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A company which has been incorporated has a separate legal entity status as granted by law. Through such incorporation, the company ("corporation") has its own identity which is considered to be separate from any shareholders and owners. Through incorporation (because it is a separate legal entity), the company has the power to act in any way permitted by law and by its corporate charter. Once incorporated, your company can buy and sell property, enter into contracts, and even sue and be sued.

One of the main benefits of incorporation is that the company is responsible for its own debts. Normally, shareholders and corporate officers are not responsible for corporate liabilities. In other words, due to incorporation, if the company suffers losses, the corporation itself must bear those losses to the extent of its own resources, and not the personal assets of the individual shareholders.

It is important to note, however, that shareholders and officers may be held liable for the debts of the incorporated company in certain instances, such as when an individual has personally guaranteed the corporate debt. For more information, you should contact an attorney qualified to advise you on the benefits and disadvantages of incorporation.