What Are Articles of Incorporation?
Anyone interested in forming a corporation already knows that this business structure has many advantages. However, it is worth communicating that this corporation cannot be formed without the articles of incorporation. In short, articles of incorporation (also called a corporate charter) are a document that establishes the existence of a corporation.
What is needed for articles of incorporation? As a new individual in the corporate world, it’s essential to understand what is necessary for articles of incorporation. This post details articles of incorporation requirements that you should have in place when you’re registering a corporation.
1. The Name of Your Business
You cannot file the articles of incorporation without having the name of your business. Your company’s name can be anything as long as another business is not using it and it meets the state’s requirements in which you’re incorporating. Therefore, it’s necessary to do a name search with the state’s business entity database to ensure the name you want is available. Once you find a known name, you can reserve it for a small fee.
2. The Purpose of Your Business
Every business has a purpose, and this needs to be stated in the articles of incorporation. The purpose clause explains what your company will do. It’s common for businesses to put "any legal purpose" in this section, which gives the company a lot of leeway to change its focus down the road. Business registration authorities want to see a specific purpose for businesses before they can allow you to progress as needed.
3. The Names of the Incorporators
The people who form the corporation are known as the incorporators, and their names and addresses must be stated in the articles of incorporation. The minimum number of incorporators is usually one, but some states require two or more. You will also be required to sign the articles of incorporation as the incorporator. Essentially, by signing the document, you’re taking responsibility for filing it with the state.
4. The Registered Agent
In every state, corporations are required to have a registered agent. A registered agent is somebody who agrees to receive important legal documents on behalf of the corporation. The documents that a registered agent will receive include service of process (notices of lawsuits) and tax forms. The registered agent must have a physical address in the state and be available during business hours. The incorporator can also be the registered agent.
5. The Stock Structure of the Corporation
In the articles of incorporation, you’ll need to detail how many shares of stock the corporation will have and what type. There are two main types of stocks: common and preferred.
Importantly, you’ll also need to assign a par value to the shares. The par value is the minimum price for which the stock can be sold. Most states have done away with requiring a par value, but some still do. Therefore, you should check with your state’s business registration office to see if a par value is required.
Conclusion
Forming a corporation is a big decision that comes with many responsibilities. Luckily, once you understand what is needed for articles of incorporation, the process becomes much more straightforward. Be sure to stay within the guidelines set by your state and consult with an attorney if needed. Contact Kedean’s Generation to get help with business registration.
Categorised in: Starting a Business