Business incorporation is the process of identifying the business as its own identity under law.  This makes it so that what happens to the business does not necessarily happen to the owners and vice versa.  There are many different laws regarding the incorporation of a business and the amount of liability the owners and managers of that business are entitled to.  The incorporation of a business also has the benefit of lowering the tax basis of the business and therefore freeing more money for investments and growth.

The process of singling out a business in the eyes of the law is rather complicated and should be done by a lawyer to ensure that the business is completely legal.  Although there are companies and websites that offer to provide the paperwork at no cost, these should be avoided as the proper research is difficult to do and the proper assembly and completion of this paperwork can make a big difference in the success or failure of the incorporation effort.  With something as important as incorporation, cutting costs is not recommended.  The incorporation of a business designates that business' belongings from that of the business owners.  This means that if something happens to the business, the owner does not lose everything.  It is also a major benefit when preparing taxes, for incorporated businesses tend to be taxed less than personal businesses and the public.  This in turn frees up more money for the company to reinvest into itself, allowing it to grow and succeed as a business.

All applications for the incorporation of a business must go through a government review and approval process. This process can take weeks or months to complete. Once a business is incorporated, all transactions performed by the business need to be recorded separately from personal transactions by the owner.