Difference Between Inc. and Corp.
Inc. (an abbreviation for the Incorporation) and the Corp. (an abbreviation for the Company) are acronyms used at the time of formation of a new business entity. Inc. and Corp. are separate institutions and are recognized as separate legal units. Both are formed with the concept of limited liability that is to say, share holders, directors or employees are personally not liable for the debts that are owed by the institution to the creditors.
Although both convey the same fundamental fact of the organization of company and there is no difference between the two in terms of their legal structure, tax structure and duties of acquiescence, the two words cannot be used in place of each other. Once a person decides to go with Company Inc., he must stick with this selection. If a body part with ‘Inc’, all its letterheads, correspondence, domain names, business cards and any related company by including the bond sales will use ‘Inc’ and vice versa, if registered as a Corp. If the business registered under the Inc. wants to change its name to Corp, it must file the formal name change before it could use the abbreviation ‘Corp’.
Incorporation is the process that legally declares a business entity separate from its owners. It’s the formation of a new legal entity, which can either be business, a non profit organization or sports club, which is recognized as a person under the law. Some of the benefits are legal Inc.;
• Protection of owner’s capital against the liabilities of the company
• The ownership can be transferred to another party
• Capital can be raised by selling stock
• Obtain its own credit rating
The legal concept of incorporation is recognized around the world, but it has registration information and state-specific fees. ‘The articles’ are made the draft, which lists down the main purpose of business, location, number of shares and class of stock being issued if each.
From the Latin word ‘corpus’, the company is a legal entity created under the laws of a state and was intended to establish the entity as a separate legal entity with its own privileges and liabilities distinct from those of its members. Although companies are not individuals, they are recognized under the law for the rights and responsibilities of the individual.
4 main features for a Corp. are;
• Legal personality
• Limited liability
• Transferable shares
• Centralized administration under a board structure
Historically, companies have been created by a charter (the grant of authority or rights) granted by the government. Today, companies are usually registered with the state, province or national government and are regulated under the laws of that government.
Companies, generally have a distinct name. Historically, few companies have been called after their members. Eg. officially known as ‘the President and the College of Harwrad Types’ now known as ‘the College of Harward’ (the company is the oldest in the Western Hemisphere).
Inc. against the Company.
Although there is no distinct difference between the two, it can not be used interchangeably. Both companies are formed with limited liability, as they are two distinct institutions and with whom the business person must be registered to use the Incorporation or the Company as part of the company name.
If you want to start a new business entity ‘ABC’ what is the difference to have the name as “ABC Inc. or ‘ABC Corp.’?
Both identify the company as having limited liability as the main goal during the registration process. The small difference that is there lies in the process by which it is incorporated between countries. Eg. some allow ABC Inc.. while some others would require ABC Incorporation while registering.
There is no real difference between Inc. and Company, but it is important to choose a name and use it consistently in all business relationships.