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What is the Difference Between Inc. and Corp.?

Inc. (Incorporated) and Corp. (Corporation) both refer to legally distinct business entities, but the terms are often used interchangeably. The real difference lies in the perception: "Inc." suggests a formal, established company, while "Corp." can imply a larger, possibly multinational, corporation. Both offer liability protection but may differ in their structures and regulations. Wondering how this affects your business choice? Let's examine the details together.
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum

There is no real difference between Inc. and Corp. Any new business organizing under standard articles of incorporation, whether it is a C or S corporation, usually must identify itself by one of these designations and use it in all its business correspondence, but there is no real legal difference between the two. Despite this, the terms cannot be used interchangeably, and they must be used on certain documents. There are also other corporate structures that businesses can choose from, which may be better suited for specific purposes.

Purpose of the Designations

Inc. or Corp. is used to legally inform people of its limited liability under the law.
Inc. or Corp. is used to legally inform people of its limited liability under the law.

Each nation or region, such as the states in the US, generally has specific laws regarding the incorporation process, including the naming of a business. Though calling a company an Inc. or Corp. is not mandatory in all regions, businesses often do it anyway for legal reasons. Once a business includes either term after its name, it has legally informed anyone dealing with it that it has limited liability and is not a natural person. This means that, if a person sues the business, he or she can only collect assets from it after getting a judgment, and he or she can't access any assets of the company owners. This type of notice is called a constructive notice, meaning that it still stands in court even if the person receiving the notice isn't aware of it.

Interchangeability and Usage Rules

Often, the use of Inc. or Corp. is required on business stationery.
Often, the use of Inc. or Corp. is required on business stationery.

Though both terms serve the same legal purpose, a business can't use the terms interchangeably, meaning that once it decides to use either Inc. or Corp., it has to stick with that throughout its life. Most areas also require companies to include the designation after their name on all professional correspondence and business stationery. Some regions have additional rules for how they want businesses to write whichever one they choose: for instance, some states in the US require incorporated companies to write their names as "XYZ, Inc." or "XYZ Corp." while others require it to read “XYZ, Incorporated” or "XYZ Corporation." This generally only applies to official and external correspondence, though. Regardless of region, it is almost always illegal to use either designation if the company isn't actually a corporation.

Alternative Structures

Some countries offer other corporate structures, including a limited liability company (LLC) and limited company (Ltd.). A LLC offers different tax structures than a C or S corporation; profits flow through to the business owners, even though the company itself is responsible for legal issues and debts. This type of structure is often preferred by small businesses, since it has a little more flexibility in terms of taxation, and it requires much less paperwork than incorporation. A Ltd. company has ownership restrictions based on owner guarantee or percentage of shares owned, but it can be traded on a stock exchange.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

Learn more...

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Discussion Comments

anon942414

To me, it seems smaller companies tend to use Inc., and large companies tend to use Corp. I don't know why there's a difference.

anon151380

What is the difference of identifying my organization in the following manner:

"we are a church, inc." or "we are a church organization"

Thank you for any input on this.

anon123299

Thanks Wisegeek for this information. I have a C Corp and thought I had to put Corp at the end of my company name.

anon106442

You’re the only one I found to explained, straight out and clear. Thank you so much.

anon80826

This information is very clear and helpful for me to understand in business. Thanks a lot!

anon55827

very clear interpretation. thanks

anon53751

Excellent, very helpful! Thanks.

anon53038

thank you so much!

anon35926

Excellent information. One suggestion. Put the last paragraph at the beginning.

anon15927

fantastic info. how do inc. and corp. compare to ltd? thanks!

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    • Inc. or Corp. is used to legally inform people of its limited liability under the law.
      By: zimmytws
      Inc. or Corp. is used to legally inform people of its limited liability under the law.
    • Often, the use of Inc. or Corp. is required on business stationery.
      By: magdamosur
      Often, the use of Inc. or Corp. is required on business stationery.