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The Ultimate Guide to Articles of Incorporation for New Business Owners

The Ultimate Guide to Articles of Incorporation for New Business Owners

Articles of incorporation, also known as a certification of charter or formation, is a legal document that you must file with your state government for incorporating your business. It is required regardless of the state in which your company is situated. These articles of incorporation includes specific information about your business/company/organization.

Articles of Incorporation are official/legal papers that establish a company’s existence in the United States and Canada. To be legally recognized as a corporation, a firm must file these documents with the Secretary of State or company registrar.

The name of the corporation, the kind of corporate structure, the registered agent, the number of shareholdings, and the names and signatures of the business’s owners are the essential components of the Articles of Incorporation.

Requirements of Articles of Incorporation

  • Name and principal office address of your corporation.
  • Purpose of your corporation: In most states, you’re allowed to state a broad and general business purpose for your company, so you don’t need to be specific.
  • Name and address of the registered agent of your corporation: This agent is the person or firm you choose to receive all critical state and legal messages and documents on your behalf. Some states require a registered agent to sign a legal document as an agreement to function as a corporation’s agent.
  • Type of corporate structure: Your corporate structure might be a non-stock corporation, a non-profit corporation, or something else entirely.
  • Name and address of each member of your corporation’s initial board of directors.
  • Number and type of authorized shares your company intends to issue, which may comprise both ordinary and preferred stock this data can be used to calculate taxes and fees.
  • Duration of your business: if you do not intend for it to exist indefinitely. In certain circumstances, people from corporations that are only intended to exist for a brief period.
  • Name and address of each incorporator: Incorporators sign the articles of incorporation and ensure they are submitted correctly. They might be anyone, not only a shareholder, director, or official of the corporation. If you are not an incorporator, you will offer such information about someone who is.
  • Signatures of the incorporators.

Purpose of Articles of Incorporation

Articles of incorporation are important papers since they serve as legal documentation that your company is created in your state and offer information about the major components of your business to the state government. When you file these articles, you must notify your state about the purpose of your company, the names of all incorporators, the identity of your registered agent, the number of authorized shares, and the quantity of common stock.

The following are some of the advantages that accrue to a business that operates as a corporation:

  • Perpetual existence indicates that the corporation will continue to operate in the future even if the owners and executives leave or die. It gives companies a more permanent status than unincorporated businesses, which can be disbanded by the death or withdrawal of all or portion of their owners. Incorporation also facilitates the transfer of the company’s ownership to another entity.
  • Incorporating a corporation in certain states entitles companies to tax breaks on certain of their operational expenses. Production expenses, employee pay, insurance costs, retirement benefits, and investments in green energy are all examples of these expenditures. The tax decreases significantly reduce the corporation’s overall tax obligation.
  • An incorporated corporation works as a distinct entity from its owners, which implies that the owners’/founders’ assets are safeguarded from business obligations. For example, if the corporation owes money to creditors, such as homes, cars, and bank accounts, the creditors cannot auction off the owners’ assets to pay, the business obligations. However, if the company functions as an unincorporated corporation, the owners risk losing their assets to cover business obligations.

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Written by Hardik Tokas

Hardik Tokas is a law graduate from GGSIPU, Delhi. He is an analytical thinker, an active team player who is proactive in legal research and writing, and has highly motivated enthusiasm for business, start-ups, and entrepreneurship. He has the vision to deliver excellent support to the visionary entrepreneurs and educate them in all legal compliances of applicable laws considering their business level and long term growth. He is a goal-oriented professional and a valuable member of the organization.

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