When forming a corporation there are a variety of different requirements. The articles of incorporation are documents that are created and filed with a local governing body in order to officially create the corporation. They separate the corporation as its own entity. These are sometimes called a certification of formation or a charter. They are not the same in every state but are typically filed with the secretary of state.
What information is included in the articles of incorporation?
Requirements are different in each state, but typically the articles of incorporation will contain the following:
- Name and office address of the corporation.
- Purpose of the corporation. This may be a broad purpose such as “sales” or a niche purpose such as “sour beer sales”.
- Duration of the corporation. Not all corporations are infinite, if you do not intend for your corporation to perpetually exist, then it may have an expiration date.
- Name and address of your registered agent and registered office. This person agrees to accept due process and official documents on behalf of the corporation.
- Names and addresses of the members of the corporation’s board of directors.
- Information regarding the number of shares and stock.
- Names and addresses of the incorporators, which are those who sign the articles of incorporation and make sure that they are filed.
- Signatures of incorporators.
Importance of Articles of incorporation
The articles of incorporation are an essential part of establishing a corporation. The articles are required to be filed within the home state and inform said state regarding important parts of the business. They may also be used to help establish the purpose, tax liability, ownership shares, and amounts of common stock. They provide a presence in the state of formation.
The articles of incorporation must also include information regarding the registered agent. Every Delaware corporation must have a registered agent who is available for service of process in the state. This can be an individual, another business entity, or corporation that is available in the state of Delaware. They must have a physical presence, and be able to accept legal papers on its behalf.
If the agent is an individual, they must have a physical street address in the state. If the agent is a business entity, they must be authorized to do business in Delaware. Should you be located in Delaware, you can be your own registered agent. It is also common to hire a third-party service to take care of this responsibility.
What is the Difference Between Articles of Incorporation and Bylaws?
When you file the articles of incorporation, you do so with your state’s business filing agency. You are required to pay a filing fee and, once approved, you will be given the certificate of formation.
Corporations also create bylaws that help to govern the corporation. Included in the bylaws are all of the rights and responsibilities of the officers, directors, and shareholders. This document is not given to the state, but rather, kept in your private corporate records.
Creating the articles of incorporation is one of the first steps in starting a corporation. They should be filed in full and according to the filing instructions for your state. You should also ensure to pay the right fee.
Filing the Articles of Incorporation: What You Need to Know
Most states require the articles of incorporation to state the business’s purpose. Some corporations choose to define their purpose less definitively because it provides the opportunity to be flexible. There are other things that need to be outlined in the articles of incorporation,, but nothing can be completed without a fee.
Most states charge filing fees for incorporating businesses. In some cases, you might incorporate in one state, but choose to do business in another. This means you will need to pay both state filing fees and taxes. These fees range from $50 such as in Iowa And up to $275 in Massachusetts.
In Delaware, there is an $89 minimum filing fee for up to 1,500 shares of no par value stock. Otherwise, it is up to $75,000 of par value stock. Fees increase after this based on the number of shares of no par stock or the value of par value stock. You should file the articles of incorporation with the Secretary of state.