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An indemnification agreement is used when forming a corporation. When you form a corporation, you as an owner or shareholder have a limited liability in that corporation, and you are responsible and liable only for your actual investment. Once you start managing and operating the corporation, you can become liable for activities as an officer or other agent of the corporation.
The indemnification Agreement protects you as an individual from liability. It's strongly recommended that any new corporation include an Indemnification Provision and Agreement in their Articles of Incorporation.
It is also strongly suggested that you work with capable legal counsel when setting up a new corporation to ensure you are protected and that the corporation's articles are legal and well-written.
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