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Understanding Articles of Incorporation

If you have decided to start your own business, and have determined to form a corporation rather than another type of legal business entity, you will need to create articles of incorporation for your new business. The articles of incorporation will be filed with your state to officially form a legal business entity.

Are Articles of Incorporation the Same as Corporate Bylaws?

Articles of incorporation officially establish a new business in a state. In contrast, corporate bylaws are not actually filed with the state. Instead, corporate bylaws establish the rules and regulations the corporation agrees to follow internally.

Bylaws also identify the number and roles of members of the board of directors and officers and establish how, and when, shareholder meetings will be conducted.

The two documents have some overlap of information and work together; however, they are separate and distinct legal documents. Both are important for any type of corporate entity.

What Information Is Typically Included in Articles of Incorporation?

The articles of incorporation for your corporation must include certain key pieces of information. While the specific information may vary slightly from state to state, depending on where you choose to incorporate, there are some constants.

Be prepared to record the following information:

  • Name – You must include the name of your new corporation on the articles of incorporation. In addition to making sure the business name you want to use is available, you should also be sure to understand the naming conventions and requirements for corporations in the state where you choose to incorporate. For example, you will probably be required to include an identifier or abbreviation such as Co., Inc., or Ltd.
  • Address – You will need to provide an address for the corporation’s principal place of business. In some states, this must be a physical address and cannot be a post office box.
  • Type of corporate structure – The articles of incorporation will identify whether the new corporation is a for-profit, not-for-profit, benefit corporation, or a professional corporation.
  • Corporate purpose – Your corporate purpose can be a broad statement rather than narrowly defining what your company will do. This is often a statement such as: "The purpose of [the name of your new corporation] is to engage in any lawful activity.” Phrasing your corporate purpose broadly means that you will not be limited if the company later decides to engage in a different type of business or offer different products.
  • Registered agent – Every corporation needs to have a registered agent. The registered agent is the person, or company, you authorize to physically accept legal documents and information affecting your company. For example, if your corporation is named in a lawsuit, the registered agent accepts delivery of the legal documents related to the lawsuit on behalf of your corporation. Your articles of incorporation will identify the name and address of the registered agent for your corporation.
  • Stock – Corporations issue shares of stock in exchange for money invested in the business. Your articles of incorporation will identify how many shares of stock the company is authorized to issue, what class of shares (such as common stock or preferred stock), and the initial value of each share.
  • Incorporator(s) – Articles of incorporation also usually include the names and addresses of the incorporators. This may be you and/or any other people establishing the new corporation; however, this may also be an incorporation service or another professional who has been retained for the purpose of getting your new corporation up and running.
  • Effective date – If you intend your business’ effective date to be some date in the future, you must include that date on the articles of incorporation. If no date is included, the effective date for the business will usually be the same date the state approves your filing.
  • Duration – Most corporations are established with a perpetual duration, meaning that the corporation does not have a fixed lifetime. Perpetual is the default duration for corporate entities. If there is a need or desire to limit the corporation’s lifetime, the articles of incorporation should identify the corporation’s duration.
  • Directors – In some states, articles of incorporation must also include the names and personal information of the corporation’s board of directors.
  • Signatures – The incorporator(s) must sign the articles of incorporation to make them effective.

The Role of the Incorporator

As previously mentioned, your articles of incorporation must identify the name(s) and address(es) of the incorporator(s) for your new business. In some states, the incorporator is called a "promoter."

The incorporator is responsible for bringing together the people with the idea for a product or service that the corporation will offer, and the eventual shareholders who have money to invest in the new startup business.

At Least One Incorporator

Every state requires corporations to have and list at least one incorporator on their articles of incorporation, although it is also acceptable to have multiple incorporators.

In addition to connecting the shareholders with the business itself, the incorporator is also responsible for putting the initial board of directors for the company in place and, in some states, for officially adopting the corporate bylaws.

Using a Professional Incorporator

After the corporation has officially been formed with the state, and a board of directors is in place, the incorporator's role is essentially over. As the job is a short-lived role, it lends itself well to this type of business relationship. There are a variety of companies and individuals engaged in the business of incorporating other peoples' companies as professional incorporators.

If you choose to work with a firm that offers its services as a professional fiduciary, be sure that the terms are clearly established at the beginning of the relationship. Your services agreement should state that the professional incorporator will resign once the corporation has been approved by the state. At that point, the incorporator should no longer have any rights in, or any responsibilities for, the new corporation.

Writing Articles of Incorporation vs. Using State-Provided Forms

Most states offer standardized, fill-in-the-blank forms that business owners can use to provide the minimum level of information the state needs in order to approve the new business entity. While it may be tempting to simply use the form provided by the state because it will save a little bit of money, do so at your own risk.

The following reasons are why you should consider drafting your own articles of incorporation:

  • You have the ability to issue different types of stock, rather than just common stock
  • Your articles of incorporation should be tailored to your business
  • The fees you pay to prepare customized articles of incorporation should be tax-deductible as a business expense

Most business owners find that it is worth the small time commitment, effort, and nominal expense to create and file articles of incorporation tailored to their business, rather than using a one-size-fits-all form provided by the state.

Who Can View Articles of Incorporation?

Articles of incorporation are designed to give the state information about your new business, but they are also designed to provide information to the public. Articles of incorporation, once filed, are available for viewing by the general public. In many states, this information is readily available online through the Secretary of State’s (or other state division’s) public website.

What Happens after Creating Articles of Incorporation?

Creating the articles of incorporation for your new business is the first step in being able to transact business in the state under the corporate name. Here is what you can expect after you create your legal document:

  • Print, review, and file – After you have created the articles of incorporation, you will need to file them with the state where you plan to organize. When you create your documents using LegalNature’s easy resources, you can download your completed articles of incorporation to your computer where you can print it for the required signatures and send it to the Secretary of State or other authorized recipient for your state.
  • Pay required state filing fees – There are filing fees associated with establishing corporations and filing articles of incorporation. These fees vary from state to state. In most states, this fee is less than $200.
  • Receive notification of approval – After the state has received articles of incorporation for your business, it will review them to make sure all required information is included and that the appropriate filing fees have been received. If your filing is in good order, the state will provide you with documentation showing that the corporation is approved to conduct business in the state.
  • Maintain documentation – Be sure to keep documentation of business approval in a corporate records book in your company’s business office.
  • Ongoing filing requirements – In most states, corporations are required to file annual or other periodic notices in order to keep the business’ registration active.
  • Other document and filing requirements may apply – Depending on the type of business you are starting, you may have other filing requirements after you have filed your articles of incorporation with the state.

Amending Articles of Incorporation

After you have established your corporation by filing articles of incorporation, you may find that the information you initially provided changes over time.

Certain changes must be reported to the state, by officially amending your articles of incorporation with the state, by completing a state-specific form, or in some cases by filing a corporate resolution with the state. For example, if your principal place of business or registered agent changes, you will need to notify the state of the change. In states where corporations are required to report the names and other information about the board of directors or officers for the corporation, changes to that information must be reported as well.

Some states include filing fees in order to make these types of changes, while others simply require that corporations file documents evidencing the change. Corporate officers and directors should be aware that there may be time constraints or requirements for filing these types of updates, which vary from state to state.

How to Create Articles of Incorporation

Use our articles of incorporation form to quickly and easily create your articles of incorporation online in just minutes.