Determining the name of your company may feel as difficult as naming your child. After all, names give important first impressions about both people and companies. But a company name also needs to be memorable and catchy because it will undoubtedly appear on marketing materials and in advertising campaigns for years to come. Once you settle on your company's name, you might be tempted to add an important-sounding industry tag on the end, such as corporation, incorporated or enterprise. But what do these terms actually mean?
Enterprise represents the more general term for a business. Unlike the word enterprise, which can be used freely to describe any company or business, the word corporation is reserved for businesses that have completed a legally binding process.
Of the words enterprise and corporation, enterprise represents the more general term for a business. Anyone can call their company an enterprise. In fact, you could even add the word to your company's official name if you wish. Although it is not always the case, some people reserve the word enterprise for entrepreneurial endeavors, such as startups or other innovative and new company ideas.
Unlike the word enterprise, which can be used freely to describe any company or business, the word corporation is reserved only for businesses that have completed a legally binding process. The process of incorporation means that the business itself is an entity completely separate from the person who founded it. For example, many professionals and entrepreneurs choose to incorporate a business in order to protect their personal assets. Should a disgruntled customer sue the company, the owner's personal assets will not be at risk. A corporation is sometimes referred to as a "legal person" due to the rights and obligations such a business enjoys. Corporations must pay taxes, can borrow money, hire individuals, enter into contracts and sue or be sued.
In order to become incorporated, a company's owners and shareholders file an application with the secretary of state in the business' primary state of operation. The application must include the names and addresses of the shareholders filing the application, as well as a statement of purpose. Both nonprofit and for-profit organizations can become incorporated.
When it comes to using the words corporation or incorporated, or the abbreviation inc., in your company's name, those are for incorporated companies. They mean that you run your business in accordance with the laws of your state that govern corporations. However, you can use the word enterprise without any such legal implications.