incorporated in a foreign country called?

Which refers to the incorporation?