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Articles of incorporation are a formal set of documents that serve as a legally binding record of a corporation's formation. These are submitted to a governmental office, typically the Secretary of State in the state where the company decides to incorporate. These include important details including the firm's name, address, agent for service of process, and the quantity and type of stock that will be issued.
The articles of incorporation serve to create the company as a separate legal entity from its owners and to shield them from personal liability for the corporation's debts and obligations. Corporations may benefit from advantageous tax advantages, the opportunity to issue stock and obtain cash, or liability protection by filing articles of incorporation.
The content and format of articles of incorporation may vary from state to state, but they generally include the following information:
- Name of corporation: The name must be unique and distinguishable from other registered entities in the state. It must also include a corporate designator, such as Corporation, Incorporated, Limited, or an abbreviation thereof.
- Principal address of the corporation: The physical location where the corporation’s main office is located. Some states may also require a mailing address or a registered office address.
- General business purpose: A brief description of the nature and scope of the business activities that the corporation intends to engage in. Some states may allow a general statement, such as “to engage in any lawful activity,” while others may require more specific details.
- Duration of the corporation: The period for which the corporation will exist. Some states may allow perpetual existence, while others may require a fixed term or a date of dissolution.
- Registered agent’s name and address: The person or entity that is authorized to receive legal documents and notices on behalf of the corporation. The registered agent must have a physical address in the state of incorporation and be available during normal business hours.
- Number and types of stock shares issued: The amount and classes of stock that the corporation is authorized to issue to its shareholders. The articles may also specify the rights, preferences, and limitations of each class of stock, such as voting rights, dividend rights, conversion rights, etc.
- Name and address of the incorporators: The person or persons who are initiating the formation of the corporation. The incorporators must sign and date the articles of incorporation.
Almost all parties other than the company use the articles of incorporation, including governmental agencies, creditors, investors, and possible business partners. Internally, other documents that control the corporation's management and activities are more helpful, such as bylaws, operating agreements, or business plans.
