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Incorporation Basic Facts. What Is Incorporation?

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By : Ramapati Singhania    99 or more times read
Submitted 0000-00-00 00:00:00
What is the process of incorporation? This article deals with incorporation basic facts.

A corporation is a legal entity (technically, a juristic person) which has a legal personality distinct from those of its members.

The defining legal rights and obligations of a corporation consist of the capacities:
* to sue and to be sued
* to have assets
* to employ agents
* to engage in contracts, and
* to make by-laws governing its internal affairs
* Other legal rights and obligations may be assigned to the corporation by governments or courts. These are often controversial. Source: Wikipedia

Difference between a corporation and a sole proprietorship:

The basic difference between a sole proprietorship and a corporation is that after incorporation the company becomes a separate legal entity. It can act as an individual on its own behalf.

The owner of the company can be one or many. His say depends on the percentage of shares he owns in the company he is legally separate from the company.

Unlike in a sole proprietorship, in a corporation, its shares can be listed on a stock exchange for trading. Of course, subject to the terms of the relevant stock exchange.

Also a board of directors is appointed by the share holders to deal with the business the company handles. In many countries the board of directors are held liable for many of the company's actions and can be prosecuted.

A Chief Executive or Managing Director is appointed to head the management team. This team deals with the task of running the company on a day to day basis. In closely held [owned] corporations, the owners are often on the board of directors and in senior positions of management.

Every corporation must have at least one director and a shareholder. In international business corporations usually there is a requirement of at least one director and shareholder also.

Residency requirements and nationality varies by tax haven jurisdiction. Every country and state have different laws for incorporation. The jurisdiction must be chosen based on the specific purpose the company is being formed.

Articles of Incorporation:

The Articles of incorporation is the document which describes the basic information about the company. And its intent of formation. The name of the company, its registered office, list of board of directors, basic rules and regulations are the key points covered in it.

Clarify everything beforehand! In many countries there still exist complicated and bureaucratic laws for new onshore corporations.

It is essential for a new investor to know incorporation basic facts, rules & regulations of the concerned state or country. Perhaps even hire some lawyer or a registration offshore company to handle the incorporation procedures.

Incorporation basic facts about the international business corporation:

International Business Corporation has become trendy with investors due to many financial and non financial reasons. Some specific incorporation basic facts dealing with the offshore corporations are discussed below:

* A simple offshore business incorporation has become easy and is not a lengthy or tiring task any more. [Unless you are in a jurisdiction that requires lots of documentation.]

* In most cases this cannot be done by the investor himself. He must appoint one of the many offshore incorporation service providers available for this purpose.

* Many countries now have tax free zones for offshore incorporations and you can easily avail of them.

* Your wealth will be protected against legal issues.

* Due to rapidly increasing offshore incorporations, many registration offshore company service providers have started incorporation of shelf companies. These have been incorporated in the past and are just waiting to be bought.

You will get them quickly especially if due diligence has been done on you. Also, if this is not your first company with the registration offshore company. But you will pay more than for a new company.

* All the basic work for incorporation is done for these readily available offshore companies for sale. You just have to buy and start your business.

* For various reasons, all countries put some restrictions on foreign investors so it is better to be aware of your constraints before incorporation.

Things mentioned above are just incorporation basic facts and in no way cover everything. But this information is a start and should trigger other questions in your mind!
Author Resource:- Ramapati Singhania specializes in creating and managing web businesses. His
latest website " target="_blank">"target="_blank"> on incorporation offshore saves wealth, focuses on
helping you to incorporate offshore companies in Seychelles, Mauritius, BVI, and Dubai and Ras Al Khaimah in the United Arab Emirates.
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