In the business world, many are conversant with the terms “Incorporation, Limited & Corporation”. In abbreviation, they are generally referred to as Inc. LTD & Co. respectively. These terms connotes different things and gives different rights and responsibilities to the business and business owners. We are going to be considering the Clear Differences Between Incorporation, Limited & Corporation. We believe you will find this very helpful.
Few people know the Clear Differences Between Incorporation, Limited & Corporation. After reading this, you will be among the few. Also, should you want to open and run your own business, you will get to know what each means. This will enable you make the right decision concerning your business. Are you ready for this new knowledge? Let us get down to work.
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Clear Differences Between Incorporation, Limited & Corporation
There are many differences that exist amongst these concepts: Incorporation, Limited & Corporation. Let us consider these differences.
|Meaning||An incorporated business is a legal entity which is separate from its owners.||On the other hand, an Ltd is a company or business where the liability of the company is limited to what the members have invested in or guaranteed.||While “corporation” is sometimes used to describe a large business, an association of people working together in a commercial or related enterprise.|
|Ownership||Stockholders||Members; however can also be public in a public limited company.||Shareholders|
|Management Level||It is run by a Board of Directors. It requires the company to appoint company officers.||Must have formally appointed company officers at all times. At least one Director.||A Corporation has a 3-tier management level. The hierarchy is as follows: shareholders – Board of Directors – Officers.|
|Taxation||Corporate tax. Profit and loss are passed onto the company and does not affect the members.||Single taxation (Profit or loss are passed directly to members).||A Corporation is taxed on all its profits. Being a separate legal entity, its tax is on the company’s profit. However, the shareholders also pay personal tax as well.|
|Regulation of entity name||Incorporated (Inc.) or Corporation.||Ltd or Ltd. or Pvt. Ltd. (private limited) or PLC (public limited company) or Inc. (Incorporated).||Separate legal entity from shareholders.|
|Continuity of life||Indefinite term||Indefinite term. It continues to exist even if all its members die or desert it.||Indefinite term|
|Liability||The stockholders are not held responsible in case of a fault, the corporation is.||Limited||Limited|
It is believed the above differences were clear for you to understand? Do you think we omitted anything? Please let us know. Thank you.