Understanding Incorporation: What You Need to Know


Incorporation is a critical step in the journey of starting and running a business. It is the process by which a business entity becomes a legally recognized corporation, separate from its owners or shareholders. In this blog post, we will explore what incorporation entails, its benefits, and why seeking legal assistance from Falcon Law PC can be essential. If you have questions about the incorporation process or need professional guidance, please feel free to contact Falcon Law PC at 1-877-892-7778 or reach out via email at info@falconlawyers.ca.

What Is Incorporation?

Incorporation is the legal process that transforms a business into a separate legal entity, known as a corporation. This means that the corporation is distinct from its owners, known as shareholders, and it has its own legal rights, responsibilities, and liabilities. When a business incorporates, it typically adopts a formal business structure and becomes subject to specific legal and regulatory requirements.

Key Components of Incorporation

  1. Separate Legal Entity: One of the fundamental aspects of incorporation is that the business becomes a separate legal entity. This separation means that the corporation can own assets, incur debts, and enter into contracts in its own name, separate from its owners.
  2. Limited Liability: Incorporating a business provides a significant advantage in terms of limited liability. Shareholders in a corporation are generally not personally liable for the company’s debts and legal obligations. This means that the personal assets of shareholders are protected from business-related liabilities.
  3. Shareholders: In a corporation, ownership is divided into shares, which are typically held by shareholders. Shareholders elect a board of directors to oversee the company’s management and make important decisions on their behalf.
  4. Perpetual Existence: Unlike sole proprietorships or partnerships, corporations have perpetual existence. This means that the corporation continues to exist even if shareholders change or if the original founders are no longer involved.
  5. Regulatory Compliance: Corporations are subject to specific legal and regulatory requirements, including filing annual reports, conducting annual meetings, and maintaining corporate records. Compliance with these obligations is essential to maintain the corporation’s legal status.

Benefits of Incorporation

Incorporating your business offers several benefits, including:

  1. Limited Liability: As mentioned earlier, limited liability protection is a significant advantage of incorporation, as it helps protect your personal assets from business-related liabilities.
  2. Credibility: A registered corporation often appears more credible and established to clients, suppliers, and investors, which can enhance your business’s reputation and growth prospects.
  3. Access to Capital: Corporations can issue shares to raise capital and may have access to government grants and incentives designed to support businesses.
  4. Tax Planning: Incorporation can provide opportunities for tax planning and potentially lower tax rates on business income.
  5. Transferability: Shares in a corporation are easily transferable, simplifying the process of selling or transferring ownership.


Incorporation is a pivotal step in establishing a business as a separate legal entity, offering limited liability protection, credibility, and various other advantages. However, the process can be complex, and compliance with legal requirements is crucial. Falcon Law PC specializes in guiding businesses through the incorporation process, ensuring legal compliance, and offering valuable legal advice. If you are considering incorporating your business or have questions about the process, don’t hesitate to contact Falcon Law PC at 1-877-892-7778 or via email at info@falconlawyers.ca. Our experienced team of legal professionals is here to assist you in navigating the intricacies of incorporation and setting your business on the path to success.

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