General Question

Jellie's avatar

What, if any, is the difference between registering a company and incorporating it?

Asked by Jellie (6489points) July 26th, 2011

As asked.

Observing members: 0 Composing members: 0

4 Answers

zenvelo's avatar

Incorporating a company means setting the company up as a legal entity separate from the owners. The earnings and liabilities of the company are the company’s, not the owners. Revenue is paid to the owners as a dividend or reinvested in the corporation.. If the owners work for the corporation they are paid a salary.

Incorporating restructures the tax burden and also limits the liability if the business goes bankrupt or has other legal problems.

Adirondackwannabe's avatar

What is registering a company?

cazzie's avatar

It depends on where you live, but the terms you are using seem pretty inter-changeable.

When you register a company, you form a entity that is separate from its directors and shareholders. Like what @zenvelo said, it is meant to limit the liability of the stockholders and directors in most cases. The company has to fill out a tax return of its own.

You don’t ‘incorporate’ a company. You can ‘incorporate’ a business by registering it as a company. This was one of my jobs when I lived in New Zealand. There were some tax and legal benefits to this, but under certain circumstances, directors could be held liable for company debts and be sued for debt registered under the company name. Every country has their own rules about these things.

In New Zealand, companies had to send in a annual fee to remain registered as well. In NZ, we sent these fees not to the Inland Revenue Department, but to the Company’s Office, which keeps a register of every company and the details involved. Changes in the shareholders or directors register had to notified to this office as well.

There are several different entities that are allowed to carry on business. Partnerships, Companies (private and public), Trusts (public or family), Non-profits… etc.. (I’m sure there are a few more but they don’t come to mind right now.) They must all be registered with the Tax Department and they will all be given a tax number in their own right and must file a yearly income return. In addition, they may also be required to fill in other returns, update forms and yearly fees with their corresponding agency.

I hope this helps some.

perspicacious's avatar

Go to the Secretary of State website for your state. You’ll find your answers there.

Answer this question




to answer.

This question is in the General Section. Responses must be helpful and on-topic.

Your answer will be saved while you login or join.

Have a question? Ask Fluther!

What do you know more about?
Knowledge Networking @ Fluther