Incorporation is the name given to the creation of new limited company. When you incorporate a business it becomes separate from the person who owns or manages it, it becomes a legal entity in its own right. You can only become a limited company under the Companies Act 2006, by incorporating it at Companies House and it is entered onto the register.
You can limit the liabilities of the company, so that the members are limited by the number of shares.
Before you incorporate a company, whether simple or complex, we would always suggest getting professional advice by speaking to an accountant or solicitor to ascertain whether this is the best model for your business, or whether being a sole trader, LLP etc is more appropriate.