When starting a business, one of the key decisions you’ll need to make is whether to register your company or incorporate it. While both of these terms are used interchangeably, they actually refer to different processes. In this article, we’ll explore the differences between company registration and company incorporation, and what you need to know about each.
Company registration is the process of officially registering your business with the relevant government body. This usually involves filling out a registration form and paying a fee. The purpose of company registration is to give your business a legal identity, which will allow you to open a bank account, obtain credit, and enter into contracts.
The process of company registration is relatively straightforward and can usually be done online or through a company registration consultant. In most cases, you’ll need to provide basic information about your business, such as its name, address, and type of business structure (sole proprietorship, partnership, or limited liability company). Once your registration is complete, you’ll receive a certificate of registration, which will show that your business is legally registered and allowed to operate.
Company incorporation, on the other hand, is a more complex process. It involves creating a separate legal entity, known as a corporation, that is distinct from its owners. This means that the corporation can own property, enter into contracts, and even sue or be sued in its own name.
The process of incorporating a company usually involves filing articles of incorporation with the relevant government body, such as the state or federal government. The articles of incorporation will typically include information about the corporation’s name, purpose, structure, and governance. In addition, you’ll need to appoint a board of directors and issue shares of stock to the company’s owners, known as shareholders.
In summary, company registration and company incorporation are two distinct processes with different purposes and benefits. Company registration is a simple and straightforward process that gives your business a legal identity, while company incorporation creates a separate legal entity with limited liability protection and other benefits. The choice between registration and incorporation will depend on your business goals and needs, so it’s important to carefully consider the options before making a decision.