Incorporated Business Definition

An incorporated business is a legal entity that is separate from its owners, providing limited liability and allowing the company to conduct business, enter contracts, and incur debts in its own name.

Starts at $0 + state fees and only takes 5-10 minutes

Excellent 4.8 out of 5 stars 18,043 reviews

What Is an Incorporated Business?

An incorporated business is one that the government recognizes as a separate legal entity. A business is incorporated when someone files legal paperwork with the state and creates a business entity. What’s more, incorporating a business creates a legal distinction between the business and the business owner. 

Thus, the definition of incorporated business is a business that’s separate from its owners. Incorporating your business helps shield your personal assets and makes it easier to manage the business’s finances. 

Incorporated Business Considerations

Wondering whether you should incorporate your small business? Here are some things to consider before taking the plunge. 

Incorporated Business Advantages

Incorporated business benefits might include:

  • Separating the business’s assets from your personal assets
  • Simplifying your taxes
  • Reducing the amount of money you pay in taxes each year
  • Limiting your personal liability
  • Setting up your business for potential growth 
  • Making it easier to transfer ownership of the business 

With these in mind, incorporating your business may help propel your business to the next level. 

Incorporated Business Disadvantages

The disadvantages of incorporating a business revolve around having to do more paperwork and tax status:

  • The government may tax your business profits twice (at the business level and personal level)
  • You need to file an annual report when incorporated

Talk to an accountant to see how incorporating may impact the amount of money you pay in taxes each year. 

Leave the paperwork with us. Luckily, our annual report service helps you stay on top of your filing requirements. We send you important reminders and help you stay compliant. 

Other Names for Incorporated Business

Another way to refer to an incorporated business is by the type of its legal business entity (e.g., LLC, S Corp). Let’s talk about examples of incorporated business types.

Incorporated Business Examples

What are incorporated businesses? Examples of businesses that fall under the incorporated business definition include:

  • Limited liability company (LLC)
  • S Corporation
  • C Corporation
  • General partnership
  • Limited liability partnership
  • Limited partnership

Incorporating your business means that you put up a shield between the business and your assets. 

Wondering which type of incorporated business is right for you? We can help.

When Should I Incorporate My Business?

Incorporating your business is an important decision and can help take your business to the next level. Typically, incorporating your business is a good idea if:

  • You want to hire employees
  • You are considering opening a second (or third) business location
  • Your business is making a lot of money
  • You sign business contracts (like vendor contracts) 

If you would like to form an LLC or a corporation, we can help. With our streamlined business formation plans, it can take mere minutes to prepare and file your paperwork. All you need to do is answer a few questions, select the appropriate service, and pay the modest fee (plus the state filing fee). More than 700,000 businesses have used our services to help set their business up for success. We’d love to be part of your success story, too. 

How Do I Incorporate My Business?

What are the steps to incorporate your business? Look no further. Here are the basic steps to incorporating your business:

  1. Come up with an awesome name that meets the state’s naming requirements (and use our name reservation service to make sure you get it first)
  2. Decide on a business entity (e.g., LLC, corporation)
  3. Pick a registered agent (or use our registered agent service to find one)
  4. File the incorporation paperwork
  5. Get an EIN 
  6. Draft an operating agreement

Feeling dizzy just thinking about all those steps? Take a deep breath and keep reading to find out how we can help simplify your day. 

Additional Resources:

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

zenbusiness logo

Written by Team ZenBusiness

Start Your LLC