What does “incorporated” mean?

What does “incorporated” mean?

A business becomes incorporated when a legal entity is formed by the founders and approved by registration authorities of a particular country. Incorporated business becomes separate from its founders and is granted with legal rights and responsibilities (such as fiscal responsibilities, etc).

A business cannot be created solely by a decision of founders as each entity has to be approved and registered with relevant authorities (e.g. Companies House in the UK, Companies Register in Cyprus).

Filing documents

The documents about a newly established company has to be filed to local authorities which review all documentation and decide whether the newly created entity (which is not incorporated yet) complies with applicable laws. During the process of incorporation, its founders are required to perform certain actions, such as:

  • Choosing a business name
    founders are required to search names of existing companies in order to make sure that a preferred name is unique and has not been taken yet
  • Appointing directors and secretaries (if applicable)
  • Choosing a legal type of business
  • It can be a public or private limited company or other type depending on the jurisdiction
  • Appointing members of the board of directors (if applicable)
  • Deciding on the quantity of shares, voting rights, etc.
  • Preparing articles of incorporation
  • Paying a charter capital (whether before or after the date of incorporation),
  • Paying registration fee, etc.


A legal entity becomes incorporated once the documents are approved. Since the incorporation date, there are various legal formalities that have to be met, such as annual shareholders’ meetings, accounting requirements, filing tax reports. All these requirements are different and may vary depending on the legal form.

Paying Taxes

This is a formal procedure without which a company cannot legally operate and generate profits. A business is established primarily for earning money, but every business is also liable for paying taxes, social contributions and other fees.

Scope of business

A business can be incorporated in one country, but it may also perform business activities in other countries, whether through establishing a legal entity, representative office or without any separate establishment in other country.

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