NALA Certified Paralegal Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

In business law, "incorporation" specifically refers to the legal process of forming a corporation. This entails registering a business entity with the state, which endows it with a distinct legal identity apart from its owners. Once a corporation is formed, it can enter into contracts, sue or be sued, and is responsible for its own debts and obligations. This distinct legal status provides key advantages, such as limited liability protection for the owners, meaning their personal assets are typically shielded from the corporation's liabilities.

This concept distinguishes incorporation from the other options, which address different business processes. For instance, forming a limited liability company is a different legal structure and process. Merging two existing companies involves combining their operations and assets rather than establishing a new entity. Lastly, the registration of a trademark pertains to intellectual property protection, which is unrelated to the formation of a corporation.