Understanding the Key Components

When we talk about establishing a corporation, the conversation invariably leads us to one critical legal document: the Articles of Incorporation. To put it simply, the Articles of Incorporation is a set of formal documents that are filed with a government body, typically the Secretary of State’s office, to legally document the creation of a corporation. This step is mandatory before a corporation can commence business operations in a state.

What’s Included in the Articles of Incorporation?

The Articles of Incorporation serve as an essential legal record of the most relevant information about a corporation at the time of its formation. They typically include the firm’s name, its street address, agent for service of process, and the quantity and type of stock to be issued. It also outlines the company’s structure and the number and type of authorized shares.

Other elements may encompass a list of board members, bylaws, the corporation’s business model, as well as information about facilities and assets. In essence, these articles provide a framework that guides the operation of the corporation and helps external parties evaluate the company.

Articles of Incorporation and the Role of the Secretary of State

Articles of Incorporation are to be filed with the Secretary of State of the area where the corporation opts to incorporate. The state authorities then review these documents, and if all requirements are met, they grant approval for the corporation to do business. In this context, it's worth noting that states levy a fee to incorporate, and most states also impose a corporate franchise tax.

A significant aspect of the Articles of Incorporation is the appointment of a “resident agent” or an agent for service of process. This individual or entity is the one who receives lawsuits and other legal documents on behalf of the corporation.

Some law firms, in a bid to serve as a resident agent, maintain offices across various states, with an employee present to answer calls and receive mail, despite not regularly operating in that particular state.

Additional Roles of Articles of Incorporation

In addition to serving as a legal document that marks the creation of a corporation, the Articles of Incorporation also come with a host of potential advantages. The corporation, post-filing of the Articles of Incorporation, can benefit from tax incentives, the capability to issue stock and raise capital, as well as the protection of owners from personal liability.

It’s important to differentiate the function of the Articles of Incorporation from other internal documents like bylaws, operating agreements, or business plans. While the latter are more beneficial for internal governance, the Articles of Incorporation are used almost exclusively for external purposes.

The Importance of Articles of Incorporation

The Articles of Incorporation, also referred to as a “corporate charter” or “articles of association,” are an indispensable part of setting up a corporation. These documents signify the birth of a corporation, providing necessary information about the business to the state and other external parties. Any company that aspires to become a corporation must undertake the critical step of filing the Articles of Incorporation with the appropriate state agency.

The ability to issue stock, gain tax advantages, and protect owners from personal liability make the process of filing the Articles of Incorporation not just a legal necessity, but also a strategic business move. Therefore, the importance of the Articles of Incorporation in the corporate world cannot be overstated.

Summary
Articles of Incorporation must be filed with the Secretary of State’s office before a corporation can do business in a state.

Articles of Incorporation are legal documents which contain descriptions of the most pertinent information about a company at its formation. This includes a list of board members, the number of shares to be issues, bylaws, business model, facilities and assets, and so forth.

These documents must be filed with the Secretary of State before a corporation will be approved to do business or to accept any startup capital. States will charge a fee to incorporate and most states have a corporate franchise tax as well. Corporations must also name a “resident agent,” to whom lawsuits and so forth can be served if they need to be.

Some law firms, for the purpose of serving as a resident agent despite not actually working in that state regularly, will maintain offices in various states with one employee at each office to answer phones and receive mail. Articles of Incorporation are also called a “corporate charter” or “articles of association.”

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