Search
Close this search box.

Table of Contents

Articles of Incorporation



Definition

Articles of Incorporation, also known as the corporate charter, is a legal document required to form a corporation. It details critical information such as the name of the corporation, its purpose, corporate structure, and the types and number of shares of stock it’s authorized to issue. This document gets filed with the state’s Secretary of State office or an equivalent department.

Phonetic

The phonetics of the phrase “Articles of Incorporation” are:- Articles: /ˈɑːrtɪklz/- of: /əv/- Incorporation: /ɪnˌkɔːrpəˈreɪʃn/

Key Takeaways

Sure, here are three main takeaways about Articles of Incorporation in HTML numbered form:“`html

  1. The Articles of Incorporation, also known as the Certificate of Incorporation, is a document that establishes a corporation’s existence and outlines the basic information about the corporation, including its name, purpose, and principal place of business.
  2. This document must be filed with the state in which the corporation is choosing to be registered. It is a demand of the state authorities in order to distinguish businesses from one another.
  3. The Articles of Incorporation usually include details like the number of shares the company can issue, the names of the initial directors until a proper board is in place, and the name and address of one registered agent who is authorized to accept legal documents on behalf of the corporation.

“`Hallmarks of this document may vary by state, but these are generally the key points to consider.

Importance

The Articles of Incorporation is a significant term in business/finance as it forms the legal core of a corporation. These articles establish the existence of a new corporation or company and contain critical information such as the business name, purpose, duration, capital structure, and information on directors and officers. This set of documents is vital as it sets the basic rules governing the management and operations of the corporation. In essence, the Articles of Incorporation provide a guideline for how the corporation conducts its business and affairs, making it a foundational necessity in the realm of corporate governance. Without these articles, a corporation would face difficulties in being recognized legally and ensuring smooth operations.

Explanation

The Articles of Incorporation, also known as the corporate charter or certificate of incorporation, play a pivotal role in establishing the existence of a corporation. This legal document sets the foundation of a new corporation and is vital for both legal recognition and protection. Primarily, it is the vehicle that provides for the birth of a new corporation with the laws of the state with which it is filed, offering legitimacy and credibility to the business.The use of the Articles of Incorporation comes into play with a wide range of applications. This document outlines the basic information about the corporation such as its name, address, purpose, number of shares it can issue, and the details regarding the structure of the corporation such as information about the board of directors. This baseline information included in the articles is crucial for informing potential investors, employees, and other stakeholders about the basic operations and goals of the corporation. The articles also assist in creating the boundaries within which the corporation can operate, along with providing a certain level of protection against liability.

Examples

1. Google Inc.: Upon its creation in 1998, Google Inc. filed its Articles of Incorporation with the Secretary of State in California. These documents laid out the structure of the company, including its purpose and the number and type of shares of stock it could issue. 2. Ford Motor Company: When Henry Ford incorporated his company in 1903, the Articles of Incorporation listed him and a group of investors as the company’s initial shareholders. By filing the articles, Ford Motor Company was able to set forth its goals, rules, and financial structure, effectively giving it legal recognition.3. McDonald’s Corporation: As part of McDonald’s incorporation in 1955, it prepared its Articles of Incorporation to define the structure of the fast food giant, including specific details about shares, business purpose, and the appointment process of its Board of Directors. The documents helped establish how the company would be governed and its accountability process to the stockholders.

Frequently Asked Questions(FAQ)

What are Articles of Incorporation?

Articles of Incorporation are a legal document required for the formation of a corporation in the U.S and Canada. This document provides key critical details about the corporation such as name, location, purpose, etc.

Where are the Articles of Incorporation filed?

Articles of Incorporation are generally filed with the Secretary of State or a similar government agency in the state where the corporation is going to be located.

What kind of information should be included in the Articles of Incorporation?

Typically, Articles of Incorporation include information such as the corporation’s name, its purpose, the initial number and types of shares of stock to be issued, etc. It may also include information about the corporation’s initial directors and registered agent.

What is the purpose of filing Articles of Incorporation?

Filing the Articles of Incorporation officially forms the corporation. It provides public notice about the corporation’s details and helps limit the owners’ personal liabilities.

Is there a fee to file the Articles of Incorporation?

Yes, there is usually a filing fee associated with filing the Articles of Incorporation. This fee varies by state.

What happens if Articles of Incorporation are not filed?

Businesses that fail to file the Articles of Incorporation may not receive the benefits of being a corporation, such as limiting personal liability, attracting investors, etc.

Can the Articles of Incorporation be amended?

Yes, if information listed in the initial Articles of Incorporation changes or needs to be updated, an amendment can be filed with the appropriate state agency.

Is there a difference between the Articles of Incorporation and Bylaws?

Yes, while both are governing documents, the Articles of Incorporation are the primary legal document of a corporation, and bylaws are internal documents outlining how the corporation is managed.

Can I create the Articles of Incorporation on my own?

While it is possible to create Articles of Incorporation on your own, it’s generally recommended to seek legal advice to ensure all appropriate and necessary information is included. Many states offer a standard form for Articles of Incorporation that can be used as a guideline.

How long does it take to file Articles of Incorporation?

The processing time varies from state to state but typically ranges from a few days to a few weeks. Expedited services may also be available at an additional cost.

Related Finance Terms

Sources for More Information


About Our Editorial Process

At Due, we are dedicated to providing simple money and retirement advice that can make a big impact in your life. Our team closely follows market shifts and deeply understands how to build REAL wealth. All of our articles undergo thorough editing and review by financial experts, ensuring you get reliable and credible money advice.

We partner with leading publications, such as Nasdaq, The Globe and Mail, Entrepreneur, and more, to provide insights on retirement, current markets, and more.

We also host a financial glossary of over 7000 money/investing terms to help you learn more about how to take control of your finances.

View our editorial process

About Our Journalists

Our journalists are not just trusted, certified financial advisers. They are experienced and leading influencers in the financial realm, trusted by millions to provide advice about money. We handpick the best of the best, so you get advice from real experts. Our goal is to educate and inform, NOT to be a ‘stock-picker’ or ‘market-caller.’ 

Why listen to what we have to say?

While Due does not know how to predict the market in the short-term, our team of experts DOES know how you can make smart financial decisions to plan for retirement in the long-term.

View our expert review board

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More